Independent oversight of infrastructure needed

Stephen Selwood.

Despite a significant increase in investment in recent years, and even more planned for the future, evidence that our infrastructure planning, funding and delivery system is failing is all around us - from congestion and unaffordable homes in Auckland, to contaminated drinking water and polluted rivers in the provinces.

Our schools are leaky, our hospitals are aged and local councils are struggling to maintain their networks. The resilience of our energy and transport networks is being increasingly challenged by natural and human hazards.

It's obvious that we need to change how we plan, fund and deliver resilient infrastructure in New Zealand.

Infrastructure New Zealand's international research has identified five critical success factors to an effective infrastructure system - clear vision backed by strong leadership, long-term thinking and plans focused on outcomes, not process; the ability to fund those plans; effective laws and regulation; and the capability to procure and capacity to deliver capital assets effectively and maintain them over the long term.

New Zealand is weak on all these fronts. Our National Infrastructure Advisory Board does good work, but has no authority and little clout.

We have few national plans and 78 regional and district plans, but they are poorly aligned and agencies either lack funding, capacity or capability to implement them.

Our planning laws are complex, disjointed and focused on process rather than outcomes.

We typically procure low-cost rather than value and without strong collaboration with the industry we are facing serious capacity constraints in the near term.

Most significantly, we lack effective leadership and governance across the infrastructure sector.

Unlike other countries we compare ourselves with, there is no one body overseeing infrastructure at the national level.

Instead, responsibility is devolved to government ministries, crown entities and agencies, local government and the private sector. No-one has oversight as to whether the system - our institutions, laws and practice - is delivering for New Zealand.

Compare that with the UK. It has a National Infrastructure Commission which provides independent, strategic thinking, analysis and advice on the UK's long-term infrastructure needs.

It also has an Infrastructure and Projects Authority which works with government and industry to deliver infrastructure and major projects efficiently and effectively.

In Sweden and Denmark, independent commissions create the political space for consensus to be achieved on complex issues, ultimately enabling cross-party support for long term development strategies.

Australia has infrastructure bodies at the federal and state government level. So does Canada.

We need a comparable body in New Zealand - a New Zealand Infrastructure Commission.

It would report independently to Parliament on whether the infrastructure system (comprising all the government ministries and agencies, local government and private sector organisations, as well as the legal, regulatory and funding framework in which they operate) is delivering for New Zealand.

If not, why not, and what needs to be done to improve the system?

The commission needs to be independent but also close to political decision-making. It would report to Parliament but maintain a "no surprises" relationship with ministers.

Like Infrastructure Australia, Infrastructure New South Wales and Infrastructure Victoria, it would be empowered by statute. It would have clear objectives that have wide-spread support. Since it will address issues that will span governments, it should serve Parliament rather than the incumbent Government.

It must have requisite authority borne of its recognised expertise so that it can influence and lead change.

Independence is central to this. Appointments would comprise the very best capability sourced from across the public and private sectors - and pay accordingly. It should seek to build durable cross-party support on solutions to long term challenges. It would need to operate in an open and collaborative way, building consensus through inclusiveness.

It would balance the need for strategic certainty with the need for flexibility. It would reduce systemic risk through regular review of the system and continuously reviewing alignment between project prioritisation and long-term strategy and outcomes.

The Commission would include a market-facing dedicated procurement and delivery unit that would approve strategic business cases and support or lead major projects.

This would enable internal project delivery expertise to be transferred, real time, on a project-by-project basis.

The extent of the unit's involvement either as lead agency, a support role or just strategic oversight would depend on the procuring agency's track record and internal capability.

The unit would collate and promote New Zealand's national and regional infrastructure pipelines.

Procurement support would be provided to Local Government either as requested, or if required by ministers, as a condition of any central government funding support.

The unit would develop, promulgate and implement capital, asset management and procurement guidelines across public agencies and report on procurement capacity, capability and performance across the system.

Its mission would be to achieve "value add" of at least 5 per cent per annum. On a capital programme of $100 billion plus over a decade, that's a return of $5 billion - the equivalent of a new Auckland harbour tunnel for nothing.

But the real gain would be ensuring New Zealand's infrastructure delivery system is fit for purpose and providing the physical platform for the national development New Zealand desperately needs. We already have the skills and resources we need.

A New Zealand Infrastructure Commission and specialist procurement unit would consolidate expertise and budgets from Treasury, MBIE, and other bodies.

Existing resources would go further because the structures and independence in place would add weight to work already under way.

The priority of a New Zealand Infrastructure Commission would always be to do more with what we've got, rather than to add to what is not working.

- Stephen Selwood is chief executive of Infrastructure New Zealand.