Government's announcement today that it will set up Crown Infrastructure
Partnerships to seed fund private investment in road and water infrastructure
provides a means to dramatically increase housing supply," says
Infrastructure New Zealand Chief Executive, Stephen Selwood.
of trunk infrastructure is a major constraint on developers' ability to deliver
housing across New Zealand," Selwood says.
"Under this model,
Crown Infrastructure Partners (CIP) will facilitate partnerships between the
Government and local councils to enable private investment in roads and water
treatment plants to unlock land for development.
councils have been unable to deliver infrastructure soon enough because of
other demands on funding and political constraints on their ability to increase
property rates and fund debt.
"Under this model,
the debt will be covered by private investors.
"The $600 million
seed fund announced today will enable CIP to cover initial demand risk until
the developments are in place and new ratepayers are able to pay for the
infrastructure. As the Crown is repaid, it will then be able to recycle that
capital into new developments.
"A key advantage
of this approach is that the cost of the infrastructure is not included in the
up front cost of a home. This will reduce house prices, meaning smaller
owners will pay for the infrastructure services over time through targeted
rates on their properties.
partnership agency is similar to the successful Scottish Futures Trust model in
Scotland and the Municipal Utility District approach in the United States. Both
countries use these models to deliver better outcomes sooner by leveraging
private capital and expertise.
Crown Fibre Holdings into Crown Infrastructure Partnerships in New Zealand is a
very smart move.
Holdings has a track record of successful partnerships with the private sector
and this approach has enabled a step change in the roll out of high speed
evolution of that model into integrated development of infrastructure and
housing at scale could transform housing supply and make a significant contribution
to delivering affordable homes sooner rather than later." Selwood says.
For further information and comment contact
Stephen Selwood on 021 791 209