By Michelle McCormick, Infrastructure New Zealand Policy Director
New Zealand infrastructure suffers from long delays between project planning and delivery. For the first time, a new report, commissioned by INZ, has highlighted the true impact of such delays – while examining potential solutions to speed up the process.
It is estimated that it generally takes 15 years to complete an infrastructure project in this country – with inefficiencies in decision-making leading to issues such as overuse, congestion and dampened down economic growth.
The report, Great decisions are timely; Benefits from more efficient infrastructure investment decision-making, assesses the economic impact of this. It also lays out other negative outcomes, including forgone economic opportunities and household wellbeing, as well as increased costs to service providers.
Delays during the infrastructure decision making (IDM) process have been a major reason for prolonged periods of excess demand for different infrastructure. For the first time this report enables us to see a breakdown of the actual implications of delays.
The success of a project being completed on time is largely dependent on how well we manage its inception. The efficiency of the IDM process is reflected in the timeliness of the planning process.
The Infrastructure Strategy by Te Waihanga / The New Zealand Infrastructure Commission suggests that our current planning system slows down essential infrastructure projects. On top of that, many New Zealand projects are being further delayed by policy decisions and funding constraints.
With planning timeframes in New Zealand taking much longer than, for example, in Australia, the report suggests there is potential to cut the IDM planning process from its current 15 years to just eight years.
The report, which was undertaken by Principal Economics, provides a case study of the Waikato Expressway, which took 40 years from conception to completion – and concludes that the decision-making process could have been 20 years shorter. Applying this time-saving model to that project indicated the New Zealand economy would have secured $2.3 billion of benefits from improving the IDM process.
The report also highlights the high costs for New Zealand developers of gaining consents and the increasing length of time that is taking to achieve.
Delays are caused by a range of uncertainties at the planning phase. These include demographic and population, macroeconomic, technological, a lack of funding, labour and material shortages, climate change and political uncertainties.
However, these are all symptoms of a broader system for planning, funding and delivering infrastructure that is failing to build critical infrastructure in the right places at the right time to meet the needs of New Zealanders.
One of our goals in commissioning the report was to find solutions. The report advocates for further flexibility in the planning process and suggests that to ensure the best use of time, the extent of the costs of delays should be worked out as the decision-making process progresses.
It also calls for use of new adaptive decision-making tools which can be developed using findings contained in the report. It is considered that the risks and costs of fast-tracking infrastructure projects would be assessed more easily using these tools.
The report also suggests successful implementation of resource management reform will be key to ensuring more cohesive and effective spatial planning approaches that streamline planning and resource management processes. It will also be important that local government reforms result in clearer roles and responsibilities for local authorities, with tools and levers commensurate with their functions.
It calls for greater use of alternative funding and financing tools that can increase our capacity to deliver infrastructure while leveraging private sector resources and expertise.
The report echoes many of the recommendations already contained in Te Waihanga / The New Zealand Infrastructure Commission’s Strategy. This underlines how important it is for the Government to adopt those recommendations, as all-important first steps to reduce the time it takes for us to deliver the infrastructure we need to support a thriving New Zealand. Read Great decisions are timely; Benefits from more efficient infrastructure investment decision-making in full here.