14 May 2014
The Public Sector Rebuild Programme of Work released today is a major step forward in Canterbury, says Stephen Selwood of the New Zealand Council for Infrastructure Development.
The Programme of work sets out estimated project costs, timing, sequencing and responsibilities across not just CERA and the city council, but all large public sector service providers in the region.
It displays graphically and concisely the quantum of investment needed in the region and will give a big lift to industry and property owners unclear until now about the forward work pipeline.
The Programme shows public construction work building steadily over the next year, to peak around $500m per quarter in late 2015. The fairly rapid decline in activity from late 2016 may be alleviated by deferral of some projects, especially if Christchurch City is forced to moderate some of its earlier aspirations, but sends a clear signal to the market about how they need to manage resources.
With $7-8 billion of projects identified above and beyond the SCIRT infrastructure rebuild, the scale of just the public sectors commitment to the recovery will reignite some of the interest lost over recent months across New Zealand and internationally. Prior to todays release, poor transparency and unclear public prioritisation have inflated risk profiles beyond perceived return potential resulting in a less positive market response.
Critical now will be confirming funding, particularly for Christchurch City Councils share, and identifying procurement options.
Capital requirements across the region are beyond anything seen outside of Auckland, and will have to compete with our biggest and fastest growing region for limited domestic resources.
Large investors essential to sustaining progress over the long term need clear indication of financial opportunities and timing, something that will be keenly awaited.
If the Council is unable to fully fund its share of the rebuild, opportunities for private capital investment in anchor projects and / or reallocation of public capital through asset sales should be carefully considered as an alternative.
"Swapping one asset for another may enable better use of limited public resources," Selwood says.
The link to the programme is available here: http://cera.govt.nz/recovery-strategy/leadership-and-integration/public-sector-rebuild