Infrastructure new Zealand News & MEDIA RELEASES

Keep up to date with the latest infrastructure developments in New Zealand.

  • 19 Aug 2016 7:02 PM | Anonymous

    In its blue sky review of the New Zealand planning system, the Productivity Commission has correctly found that the planning system is failing, but their recommendations for change will not succeed without governance and funding reform, says Stephen Selwood chief executive of the New Zealand Council for Infrastructure Development.

    The Commission observes that the principal planning laws the Resource Management Act 1991, the Local Government Act 2002 and the Land Transport Management Act 2005 are now complex to the point of incoherence and that New Zealands urban planning system overall lacks clarity, focus, responsiveness and is not achieving its objectives.

    Their identification of the primary purpose of urban development planning enabling development and change; providing development capacity; and ensuring people and goods can move around is especially welcome.

    The Commissions frank assessment that the urban planning system is failing is clearly evidenced by house prices at unacceptably high levels and chronic congestion in our largest city. But unbalanced regional development and poor environmental outcomes across New Zealand demonstrate that the problems are much broader.

    The reality is that we have not managed development, growth or cumulative effects on the environment well in New Zealand for a very long time.

    Looking to the future, the Commissions recommendations for spatial planning and pricing on land and infrastructure will be essential to successfully reforming the planning system, but it is difficult to see how these changes can take place in the absence of an honest discussion around funding and responsibility.

    Fragmented governance prevents effective spatial planning. How can development be allocated if individual councils responsible for funding infrastructure do not have the resources or desire to accommodate growth?

    How can an individual council be forced to provide for growth and reprioritise existing investments in accordance with a wider vision?

    Who benefits and who should pay when a council on one side of town provides for growth, while another on the opposite side shirks its responsibility on the basis of residential opposition or refuses to fund the required infrastructure?

    Spatial planning cannot take place on a sub-regional scale. It cannot be effective unless the plan can be supported by infrastructure. And no regional spatial plan will succeed unless the biggest infrastructure and service provider central government participates in plan development and explicitly commits to funding services in agreement with the plan.

    The planning, governance and funding of urban growth and regional development cannot be reformed in isolation.

    The Commission has comprehensively demonstrated that planning is not functioning effectively in New Zealand. But, in addition to fixing the planning laws, a much more fundamental review of local and central government responsibilities, structures and funding will be needed to address the core problems that have been identified, Selwood says.

    For further comment, please contact Stephen on 021 791 209.

    ENDS


  • 19 Aug 2016 1:02 PM | Anonymous

    The 15 year regeneration of the defence estate announced today provides an example of effective investment management that other public agencies should replicate, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

    The Defence Estate Regeneration Plan identifies a $1.7 billion capital works programme over the next 15 years, including detailed project pipeline to 2022.

    Following up on the strategic White Paper released earlier this year, the regeneration plan provides estimates of capital allocations by area, giving clarity to local as well as national contractors about what is required in the short-medium term.

    Acknowledging weak asset management in the past, Defence will adopt an integrated approach to renewing assets across its 81,000 hectare estate, including outsourcing and alternate delivery models on a project-by-project basis.

    This is textbook asset management and must be commended.

    While Defence may be one of our more capable investment managers, as revealed through Treasurys Investor Confidence Rating Scheme, it has also clearly benefitted from strong Government funding commitment.

    Not every Government agency is in a position to impartially review its assets, identify weaknesses and book a 15 year regeneration programme.

    Instead, we often see major asset owners reliant on annual funding commitments which rise and fall with the economy and having to compete other public agencies within budget constraints.

    In such an environment, it is virtually impossible to manage assets efficiently or signal future capacity requirements to key suppliers. New projects are cut according to budget provisions, undermining whole-of-life project evaluation, and maintenance is deferred until such time as funding is available, even if that means a higher final cost to the taxpayer.

    The Defence regeneration plan demonstrates what public agencies with future funding confidence and a long term planning horizon can achieve.

    It is vitally important that this confidence is not shaken by unexpected funding revisions in the future and that other sectors are given similar operational support to honestly review their assets, develop and publish a long term asset management plan and deliver on that plan over the long term, Selwood says.

    A copy of the Defence regeneration plan can be found here.

    For further comment, please contact Stephen Selwood on 021- 791 209.


  • 10 Aug 2016 1:00 PM | Anonymous

    TRC has now issued a Notice of Intent to procure via GETS advising of the release date of an Invitation for Expressions of Interest (EOI) for phase one of the development programme (10 August). The notice also provides details of a subsequent market briefing following the EOI release.

    You can find more detail and subscribe to the notice at:

    https://www.gets.govt.nz/TRDC/ExternalTenderDetails.htm?id=17735350

    For more information please contact:

    Jeff Valenzuela
    JV Public Strategies
    021 043 7669


  • 02 Aug 2016 12:59 PM | Anonymous

    The Puhoi to Warkworth motorway partnership between the New Zealand Transport Agency and the Northern Express Group has accelerated investment in critical infrastructure for North Auckland and Northland, while protecting the taxpayer from construction blowouts, says Stephen Selwood chief executive of the NZ Council for Infrastructure Development.

    The consortium of ACC, HRL Morrison & Co, Macquarie, Fletchers and Spanish construction giant Acciona has become the preferred bidder to construct the 18.5 km Road of National Significance.

    We can now expect construction to get underway on this vital link by early 2017, perhaps a decade or more faster than if the project had been constrained by traditional funding limitations.

    In leveraging private finance, the road will get built sooner, bringing forward the benefit of improved connectivity for areas north of Auckland.

    By tying private capital to the deal, NZTA will be guaranteed a fit for purpose road for 25 years and problems which arise will be absorbed by the private consortium and not shifted onto taxpayers.

    Enabling this project to proceed as a PPP is a big step forward for the economy of Northland, which, when the motorway is complete, will enjoy faster and safer access to its major markets. Northerners can expect immediate and sustained investment in their communities, just as those living north of Wellington have experienced since Transmission Gully was announced.

    The opportunity now will be to develop a plan to further extend the motorway north, ultimately to Whangarei," Selwood says.

    For further comment, please contact Stephen on 021-791 209


  • 22 Jul 2016 6:59 PM | Anonymous

    "The Unitary Plan recommendations released today by the Independent Hearings Panel provide a significant increase in development capacity, but will seriously exacerbate congestion in Auckland if development occurs in areas not well supported by public transport," says Stephen Selwood, Chief Executive of the New Zealand Council for Infrastructure Development.

    "The Plan permits urban in-fill across almost all of the current urban area, as well as significant apartment living adjacent to key transport corridors.

    "Density beside rail and busway corridors makes sense, especially for those that work in the city.

    "But, increasing household density without corresponding and viable public transport alternatives will result in increased car density and cause much worse congestion.

    "Modelling undertaken as part of the Auckland Transport Alignment Project shows that on current plans congestion in Auckland will be much worse in 2026 than it is today.

    "The Panel's recommendations allow a marked increase in density in areas that do not have viable public transport alternatives. This will make congestion an even more serious problem than has been anticipated by ATAP.

    "Motorways and arterial roads are of particular concern. Additional motorway capacity and widening of arterial roads will be essential to avoid Auckland grinding to a halt. A marked increase in public transport funding will also be essential.

    "Funding that level of investment will require new ways to raise revenue and manage demand.

    "If future urban areas were developed in a way that enabled high density living close to work, this would be a much more effective way of providing for growth than allowing in-fill in areas not well supported by transport capacity.

    "The Hearings Panel has done a fantastic job in providing capacity to meet urgent housing needs. The opportunity for the incoming council is to provide much more targeted growth around public transport corridors and make provision for integrated residential and employment development in future urban areas," Selwood says.

    For further comment, Stephen can be reached on 021-791 209.

    ENDS


  • 03 Jul 2016 6:45 PM | Anonymous

    "The Governments $1 billion interest free housing infrastructure loan will accelerate infrastructure and land development, but clarity of the implementation plan setting out how the funds will be released and how the debt will be repaid is now urgently needed, says Stephen Selwood, chief executive of the NZ Council for Infrastructure Development.

    "If development levies are used, this will transfer risk to developers and result in higher section prices.

    On the other hand, if targeted rates are used, this will reduce development risk and home owners will pay for infrastructure over time, rather than in section prices, making houses more affordable to purchase.

    "This kind of approach is similar to schemes internationally, known as tax increment financing, where government or councils borrow to invest in infrastructure and the debt is repaid from the "incremental" tax revenue that results from growth.

    "The debt is clearly linked to a specified development area and repayment is directly connected to the additional tax revenue that results from the investment.

    This would be a useful model for the Government to use in New Zealand as it provides transparency between where the money is invested and how it will be repaid.

    "The Governments proposal to establish urban development agencies with the power to aggregate land is another important element to increasing supply.

    Matched with investment in the infrastructure needed for large scale development, this could make a significant difference to housing supply.

    New Zealands traditional home by home construction sector does not have capacity to keep pace with demand. But if significant land holdings can be aggregated, this will be attractive to large scale developers in New Zealand and internationally.

    In combination, interest free infrastructure loans and urban development agencies could make a material difference to housing supply and improving housing affordability, but an implementation plan is now urgently needed, Selwood says.

    For further comment, please contact Stephen Selwood on 021 791 209.

    ENDS


  • 01 Jul 2016 12:51 PM | Anonymous

    Watercare's new asset management plan released this week demonstrates the value of having a strategically capable specialist infrastructure provider with the ability to set prices to fund growth," says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

    "Aucklands water Council-Controlled Organisation (CCO) 20 year asset management plan details a $4.9 billion fully funded capital spend over the next decade aligned with the Councils vision for growth. Approximately $3 billion will be directed towards wastewater provision and $2 billion towards water supply.

    In addition, some $2.6 billion will be allocated to operational spending, signalling a total $7.4 billion spend overall by 2026 and $18.4 billion over 20 years.

    Investment over the next decade will ensure provision for a further 195,000 dwellings across the region on top of present capacity for 45,000 more dwellings, exceeding population growth projections.

    Timely investment ahead of demand will help unlock developable land and take pressure off house prices.

    The ability to look out 10 and 20 years and produce a fully funded investment programme is made possible by Watercares consolidation of activities inside a special purpose, non-profit council company resourced by user charges.

    Having the ability to charge customers directly to fund future investment to support growth is fundamental to the success of this model.

    Compare this situation to other publicly owned entities like Auckland Transport and dozens of council funded water programmes where investment decisions are more influenced by politics than by good asset management.

    Auckland faces a transport funding gap of up to $20 billion over the next 30 years having assumed a legacy of underinvestment that goes back some decades and cant use prices to raise revenue or send price signals to users. The result is congestion.

    Many local authorities across the nation have water renewal and upgrade programmes that remain unfunded. Local politicians are fearful of ratepayer reaction to rates increases so arent funding investment needed to meet basic levels of service.

    Although Watercares AMP does not contain a detailed investment pipeline, this is something Watercare will no doubt develop over subsequent iterations.

    Comprising one third of New Zealands urban water sector, Watercare has the capacity to send strong forward signals to the supply market and drive best value from appropriately scaled business partners.

    This kind of CCO model is worthy of serious consideration by other Councils, many of whom lack the scale, expertise and funding needed to enable timely investment in water infrastructure services, Selwood says.

    Watercares 2016-36 AMP can be found here

    For further comment, please contact Stephen Selwood on 021 791 209


  • 21 Jun 2016 12:49 PM | Anonymous

    Media Release
    22 June 2016

    "The Auckland Transport Alignment Project Interim Report released yesterday sets out a logical theoretical case which balances investment, technology and demand management, but rigorous analysis of the costs and benefits of each approach is required to determine the optimum mix that will get Auckland moving," says Stephen Selwood chief executive of the New Zealand Council for Infrastructure Development.

    "The ATAP process is a landmark in local and central transport cooperation made possible by the 2010 restructure of Auckland governance which has allowed a single interface between the region and Government across key issues.

    "What should not be lost in the discussion is that we have the Government and Auckland Council sitting down to nut out the tough issues with the result that the Council has now strengthened its stance on tackling congestion and the Government has recognised the potential of pricing roads.

    "Both parties should be commended for progress thus far, but momentum retained to ensure Auckland gets an outcome which reflects the wants and needs of transport users as well as their ability to pay.

    "The purpose of a transport network is to enable the movement of people and goods and it is the responsibility of officials to achieve this at the lowest overall price. Demand management is an opportunity to get the most out of networks, not discourage travel.

    "Further analysis is needed to demonstrate that demand management proposals deliver a net economic, social and environmental benefit, which is much broader than just managing down congestion.

    "Something still to be addressed through ATAP is determining the feasibility and timing of technology. There are as many analyses showing road demand will increase, for example, as fall with the emergence of innovations like driverless cars.

    "Given that the New Zealand vehicle fleet is on average around 14 years of age, from a technological and affordability perspective some solutions remain many years, possibly decades, away.

    "Options like traffic signal phasing, are ready to go now and need to be accelerated. Other technologies like electric vehicles will lower the cost of travel and provide increased mobility. We wouldn't want road pricing to reduce the benefits that these sorts of technology have to offer.

    "In the NZCID report, Transport Solutions for a Growing City (click here), we identified poor integration between transport, development and density as major factors in worsening congestion. Much of Auckland's road network is not configured to meet intensified land use and Unitary Plan provisions which allow development in such areas without delivering public transport are increasing cars per kilometre of road, making congestion worse.

    "Growth should be targeted around rapid public transport and ATAP should provide feedback to the Unitary Plan panel on the impacts of different growth allocations on transport.

    "The challenge for the next phase of ATAP is to identify the optimum mix of investment, technology, land use and pricing that Aucklanders can afford and will support," said Selwood.

    For further comments please contact Stephen Selwood 021-791 209.


  • 26 May 2016 12:46 PM | Anonymous

    Social infrastructure is the clear winner from Budget 2016, with significant allocations made in housing, corrections and education, indicating that 2017 will be the year for investment in transport, particularly in Auckland, said New Zealand Council for Infrastructure Development Chief Executive Stephen Selwood.

    Schools have taken centre stage in this years budget, with $700 million over four years committed to build 480 new classrooms. This amount includes $328.9 million of capital funding and $20.2 million of operating funding over the next four years for school PPPs which have been shown to provide better outcomes for students and teachers.

    Social housing will also receive a much needed boost with close to $250 million over four years committed to increase social housing places in Auckland providing emergency shelter.

    In addition, $100 million has been allocated to enable housing development on Crown land in Auckland. The finer details have yet to be announced but there is potential to use this funding to leverage private residential development at scale.

    Hospital improvements are not yet clear, but DHBs have received a large increase in spending of around $400 million per annum.

    Transport spending announcements have focused on the regions and Marlborough, Gisborne and Taranaki will welcome reconfirmation of over $100 million of road improvements.

    Bigger challenges in our large cities, many of which have Roads of National Significance projects under construction, have not been tackled in this years Budget.

    Massive investment in Aucklands transport networks is desperately needed to cope with growth. But with the Auckland Transport Alignment Project yet to determine the agreed investment programme, it comes as no surprise that there was no money for transport in Auckland in this years budget.

    With long awaited Government commitments to the Central Rail Link and East West Connections investments, our expectation is that 2017 will be a big year for transport in our largest city.

    In the meantime, this budget will do a lot to addressing existing demand and future growth needs for social infrastructure investment across the country, Selwood says.

    For further comment:
    Stephen Selwood
    021 791 209


  • 24 May 2016 12:41 PM | Anonymous

    A major gathering of 100 of New Zealands capital procurement specialists yesterday in Wellington unanimously agreed that there are significant opportunities to improve value for money for tax payers and rate payers through better investment decision making and procurement practices, says New Zealand Council for Infrastructure Development CEO Stephen Selwood.

    The NZCID led forum, Institutionalising Best Practice in Capital Procurement, was a multi-sector collaboration hosted by Deloitte, cosponsored by AECOM and opened by Finance Minister Bill English. It brought together many of the best minds across the public and private sectors to investigate how capital procurement can be managed to maximise the value of infrastructure investment.

    Central and local government will spend $100 billion over the next ten years, $10 billion per annum, investing in infrastructure, according to the national infrastructure Capital Intentions Plan. Its imperative that this money goes into projects which meet customer needs and deliver the outcomes intended.

    A five to ten percent improvement in performance outcomes, similar to that being achieved in other countries, signals an opportunity to deliver $5 to $10 billion in value to rate payers and tax payers over the next decade.

    The results of an NZCID industry survey of public procurement proficiency, released at the forum, e choed findings from last years survey, with the New Zealand Transport Agency emerging again as the top public procurement body. Virtually all other agencies, from councils to district health boards and other social service providers, were rated average or below average.

    John Bridgman, the New Zealand Managing Director of global engineering services giant AECOM, observed that the cost of procuring professional services in New Zealand is 80% more than Europe, twice the cost of the USA and three times the cost of Asia.

    Much of that is due to major projects being broken into piecesto fit capital budgets and separate bidding processes for design and construction. Project size is half that of Europe and USA, one third the size of China and one sixth that of the Middle East.

    This data suggests there is potential to drive value through better procurement processes and economies of scale.

    "Deloitte Partner Linda Meade emphasised that it is critical all options are tested before an investment decision is made and that the preferred option must demonstrate that it will deliver the desired outcome.

    "Geoff Hunt,Chief Executive Officer of Hawkins Group,noted that the greatest opportunity to create value in projects is in the design phase, but the primary focus was so often on squeezing costs through competitive bid processes and without sufficient contractor involvement.

    It is of no surprise that when surveyed not a single person in the room considered that continuing along the same procurement path is acceptable.

    All delegates recognised that Treasury and MBIE initiatives were having a positive effect but much more could be done. Lifting skills in the sector and expanding professional development was universally supported.

    There was agreement on the need for strong collaboration across central agencies to decide how best to provide support and capability to those who need it most. Ideally, this would be a central and local government partnership.

    The forum was split on whether or not a specialist support agency should be established, but half felt this option should be implemented. In NZCID's view, this is sufficient support to warrant Government giving this option serious consideration. Selwood says.


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