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Home / Business / Business Reports / Infrastructure report

B+ score on national infrastructure

By Stephen Selwood
NZ Herald·
18 Aug, 2013 05:30 PM6 mins to read

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For a productive economy, we need all our regions to achieve to their potential

If it's marks out of 10 for progress on New Zealand's infrastructure development, any scorecard would have to give the Government credit where credit is due. The list of positive change is extensive and there's no doubt the Government has made significant strides on the infrastructure front since elected in late 2008.

But ever-impatient for faster and better progress, what more must be done to deliver on our mission of world class infrastructure for all New Zealanders?

Given its critical importance, top priority must now be given to speeding up the Canterbury rebuild. This is closely followed by the need to address long-term transport funding challenges, especially in Auckland, improving regulatory certainty in the energy and telecommunications sectors, leading local government and planning law reform so that the full potential of regions across New Zealand can be realised.

At the most fundamental level, there remains an urgent need for the resolution of insurance and housing uncertainties. Immediate priorities are redoubling the focus on initiatives to retain people and capital in Christchurch, and a more tangible sense of momentum on the rebuild of the CBD where people are missing the vibrancy and beating heart of the city.

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Moving from emergency action to reconstruction of the central city requires less bureaucracy and the injection of the highest levels of commercial expertise, risk management and project management skills. Rather than direct hands-on political management, a better outcome could now be achieved by government and councils stepping back, being very clear about the outcomes they seek, and transitioning the Central City Development Unit into a jointly owned central and local government urban development agency responsible and accountable deliver those outcomes.

This organisation would have an independent board of governance and would recruit the highest levels of public and private sector delivery expertise. The first imperative would be to develop the CBD design blueprint into a commercially attractive and bankable investment proposition. Providing market transparency about decision-making and procurement of the project pipeline is fundamental to enabling the industry to commit the right resources efficiently and ensuring that investment confidence is there when needed.

The Stronger Christchurch Infrastructure Rebuild Team (SCIRT) alliance has shown the benefits of partnership contracting in restoring essential infrastructure. The capacity of the industry to deliver complete solutions from "design, build and maintain" to fully integrated solutions including private finance now need to be further energised. Reverting to traditional contracting methods, as seems now apparent, creates an enormous risk that rebuild will stall and that real synergies in bundled whole-of-life solutions will be missed.

Parallel to the central city rebuild is the need for macro-thinking and action at a regional level. The clear definition of a future vision for Canterbury to which everyone subscribes and rallies, and developing a new governance structure to better leverage the strengths of the region must now be progressed.

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By 2016 the Canterbury Earthquake Recovery Authority (CERA) and the commissioners at Environment Canterbury (ECan) are due to be replaced. The three-year period from now until then creates an ideal time to transition from the divided local government structure that existed before the earthquakes to a single council for greater Christchurch or, even better, one unitary authority for all of Canterbury.

While reforms to the Local Government Act have made council amalgamations easier it is of concern that, as yet, there is no commitment by government to leading local government consolidation, either in Canterbury or elsewhere. As Economic Development Minister Steven Joyce rightly observes, for New Zealand to build a more productive and competitive economy, we need all of our regions to achieve to their potential. Around three-quarters of the nation's exports by value depend on both raw inputs from our regions and manufacturing, technical, financial commercial inputs from our cities. Transport, energy, water and telecommunications networks provide the lifeblood of regional economies. Schools, universities, hospitals, libraries, galleries, stadia, theatres and public institutions are home to our nation's health, justice, creativity, and innovative potential.

Yet, despite the importance of regional production and the infrastructure that supports it, New Zealand's local government structures and planning frameworks remain fragmented and disintegrated. Lifting regional productivity requires leaders committed to long-term vision and planning, unity of purpose, ability to fund, effective regulation and the expertise to implement strategy in partnership with the private sector, iwi and local communities.

Some council amalgamations are being considered. But the approach is both piecemeal and inconsistent and unlikely to derive the best outcomes in a timely way. Like Auckland, an external process such a royal commission on local government and planning law reform is needed for the rest of the country.

There's no doubt that amalgamation will see Auckland go from strength to strength. Nothing demonstrates this better than the development of the Auckland Plan and central government's commitment to "backing Auckland". But in the face of spiralling demand for road space at peak periods, under-utilised public transport services, and a transport funding gap in the tens of billions, some form of road pricing is the next logical step. The work of the Consensus Building Group has shown that Aucklanders are ready to embrace user pays. The time is right for the Government to show political leadership on this issue as well.

So, marks out of 10 for progress so far? You'd have to rate outcomes to date in the high sevens - a B+ overall. The elusive A+ requires new directions on the Canterbury rebuild, leadership on local government and planning law reform, improving regulatory certainty and grasping the road pricing nettle by the roots in Auckland.

Positive outcomes

* Emergency response in Canterbury.
* Formation of the Super City in Auckland.
* "Backing Auckland" support for major transport projects.
* Streamlining of RMA approvals for projects of national significance.
* Major investment in the national transport system - both road and rail.
* Electricity market reforms.
* Crown investment in ultrafast broadband, hospitals, schools, and social infrastructure.
* Establishment of the irrigation and future investment funds.
* Focus on affordable housing and urban planning.
* Enablement of local government reform.
* Improved focus on whole of life procurement and private sector investment in infrastructure.
* Nascent development of a National Infrastructure Plan.

Stephen Selwood is Chief Executive of the NZ Council for Infrastructure Development.

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