infraread - Te Kawepūrongo Waihanga

Keep up to date with key happenings in the NZ infrastructure space with our Monthly Newsletter.



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  • 28 Jul 2021 12:32 PM | Anonymous

    By Claire Edmondson, General Manager

    I’m all for modeshift. I bought my electric bike three years ago and recently invested in an electric scooter. I love my electric bike and am a confident cyclist – I zoom around Auckland’s city centre, take my e-bike with me over to Waiheke Island, and it even accompanies me on the ferry to the Coromandel. However, I still cannot fathom why the government thinks spending $785 million on a walking and cycle lane across the Waitemata Harbour is a good investment, especially at this time when the government has either downsized or culled some other committed projects.

    Last month, Transport Minister Hon Michael Wood announced the Northern Pathway Westhaven to Akoranga project as a dedicated walking and cycling link between Central Auckland and the North Shore. The preferred option is a stand-alone bridge alongside the existing Harbour Bridge.

    Perhaps I’m experiencing a different reality in Auckland and New Zealand than whoever came up with this idea, but I really cannot understand the logic behind this project. The Benefit Cost Ratio (BCR) is estimated at 0.4-0.6 – yes, for every dollar spent, there could well be a loss of up to 60 cents.

    I cannot help but question this project’s priority at a time when:

    • there is a significant infrastructure deficit in areas such as the health sector
    • we have nurses striking over their pay during the COVID-19 pandemic
    • we have over 100,000 New Zealanders stating they are homeless
    • over 100,000 people have presented a petition to Parliament asking for more funding so New Zealanders can get access to modern medicine from Pharmac, because the $200 million extra funding allocated over four years in this year’s National Budget is insufficient.


    Why not just get on with a multimodal harbour crossing instead?

    The government is rightly copping flak on the issue, with the National Party stating the whole fiasco – including the earlier clip-on version – has already cost $37 million, with $20 million spent on consultants alone over the past two financial years. The ACT Party’s David Seymour has stated the announcement breaks the government’s original 2018 statement that it would fully fund the cycle crossing only if the business case for it stacked up.

    Minister Wood believes the BCR would improve once a more detailed re-assessment was done. To me, that suggests fudging numbers to artificially make a project appear beneficial. If the numbers do improve substantially, it would be useful to review the methodology and apply it against projects that have not progressed due to an unfavourable BCR.

    All this announcement tells me is that if you have the means and create noise, this government will give you what you want when others without a voice are not getting what they need!

  • 28 Jul 2021 12:30 PM | Anonymous

    By Martina Moroney, Researcher

    A confluence of below average rainfall, low hydro lake storage levels and less wind has resulted in New Zealand using more coal for electricity generation in the quarter to March 2021 than in any other quarter since 2012. Hydro generation was down by 9%, and gas faced supply issues, experiencing an 18% decrease over the past year, resulting in a turn to coal as a back-up generation source. Compared to the quarter immediately preceding it, the amount of coal burned for electricity production more than doubled, to nearly 430,000 tonnes.

    At Huntly, our least renewable energy production source, these challenges have meant that their third Rankine unit was brought online during this period of increased coal-demand. And the share of renewable energy decreased to 79% from 82% compared to the same period last year. This forced reliance on coal demonstrates the difficult and expensive battle the government faces in closing the gap between our current capacity and its goal of 100% renewable energy by 2035.

    Addressing the issue will depend on increasing hydro energy storage capacity and the productive resilience of renewable sources. The Ministry of Business, Innovation and Employment’s NZ Battery project seeks to address the dry-year problem by funding the establishment of further hydro-storage to the tune of $30 million for the feasibility study alone, and billions more if construction is undertaken. Against a background of limited capital available for climate change adaptation and mitigation, the technically difficult task of building storage capacity to enable the achievement of those last few percentage points of renewable energy generation is going to be equally as economically challenging as it is technically difficult.

    Further, as we transition away from fossil fuels and increasingly seek to rely on renewable energy sources under the government’s decarbonisation agenda, the issue of limited supply is only likely to worsen and compound the existing challenges. What is now a dry-year problem, is likely to become a dry, cloudy, and/or calm issue as we also rely on wind and solar, which will in turn be worsened by rising electricity demand.

    In recognition of the size of the challenge presented by work to ensure the consistency of renewable energy provision, the Climate Change Commission itself discusses a more realistic assessment of the 100% decarbonisation goal and recommends that the government avoid prioritising a huge pay out for a few percentage points, and instead focus on decarbonising other sectors and address other challenges in the electricity generation space. 
  • 28 Jul 2021 12:29 PM | Anonymous

    The Ministry of Housing and Urban Development is consulting on a discussion document that will inform the Government Policy Statement on Housing and Urban Development (GPS-HUD).

    The GPS-HUD is intended to provide a shared vision and direction across housing and urban development, to guide and inform the actions of all those who contribute. It will seek to set out how the government and other parts of the housing and urban development system will work together to realise this vision. The GPS-HUD will seek to shape future:

    • government policy
    • investment
    • programmes of work.

    The first GPS-HUD will be published by 1 October 2021 and reviewed at least every three years.

    The consultation and publication timeline appears overly ambitious and rushed, and the government is consulting on a discussion document as opposed to a draft government policy statement. Submissions close on Friday, 30 July. We will make a submission.

  • 28 Jul 2021 12:25 PM | Anonymous

    The government released an exposure draft of the Natural and Built Environments Bill (the Bill) on 29 June. The resulting Natural and Built Environments Act will be one of three Acts to replace the Resource Management Act 1991 (the RMA), the others being the Strategic Planning Act and the Climate Change Adaptation Act.

    The Bill’s proposed purpose is broader than the RMA’s; it emphasises protecting and enhancing the natural environment (instead of just managing it) and considers future generations’ well-being.

    The exposure draft covers land-use and environmental regulation and includes draft clauses on: 

    • the Bill’s purpose and related provisions (Part 2)
    • a national planning framework (Part 3)
    • natural and built environments plans (Part 4).

    The exposure draft marks another step in replacing the RMA, though questions are being raised over how much of an improvement the Bill really is over the RMA, including concerns around further cost pressures on councils and erosion of local democracy.

    Timelines

    The Bill’s exposure draft is a partial one, and the Environment Committee will consider it between 29 June and 18 October. The closing date for public submissions is 4 August. The select committee will report its findings to Parliament. Changes will be made before the entire Bill is formally introduced to Parliament in the first quarter of 2022, followed by the usual select committee process.

    The government is looking to pass the Bill and the Spatial Planning Bill into law before the second half of 2023.

    We ran a survey from 7-18 July seeking member input – thank you to those who completed the survey. We will make a submission on the exposure draft.

    A national planning framework

    The Bill proposes a national planning framework which would have the effect of regulations, i.e. the government will be able to prepare, update or review the framework without going through the Parliamentary process. While it could serve as a key catalyst to making the resource management system agile, responsive and enabling the government to respond quickly, the framework could look very different depending on the government of the day.

    The exposure draft also puts forward a list of indicative principles under Part 2, such as taking a precautionary approach and having particular regard to cumulative effects; one of the criticisms of the RMA has been its inability to account for cumulative effects adequately. Also, this list is more like a shopping list than a key list of principles. MFE need to cut these down to a core few.

    Natural and built environments plans

    A further key proposal in the exposure draft is having planning committees in each region to prepare natural and built environments plans. The proposal follows the Resource Management Review Panel’s proposal to develop one natural and built environments plan per region. The government has indicated it is still considering the best approach to plan preparation and decision-making. It will look to the feedback received from the select committee inquiry. Natural and built environments plans will consolidate over 100 RMA policy statements and regional and district plans into about 14 plans, which the government considers vital to simplifying and improving the integration of the system.

    A concern of the reforms is that there will now be three Acts to navigate and interpret and that this may lead to further delays to planning and developing.


  • 28 Jul 2021 12:22 PM | Anonymous

    The government announced earlier this year it was making a “fresh start” on the Auckland Light Rail project. Transport Minister Hon Michael Wood said this was because the previous process had not involved Aucklanders enough. The government subsequently set up the Auckland Light Rail Group to develop a business case and make recommendations. The group consists of Waka Kotahi NZ Transport Agency, the Ministry of Transport, Auckland Council, Auckland Transport, and Kāinga Ora.

    Auckland’s light rail will run from the city centre to Māngere and is intended to provide the backbone for future light rail to North and North-west Auckland.

    The group is currently holding community focussed “listening” sessions until 31 August to understand what people want and build the project’s social licence.  This engagement period is about finding the solution that gives the best transport, access, urban development, economic and environmental outcomes for everyone.

    The Auckland Light Rail Group will include the feedback into its business case and it expects to provide its recommendations to the government in September. We encourage you to visit the light rail website and complete the online feedback form.

    The government will make a decision about the route, mode and delivery entity later this year.

    Later phases of consultation will address more detailed issues like the location of stops or stations and how disruption will be managed.

    Infrastructure New Zealand will be holding a member event in August on the Auckland Light Rail. More details to be released soon.

  • 28 Jul 2021 12:18 PM | Anonymous

    The Climate Change Commission’s final advice to the government on how New Zealand can reach its climate target was tabled in Parliament last month. The government now has until 31 December 2021 to set the first three emissions budgets out to 2035 and release its first all-of-government emissions reduction plan. If it chooses not to accept the commission’s advice, it must publish an alternative plan for addressing climate change in New Zealand and reaching its targets.

    Work on an emissions reduction plan has already begun. The plan will include a chapter on transport and the Ministry of Transport recently consulted on a consultation document Hīkina te Kohupara – Kia mauri ora ai te iwi - Transport Emissions: Pathways to Net Zero by 2050. The consultation document focussed on identifying opportunities to reduce emissions across three themes: changing the way we travel; improving passenger vehicles; and supporting a more efficient freight system. Submissions closed late last month and we made a submission primarily focussed on the need for integration between urban, transport and land-use planning, and broadening the first theme to ‘changing why and the way we travel’. Full public consultation on initiatives to reduce transport emissions will occur in the second half of this year and then refined further for inclusion in the transport chapter of the emissions reduction plan.

    The Climate Change Commission will begin monitoring how the government’s emissions reduction plan is being implemented from 2022, including how well New Zealand is tracking to meet the 2050 net zero target.

  • 28 Jul 2021 12:15 PM | Anonymous

    The process of councils consulting on and adopting their long-term plans has concluded. Long-term plans are councils’ 10-year budgets which are renewed every three years. The themes of emissions and climate change, environment, infrastructure, COVID-19 impacts and recovery have been consistent across the plans, with rates rises remaining a contentious issue for ratepayers. Some commentators have expressed their amazement as to how easily councils can increase rates – often significantly – with negligible to no pushback from those who pay them.

    Alongside long-term plans, regional councils and Auckland Transport have also adopted their respective regional land transport plans (RLTPs). RLTPs lay out a region’s land transport objectives, policies, priorities and measures for at least 10 years. They include capital as well as operational spending and identify a range of projects, but as the saying goes, the devil is in the detail. Some much bigger and potentially contentious projects, even projects without confirmed funding, can be timed for later years and then again pushed out in the following iteration resulting in a vicious cycle.

    In the case of Auckland, a decision to introduce congestion charging will have significant implications for the RLTP; not only will there be a need for infrastructure to establish and run a pricing scheme, but increased investment will also be needed to cater for the increased mode shift that will result from congestion charging. The newly adopted RLTP does not include the cost of implementing congestion pricing.

    Meanwhile, Parliament’s Transport and Infrastructure Committee is undertaking an inquiry into congestion pricing in Auckland at the request of Transport Minister Hon Michael Wood. We made a high-level submission in May. The select committee is expected to report back later this year.

  • 28 Jul 2021 12:12 PM | Anonymous

    The government has made a number of recent announcements regarding its proposal for three waters reform.

    The government is proposing to create four large publicly-owned water entities to take on the role of public water providers in New Zealand. A $2.5 billion package has also been announced for councils who participate in the reform programme – $500 million will be spent on supporting councils through the transition process and to ensure the reform’s financial impacts will be managed, and $2 billion will be awarded to councils to invest in the future for local government, urban development, and their communities’ wellbeing.

    Details of how the package will be divided across councils or how exactly growth-related infrastructure would be funded is not yet clear. It is too early to speculate on how successful the reform programme will be given the response from several councils continues to be lukewarm. The possibility of the reform being mandated by the government is a possibility.

    Infrastructure New Zealand, in conjunction with co-hosts Chapman Tripp, held a lively question and answer session with Hon Nanaia Mahuta last Thursday (22 July). The event was well-attended, and the Minister used the opportunity to reflect on the progress and implications of the Three Waters Reform Programme.

  • 16 Jun 2021 5:08 PM | Anonymous

    By Claire Edmondson, Chief Advisor

    The government faces a critical test in infrastructure in the next five years that will burn as much financial capital and as much political goodwill as it can muster.

    In the last few weeks, with the Climate Commission’s final advice to the government sitting in the Prime Minister’s in-tray and Te Waihanga’s draft 30-year strategy about to arrive in Grant Robertson’s inbox, it has become apparent the government is facing:

    • A shortfall in capital to address the 30-year demands of New Zealand under climate change and Three Waters
    • Pressure in the cities and regional centres where Three Waters makes sense in policy, but not necessarily politically
    • Medium-term demands in public and private transport, with New Zealand Upgrade jumping nearly 30% in total capital in just 18 months.

    The issue of climate change has very quickly taken centre stage. The extensive work of the Climate Change Commission has generated much debate and discussion. Infrastructure decisions will have a significant impact on climate change adaptation, mitigation and resilience. While the government has used the COVID-19 pandemic to justify canning some critical projects from the New Zealand Upgrade Programme, we are encouraged to see the Infrastructure Commission giving climate change serious consideration.

    The Commission’s recent consultation document on a national infrastructure strategy has brought together several issues, such as climate change, that have previously been discussed either in isolation or in parallel to one another. The consultation document steers clear of taking a stand on some of the more gnarly matters. Nonetheless, to see issues like value capture and a population strategy being discussed in the same document is encouraging. It demonstrates an attempt at a holistic approach to addressing our infrastructure woes.

    More immediately, 2021-2022 has shaped up to be a busy year, fast. We expect to see an exposure draft of the Natural and Built Environment Bill to be released in the third quarter for public submission potentially, work on the Strategic Planning and Climate Change Adaptation Bills will be initiated in some form, the Three Waters Review is gaining significant momentum, and there will be an opportunity to get involved in and influence the review into the future of local government. 

  • 16 Jun 2021 5:05 PM | Anonymous

    By Owen Gill, Chief Executive 

    I often wonder what it must be like to work in Minister Grant Robertson's office. In the last few weeks, I suspect it has been like being a circus juggler. The Finance and Infrastructure Minister has more balls in the air than perhaps any minister since Bill Birch pushed through Think Big in the early 1980s. As Minister Robertson notches up his fourth Budget (2018 was his first – it seems a long time ago now), he has shepherded into life:
    • Three Waters, alongside Minister Nanaia Mahuta
    • Te Waihanga, with assistance from then-ministers Shane Jones and Phil Twyford
    • New Zealand Upgrade Programme
    • A proposed resurgence of rail and rolling stock-making in New Zealand, with assistance from Transport Minister Michael Wood
    • A housing acceleration fund, with assistance from Housing Minister Megan Woods
    • A renewed assessment of light rail for Auckland proposed to report before Christmas.

    On top of all that, he threw a few curveballs in Budget 2021 – $306 million to rebuild Scott Base, and a $300 million fund to encourage the uptake of low-emissions vehicles. Some saw Scott Base coming, but the low-emissions vehicles piece was a surprise. Three Waters received an additional $296 million, to take the total available to just $1.1 billion.

    New Zealand Infrastructure Commission: Te Waihanga will present Minister Robertson with its proposed 30-year strategy for New Zealand this September and is currently engaging on a consultation document. The government will table the final strategy to Parliament before the end of March 2022. Our pick is that the September version of the strategy will be 99% of the story – Te Waihanga and Minister Robertson will not want any surprises next March.

    Expect to see Te Waihanga make a strong play for the idea of lead infrastructure, which is identifying and prioritising the big builds that produce significant results. New Zealand fast fibre – which has been a success in anyone's books and an enormous credit to Crown Infrastructure Partners and its contractors – is the class-act in this regard.

    The big question for Minister Robertson – who is proving to be remarkably adept at juggling – is what next? With the assistance of a handful of others, he has catalysed a lot of action in a short time. He must now be thinking about his second act and what he can do in the remainder of this term. As Te Waihanga opens consultation on its strategy, here's our summary of Minister Robertson's medium-term choices:

    Private capital or not?

    PPPs have proved to be a vexed thing for this government. One of the Minister's tasks is to figure out how the government can accept more private capital. Budget 2021 shows the government's balance sheet will be stretched right through to 2028 or so, which means the minister has little room to raise capital via the government's own means.

    Finessing delivery

    In the 1990s, then UK Prime Minister Tony Blair had a group of senior officials who worked on what was known as Deliverology – the art of taking an approved piece of policy and getting action on the ground. Indeed, Sir Michael Barber, Blair's deliverology leader, went on to make an entire school of thought out of the subject. Delivery is one of Minister Robertson's most problematic areas. The government will raise its capital investment to near-record levels in the following year, but – as the national budget shows – the government is increasingly caught between rising project costs, skills shortages, and a lack of prioritisation.

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