Infrastructure new Zealand News & MEDIA RELEASES

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

  • 07 Jul 2021 4:30 PM | Anonymous

    Kia ora

    The government recently released an exposure draft of the Natural and Built Environments Bill (the Bill). The exposure draft has been referred to the Environment Committee to provide feedback to the government on the extent to which the provisions in the exposure draft will support the resource management reform objectives. The select committee is currently seeking public feedback as part of that process, with submissions closing on 4 August. The select committee’s report to Parliament is due in October. Changes will be made before the whole Bill is formally introduced to Parliament in the first quarter of 2022, followed by the usual select committee process.

    We will make a submission on the exposure draft and would like to provide members with the opportunity to complete a short survey so we can capture your views in our submission. Please complete this survey by 11 p.m., Sunday, 18 July.

    The survey can be accessed here.

    The Parliamentary paper and the exposure draft of the Bill can be accessed here.

    Context

    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 government is looking to pass the Bill by the end of 2022 and the other two pieces of legislation in 2023.

    The Bill’s purpose and focus

    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).

    A national planning framework

    The Bill proposes that a national planning framework 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 as is the case when passing a Bill or amending an Act. One of the criticisms of the RMA has been that it has been too slow to react to new challenges like the housing crisis adequately. The national planning framework will serve as a key mechanism for the government to directly influence how well environmental outcomes – like housing supply and infrastructure – will be achieved.

    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.

    Natural and built environments plans

    Another key proposal in the exposure draft is 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.

    Please contact me at claire.edmondson@infrastructure.org.nz or 021 272 7879 to discuss further.

    I encourage you to forward this email to others in your organisation.

    Ngā mihi
    Claire Edmondson
    Chief Advisor


  • 29 Jun 2021 11:44 AM | Anonymous

    MEDIA RELEASE

    Infrastructure New Zealand welcomes the release of the exposure draft of the Natural and Built Environments Bill.

    Infrastructure New Zealand has been a key proponent of reforming the resource management system. Getting to this point has been years in the making. This exposure draft marks a significant milestone in moving beyond the Resource Management Act 1991 to a system that is resilient, efficient, effective, future-ready and better able to provide for New Zealanders’ wellbeing, now and in future.

    Infrastructure New Zealand's Chief Advisor Claire Edmondson states she is encouraged by the Bill’s overall direction and calls it a radical shift that will see process-heavy matters shifted to a national planning framework.

    “This will serve as a key catalyst in achieving a resource management system that is nimble and responsive.

    "The national planning framework will effectively be a set of regulations that Cabinet can update or review without having to go through the Parliamentary process as is the case when passing a bill or amending an act.”

    A key criticism, amongst many others, has been that the RMA failed miserably in adequately accounting for cumulative effects. We are encouraged to see that the exposure draft shifts away from just managing effects of activities to setting positive outcomes.

    “The draft Bill also explicitly mentions housing supply, well-functioning urban areas and responding to growth.”

    Ms Edmondson says the Bill could be strengthened on infrastructure matters as it still does not go far enough in considering infrastructure an integral part of the resource management system.

    She clarifies that while the Bill is welcomed, what will ultimately matter is how clear national direction is, how well the new law will be applied and how the courts will interpret it.

    Ms Edmondson states, “The mismatch between intention, interpretation and application has been a key failure of the RMA and we cannot afford to let that happen again.”

    Ms Edmondson says while it is common knowledge Infrastructure New Zealand has been a visibly strong advocate for the reforms, they are grateful for the support from Employers and Manufacturers Association, Business New Zealand, Property Council New Zealand and the Environmental Defence Society over the last few years in making a convincing case for change.

    ENDS.

     

    For further information and media queries, please contact Claire Edmondson, Chief Advisor, on 021 272 7879 or at claire.edmondson@infrastructure.org.nz


  • 23 Jun 2021 1:00 PM | Anonymous

    Kia ora,

    Infrastructure Commission is consulting on the He Tūāpapa ki te Ore: Infrastructure for a Better Future. Feedback on the consultation document will inform the Draft Aotearoa New Zealand Infrastructure Strategy 2050, which the commission will submit to the Minister for Infrastructure in September 2021. The first edition of InfraRead which we published yesterday includes an article on this.

    We hosted the commission at several workshops around the country, enabling members to directly provide feedback and influence the shape of the draft strategy.

    Submissions on the consultation document close next Friday, 2 July. Infrastructure New Zealand’s submission was made yesterday. Our submission is divided into three parts:

    (i) Setting the strategic context
    (ii) Response to selected questions in the consultation document
    (iii) Conclusion.

    You will find our submission here. If your organisation is looking to make a submission, feel free to use content you may find useful.

    If you have any questions or feedback (or if you would like a Word version of the submission), please feel free to contact Azeem at azeem.khan@infrastructure.org.nz.

    In the meantime, we hope you are enjoying your read of the first edition of InfraRead.

    Ngā mihi
    Claire Edmondson
    Chief Advisor


  • 09 Jun 2021 4:08 PM | Anonymous

    Today’s final advice to the Government from the Climate Change Commission reveals it hasn’t pulled any punches, but is willing to take a breather between rounds.

    The Commission’s final advice sets out the total amount of emissions New Zealand must cut over the next 15 years and provides three different pathways the Government could follow to keep within the proposed emission budgets. The original estimate has been revised to reflect the latest science and the reality that New Zealand’s emissions are still increasing.

    These revised estimates now mean that the Commission has set higher budgets to reflect the more significant challenge ahead. However, regardless of the size of the task ahead, the Commission has recognised that many of its recommendations, most notably in energy, heavy transport, and electric vehicles, were ambitious and may not be achievable.

    The Commission stands by its overall recommendations, but has remodelled and adjusted the detailed recommendations. Overall, the Commission has New Zealand on track for net-zero carbon by 2050, but there are many hurdles to get over than initially proposed when it tabled its draft advice in March.

    The Government has until 31 December to set the first three emissions budgets out to 2035 and release its first emissions reduction plan. The Government needs to move quickly, but not at the risk of impacting employment while industries adjust to practicing their professions in the new low emissions environment. Suppose Government chooses not to accept the Commission’s advice, in that case, it must publish an alternative plan for addressing climate change in New Zealand and reaching its targets that don’t involve just planting trees.

    Starting in 2022, the Commission will begin monitoring how the Government’s emissions reduction plan is implemented, including how well New Zealand is tracking to meet the 2050 net-zero target.

    Main recommendations:

    Finance

    • Improve the New Zealand Emissions Trading Scheme to provide more substantial market incentives to drive low emissions choices.
    • Make sure all government policy and investment decisions support the transition to low emissions.

    Transport (including heavy transport and EVs)

    • Provide affordable, reliable and convenient low-emission alternatives to high emission vehicles
    • Introduce measures to make sure vehicles entering the fleet are efficient and to accelerate the uptake of electric vehicles, including options to decarbonise heavy transport and freight.

    Energy

    • Develop a national energy strategy to decarbonise the energy system and introduce measures to make sure the electricity sector is ready to meet future needs.
    • Accelerate the switch to low-emission fuels to process heat, drive energy efficiency improvements, and develop a plan to transform buildings to low emissions.

    Waste

    • Reduce emissions from waste through measures that reduce the amount of water generated and increase resource recovery.


    For further information and comment on the Climate Change Commission Report, contact Claire Edmondson, Chief Advisor, on 021 272 7879, claire.edmondson@infrastructure.org.nz.


  • 02 Jun 2021 3:06 PM | Anonymous

    About the Reports
    Phase 2 Analysis – advancing the evidence base

    Today the Department of Internal Affairs (DIA) released a second tranche of evidence-based reports, commissioned to inform the case for change for the Three Waters Reform Programme. The complete reports are published here.

    This analysis further demonstrates the need for reform and its potential benefits and addresses key questions raised by local government members through recent engagements. The analysis uses the Request for Information (RfI) data provided by councils and publicly available information, including international benchmarks, to undertake economic analysis of reform options.

    This information release provides national-level analysis on the case for change (the size of infrastructure investment need into the future, and how reform options could help us meet this more affordably) – WICS Phase 2.

    The release includes two independent reviews of the WICS Phase 2 methodology and assumptions to ensure it is fit-for-purpose in a New Zealand context – undertaken by Beca and Farrierswier.

    The release also contains a broader economic analysis on the potential impacts of reform on the economy and workforce – Deloitte report.

    This national level information release is just one part of a series of information packages DIA will provide to support understanding of the potential impacts and opportunities of reform at a national and local level.

    Further council-specific analysis and supporting information will be provided in the coming months as key decisions are taken by Cabinet, including on the number and boundaries of new water services entities.

    Infrastructure New Zealand will partner with DIA to provide several workshops on the reform programme in the coming months.

    Background on Phase 1 information

      • In December 2020, DIA released a package of information on the case for change, commissioned as part of the Three Waters Reform Programme.
      • This early analysis was conducted by the Water Industry Commission for Scotland (WICS), a respected three waters economic regulator familiar with the New Zealand context and with experience of water services reform in the United Kingdom and parts of the European Union.
      • The Phase 1 report was high level and directional in nature as it used publicly accessible council information. Several limitations were noted at the time, including not accounting for population growth. However, the report provided was valuable in providing an early indicative view on the size of New Zealand’s Three Waters infrastructure deficit and the potential benefits of reform.
      • Local government representatives have expressed concerns over the validity of parts of this analysis (particularly the size of the investment deficit and potential efficiencies of scale) and its applicability to the New Zealand context.

    The Request for Information (RfI) process

      • In late 2020/early 2021 councils undertook a Request for Information (RfI) as part of the Three Waters Reform Programme.
      • This RfI provided up-to-date and more detailed information at a local level to inform further economic analysis, and other commercial and financial analysis as part of the reform programme.
      • This process represents a major undertaking by the local government sector to improve the state of knowledge and understanding about three waters assets, network performance, service delivery costs, commercial arrangements, and future investment requirements and is no small feat.
      • Given the timeframes with which councils had to complete the RfI, not all information provided could be audited or fully researched. To reflect this, the Department and WICS asked councils to apply confidence grades to their raw data.
      • This will of course mean there is variability across the country in this foundational data, and it should be treated as indicative and reflective of the point in time at which it was commissioned and provided.
      • The analysis has also been informed by emerging draft long-term plans that councils have been producing during this period.

    Key Findings
    WICS Phase 2

    The WICS Phase 2 report builds on the findings of the earlier report to provide a more up-to-date analysis. The key findings of the report are in three parts:

    1. The modelling indicates a likely range for future investment requirements at a national level in the order of $120 billion to $185 billion. This investment is estimated as necessary for New Zealand to meet current levels of compliance that water utilities in the United Kingdom achieve with EU standards over the next 30 years. These standards are assessed by WICS (and confirmed by Beca) to be broadly comparable with equivalent New Zealand standards.
    2. WICS assesses the scope for efficiency by looking at the performance of regulated water utilities in the United Kingdom and making adjustments to take account of factors specific to the New Zealand context. It demonstrates that New Zealand’s Three Waters sector is in a broadly similar position to Scotland in 2002, in terms of relative operating efficiency and levels of service. In just under two decades, Scottish Water has lowered its unit costs by 45% and closed the levels of service gap on the best-performing water companies in the United Kingdom. WICS considers that New Zealand can achieve similar outcomes to Scottish Water over a longer period (30 years).
    3. WICS has analysed around 30 possible aggregation scenarios, reflecting the large number of possible number and boundary configurations. The WICS analysis shows that scenarios ranging from one to four entities provide the greatest opportunities for scale efficiencies and related benefits in terms of improved levels of service and more affordable household bills (when compared against the likely outcomes ‘without reform’).

    Farrierswier independent review of WICS findings

      • Farrierswier find that the overall approach WICS takes to its analysis should give reasonable estimates in terms of direction and order of magnitude.
      • They note that there are certain limitations associated with the analysis which decision-makers should be mindful of, which relate to estimating the level of future investment requirements and potential efficiency savings that could be realised, particularly given differences in the nuances of the New Zealand regulatory and policy context.
      • While their review highlights several limitations associated with the analysis, they note that these are inherent and to be expected in modelling of this kind. Farrierswier also find that WICS’ approach to addressing these limitations appears reasonable.
      • Farrierswier notes that the approach WICS takes to assessing the potential efficiency gains appears reasonable but care needs to be taken in translating overseas experience into a New Zealand context. They agree with WICS on the factors that will promote efficiency gains in the water sector, including the quality of management, clear policy priorities, and an appropriate economic regulatory regime.
      • Farrierswier also explored the relevant literature to test whether any concerns arise that amalgamation might lead to water entities becoming large enough that diseconomies of scale may emerge. Their view is that the amalgamation scenarios under consideration – with entity sizes that do not exceed 2 million connected citizens – do not appear to include entities of a size that give rise to concerns about diseconomies of scale.

    Beca independent review of WICS findings

      • Beca reviewed the standards and practices in the United Kingdom Three Waters industry and their relevance to New Zealand given WICS has used United Kingdom data and benchmarks as part of its analysis.
      • The Beca report considers that, on balance, the forecasts from WICS modelling may underestimate the estimated investment requirements and timeframes, suggesting that WICS modelling of future investment may be conservative.

    Deloitte industry development study and economic impact assessment

      • Deloitte has undertaken a comprehensive study of the economic impacts of reform and the implications for affected industries. Key findings in their report include:
          • The reform is forecast to impact every corner of the economy and is estimated to increase Gross Domestic Product (GDP) by $14.4 billion to $23 billion in present value terms over the next 30 years when compared to the likely outcomes without reform. In relative terms this increased economic activity equates to an average increase in GDP of 0.3% - 0.5% per annum.
          • Every region is expected to be positively impacted by reform in terms of GDP and employment growth.
          • Reform is expected to support significant job creation across the economy. Relative to the counterfactual, the reforms are estimated to result in an extra 5,800 to 9,300 additional FTE jobs between 2022 and 2051.
          • Average real annual wages are expected to increase by 0.16% - 0.26% over the period from 2022 to 2051. The increase in real wages mainly reflects a projected increase in labour productivity.
          • The additional jobs are expected to be spread across a broad range of sectors. While there is likely to be changes in the configuration of jobs in the water sector and its supply chain in the short to medium term. Over 30 years significant growth of up to 80% is anticipated in the water sector workforce, presenting significant opportunities for employment growth, specialisation and increased career opportunities.
          • The report highlights a wide range of opportunities and challenges for the implementation of the reforms relating to the workforce, supply chain, management of the capital investment programme, innovation and productivity.

    For further information and comment on the Three Waters Reform, contact Claire Edmondson, Chief Advisor, on 021 272 7879, claire.edmondson@infrastructure.org.nz.

  • 20 May 2021 3:00 PM | Anonymous

    Budget 2021 continues with its wellbeing approach. The budget is guided by three overarching policy goals for the next three years:

    • continuing to keep New Zealand safe from COVID-19
    • accelerating the recovery and rebuild from the impacts of COVID-19
    • laying the foundations for the future, including addressing key issues such as our climate change response, housing affordability and child poverty.

    The four priorities of Budget 2021 are:

    • continuing the COVID-19 response
    • delivering priority and time-sensitive manifesto commitments
    • supporting core public services through managing critical cost pressures
    • continuing to deliver on existing investments.

    Infrastructure Sector Overall

    Budget 2021 is a mixture of good news for the infrastructure sector, and some disappointments.

    The budget signals the government’s commitment to Three Waters, with 40% more cash ($296m newly committed) available.

    It also signals a big commitment to rail, with an additional $722m capital for Future of Rail, most of it for rolling stock and two new capital bases in the South Island (Hillside in Dunedin and Waltham in Christchurch).

    There is an investment in encouraging New Zealanders to shift to low-emission vehicles ($300m), a new regulatory standard for clean cars ($16m), and capital to Scott Base ($306m) and the civil aviation/aviation security estate ($113m) up to scratch.  School property maintenance receives a $634m injection of capital.

    Big Picture

    The Finance and Infrastructure Minister, Hon Grant Robertson, told analysts and media in Wellington that he wanted to provide confidence in the infrastructure sector, with a clear signal as to how much work will be coming.

    Total (net) capital investment – including in rail, roads, water, and health - over the near term (five years) is close to $60b. Waka Kotahi will spend $10b over five years on public transport, and roads.

    However, nearly half of the $60b will be invested in the 2021 and 2022 years, with capital investment trailing off by 2025. Net capital spending in 2025 will be about $8b, half that in 2022.

    So, for infrastructure, the near term looks sunny. The longer-term needs attention.

    Reading the Small Print

    Elsewhere, the small print reveals the government is under considerable pressure with the New Zealand Upgrade Programme (NZUP). The budget says the $6.8b envelope which was originally provided is proving too small, with costs rising.

    Waka Kotahi New Zealand Transport Agency and KiwiRail are going back to basics, reassessing all the NZUP projects.

    The small print says the government is ready to put in more to Three Waters, if necessary, additional to the 40% increase announced today, providing a signal of the government’s determination on Three Waters. Funding announced today includes provision for transferring assets from local government to new water enterprises.

    Cost increases and skill shortages – on top of costs related to COVID-19 – are biting, especially in the government’s most ambitious builds. Budget 2021 reveals that Kāinga Ora is under cost pressure in its large-scale housing projects, including Tamaki. In Auckland, the budget says that City Rail Link will cost more than $4.4b, partly because of the effect of COVID-19 and skill shortages.

    Let’s Get Wellington Moving is likely to cost much more than originally estimated, with the risk rising that the initiative may not be delivered in full.

    The defence estate receives an additional $5.1m of operational funding, a low sum given the size of the defence estate. Reading between the lines, the government is apparently having difficulty prioritising any new capital projects in the defence estate.

    Post the Resource Management Act (RMA)

    Budget 2021 signals the scale of the task in parting company with the RMA, with $131m provided over three years to pay for the design and implementation of the three new statutes that will replace the RMA.

    Nearly 38% of that will be spent next year, which suggests the hard graft on post-RMA is beginning now.

    Detailed Commentary of Budget 2021

    There are two key disappointments that are worth noting.

    Firstly, the government has, as expected, shied away from taking on more debt at a time of exceptionally low borrowing rates to fund an expansionary fiscal policy and this will be a cause for frustration. The government could have been more ambitious and spent more on capital in the out-years, which would have raised net debt.

    The second disappointment is around the lack of innovation. The government has missed an opportunity to be innovative, especially in making cities and regions internationally competitive and increasing their contribution to the gross domestic product. Auckland remains the engine of New Zealand’s growth as well as our only internationally competitive city, but there is little for Auckland – or indeed, any region – in the budget.  

    Transport

    Transport is the biggest single infrastructure winner. It has received a capital funding boost of over $939m over the 10 years (2021-21 to 2029-30).

    Across the forecast period there will be $10b of investment in roads and public transport projects through Waka Kotahi New Zealand Transport Agency.

    For the 2021-22 period, a funding allocation of $7.906b has been made up, comprising of the following:

    • National Land Transport Programme (NLTP), funded through the National Land Transport Fund  50% at $3.976m
    • A loan facility for cash flow management – 9% at $750m
    • Rail, in addition to funding through the NLTP – 22% at $1.77b
    • Road, in addition to funding through the NLTP, additional Crown and loan funding is provided for specific roading projects – 12% at $900m
    • Crown Entity and other funding – 7% at $519m.

    Rail

    Budget 2021 allocates a further $1.3b towards a reliable and resilient rail system, comprised of $810m capital spending and $535m operating spending.

    Of this, $810m is also allocated to purchase 60 new locomotives and 1,900 new wagons and upgrade existing stock, adding to the more than $4b put into rail over the last term of government.

    The rail allocation includes $85m to build a local wagon assembly facility at Hillside Workshops in South Dunedin; the facility will initially assemble 1,500 wagons.

    City Centre to Māngere Rapid Transit Project

    The government acknowledges that the cost of the preferred rapid transit solution for the city to Māngere corridor is uncertain at this stage.

    An indication of costs will be provided through the business case process undertaken by the establishment unit. Significant Crown funding will be needed to deliver the preferred solution. Other funding tools, including value capture will be further considered.

    NZUP

    The transport component of NZUP consists of projects delivered by both Waka Kotahi New Zealand Transport Agency and KiwiRail within a fixed funding envelope of $6.8b.

    Waka Kotahi has advised its component of NZUP is facing a significant increase in forecast costs, primarily due to property price escalations and acquisitions, inflation, and revised standards and assumptions behind cost estimates.

    A baselining exercise has been undertaken to better define the scope, costs, outcomes, and

    schedules for the projects and identify options for moving NZUP forward.

    Housing Acceleration Fund

    The government had announced earlier this year $3.8b to establish the Housing Acceleration Fund. $1.069b has been allocated for the 2021-22 period.

    The contestable fund will be aimed at boosting supply of ‘development-ready’ or infrastructure-serviced land across New Zealand and will go some way in increasing development capacity which is required through the National Policy Statement on Urban Development.

    Three Waters

    Budget 2021 allocates a further $296m (original funding $761m) to fund the costs of the creation of new entities to effectively, equitably and efficiently manage water infrastructure and provide New Zealanders with safe supply wherever they live.

    The government says it is committed to water remaining in public ownership, with local authorities, communities, iwi and others playing a central role. Further announcements on the details and further support for the programme will be made in coming months.

    District Health Boards

    A further $700m has been allocated for district health boards’ capital investment over the next four years.

    Final Remarks

    This is a high-level analysis prepared in a very short period of time. The focus of the analysis is on infrastructure matters.

    Some big questions remain for the infrastructure sector, notably how NZUP will roll-out post-assessment, and how the government’s $300m fund for low emission vehicle uptake will take effect.

    Three Waters remains a work in progress, with the government underlining its commitment today, but with big hurdles to overcome yet.

    Hidden in the fine print of the budget are cost pressures on Auckland’s City Rail Link, Kāinga Ora’s major housing projects, and other places. Skills shortages are biting on big build projects.

    The story of Budget 2021 and infrastructure is less in what happened today, and more in what happens in the next 12-18 months.

    ENDS 

    For further information and comment on Budget 2021, contact Owen Gill, Chief Executive, on 021 961 922 or Azeem Khan, Senior Policy Advisor, on 021 150 8677, azeem.khan@infrastructure.org.nz.


  • 23 Apr 2021 1:10 PM | Deleted user

    MEDIA RELEASE

    “The independent review of local government announced today is a genuine opportunity to address a wave of serious issues across housing, transport and water by strengthening the ability of councils to execute, address long standing infrastructure funding and financing challenges and ensure that New Zealand becomes a more competitive, equitable and sustainable society,” says Hamish Glenn Policy Director at Infrastructure New Zealand.

    “Minister Mahuta has today announced a major review of local government to be chaired by former Waimakariri CEO Jim Palmer and with panel support from John Ombler QSO, Antoine Coffin, Gael Surgenor and Penny Hulse.

    “We are very pleased to see the review panel has been given a broad mandate. The panel will consider the future of local government, including roles, functions and partnerships; representation and governance; and funding and financing.

    “Councils provide critical infrastructure services across New Zealand, including the planning, funding, delivery and regulation of billions of dollars of assets.

    “The current local government system was largely set in place in 1989 and is simply not geared for the kinds of challenges we see today.

    “Complex environmental issues like climate change and freshwater degradation have combined with major economic trends around remote working and digitisation to fundamentally change our expectations of local government standards and services.

    “In the context of inadequate funding and financing arrangements for infrastructure, councils have not been able to keep up.

    “The review announced today gives the country a two year programme to discuss exactly what type of system might work better.

    “There needs to be a genuine first principles discussion around what services are best delivered locally, which services regionally and what centrally.

    “Effective strategic planning and infrastructure delivery needs a degree of scale that 67 territorial authorities are not optimised to implement.

    “But equally, there are a range of public services which do not benefit from scale and which can and should be delivered closer to affected communities.

    “It is very important that central government itself keeps an open mind to reform as the review may identify opportunities to transfer responsibilities and resourcing to local government to better incentivise decisions.

    “This is a huge opportunity not just to strengthen local government but to improve the entire system of domestic decision making so that New Zealanders continue to enjoy high incomes, a sustainable environment and equal access to opportunities,” Glenn says.

    ENDS

    For further information and comment contact Hamish Glenn on 021 034 7229


  • 20 Apr 2021 3:05 PM | Anonymous

    MEDIA RELEASE

    “The independent review of the Transmission Gully project provides valuable recommendations to improve public private partnership (PPP) procurement in New Zealand. These will ensure that the model continues to provide decision makers with an option to achieve best value for money in delivering major public infrastructure,” says Infrastructure New Zealand Policy Director, Hamish Glenn.

    “A PPP is a long term contract between a client and a private sector consortium to design, build, finance and maintain an asset, with the client retaining full ownership of the asset. Bundling all these activities in one package for an asset lasting 30 years is extremely complex, so PPPs tend to be used for large projects where the benefits can be shown to outweigh the costs.

    “Seven PPPs have been signed in New Zealand. Each of the five operational contracts was delivered on budget for the Crown.

    “The Government launched this review following concerns that the PPP model used to procure Transmission Gully had not performed as intended.

    “It’s important to note that Transmission Gully successfully passed all the value for money tests designed to protect the taxpayer from project time and cost overruns, or assets which do not meet essential community needs.

    “But what the interim review released today shows is that there were several issues in the process, including that original cost estimates for the project were too low, encouraging bidders to seek out ways to reduce costs which did not necessarily provide best value, and that PPP project governance can be strengthened.

    “It is important that these recommendations are quickly implemented to maintain confidence across the general public and industry that the model provides a viable infrastructure procurement option.

    “New Zealand has a very large nation-building investment programme ahead. Use of private capital to manage public cashflows, inject innovation, attract international expertise and better allocate risk is critical to successful delivery.

    “PPP is one such way to leverage private investment to achieve public outcomes. The review recommendations ensure that PPPs continue to provide decision makers with a genuine option to deliver major infrastructure,” Glenn says.

    ENDS

    For further information and comment contact Hamish Glenn on 021 034 7229

  • 31 Mar 2021 5:00 PM | Anonymous

    MEDIA RELEASE

    “The Government’s new light rail establishment unit represents an opportunity to rethink the wider transport and development vision for Auckland to tackle congestion, carbon and housing affordability challenges,” says Infrastructure New Zealand Policy Director, Hamish Glenn.

    “The Government announced today it is setting up a new Establishment Unit to evaluate options for rapid transit between the city centre and Mangere. The new unit will sit inside Waka Kotahi and be led by an independent chair with a governance board comprising representatives from Auckland Transport, Auckland Council, Ministry of Transport, Kainga Ora and Waka Kotahi itself.

    “It is expected to report back to the Government towards the end of the year on mode, route, costing, funding, financing, value capture and delivery entity.

    “This is an ambitious timeline and the new Minister deserves credit for moving quickly to address questions over the future of the project.

    “The unit is expected to engage communities left out of the previous process. It will be important to engage not just communities but the industry which will be required to deliver light rail and which has endured several years of uncertainty.

    “Early clarity will be important for the financial community in particular who will need to understand what the Government’s appetite is for private sector involvement.

    “Essential to the success of the Unit and its ability to develop a project which endures political cycles will be a broad mandate which answers major outstanding questions about the future growth and development of Auckland.

    “Recently released ATAP analysis found that congestion and carbon emissions both worsen under current transport plans and there remains no evidence that housing can be delivered at a price point Aucklanders can afford.

    “What is the transport network that Auckland needs to be a competitive, equitable and sustainable economy?

    “What does a transport system which achieves a net zero carbon New Zealand in 2050 look like?

    “Where and when will competitive land supply which enables affordable housing be unlocked?

    “If the Establishment Unit can answer these questions and demonstrate that light rail between the city centre and Mangere is an essential component then public concerns with the project will quickly dissipate.

    “This project is a test case for the future of integrated transport and development in New Zealand.

    “Other major cities in New Zealand will be watching the progress of the Unit closely as will the domestic and international infrastructure sector,” Glenn says.

    ENDS

    For further information and comment contact Hamish Glenn on 021 034 7229

  • 23 Mar 2021 1:16 PM | Anonymous

    MEDIA RELEASE

    “The new $3.8 billion Housing Acceleration Fund will help address short to medium term infrastructure barriers to housing, but only if it is integrated with a visible, committed and sequenced pipeline of projects that encourages industry to invest, scale up and lift construction sector productivity,” says Hamish Glenn, Policy Director at Infrastructure New Zealand.

    “The Government has announced a raft of supply and demand side measures to address rapid property price inflation, including changes to the brightline test, increases to first home buyer caps and removal of interest deductibility for property investors.

    “Pleasingly, the Government has committed a very significant $3.8 billion to overcoming infrastructure barriers to new housing developments and provided a further $2 billion debt facility to Kāinga Ora.

    “However, while this investment is urgently needed and will be widely welcomed, there is a risk that new investment starts competing with existing commitments to the NZ Upgrade programme, shovel ready projects, rising three waters commitments and other critical initiatives.

    “To avoid competing for the same fixed pool of labour and other resources, it is extremely important that visibility of the forward work programme is improved.

    “Designers, architects, contractors, subbies and the raft of other critical service providers who take each project from idea to reality need to understand what’s coming up not just in the next 6 months, but over 3-5 years and beyond if they are to invest in the systems, skills and capacity to meet a growing workload.

    “For this reason, it was also very positive to see in today’s announcement that the Government will boost apprenticeships.

    “But the sector still needs better clarity of when projects will be brought to market and confidence that timeframes and priorities will be predictable.

    “Project sequencing which avoids market participants from competing for the same pool of labour and which encourages companies to invest in training and productivity is critical, as is progress on getting skills which can’t be sourced locally into the country.

    “New Zealand’s infrastructure and construction sector can meet the challenge, but can meet it faster and more affordably with a clearer sightline of the programme ahead,” Glenn says

    ENDS

    For further information and comment contact Hamish Glenn on 021 034 7229

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