Transport Minister Phil Twyford plans a "mode neutral" approach.

Transport Minister Phil Twyford says in the next 10 years, New Zealand is going to be spending $45 billion — the biggest investment ever in transport. He says the Government has changed the priority so there will be fewer urban expressway projects — which were the go-to option for the last government — which "we always felt was to the detriment of the broader transport system".

The Labour-led Government is trying to take a more 'mode-neutral' approach. Twyford points to the Golden Triangle (between Auckland, Hamilton and Tauranga) as a really good example where you could have rail alongside motorways and roads, offering better options and taking pressure off the road system. "It's the same logic behind the rapid transport system in Auckland."

To Twyford, the problem with motorways as the primary transport network is peak-hour congestion. "When you've got rapid transport alongside it helps to take off the pressure.

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The same logic applies for freight transport — some freight can be moved more efficiently by rail or by coastal shipping.

"We spend $5b a year on transport, so let's choose what we invest in for a particular corridor or freight path that's going to deliver the best bang for our buck for the country."

What do you say to calls for certainty around these projects?

Twyford:

Our Government sees infrastructure as a critical part of nation-building. The new Government's mix of projects and policies will be different and have a different complexion, reflecting our overall policy direction — but we are still going to be building infrastructure.

We're working very hard, and are very conscious that the system has to recalibrate. There are still going to be projects — more than there were before. I want to provide assurance that we're going hell for leather and making sure there is a pipeline of projects.

What do you expect to see from the private sector around the light rail development?

Twyford:

Light rail will be a massive stimulus to private investment — that is why it's such an attractive option. You see that now all over the world; investment into light rail because of the permanence of tracks and the quality of the urban neighbourhoods it produces. It is quiet and safe and coexists with pedestrians and cars, meaning that you get neighbourhoods that are a magnet for investment. There are billions of dollars of private investment going in alongside light rail, as can be seen in the Gold Coast, Canberra and Sydney.

By taking a more joined-up approach, we can stimulate lots of other growth and development led by the private sector. The urban development authority we are going to create will plan the development and zoning around those lines, optimising and de-risking the opportunities for private sector investment.

Hasn't this area been the domain of local government?

Twyford:

Historically it has. But we are consciously inserting central government into this space — not taking away local government's role, but putting ourselves in there as a partner.

We haven't done this kind of second generation urban growth well in New Zealand. We need the heft of central government and central government's ability to rise above local nimbyism and vested interests, which is in the interest of the whole country. When you stop the city from growing, bad things happen. Land prices go through the roof and that's a big part of the housing crisis that we've inherited. We want to build affordable houses or else our kids will never be able to afford to live in this town.

What makes you passionate about developing affordable housing?

Twyford:

As a Labour politician, this issue is fundamentally about social justice, and the ridiculous state of our housing market is an affront to the egalitarianism or decency that we have in this country. As important as making things better for the most vulnerable is, we will never solve this problem without tackling the structural state of the market. That is why we have to consider the planning system, infrastructure financing, the low productivity in the construction industry, the tax system — they are the really big drivers of the problem we've got.

What are you considering in terms of pre-fabricated housing?

Twyford:

We're about to do an invitation to pitch to offsite manufacturing companies here and abroad on how we can build a large-scale off-site manufacturing industry for residential. When you are building several thousand state houses a year — plus all the KiwiBuild homes — for the first time ever in New Zealand, you've got the potential to contract thousands of homes a year, over multiple years. That is — at last — the kind of conditions where you could allow some firms to scale up. There has been a lot of appetite on that from industry.

What do you make of the current state of the vertical sector?

Twyford:

Master Builders has convened an industry group in the vertical sector that I think is really helpful. There is a recognition that while there are some things government can do, there are things that industry needs to do as well. We don't want to see companies falling over, we need a viable New Zealand industry.

There are things we could learn from the horizontal sector, which is in good shape. They are bringing in big projects on time, and at a good quality. There is a partnering approach and a more transparent negotiated approach to risk allocation. We could learn a few things from that in the vertical sector.