Infrastructure new Zealand News & MEDIA RELEASES

MEDIA RELEASE

“We’re delighted with today’s announcement of $12 billion in new capital investment by the Government,” says Infrastructure New Zealand CEO Paul Blair.

“The next critical step is to give the industry certainty, execute effectively, and procure in partnership with iwi, councils, and the private sector in alignment with the Construction Sector Accord principles.

“It is encouraging to see the Government using its recent surplus to invest in productive infrastructure to deliver environmental, social, cultural, and economic outcomes.

“Transport, health and regional investment, as well as earlier announced spending on schools, comprise the majority of the allocations.

“A long awaited $6.8 billion investment in roads and rail is the highlight of the package and represents by far the largest transport commitment from the consolidated fund by any Government in over a generation.

“The $300 million allocated to regional investment could generate significant benefits in the provinces, particularly if leveraged to attract local and private investment.

“Stepped increases in capital spending over the next few years will see net new Government capital investment peak at close to $12 billion in 2021, up from just $1 billion five years ago.

“Project reprioritisation has impacted both government and industry’s ability to get projects delivered in recent years, affecting business confidence and economic performance.

“A significant barrier to execution is the Resource Management Act, which is why we’re delighted to see the Randerson-led review underway.

“In the interim, the most effective way to expedite resource management approvals would be to partner with councils to make sure that communities, iwi, and businesses are adequately engaged on projects.

“Two of our poorer performing infrastructure portfolios, housing and water, do not feature heavily in today’s announcement.

“However, it is pleasing to see critical legislation around a new drinking water regulator, new powers for Kāinga Ora, and new infrastructure funding and financing tools being addressed with urgency.

“For urban development to be effective, urban water, transport and housing need to be planned and delivered in an integrated fashion.

“If the Government can deliver its ambitious programme, this is a great start to build momentum and address our long-standing infrastructure issues, but we are not there yet,” says Blair.

ENDS

For further information and comment contact Paul Blair on 021 902 436

MEDIA RELEASE

“Relocating Auckland’s freight port is one of the biggest decisions this country will ever make and needs a full assessment of all the challenges and opportunities,” says Infrastructure New Zealand CEO Paul Blair.

“We recommend that the Upper North Island Supply Chain Strategy (UNISCS) reports be upgraded to a fully compliant Better Business Case, with independent oversight from the Infrastructure Commission.

“New Zealand Cabinet Rules and NZ Treasury advocates use of the Better Business Case for all significant investment decisions involving whole of life costs of more than NZ$15 million.

“Infrastructure New Zealand welcomes constructive debate on the critical transport infrastructure of the Upper North Island supply chain.

“We applaud UNISCS Working Group for shining a light on this important sector, but think this is the start of the discussion, not a conclusion.

“Infrastructure Victoria, the state’s equivalent of our new Infrastructure Commission, led a detailed and independent assessment of Victoria’s port strategy in 2017, which considered a new port to supplement or replace the existing Port of Melbourne.

“Infrastructure Victoria highlighted two critical factors for an efficient and effective port, based on global best practice. Ports should be as close as possible to their customers to minimise land transport costs and have a balance of imports and exports to avoid the costs of shipping empty containers to the next port.

“Infrastructure Victoria’s independence, use of global port experts, and wide consultation produced an evidence base which removed the political heat that surrounded Victoria’s port future. We believe a similar process should be used in New Zealand.

“We have five major questions that we expect a future Better Business Case would fully consider.

“First, additional freight costs need to be fully addressed. 80% of Ports of Auckland’s goods are currently delivered by truck within 20 kilometers of the port gates. Even if 70% of freight arrives back in Auckland by rail, it will arrive at an inland port somewhere in West Auckland and still need to move 20-30 kilometres to its final destination. In addition to financial costs, the report is silent on the substantial carbon emissions and potential road and rail safety issues from freight travelling through the crowded Auckland isthmus.

“Second, if Ports of Auckland is forced to close and the government builds a new port 140 km north, how confident are we that freight companies will go to Northport?

“Shipping companies will go to ports where they can balance export and import loads to minimise the number of vessel calls. Northland does have a growing export base, but it is substantially less than Auckland’s import volume. Even if the freight did follow the investment to Northport, we may all be paying much more to have empty containers moved from Northport to our main export port in Tauranga.

“Third, we need to consider what the issues are that we are trying to solve and what’s the best way to achieve them.

“If we want to revitalise Northland, is this $10+ billion investment the best bang-for-buck? If we are aiming to decongest Auckland, will this move really solve the city’s transport woes? We call for further investigation of revenue-neutral road pricing as a tool to unblock traffic congestion.

“Fourth, we need to understand who pays for this move and who benefits. The UNISCS report gives us an overall cost-benefit ratio, but individuals and businesses will be impacted in significant and divergent ways. Moreover, the analysis is heavily influenced by which projects are included in it.

“If Aucklanders want a low-density parkland waterfront, are they willing to pay for that in higher rates, taxes, and higher costs on their goods?

“Lastly, each of the ports in question (Auckland, Tauranga, and Northport) have different ownership and governance structures. Taxpayer investment of $10+ billion will produce costs and benefits for individuals, councils and private investors. Rationalisation of the governance of our ports would be complex but must be considered given the amount of money involved.

“The proposed port move would be New Zealand’s largest ever infrastructure investment and will have long-lasting impacts on New Zealand.

“The Infrastructure Commission was established precisely to provide an independent evidence base for these kinds of infrastructure decisions.

“We should use their independence and expertise to make sure this once-in-a-century decision is the right one,” says Blair.

ENDS

For further information and comment contact Paul Blair on 021 902 436

MEDIA RELEASE

“Today’s update of the Infrastructure Pipeline is a sign that the New Zealand Infrastructure Commission – Te Waihanga is making good progress and we look forward to more government agencies, councils, and council-controlled organisations contributing to the pipeline over time,” says Paul Blair, CEO of Infrastructure New Zealand.

“The Commission has launched its first update of the Infrastructure Pipeline, a tool which catalogues proposed and underway infrastructure projects across the country.

“The current project pipeline has a combined value of over $20 billion, but is still only a fraction of what it will eventually become.

“Around $130 billion is expected to be spent on infrastructure over the next 10 years, including private infrastructure, which future iterations of the pipeline will gradually capture.

“Particularly pleasing is the introduction of local government projects, continuing momentum towards a single, comprehensive forward works programme for the country.

“Having a clear pipeline of work is essential for construction and engineering firms to understand what projects are on the horizon and where their labour and capital will be needed next.

“If projects are slowing down in one region or sector, it is important for firms to be able to readily identify other opportunities around the country.

“Greater transparency and certainty of work is critical to supporting investment in the skills, technology and systems necessary to improve poor productivity and manage risk across the construction sector.

“Once the country has an identified pipeline in place, we can really look to optimise investment.

“Via this approach, Watercare in Auckland expects to reduce the cost of its infrastructure programme by 20 per cent.

“Even just a 10 per cent saving across the national programme over the next decade would allow some $13 billion of investment to proceed which otherwise would not have.

“That’s sufficient to deliver the Let’s Get Wellington Moving transport plan and clear the country’s backlog of water supply and wastewater needs, delivering great outcomes for everyday kiwis.

“The Infrastructure Pipeline illustrates the importance of the Commission’s powers to collect data from government departments, including local councils and their council-controlled organisations.

“We are pleased to see the Commission continue work on the pipeline and to signal work on their major deliverable: the 30-year Infrastructure Strategy.

“The Commission will provide the strategy report to the Government towards the end of 2021 and update it at least every 5 years.

“The strategy and pipeline will ultimately provide a robust evidence base for both public and private investment decisions over the long term, helping to depoliticise major projects and get the most out of the nation’s capital investment,” says Blair.

ENDS

For further information and comment contact Paul Blair on 021 902 436.

MEDIA RELEASE

"The decision to establish an independent drinking water regulator is very positive and will help bring New Zealand’s water services up to international standards, but the absence of user charges leaves a significant gap in national water policy which needs to be filled,” says Infrastructure New Zealand CEO Paul Blair.

“Local Government Minister Nanaia Mahuta and Health Minister David Clark announced this morning that the Government will establish an independent drinking water regulator, likely in 2020.

“This is one of the most significant decisions ever for New Zealand’s three waters service provision.

“The current drinking water system has failed to keep New Zealanders safe, resulting in up to four deaths in Havelock North and hundreds of thousands of New Zealanders receiving water which fails to meet basic standards every year.

“That the new regulator will be independent and focus on areas wider than just drinking water quality is particularly pleasing. The regulator will also help build capability across water suppliers, ensure Māori interests in water are recognised and provide oversight of wastewater and stormwater activities to promote environmental outcomes.

“Water is critical to promoting environmental and cultural wellbeing, as well as sustaining the health and social wellbeing of New Zealanders.

“But it is also critical to promoting economic wellbeing and there is no clear link in today’s announcement with the vital role water plays in sustaining the New Zealand economy.

“There are currently major issues in funding, financing, procuring, maintaining and operating water services to meet population and economic growth. This reflects the ownership structure of water provision, which sees 67 often small local councils carry responsibility for three waters provision, as well as investment arrangements which usually see water in New Zealand funded via rates, rather than volumetrically through user charges.

“Existing challenges are being compounded by a perfect storm of increased regulation, climate change and a backlog of investment starting at $2 billion and likely much higher.

“Ultimately, user charges are needed to pay for drinking and wastewater infrastructure.

“Structural separation is also required so that publicly-owned expert water delivery companies can manage debt off council balance sheets, prioritise investment over the long term and sustain necessary service expertise.

“Priced water needs an economic regulator to ensure consumers are not paying too much or too little for an acceptable standard of service. Scottish Water, the regulated public water provider for Scotland was able to reduce operating costs by 40 per cent and improve levels of service through better specialisation and good economic management.

“We call for the Government to require the new regulator to benchmark key economic and financial metrics, including the costs of service delivery and long term asset management and investment programmes. This will provide a stepping stone to future full economic regulation.

“Infrastructure New Zealand fully supports the plan to promote social, environmental and cultural outcomes for water, but a plan without money is not sustainable.

“We call for the Government to expand its approach to fully account for all four wellbeings in its water policy,” says Blair.

ENDS

For further information and comment contact Paul Blair on 021 902 436

MEDIA RELEASE

“The finding that moving Auckland’s freight port to Northland would yield significant benefits opens the door for an Infrastructure Commission assessment of how such a move could proceed, who would pay, and how the process could be best executed,” says Infrastructure New Zealand CEO Paul Blair.

“The report from the Upper North Island Supply Chain Working Group indicates that moving the port’s freight operations north would have substantial benefits for the Northland region as well as freeing up valuable land in the Auckland CBD.

“This project could be a rare exemplar of a nation-building strategic investment where meaningful infrastructure investment will lead to knock-on benefits for the local regions and ultimately the country.

“Since this process has such enormous implications for infrastructure development and the overall fate of New Zealand’s well-being, an independent review by the newly formed New Zealand Infrastructure Commission – Te Waihanga is essential to make sure we do this right.

“The Port of Auckland has had a 150-year life, so we need to be thinking in terms of the next port lasting 150 more years.

“The EY report notes significant sensitivity to key assumptions and these should be further tested with stakeholders.

“Will Auckland’s port land be used for commercial or recreational uses? Does the business case deliver net jobs growth to Northland and New Zealand or does it simply shift these from Auckland? How commercially viable is the shift of the supply chain to Northland versus use of Tauranga? Is 70% mode shift to rail realistic and does it require road and rail to be delivered together?

“Moving the port will be no mean feat, and there should be broad agreement on who will foot the bill for the substantial investments needed in rail, road, inland freight hubs, and harbour redevelopments.

“If this $10 billion investment in the north crowds out transport investment south of Auckland, there could be severe impacts for housing supply and development capacity.

“The Golden Triangle is over half of New Zealand’s population and more than that in terms of economic growth.

“The primary question should be: what strategic investments should we make to optimise New Zealand’s long-term growth and well-being?

“Te Waihanga was established for exactly this type of project, so we look forward to it adding its weight to New Zealand’s largest infrastructure project. We only get one shot at moving Auckland’s port, it is important that we get it right,” says Blair.

ENDS

For further information and comment contact Paul Blair on 021 902 436

MEDIA RELEASE

“Today’s announcement of a $2.4 billion, 10-year construction partnership between Watercare and Fulton Hogan and Fletcher Construction is a positive development for the wider infrastructure industry that will lead to better outcomes for all parties,” says Infrastructure New Zealand CEO Paul Blair.

“By committing to a long-term programme of work rather than one-off projects, Watercare is giving the certainty that construction companies like Fulton Hogan and Fletcher Construction need to be able to invest in skills, drive efficiencies, and innovate.

“The collaboration is good for Watercare, which needs partnership to drive its ambitious sustainability, cost, and well-being goals, as well as for its key suppliers.

“This partnership is consistent with the Construction Sector Accord, established earlier this year, that aims to bring the public sector and construction industry together to support a long-term, sustainable, and innovative construction industry in New Zealand.

“Infrastructure New Zealand is delighted to see that this type of collaborative partnership uses the best-practice guidelines established in our 2018 report, Creating Value Through Procurement: A Report into Public Sector Procurement of Major Projects.

“With a national infrastructure pipeline of $129 billion over the next 10 years, we call on all public sector entities to closely examine this model. Watercare is aiming for 20% cost savings, but if our country saved even 10% we could deliver at least 20,000 new social homes or pay for 15 transport projects the size of Transmission Gully.

“The agreement has occurred while Watercare remains tied to the Auckland Council’s balance sheet, limiting the CCO's capacity to raise debt to finance major infrastructure projects.

“Imagine how much more Watercare could do if it had financial independence. The scale and depth of infrastructure investment would be much greater, leading to both better results for the construction sector but also to better, safer, and more sustainable water infrastructure for Aucklanders.

“We look forward to the Government’s forthcoming water sector reforms to enable more long-term, large-scale and strategic investment in New Zealand’s essential water infrastructure,” says Blair.

ENDS

For further information and comment contact Paul Blair on 021 902 436

MEDIA RELEASE

“Three-quarters of the infrastructure sector have called for transformation, rather than incremental change, of the culture and incentives between central and local government to work together to promote national well-being,” says Infrastructure NZ CEO Paul Blair.

Infrastructure NZ today released the results of Beca-sponsored polling taken during the 2019 Building Nations Symposium from 21-23 August. Over 720 industry leaders attended the conference and were polled after each session on current and proposed policies.

“Respondents overwhelmingly supported more tools for local and regional governments in order to unlock the full potential of our regions.

“Only 2 per cent of respondents believed that water provision should remain in its current state.

“Sixty-six per cent of respondents agreed that water services should not be owned by local councils and instead be delivered by regulated Watercare-type entities.

“City and regional deals, where central and local governments partner to drive regional economic development, also received particularly strong support, with 98 per cent of respondents believing the approach would be useful in our context.

“A core contributor to our governments' inability to respond to complex, multi-faceted issues such as housing affordability and transport needs, is a culture where central and local government lack trust and in fact often compete with each other.

“The city deal model incentivises regional governments with the money and the responsibility to take faster, localised action on the outcomes that matter to communities and the country. It builds a more collaborative relationship.

“Between 65 and 74 per cent of respondents supported a redistribution of central government’s GST, or income and corporate tax revenue, to local governments.

“Our political system has evolved to the point where central government takes 93 per cent of all taxes and rates revenue, leaving only 7 per cent for local and regional authorities. This is highly unusual internationally.

“Our proposal, which almost three-quarters of respondents supported, would double the current $3 billion Provincial Growth Fund into a $6 billion Regional Growth Fund and use it as a tool to align central and local government investment.

“An additional $3 billion over the next three years to regions who cooperate to develop spatial plans would drive regional growth and development for the benefit of the nation as a whole.

“Central government would trial this responsibility-sharing through a city deal-type arrangement where regions would be funded if they commit to and deliver on complex system-wide outcomes such as adequate housing supply, reliable transportation networks, healthy waters, and economic performance,” says Blair.

Greg Lowe, Group Chief Executive, Beca, commented that “New Zealanders want to see their tax dollars invested in projects and outcomes that will improve how we live, work and play in our communities. Encouraging stronger partnership between central and local government would lead to better decisions and more effective funding for regional infrastructure. 

“Better long-term planning and a transparent project pipeline will improve New Zealand’s productivity and strengthen our economy. It will lessen the impact of political change and encourage industry to invest with confidence in upskilling our people and creating more jobs in our communities.

“We are not keeping pace with the infrastructure needs of our country and our communities - we need to be able to move together, both public and private sector, to plan and deliver quality infrastructure at a faster pace,” says Lowe.

The full results of the polling, sponsored by Beca, from the 2019 Building Nations Symposium can be found here.

A copy of Infrastructure New Zealand’s thought leadership report “Building Regions: A Vision for Local Government, Planning Law and Funding Reform” is available here.

ENDS

For further information and comment contact Paul Blair on 021 902 436

MEDIA RELEASE

“Infrastructure New Zealand is proud to see Sarah Lang off on the International Visitor Leadership Program to the United States tomorrow. With Sarah one of only eight people from the southern hemisphere hand-picked by the US Embassy to participate in this exclusive programme, it is a credit to the leadership she has demonstrated in a wide variety of areas” says Paul Blair, CEO of Infrastructure New Zealand.

“This programme has hosted numerous leaders around the world, including influential leaders such as Helen Clark, Jenny Shipley, David Lange, Julia Gillard, Tony Blair and Margaret Thatcher.

“The accolade follows Sarah’s previous leadership achievements, including Winner of the 2018 Woman of Influence Award for Diversity and 2019 Nominee for the Kiwibank New Zealander of the Year 2019.

“Sarah has been influential in the infrastructure sector, notably launching the Women in Infrastructure Network in 2016, which now has seven chapters and 1600 members nationwide.

“She also helped establish the Emerging Talent Network, whose Auckland and Wellington chapters now boast over 600 members.

“The leadership programme will help Sarah further develop her expertise in two of the five strategic pillars that Infrastructure New Zealand considers vital for the delivery of world class infrastructure: leadership and delivery capability.”

“Congratulations to Sarah. New Zealand needs to celebrate its leaders who achieve this type of recognition, and we are really looking forward to benefitting from the insights, connections and leadership experience she brings back,” says Blair.

The focus of this year’s programme will be on disaster preparedness and building national resilience. Sarah and the other delegates will visit a number of US states to see how agencies and communities are working together to respond to challenges such as climate change, weather events and natural and human disasters.

ENDS

For further information and comment contact Paul Blair on 021 902 436

MEDIA RELEASE

“The cancellation of the Westpower hydro scheme concession under the Conservation Act after years of community engagement has significant implications for the review of the resource management system that is about to commence and underlines the need for an improved system for planning consents,” says Paul Blair, the new CEO for Infrastructure New Zealand.

“Westpower, the locally owned electricity distributer and generator for Westland, had hoped to build a 20 MW hydro scheme on the Waitaha river on the South Island’s West Coast.

“The scheme would have improved resilience of electricity supply, was aligned with national carbon reduction priorities and would have injected millions of dollars into a part of the country whose traditional industries are under significant pressure.

“But it also would have reduced water flows along a pristine river, impacting recreational activities, and impacted the natural character of the area.

“This was always going to be a difficult decision, but the fact that a local company spent millions of dollars before a line call from a Cabinet Minister cancelled the proposal shows how tenuous and uncertain the consenting process is in New Zealand.

“Though this was a Conservation Act process, this is an excellent case study for the RMA review panel chaired by retired court of appeal judge Tony Randerson.

“How do we develop a system to optimally trade off the wider social, economic, cultural and environmental benefits of a proposal versus negative environmental effects?

“How do we balance local aspirations to grow and prosper against national objectives to retain areas of national significance?

“How do we provide guidance or accelerate decision making so that economic and social uncertainty, waste and frustration are mitigated, along with environmental impacts?

“In a better system, the need to expand renewable energy supply would have been part of a coordinated regional plan for Westland, led by the region, supported by central government, iwi and local communities, and linked to a wider programme designed to enhance regional wellbeing.

“National concerns about the significance of the Waitaha river would have been tackled through a collaborative planning process and either the effects mitigated or alternatives developed.

“That would have saved everyone a lot of time and cost and instead of wondering ‘what next?’ Westland would now be implementing an agreed strategy to lift incomes and improve the environment,” Blair says.

ENDS

For further information and comment contact Paul Blair on 021 902 436

MEDIA RELEASE

“Infrastructure New Zealand is proud to see infrastructure organisations leading the way in workplace diversity, but urges organisations across the sector to continue pushing for positive outcomes,” says Paul Blair, CEO of Infrastructure NZ.

The awards, run by Diversity Works New Zealand, are in their 22nd year and celebrate best practice in workplace diversity and inclusion. Click the names of each member for a link to a video summarising their work.

Infrastructure NZ member Vector took home the Supreme Award at last night’s 2019 Diversity Awards NZ™, for their work in driving a diverse and inclusive culture throughout their organisation.

Vector also won the Empowerment Award, in recognition for their work to have their workforce match the gender diversity of the NZ population, and for their efforts to develop women leaders across the organisation. The electricity distribution business also won the Diversability Award for their work in supporting equitable hiring and support for employees with disabilities.

Fellow Infrastructure NZ members Air New Zealand won Cultural Celebration award for training their staff about the culture behind their well-known brand.

“It’s wonderful to see infrastructure businesses leading the way when it comes to driving diversity in their workforce and building a culture of inclusion,” says Blair.

“Diversity and inclusion aren’t just about being more marketable or earning social license to operate. A diverse workforce has more and better ideas and is making full use of New Zealand’s diverse labour force.

“When organisations drop the ball on diversity, they are leaving money on the table. If there’s one sector that should be striving for every advantage and opportunity, it should be the infrastructure sector in New Zealand.

“Ultimately, it’s just the right thing to do.

“Organisations ought to represent the customers they serve, being aware of the unique advantages and challenges that different users have,” says Blair.

Infrastructure NZ is delighted to acknowledge the growing number of member organisations nominated as finalists for the 2019 Diversity Awards NZ™, demonstrating the increasing importance the infrastructure sector is placing on diversity and inclusion to help build a future-focused industry.

This year, Infrastructure NZ members Downer NZ and HSBC NZ were finalists in the Cultural Celebration Category, where they were commended for their responses to cultural and ethnic engagement in the workplace;

Spark was a finalist in the Emerging Diversity and Inclusion Category which honours a diversity and inclusion initiative that is less than two years old;

Kensington Swan was a finalist in the Empowerment Category which celebrates innovative responses to empowering women in the workplace;

GHD was a finalist in the Positive Inclusion Category, for their innovative response to inclusivity of the LGBTQI community in the workforce;

Downer NZ and GHD were finalists in the Tomorrow’s Workforce Category, which celebrates innovative responses to a changing workforce demographic

Glen Cornelius from Harrison Grierson and Shane Morgan from Watercare Services were finalists in the Walk the Talk Category, which celebrates leaders who exemplify excellence in promoting and managing a diverse workforce.

Infrastructure NZ also acknowledges the success of industry association partners Engineering NZ, who were finalists for the Emerging Diversity and Inclusion Category for the transformational work they are leading across the industry.

As a member of Diversity Works New Zealand, Infrastructure NZ is a strong advocate for member organisations developing diverse and inclusive workplaces by publicising clear targets and metrics on diversity, prioritising action and reporting externally to stakeholders.

“One of the five requirements for world class infrastructure is the skill base of our industry. Future proofing our industry through diversity, inclusion, and hearing all the voices of our best and brightest minds is critical,” notes Blair.

“These awards recognise some strong and positive efforts by the infrastructure industry, but there is still more to be done.

“We look forward to seeing more infrastructure organisations succeeding in this space next year and in the years to come.”

ENDS

For further information and comment contact Paul Blair on 021 902 436