Infrastructure new Zealand News & MEDIA RELEASES

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

  • 22 Jan 2016 11:08 AM | Anonymous

    Transmission Gully PPP brings innovative approach to transport infrastructure investment in NZ

    Media Statement 
    29 July 2014

    After many decades of frustration, Wellingtonians can now look forward to a resilient and efficient roading connection to the rest of the North Island, due in large part to alternate financing arrangements which overcome institutional barriers to major transport investment, says Stephen Selwood, CEO of the New Zealand Council for Infrastructure Development.

    The billion-dollar Transmission Gully mega-project is a vital link in the Wellington Northern Corridor Road of National Significance, providing a much more effective strategic connection between Wellington city and the territories north of Paekakariki. Employment centres, activities and, potentially, entire industries will be made possible by improved connectivity between the lower North Islands population centres and Wellingtons central business district, port and airport.

    The new corridor will replace the fragile coastal segment of State Highway 1 north of Tawa which is vulnerable to both flooding and earthquakes, and will save many lives on what is currently one of the most hazardous stretches of road in the country.

    Despite the clear strategic merit of this project, Transmission Gully has been deferred for decades because of its comparative high cost. Conventional cost-benefit analysis does not adequately recognise regional growth potential, land use and other transformational benefits which lie at the very heart of Transmission Gully and the pay-as-you-go National Land Transport Fund is not geared for billion-dollar projects which consume such a disproportionate share of annual resources.

    The Governments elevation of inter-regional investment through the RoNS initiative and NZTAs expansion of transport evaluation to recognise the importance of strategic corridors like Transmission Gully both deserve commendation for overcoming the barrier posed by narrow economic analyses.

    The funding challenge was overcome by the first ever use of private finance in a New Zealand transport project.

    By employing a public-private partnership or PPP model, NZTA are able to leverage private capital to advance Transmission Gully as a single project. Not only does this enable the economic, safety and strategic benefits of the project to be brought forward, but the successful Leighton-led consortium have been able to demonstrate over the past year that efficiencies in project delivery and risk transfer away from tax payers has been sufficient to offset the cost of private debt.

    This is a significant innovation in transport infrastructure investment in New Zealand. It caps off a mixed week following the Environmental Protection Authoritys consent for Puhoi to Warkworth, but cancellation of approval for the Basin Flyover.

    Maybe its time to go to the market and seek innovative solutions to solving transport connectivity across, around or under the Basin Reserve in Wellington? Selwood asks.

  • 22 Jan 2016 11:07 AM | Anonymous

    Media Release 
    3 July 2014

    New Zealand will not achieve the governments target to build 35,000 affordable homes in six years unless we throw out old ways of thinking, says New Zealand Infrastructure chief.

    Stephen Selwood, Chief Executive of Infrastructure New Zealand is speaking at this weeks Community Housing Aotearoa conference in Nelson and says the old ways of building homes, house by house and builder by builder have got to go.

    Our culture has been around the quarter acre pavlova paradise. A single house on a single section built one by one, block by block. But if we really want to reduce the cost of housing we need to reduce the amount of land we consume, build up instead of out and shift to modular construction of new homes at scale. We should be looking at developments of five hundred or more homes at a time. We need to be creating new communities to achieve the transformation we need.

    Stephen Selwood says New Zealand is lagging behind countries such as Australia and Canada where strong partnerships between community housing organisations and private sector developers have been successful in creating mixed tenure mixed development communities at scale.

    In New Zealand, he says there is resistance to intensified redevelopment exemplified by the objections to Auckland councils unitary plan.

    People have not seen what good urban development looks like and when you start talking about intensification it conjures up student apartment developments in Aucklands CBD or high rise isolated tower buildings in Britain and people dont want a bar of it.

    He says New Zealand needs good examples to show there is a good way of achieving intensification. A model development on land in Tamaki offers an ideal opportunity.

    The Creating Communities redevelopment of 270 new homes in Northern Glen Innes is a good start. The initiative will create more housing choices in the area including homes for first home buyers and for the general market, as well as 78 new state homes. A key part of the plan is to build on strengths of the community that exists in Glen Innes, encouraging new opportunities, and enhancing a greater sense of community pride and belonging.

    Id like to see this kind of development extended further with strong partnership between the development industry, equity investors including iwi, the banks and community housing organisations providing place management and wrap around support services for those who need it.

    In Glenn Innes, we need to create a whole new community thats a nice place to live, affordable to buy into, has good amenities around it and provides good social interaction. There needs to be a mixture of private and social housing and mixed tenures alongside amenities like shopping, parks, and relative proximity to jobs, he says. 
    Stephen Selwood says the government could provide state housing land and go to community housing organisations and private sector providers and ask them what it would take to deliver what is needed.

    He says more leadership from government is needed to support interest from the community and business sectors. Government will also need to provide subsidy through transfer of existing state housing stock or commitment of existing social support budgets to fund the provision of necessary wrap around services for socially disadvantaged tenants. But if existing budgets can be redeployed to deliver better long term results that has to be a good outcome for government and the local communities.

    The government is slowly making changes with its support for community housing organisations creating a competitive model to the traditional Housing New Zealand model, but could do more to put long term funding and settings in place.

    Community Housing Organisations are doing a fantastic job. We need more partnerships between them and our urban property developers who specialise in this redevelopment delivery model at scale. Lets test the model.

  • 22 Jan 2016 11:06 AM | Anonymous

    Media Statement 
    16 June 2014

    The draft 2015 Government Policy Statement reaffirms the Governments commitment to transport investment and will continue the countrys progress towards an internationally competitive transport system. But one cant help but wonder whether an opportunity to establish this GPS as the new global benchmark in forward planning has gone begging, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

    The GPS in fact signals a slight easing of investment, with total targeted expenditure in 2021/2022 $150m less than that projected in 2012, though this figure does not include projects such as Aucklands City Rail Link which, appropriately, is likely to be funded through general Crown accounts. Once included, Government spending on transport over the next decade will be a record breaker.

    Thats good news for commuters and for freight. Lifting investment has had large positive impacts in Auckland, where the first Road of National Significance has already been delivered, and many further regions stand to benefit from improved access over coming years.

    This GPS is also notable for acknowledging the potential for new funding and delivery mechanisms, including road pricing and private finance. These activities are essential to leveraging public investment and improving efficiency over the network.

    But while this draft GPS is, like many of its predecessors, a commendable improvement on previous iterations, it remains a product of the past. It presents a future of conventional road, balanced against traditional safety, public transport and other objectives which are increasingly distant from the transport revolution currently occurring across the world.

    Vehicles that run on electricity, talk to one another and drive themselves are the future. They will be cheaper to run, reduce journey times and offer unprecedented flexibility to meet 21st century needs. They will break down the existing interface between public and private vehicles and revolutionise the way people and societies interact.

    Although these vehicles and other technological advancements remain a long way from car yards, it is imperative that rules, guidelines and institutions are in place to manage their arrival. Establishing this back office support will take time and issues including privacy and vehicle autonomy will have to be tackled in the next decade.

    This GPS can start the transition to a new transport paradigm or it can reproduce past approaches. The promise of transport solutions that are better on the environment, better for people and places and better for business suggests the sooner we in New Zealand look to the future, the better it will be for everyone, Selwood says.

  • 22 Jan 2016 11:04 AM | Anonymous

    Media Statement 
    14 May 2014

    The Public Sector Rebuild Programme of Work released today is a major step forward in Canterbury, says Stephen Selwood of the New Zealand Council for Infrastructure Development.

    The Programme of work sets out estimated project costs, timing, sequencing and responsibilities across not just CERA and the city council, but all large public sector service providers in the region.

    It displays graphically and concisely the quantum of investment needed in the region and will give a big lift to industry and property owners unclear until now about the forward work pipeline.

    The Programme shows public construction work building steadily over the next year, to peak around $500m per quarter in late 2015. The fairly rapid decline in activity from late 2016 may be alleviated by deferral of some projects, especially if Christchurch City is forced to moderate some of its earlier aspirations, but sends a clear signal to the market about how they need to manage resources.

    With $7-8 billion of projects identified above and beyond the SCIRT infrastructure rebuild, the scale of just the public sectors commitment to the recovery will reignite some of the interest lost over recent months across New Zealand and internationally. Prior to todays release, poor transparency and unclear public prioritisation have inflated risk profiles beyond perceived return potential resulting in a less positive market response.

    Critical now will be confirming funding, particularly for Christchurch City Councils share, and identifying procurement options.

    Capital requirements across the region are beyond anything seen outside of Auckland, and will have to compete with our biggest and fastest growing region for limited domestic resources.

    Large investors essential to sustaining progress over the long term need clear indication of financial opportunities and timing, something that will be keenly awaited.

    If the Council is unable to fully fund its share of the rebuild, opportunities for private capital investment in anchor projects and / or reallocation of public capital through asset sales should be carefully considered as an alternative.

    "Swapping one asset for another may enable better use of limited public resources," Selwood says.

    The link to the programme is available here: http://cera.govt.nz/recovery-strategy/leadership-and-integration/public-sector-rebuild


  • 22 Jan 2016 11:03 AM | Anonymous

    Hon Gerry Brownlee, Minister for Canterbury Earthquake Recovery, released a media statement today:

    "Canterbury Earthquake Recovery Minister Gerry Brownlee says feedback provided to the New Zealand Council for Infrastructure Development (NZCID) by stakeholders in Christchurchs rebuild will help inform the governments ongoing work programme".

    To read the full release: http://www.beehive.govt.nz/release/nzcid-report-useful-guide-recovery-work


  • 22 Jan 2016 11:02 AM | Anonymous
    Reports show need for improved water service delivery by councils


    Media Statement 

    14 April 2014

    The recent release of the Ministry of Healths Annual Report on Drinking Water Quality and a stormwater report commissioned by the Auckland Council provide two further reminders of the need for better scrutiny and accountability in meeting drinking water, wastewater and stormwater standards in New Zealand, says CEO of the New Zealand Council for Infrastructure Development Stephen Selwood.

    While freshwater issues have succeeded in penetrating the public debate, leading to a number of positive initiatives including the Land and Water Forum and the Land Air Water Aotearoa monitoring website, these reports highlight immediate issues of urban water service quality and accountability which are not receiving the attention they deserve.

    Pleasingly, Local Government New Zealand is leading a project to create a nationwide data framework for water infrastructure which seeks to share best practice, reduce costs and adopt innovative practices in water service delivery. This work needs to be completed with urgency, but ultimately requires a national discussion and Government buy-in to overcome the size of the challenge.

    Consistent with the previous study in 2011/12, the Ministry of Healths latest report reveals, once again, quite serious problems with drinking water in areas serviced by smaller providers. Just 22 per cent of residents living in small water zones of 101-500 people and 37.8 per cent of those in minor zones of 501-5000 people received drinking water that met all national standards.

    That performance can be compared to large zone populations above 10,000, where drinking water met standards for 86.7 per cent of residents.

    "The New Zealand Herald today reported that stormwater performance may in some cases be even worse. Around $10 billion is required to fix Aucklands stormwater system over the next 50 years. In the meantime, runoff from homes, roads and gardens will continue to pollute many popular swimming, food collection and coastal activity areas.

    Both reports provide revealing insights into the reasons why and how New Zealands urban water sector is the worst performing infrastructure category identified in the National Infrastructure Plan 2011.

    But they also suggest potential benefits of scale and specialisation in the provision of water services.

    Aucklands water supply and wastewater services are delivered under a single, vertically integrated provider able to leverage economies of scale to improve strategic capacity, focus and implementation.

    Watercare is, however, unique in the New Zealand context, being empowered through legislation, resourced through metered water charges and directly accountable to deliver water supply and wastewater services.

    As a result, Auckland performs strongly across indices such as water supply. But in a related service activity such as stormwater, where responsibility and accountability is diffused within the council structure and where resourcing is an annual competition for limited funds with transport, parks and other activities, performance is much less exemplary.

    Whether or not stormwater can and should become a function of a dedicated three waters agency like Watercare is unclear, due to the unpriceable nature of stormwater provision. What is demonstrable is that specialised agencies delivering water services at scale are generally more effective than distributed models with complex governance arrangements.

    Such was the finding of the Government-appointed Local Government Infrastructure Efficiency Expert Advisory Group anda 2012 report by PWC and GHD commissioned by NZCID and Water NZ.

    Its positive to see reporting now catching up with performance, but if New Zealand is to really lift its game in the water service sector, a closer look at structures and resourcing models will be required, says Selwood.

  • 22 Jan 2016 11:01 AM | Anonymous
    Reports show need for improved water service delivery by councils


    Media Statement 
    14 April 2014

    The recent release of the Ministry of Healths Annual Report on Drinking Water Quality and a stormwater report commissioned by the Auckland Council provide two further reminders of the need for better scrutiny and accountability in meeting drinking water, wastewater and stormwater standards in New Zealand, says CEO of the New Zealand Council for Infrastructure Development Stephen Selwood.

    While freshwater issues have succeeded in penetrating the public debate, leading to a number of positive initiatives including the Land and Water Forum and the Land Air Water Aotearoa monitoring website, these reports highlight immediate issues of urban water service quality and accountability which are not receiving the attention they deserve.

    Pleasingly, Local Government New Zealand is leading a project to create a nationwide data framework for water infrastructure which seeks to share best practice, reduce costs and adopt innovative practices in water service delivery. This work needs to be completed with urgency, but ultimately requires a national discussion and Government buy-in to overcome the size of the challenge.

    Consistent with the previous study in 2011/12, the Ministry of Healths latest report reveals, once again, quite serious problems with drinking water in areas serviced by smaller providers. Just 22 per cent of residents living in small water zones of 101-500 people and 37.8 per cent of those in minor zones of 501-5000 people received drinking water that met all national standards.

    That performance can be compared to large zone populations above 10,000, where drinking water met standards for 86.7 per cent of residents.

    "The New Zealand Herald today reported that stormwater performance may in some cases be even worse. Around $10 billion is required to fix Aucklands stormwater system over the next 50 years. In the meantime, runoff from homes, roads and gardens will continue to pollute many popular swimming, food collection and coastal activity areas.

    Both reports provide revealing insights into the reasons why and how New Zealands urban water sector is the worst performing infrastructure category identified in the National Infrastructure Plan 2011.

    But they also suggest potential benefits of scale and specialisation in the provision of water services.

    Aucklands water supply and wastewater services are delivered under a single, vertically integrated provider able to leverage economies of scale to improve strategic capacity, focus and implementation.

    Watercare is, however, unique in the New Zealand context, being empowered through legislation, resourced through metered water charges and directly accountable to deliver water supply and wastewater services.

    As a result, Auckland performs strongly across indices such as water supply. But in a related service activity such as stormwater, where responsibility and accountability is diffused within the council structure and where resourcing is an annual competition for limited funds with transport, parks and other activities, performance is much less exemplary.

    Whether or not stormwater can and should become a function of a dedicated three waters agency like Watercare is unclear, due to the unpriceable nature of stormwater provision. What is demonstrable is that specialised agencies delivering water services at scale are generally more effective than distributed models with complex governance arrangements.

    Such was the finding of the Government-appointed Local Government Infrastructure Efficiency Expert Advisory Group anda 2012 report by PWC and GHD commissioned by NZCID and Water NZ.

    Its positive to see reporting now catching up with performance, but if New Zealand is to really lift its game in the water service sector, a closer look at structures and resourcing models will be required, says Selwood.

  • 22 Jan 2016 10:59 AM | Anonymous

    Auckland productivity dividend must be realised to justify city shaping infrastructure investment

    Media Statement 
    21 February 2014

    An independent review of Aucklands planning framework by international consulting firm SGS Economics and Planning released today identifies a lack of city shaping infrastructure investment as the principal impediment to achieving a quality compact city. The report recommends that the productivity benefit from investment, demand management and urban intensification needs to establish the case for expanded co-investment and policy reform by Central Government.

    We commissioned this study to gain a better understanding of how successfully programmes, policies and investment plans developed over the past three years by the Council are delivering on the Auckland Plan vision to make the city the Worlds Most Liveable, said Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

    SGS found that governance reforms have equipped Auckland with the most evolved metropolitan governance structure of any city in Australasia.

    Auckland has a united voice on regional issues and has the critical mass to make trajectory shifting decisions in its own right.

    The Auckland Plan sets out a compelling and demonstrably achievable vision for Aucklands spatial development.

    However, SGS found that the Auckland Plan objective of a quality compact city was unlikely to be achieved without increased investment in city shaping infrastructure, identification of the means to fund that investment and policy reform to support road pricing and value capture mechanisms.

    On current plans there simply is not sufficient investment in transport infrastructure to support a transition to an efficient and competitive higher density urban form, Selwood said.

    To reverse many decades of low-density, motor-vehicle oriented growth will take much more than the city rail link and other projects prioritised in the Auckland Plan.

    This finding helps explain why transport modelling of future land use and transport investment completed last year showed Aucklands congestion worsening significantly over the course of the next thirty years, even with all proposed investment committed.

    But rather than retracting the compact city vision, SGS call for analysis of the productivity benefit that is expected from urban transformation. Where the Auckland Plan vision can be shown to boost national productivity, GDP and aggregate tax revenues there is a strong case for co-investment from central government. Increased economic performance more generally also substantiates the case for new funding sources, such as road pricing and value capture, which are key to achieving the Auckland Plan vision.

    Better understanding of these benefits may also help foster community and local board support, which has so far been an impediment to the scale of intensification proposed.

    We hope that this report will stimulate a joint Government and Council work programme to identify the productivity dividend that can be achieved through optimal investment in city shaping infrastructure. In NZCIDs view, this requires vast improvement in integrating transport investment and land use development, including more targeted densification to support major investment in public transport, and implementation of road pricing and value capture mechanisms.

    While the united Auckland Council is making great progress, stronger alignment and unity of purpose between central government and the Council is needed if the productive potential of Auckland is to be truly realised, Selwood says.

    To view the report please contact us.

  • 22 Jan 2016 10:53 AM | Anonymous

    Project information and better procurement essential to raising construction productivity and value

    Media Statement 
    16 December 2013

    The Productivity Partnership-commissioned National Construction Pipeline released recently is an important step to understanding the scale of New Zealands building and infrastructure challenge, but to lift the performance of the sector the future work programme must be project specific, well sequenced and utilise best in class procurement capability, says NZ Council for Infrastructure Development chief executive Stephen Selwood.

    Its encouraging to see well-evidenced information being produced and published on the projected value of the forward work programme in key regions and nationally and across residential and non-residential sectors.

    Knowing, for example, that the Canterbury rebuild will likely peak in 2015 and remain elevated until 2018 will give contractors in the region the confidence to take on or up-skill staff, suppliers to gear upandstudents the option to pick up a trade for a very positive period ahead.

    "But bringing projects to market in a well-sequenced cogent programme, making timely decisions, providing transparent communication of information to suppliers and service providers and conforming with stated bidding processes and timelines is also key to unlocking value.

    "Already, there are several instances where investors and major construction firms have made considered decisions to withdraw from the rebuild having to that time funded business development and taken part in market briefings, bid processes and being otherwise prepared to engage in competitive processes.

    "Given the significance of the forward work programme, adopting best practice procurement is critical if the Government and Council are to extract best value for tax payers and rate payers.

    "The Auditor General recently endorsed procurement practices used by the SCIRT alliance (Stronger Canterbury Infrastructure Rebuild Team), and NZ Transport Agency is generally regarded as a leader in procurement of major projects in New Zealand. Both provide good examples to follow.

    "A dedicated high performance procurement agency acting on behalf of both Government and the Christchurch City Council remains an option worthy of consideration - especially noting that CERA has only two years to run under current statutory arrangements.

    On the national front, large contractors and other corporates will be able to use the National Construction Pipeline information to develop strategies for capital raising, product development, labour specialisation and market positioning.

    But if the businesses involved in meeting New Zealands infrastructure, housing and commercial building needs are to have the capacity available when required, much greater transparency at the project level is required.

    The timing of large projects, such as when requests for proposals will be released and what the intended construction timeframes are, as well as potential procurement options, are all essential to a market which has to deal with lumpy, complex investments requiring long lead-in times.

    The market can operate in an environment where projects are announced with little warning, arrive in clusters followed by periods of relative calm and where expectations for finance requirements or project bundling are frequently thwarted.

    But its a question of, at what cost? Boom-bust project procurement is not only inefficient for the industry it results in much higher costs for clients. Firms invest short term, underinvest in training and incur significantly increased costs of scaling up and scaling down to meet market demands. Inevitably prices rise in the boom and firms go bust when the project pipeline stops.

    Since the public sector has long term certainty over revenue sourced from taxes, rates and charges it is in a unique position to plan and implement asset replacement and renewal on a medium term horizon and be ready to profit from counter cyclical investment.

    The better the planning, the better will be the value for money for tax payers and ratepayers.

    Thats why as much detail as possible is required about not only the aggregate value of work expected across the building and construction sector, but also detail about the type and expected timing of projects and how they will be procured.

    A lot of expectation now hangs over the release of Treasurys much anticipated Ten Year Capital Intentions Plan, due out early next year, and continued improvement to procurement in Christchurch, Selwood says.


  • 22 Jan 2016 10:51 AM | Anonymous

    One Hawke's Bay will strengthen local and regional decision making and service delivery

    Media Release
    2014

    Unifying the Hawkes Bays five councils to create a single Hawkes Bay unitary authority supported by nine councillors and 37 local board representatives across five wards will strengthen local decision making and better meet the long term needs of the regional community, says Stephen Selwood of the NZ Council for Infrastructure Development.

    Under existing governance arrangements, ownership and decision making rights and responsibilities are so fractured that they undermine local democracy.

    All residents of the region, for example, share ownership and shape decision making for the Port of Napier, but only the residents of Napier and Hastings possess the same rights over the Hawkes Bay airport. Napier meanwhile, carries responsibility for managing McLean Park and Hastings has to maintain local roads to and around its major manufacturing plants so that residents outside the district can get to work.

    Yet, one would have to question how less dependent a resident of Wairoa is on the airport or why a Central Hawkes Bay rugby fan should be less responsible for maintaining McLean Park.

    Bringing these interdependent entities under a single regional umbrella and recognising the common facilities and activities of residents will enhance regional decision making for everyone in the Hawkes Bay.

    The Hawkes Bay Council, which will include rural and urban representation in proportionate numbers, will be accountable for services to the whole region not just to the urban centres as has been suggested by some local commentators. That will require councillors to recognise and support the interdependency between town and country.

    Local decisions, meanwhile, can be passed over to community boards, strengthening the ability for residents to influence those decisions which truly are theirs to make.

    Restructuring the region as proposed by the Local Government Commission will not just improve democratic decision making, it will also better reflect the economic relationships binding the area.

    The split between the two more urbanised territorial authorities, Napier and Hastings, and the two more rural districts, Wairoa and Central Hawkes Bay, unfairly reflects the important role that the hinterlands play in supporting urban centres and is unhealthy for the future of the region.

    Manufacturing plays a greater role in the Hawkes Bay than in any other region across New Zealand, but that industry is heavily dependent upon produce sourced from rural areas in and around the urban centres.

    It is not economically sustainable to sit back and watch as the Wairoa district loses a further 17 per cent of its population over the next 20 years while Hastings grows almost 10 per cent.

    A central decision making body with the scale and expertise to identify issues, implement solutions and seize opportunities is much better placed to address the long term challenges of the two rural districts and continue to foster growth in Napier and Hastings.

    The Auckland example shows just how much impact a single voice for a region can have on the investment decisions of central government and the attractiveness of a destination for capital. Separate and sometimes opposing tourism, marketing and economic objectives across the Hawkes Bay are fracturing the message conveyed outside the area and reducing investment opportunities.

    What the region sorely needs is strong, unified leadership, a single plan and the capacity to deliver. Current governance arrangements inhibit progress and it is positive to see the Local Government Commission is taking the bold steps necessary to improve the future for all Hawkes Bay residents, Selwood says.


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