Infrastructure new Zealand MEDIA RELEASES

Our media releases keep you up to date with the latest infrastructure developments in New Zealand.

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  • 17 Aug 2017 9:36 AM | Anonymous

    MEDIA RELEASE

    "There is now broad agreement across the infrastructure industry that consolidating public procurement expertise in an arm’s-length specialist agency is critical to meeting New Zealand’s investment programme," says Stephen Selwood, CEO of Infrastructure NZ.   

    "We’ve seen a definite shift across industry over the past 12 months. Now, four out of five of the people most heavily involved in designing, building and providing infrastructure services to government and councils believe a specialist procurement agency would be “effective” or “highly effective” in lifting performance.

    "A separate poll conducted at the release of the survey findings found a staggering 96 per cent believed we cannot continue to procure infrastructure the way we are.

    "We have enormous resource challenges in front of us. If we are to successfully deliver the $125 billion infrastructure programme over the next 10 years and make the most of new services, the way we plan, fund, procure, deliver and operate these services must be as good as it can be.

    "The industry survey identifies major opportunities for improvement across the sector. Many agencies are excessively focused on price over long term value. Projects are poorly phased to the market in boom bust cycles. A limited range of procurement options are being used that fail to draw on the experience and capability of the industry. Contract law is being rewritten on almost every project and risk is being unfairly transferred to contractors resulting in poor outcomes and unnecessarily high costs to the client.

    "There are examples of good practice across the country.

    "NZTA came out on top as the country’s top procurer of infrastructure services for the third year in succession. Its work on bodies like the Road Efficiency Group and SCIRT has delivered efficiencies through scale, partnership, new delivery models and an advanced understanding of risk.

    "NZTA is held in high regard by the industry because its staff are experts at what they do. They understand how best to allocate risk. They focus on value rather than cost and match the procurement method with the job to be done. They also proactively engage suppliers to ensure the forward work programme is clearly signalled in advance to maintain a healthy, competitive market that has capacity to deliver.

    "But with 20 District Health Boards, 78 councils, transport, education, housing and other public institutions all procuring major capital assets independently, skills are too widely distributed and processes too fragmented.

    "New Zealand does not have the capacity to harness best practice and transfer it efficiently from one project to the next.

    "Every country we compare ourselves to has responded to this challenge with a specialised collaborative procurement body.

    "Whether it’s Partnerships BC in Canada, Infrastructure NSW in Australia or the Scottish Futures Trust, other jurisdictions have realised huge benefits by consolidating expertise in a fit-for-purpose entity which assists public bodies with project procurement.

    "Public bodies responsible for delivering services remain in charge. The difference is that they have experts in project procurement helping them along the way.

    "In its first year of operation the Scottish Futures Trust delivered £111 million of added value from just a £4.3 million budget. The UK has recently achieved a 15 per cent saving on infrastructure spending by focusing on best practice procurement and collaborative working.

    "If we could achieve a much more modest 5-10 per cent improvement in delivering New Zealand’s $125 billion capital intentions plan, we could secure $6-12 billion of infrastructure value above and beyond what we’re planning.

    "That’s five or six Waterview Connections or enough to address the entire backlog of water supply and wastewater investment nationwide.

    "Benefits come from standardising contracts and processes, picking the right model for the job, allocating risk effectively between client and suppliers, sequencing projects to align initiatives and optimise capacity, packaging projects to achieve economies of scale, and ensuring the whole asset process from planning to delivery and operation is performed efficiently.

    "Between the public and private sectors we have the skills and the capability. Experts in the Ministry of Business, Innovation and Employment, Treasury, NZTA and other agencies are funded already. Bringing these experts together with procurement and delivery specialists from the private sector into a dedicated and highly focused centre of expertise would enable New Zealand to emulate the results we see in other countries.

    "It’s a huge opportunity and one which the incoming government should embrace immediately," Selwood says.

    ENDS

    For further information and comment contact Stephen Selwood on 021 791 209
  • 10 Aug 2017 4:46 PM | Anonymous

    MEDIA RELEASE

    EMA, Infrastructure New Zealand, Property Council New Zealand and the Environmental Defence Society’s call for a cohesive strategy to drive reform of the country’s resource management and planning systems seems to have gained momentum.

    The coalition of these organisations says their jointly funded research and first-hand experience of the current system clearly demonstrates it is failing its environmental goals and New Zealand’s prosperity is being held back. Change is now urgent.

    Views expressed at EDS’s Tipping Points conference reflects this. Today, the Green Party called for a formal review of New Zealand’s environmental management and planning laws, if it was in Government.

    "The evidence of our failure is clear. Escalating housing unaffordability, groaning infrastructure and a slow but significant deterioration in the quality of monitored streams, rivers and lakes are just some examples," says Gary Taylor, CEO, Environmental Defence Society.

    Collectively the coalition is calling on the Government, whatever its make-up post-23 September, to be bold, visionary and initiate a broad review covering of the system as a whole.

    "A Royal Commission is one way to do that. As a coalition, we are open to other ways to provide a broad and independent review that can cut through political sensitivities, accommodate the diverse perspectives of multiple stakeholders and provide binding outcomes," says Kim Campbell, CEO, EMA

    ""The problems are wider than the RMA, reaching into New Zealand’s system of local government, the role, form and resourcing of councils and how infrastructure is planned and funded," says Stephen Selwood, Chief Executive of Infrastructure New Zealand

    Having consulted extensively, the coalition recognises that whilst many New Zealanders agree there is a need for change, they differ on how to achieve it.

    "What is needed, in our view, is a first principles review of our central and local government planning, funding and environmental resource management system. This review must also bring together and draw upon the experience and insight of business, environmental, community and political voices," says Connal Townsend, Chief Executive Property Council New Zealand.

    ENDS

    For further information and comment contact Stephen Selwood on 021 791 209



  • 06 Aug 2017 3:45 PM | Anonymous

    MEDIA RELEASE

    "Labour's commitment to solving Auckland's long term transport funding challenge is a big step forward," says Stephen Selwood CEO of Infrastructure New Zealand.

    "The region is facing an annual deficit of around half a billion dollars to fund the agreed programme. Labour will introduce a 10 cents per litre regional fuel tax, which will levy around $160 million per annum, and deploy targeted rates to fund the remainder. 

    "Carefully applied targeted rates in particular could be transformational in Auckland. Over the past few years we've seen major public transport investments materialise as property value increases, but had limited scope to capture that value and use it to fund the programme.

    "A key concern for business has for many years been the lack of certainty for transport investment in Auckland. The projects are there on paper, but without funding certainty it is difficult for everyone from property investors to transport suppliers to gear up for opportunities ahead.

    "As long as funding is provided on a case by case basis, the investment programme is less a forward work plan for industry than a political football which increases investment risk. 

    "Risks are priced into projects and we all pay more for roads, rail, homes and buildings. 

    "We hope that the vital East-West Link does not become a case study on this issue. 

    "The project has a very strong business case, including a benefit cost ratio approaching 2.0, but with its benefits accruing to freight and industry it has struggled to receive popular support. 

    "Agreeing a forward work plan and providing a stable funding regime to deliver that programme when required is critical to meeting Auckland's growth needs. 

    "If Labour's approach provides this certainty, it will be warmly received by everyone," Selwood says.

    ENDS

    For further information and comment contact Stephen Selwood on 021 791 209


  • 04 Aug 2017 11:28 AM | Anonymous

    MEDIA RELEASE

    "The Government’s $2.6 billion commitment to Auckland’s overwhelmed transport system is a well-balanced package of investment in road, rail and bus. Combined with consents for the East-West strategic link, expected later this year, this will deliver benefits inside and outside the boundaries of our largest city," says the CEO of Infrastructure New Zealand, Stephen Selwood.

    A billion dollars has been committed to developing the Mill Rd corridor, which will duplicate a large portion of State Highway 1, freeing up New Zealand’s most important freight corridor and providing for new housing development.

    A further $100 million has been allocated to construction of a third rail line through the busiest part of the rail network. Recent analysis has shown this will deliver a strong economic benefit by improving freight access to and from port facilities and reducing interruption to commuter services.

    "Both these projects are about reducing the choking effect Auckland is having on national transport movements and will deliver wider supply chain benefits to the national economy.

    "The remaining and greater share of the investment is to be committed to rapid transit in the west, east and south via a new busway to growth areas in the north-west, an injection into the long delayed AMETI eastern busway and electrification of rail from Papakura to Pukekohe.

    "This is a comprehensive response to NZIER’s finding that congestion is costing all of New Zealand around $2 billion every year.

    "One project not featured in today’s announcement is the critical East-West Link. We’ve all experienced the positive benefit of the Waterview Connection, but the only new strategic capacity we’re assuming on the isthmus over the next 30 years is the East-West Link.

    "This vital corridor will deliver almost $2 of benefit for every dollar invested by opening up New Zealand’s most important industrial zone.

    "These benefits do not even include the resilience of connecting State Highway 1 and State Highway 20, the value of retaining long term capability to connect further east or the environmental benefits of fixing up a former rubbish dump on the edge of the Manukau harbour.

    "It is vital that resource consents for this project are granted. Once in place, the East-West Link and other projects announced today will have a lasting positive impact on movements to, from, through and within our largest city," Selwood says.

    ENDS

    For further information and comment contact Stephen Selwood on 021 791 209
  • 02 Aug 2017 4:00 PM | Anonymous


    MEDIA RELEASE

    Productivity in Auckland could be boosted by at least $1.3 billion per annum if use of the roading network could be optimised.

    An NZIER report commissioned by the EMA, Auckland International Airport Ltd, Infrastructure NZ, Ports of Auckland Ltd and the National Road Carriers Association took a detailed look at the social and economic costs of congestion to Auckland’s lifestyle and economy.

    The report found that if Auckland’s road network could operate at its designed capacity during week days it would benefit the Auckland economy by nearly $3.5 million per day. Sick days cost the New Zealand economy $1.5 billion per annum - fixing Auckland’s congestion illness would be like finding a cure for the common cold and immunising the entire country against the flu.

    The funding organisations are united in the view that there is a pressing case for decongestion measures to be introduced in Auckland now, not in the 6-10 year time frame currently being contemplated by both central and local government.

    All agreed the size of the productivity prize and liveability gains for Auckland and the scale of the problem demanded action.

    NZIER took a sophisticated model that can break down the impact per business sector and applied Auckland Transport’s latest 2016 traffic flow information to the problem that is increasingly strangling Auckland and its economy.

    “What business is telling us and what we’re seeing in the numbers is that congestion has worsened exponentially in the past three to five years,” says Kim Campbell, CEO, EMA.

    “Our EMA members who took part in focus groups put the productivity loss in the 20-30% bracket so what the above figures show is the average productivity loss across the entire population of Auckland.”

    Some of the highlighted costs were:

    •          Hiring 20% more staff to carry out the same volume of work

    •          Trucking firms making fewer runs over fixed routes over longer time frames to deliver less volume of product with a near 30% productivity loss

    •          Service firms establishing depots around the city, at significant costs, to meet service promises i.e. one-hour replacements or deliveries

    •          Trucking firms refusing to deliver to some parts of the city described as black holes for their vehicles

    According to Infrastructure NZ CEO Stephen Selwood, the actual productivity gains may be even higher.

    “We know this estimate is conservative. The model only measures congestion on five of seven days and of course, business is a seven-day a week operation. It also only values leisure trips at less than half the value of work time, a value I’m sure many Aucklanders would agree undershoots the cost.

    “I’m also very concerned that the Auckland Transport Alignment Plan (ATAP) only sets its sights on not making congestion worse in the next 30 years and its 10-year time-frame for introducing congestion charging is just too far away.”

    Ports of Auckland CEO Tony Gibson stressed the report showed a need for a multifaceted approach to reducing congestion to boost productivity.

    “Congestion is making life worse for all of us, so we need to act now. There is no one answer to the problem, we need to attack congestion with everything we’ve got: investment in road, rail, public transport, technology, demand management and so on. We also need to be much smarter and think further ahead in how we plan transport for the future.”

    National Road Carriers Association CEO David Aitken also highlighted lifestyle issues caused by congestion as a fundamental difficulty for recruiting in the freight sector.

    “The Road Freight sector has seen increasing congestion for some years.  The fact that travel times have increased 47% in just three years and is only going to get worse if we don’t do something is a clear sign we need to be thinking about solutions and taking actions now.  Productivity has declined in an already tight market.

    “Five years ago a truck driver could make a living on about 50 hours per week, but now with congestion that’s up to 70 hours a week and people do actually want to spend time with family rather than sitting in Auckland traffic.  At a time when it’s hard to get drivers, we are losing them as they don’t want to be sitting in congestion all day.” 

    While all of the CEOs acknowledge that better progress is being made than has been the case in the past, authorities need to demonstrate a much greater sense of urgency.

    That Auckland experiences worse congestion than cities up to five times its size is an indictment on poor planning and inadequacy of investment which goes back decades. Neither Auckland nor New Zealand can afford to let the problem get any worse. We must act now to realize the social and economic opportunities that decongesting Auckland presents.

    ENDS

    For further information and comment contact Stephen Selwood on 021 791 209
  • 24 Jul 2017 9:49 AM | Anonymous

    MEDIA RELEASE

    "The Government's announcement today that it will set up Crown Infrastructure Partnerships to seed fund private investment in road and water infrastructure provides a means to dramatically increase housing supply," says Infrastructure New Zealand Chief Executive, Stephen Selwood.

    "Timely delivery of trunk infrastructure is a major constraint on developers' ability to deliver housing across New Zealand," Selwood says.

    "Under this model, Crown Infrastructure Partners (CIP) will facilitate partnerships between the Government and local councils to enable private investment in roads and water treatment plants to unlock land for development.

    "Traditionally councils have been unable to deliver infrastructure soon enough because of other demands on funding and political constraints on their ability to increase property rates and fund debt. 

    "Under this model, the debt will be covered by private investors. 

    "The $600 million seed fund announced today will enable CIP to cover initial demand risk until the developments are in place and new ratepayers are able to pay for the infrastructure. As the Crown is repaid, it will then be able to recycle that capital into new developments.

    "A key advantage of this approach is that the cost of the infrastructure is not included in the up front cost of a home. This will reduce house prices, meaning smaller mortgages. 

    "Instead, home owners will pay for the infrastructure services over time through targeted rates on their properties.

    "The Crown partnership agency is similar to the successful Scottish Futures Trust model in Scotland and the Municipal Utility District approach in the United States. Both countries use these models to deliver better outcomes sooner by leveraging private capital and expertise.

    "Re-purposing Crown Fibre Holdings into Crown Infrastructure Partnerships in New Zealand is a very smart move.

    "Crown Fibre Holdings has a track record of successful partnerships with the private sector and this approach has enabled a step change in the roll out of high speed broadband.

    "Successful evolution of that model into integrated development of infrastructure and housing at scale could transform housing supply and make a significant contribution to delivering affordable homes sooner rather than later." Selwood says.

    ENDS

    For further information and comment contact Stephen Selwood on 021 791 209
  • 19 Jul 2017 1:44 PM | Anonymous

    MEDIA RELEASE

    "It is positive to see the Local Government Commission has put forward a sound proposal for the Wairarapa, but the ongoing piecemeal approach to reform is not tackling the wider national issue of whether councils can plan, fund and meet long-term local needs," says Stephen Selwood Chief Executive of Infrastructure New Zealand.

    The Commission has proposed that the existing Masterton, Carterton and South Wairarapa district councils be brought together into a single Wairarapa District Council. The new entity will have a single mayor, elected at large, and 12 councillors elected across seven wards.

    Wairarapa will have the choice of either accepting or rejecting the Commission’s proposal, likely in a poll next year.

    "The Commission’s proposal will deliver a more capable and better resourced council for the area. The larger entity will have improved capacity for strategic planning, a bigger balance sheet to support investment prioritisation and will be able to speak with a louder, united voice on behalf of all of Wairarapa.

    "We agree with the Commission that these benefits can be realised whilst maintaining local representation and identity through community boards.

    "In our view, community boards should be delegated with appropriate powers and funding at the local level to support community needs.

    "This proposal is definitely a step forward for Wairarapa.

    "But it is still not clear whether the new 40,000 resident entity will be sufficient to meet long term challenges. Nor is it clear what the solution is for New Zealand’s 64 other territorial authorities, most of whom find themselves facing exactly the same issues as the Wairarapa.

    "Population aging across virtually all of New Zealand is constraining the ability of councils to increase rates at the same time as billions of dollars of infrastructure comes up for renewal. Together with increased expectations for environmental performance, greater health and safety requirements, stronger heritage protections and other directives from central government, growth councils are responding by underfunding new development and impeding housing supply.

    "The whole system by which councils are funded, the responsibilities they have and the decisions they are required to make is unsustainable and needs to be revised.

    "Meeting long term challenges requires governance structures which allow effective planning supported by resources and delivery capability. This is as true for councils in the South Island as it is in the Wairarapa and rest of the North Island.

    "What is required is a first principles review of local government’s role in New Zealand, how councils are resourced and what the optimum structures are for meeting 21st century needs," Selwood says.

    ENDS

    For further information and comment contact Stephen Selwood on 021 791 209


  • 11 Jul 2017 2:40 PM | Anonymous

    MEDIA RELEASE

    "The Government’s $1 billion financing of much needed growth infrastructure is very welcome, but infrastructure requirements nationwide are now in the tens of billions and better planning, funding and delivery systems are required to meet the challenge," says Infrastructure New Zealand's Chief Executive, Stephen Selwood.

    "The Housing Infrastructure Fund (HIF) is a helpful component of the Government’s housing response. The allocation of government debt to New Zealand’s fastest growing regions will improve the supply of serviced land where it is most needed.

    "Today's announcement combined with recent budget commitments to infrastructure investment is positive but a lot more is required.

    "Analysis by the Office of the Auditor General consistently shows that councils across New Zealand are struggling to maintain and renew existing assets, let alone provide for growth.

    "In Auckland there is a $400 to $700 million transport funding gap that must be bridged, and a 7000 home construction deficit accumulating every year. Against that, the 10,500 homes announced this morning will add just 1000 homes a year.

    "Addressing infrastructure challenges which sit at the heart of New Zealand’s housing supply issues demands more than one-off loans.

    "The private sector is going to need to step up and for this to happen there needs to be certainty that public infrastructure will be funded and delivered in a timely way.

    "A clear and committed pipeline of projects will give infrastructure and home construction companies the confidence to invest in resources needed.

    "Government plans for Urban Development Agencies must also be accelerated. This could unlock opportunities for urban development at scale where development is master planned to integrate fully with transport and infrastructure services.

    "New transport funding tools like road tolls are needed sooner rather than later. 

    "We desperately need to improve governance and streamline our planning and decision-making processes. The current approach to planning, funding and delivery of housing and infrastructure is not working.

    "While the HIF and budget allocations help in the short term, a longer term response which addresses the failed planning, governance and funding system in New Zealand is urgently needed," Selwood says.


    ENDS

    For further information and comment contact Stephen Selwood on 021 791 209

  • 08 Jun 2017 3:30 PM | Anonymous

    MEDIA RELEASE

    "New Zealand can make best use of the Government's $32 billion infrastructure commitment over the next four years by streamlining plans and institutions, including specialist procurement, environment and water regulation agencies and a top down national spatial planning framework," says Stephen Selwood CEO of Infrastructure New Zealand.   

    The findings are set out in an Infrastructure NZ report released today which follows a delegation to Scotland in March this year.

    "Over the last two decades, the Scottish have completely transformed infrastructure planning, funding and delivery. 

    "They've established innovative and effective institutions at the national level which support and guide central and local government infrastructure delivery. 

    "The UK National Infrastructure Commission, Scottish Futures Trust, Scottish Environmental Protection Agency and Scottish Water are all bodies which could be employed here to rationalise and improve infrastructure planning, funding and delivery.

    "Initiatives based on Scotland’s National Planning Framework and hub, City Deal, tax increment financing and Growth Accelerator programmes would each help align central and local decision making and enhance collaboration with the private sector.

    "The Scottish system is simpler, more transparent and reduces conflicts of interest across the public sector. 

    "The extensive infrastructure investment that New Zealand is planning over the coming years will need to be well-managed if we are to tackle the growth challenge. The best elements of Scotland's decision making system are worth replicating," Selwood says.  

     The key findings for New Zealand set out in the report are:

    • We could improve public understanding of infrastructure challenges and better support national investment by establishing an empowered national body charged with identifying infrastructure needs.
    • Scotland's plan-led approach gives greater certainty and better balances strategic priorities with local interests than New Zealand's effects-based RMA system.
    • We could save money and improve infrastructure performance by establishing an independent centre of expertise for project procurement, integration and public private partnerships.
    • A specialist central agency could work in partnership with local government to consolidate procurement and provide immediate and substantial benefits for water and tourism infrastructure.
    • Public and environmental health could both be improved across New Zealand by consolidating wastewater and water supply delivery at a regional level.
    • Auckland’s Watercare could be sold to fund Auckland growth with minimal impact on the cost of services and improved strategic capability.
    • Dedicated independent regulators are more informed and take an outcomes-focused strategic view of the sector which results in better services.
    • Local government can be incentivised to align investment priorities with national outcomes by using the UK City Deal approach.

     A full copy of the report can be accessed here.

    ENDS

    For further information and comment contact Stephen Selwood on 021 791 209


  • 07 Jun 2017 3:30 PM | Anonymous

    MEDIA RELEASE

    "Infrastructure New Zealand welcomes today’s announcement that the Government and Auckland Council will investigate road pricing, but is concerned that the Terms of Reference over-emphasise demand management and do not recognise the constraints current funding is placing on both near and longer term investment," says Stephen Selwood CEO of Infrastructure NZ.

    "Mobility is central to social and economic well-being. Imposing prices at a level which makes travel prohibitive should not be the goal.

    "We need to find an appropriate balance between raising the revenue necessary for investment whilst also managing demand more effectively across the transport system.

    "Prices should be set at a level that encourages people to think about travelling at a different time, in a different way or in another mode rather than at a level which is not affordable and where mobility is suppressed.

    "Organisations including business and community groups, the AA and public transport associations are all integral to winning support for change.

    "We strongly recommend that the governing parties undertake a very proactive engagement process to ensure support.

    "While a fair and robust pricing system is developed for New Zealand over the medium term, a near-term solution to Auckland’s funding challenge must be identified.

    "The easiest way to implement pricing in the short term would be tolls on the motorway. Using existing technology and priced dynamically, motorway tolls would balance demand and provide a stepping stone to full road pricing," Selwood says.


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