Infrastructure Report: The transformers

By Alexander Speirs

NZ Herald·

19 Aug, 2015 01:00 PM5 mins to read

Delays to the Waterview Connection project is costing the NZ economy millions of dollars in missed economic uplift, says Stephen Selwood, CEO of NZCID. Photo / Brett Phibbs

Our mega infrastructure projects have the ability to transform community life but first there needs to be better planning, co-ordination and funding methods.

New Zealand has earmarked $35 billion worth of funding over the next two decades into mega infrastructure projects, each with a price tag of at least $1 billion.

It marks a major shift for New Zealand as national investment in significant projects is stepped up after a hiatus for the best part of 20 years.

Stephen Selwood, chief executive of the New Zealand Council for Infrastructure Development (NZCID), says the pipeline of projects has the potential to be transformational for New Zealand.

"For this reason, they require the commitment and input of all of society, bringing together all levels of government and the private sector. They demand a different approach to planning, funding, procurement and delivery.

"Such a change presents significant challenges for our politicians, planners and engineers," says Selwood. "But it also presents the opportunity to up our collective game when it comes to the procurement of infrastructure."

NZCID led two senior delegations to Australia and the UK to study infrastructure and urban development. The delegations, hosted by the Australian Trade Commission and United Kingdom Trade and Investment, comprised a mix of central and local government officials and private sector representatives. The goal was to "investigate how other developed countries ... have evolved their thinking and approach to maximise the value of public investment and minimise the risk of failure".

Some of those lessons will be discussed at the NZCID's Building Nations Symposium, which gets under way in Christchurch today.

Australia and the UK represented the closest nations to New Zealand when it comes to legal, planning and institutional arrangements critical to the delivery of infrastructure. An outcome-based approach to infrastructure planning was a common characteristic there — in distinct contrast to the traditional best practice in New Zealand.

"Mega-projects in both countries are conceived, planned, funded and delivered on the basis that they will significantly contribute to local, regional and national social and economic outcomes," says Selwood.

"We must lift our vision and focus on outcomes, not inputs. Successful mega-projects must be driven, sustained and at all times committed to achieving broad societal outcomes,"

He cites delays to the Waterview Connection project as costing the New Zealand economy hundreds of millions of dollars in missed economic uplift. Such delays can ultimately result in fewer jobs and less competitive industries in the short term and lost investor confidence in the medium term.

For over two decades the spectre of 'Think Big' and changing perceptions of the State's role in national development prevented the delivery of a single mega-project. The upshot was major infrastructure problems — blackouts, heavy congestion, deficient public transport and broadband speeds which put New Zealand at the very bottom of the developed world. That situation was exacerbated by the Canterbury earthquakes placing further stress on already struggling infrastructure. But they also presented an unheralded challenge to rebuild essential infrastructure on a scale and capacity far beyond anything seen in the past.

The Government enacted emergency legislation to kick off the rebuild and eliminate unnecessary red tape. The establishment of the National Infrastructure Unit and delivery of a National Infrastructure Plan also paved the way for further development.

But in Auckland a lack of collaboration and occasional adversarial relationship between local and central government has hampered progress.

The creation of Development Auckland is expected to pay dividends.

In Australia and the UK, the delegations observed public private partnerships were the default method for delivering major infrastructure projects and public agencies were generally not responsible for project management.

Selwood says back here, independent delivery agencies have only been established for the Ultra-fast Broadband and Wynyard Quarter projects.

"The majority of projects are instead managed by public agencies," he says. "Political imperatives drive delivery models, funding and timing decisions, rather than just project needs. Consequently, there is a greatly increased risk that project decisions are driven by short term political imperatives which may not be in the best long term interest of the public or the project."

• Auckland's Western Ring Route Road of National Significance (RoNS): NZTA, $2 billion

• Wellington Northern Corridor RoNS: NZTA, $2.5 billion

• Puhoi to Wellsford RoNS: NZTA, $2 billion

• Waikato Expressway RoNS: NZTA, $2 billion

• Auckland City Rail Link: Local and central government, $2.5 billion

• Auckland's Second Waitemata Harbour Crossing: NZTA, $4 billion

• Auckland-Manukau Eastern Transport Initiative: Auckland Transport, $1.5 billion

• Auckland's East-West Link: NZTA and Auckland Transport, $1 billion

• Kiwirail's Turnaround (business and financial) Plan: KiwiRail, $1 billion

• Christchurch central city rebuild: Local and central government, $5 billion

• Tamaki redevelopment: Local and central government, $1 billion

• Wynyard Quarter and waterfront redevelopment: Waterfront Auckland, $2 billion