Infrastructure New Zealand News

Decisive leadership required to improve local government services

Thu, 21 Dec 2017 01:52:29 GMT

MEDIA RELEASE

"Waipa District Council’s rejection of a shared water services partnership with neighbouring Hamilton City demonstrates, once again, the need for government intervention in the funding, responsibilities and structure of domestic governance," says Stephen Selwood Chief Executive of Infrastructure New Zealand.

"No fewer than four independent expert analyses of water services in the Waikato have agreed that it is in the best interests of residents of Waipa District to combine their wastewater, water supply and stormwater services with Hamilton.

"Yet at the political level, these clear, demonstrable and agreed benefits were insufficient to persuade the majority of Waipa councillors to agree to partner with their neighbours in the provision of water services.

"Despite the example set by Wellington Water, which has demonstrated significant benefits resulting from a jointly owned management company for its five council owners in the Wellington region, this latest Waipa decision puts another nail in the coffin for shared service arrangements between councils.

"The case for change in water service delivery at a national level was clearly demonstrated in Havelock North when 5000 people got sick from drinking contaminated water. The subsequent inquiry identified “widespread systemic failure among water suppliers to meet the high standards required for the supply of safe drinking water to the public”.

"Yet, almost all evidence to date, including rejection of Local Government Commission proposals for consolidation in Northland, Wellington, Hawkes Bay and Wairarapa, shows that significant change will not come from within the local government sector, no matter how beneficial.

"Local Government New Zealand's Reputation Index gives local government leadership, performance and communication a score of 28/100.

"Central government is having to constantly put workarounds in place to fix tourism infrastructure funding or growth investment financing. Auckland and other growth cities are 70,000 homes short of the number required for their populations, but they are not being built because there are not enough pipes and roads in the ground.

"Major change is needed at a national, local and regional level.

"Nation-wide functions should not be left to local government, including overall responsibility for environmental management and meeting the basic needs of New Zealanders for food, healthy water and shelter.

"On the other hand the ability of local communities to build the identity and sense of community in their local areas must be strengthened.

"And in between, there are decisions which need to be made which affect entire cities and their surrounding areas, including water, transport and economic development. These are regional in nature and require empowered regional decision making.

"Effective institutions with the resources and mandate to deliver services at the level at which they impact communities are required.

"If the new government is not prepared to lead fundamental reform itself, then a first principles review by an independent and appropriately resourced commission is the least it could do to identify solutions to longstanding deficiencies in New Zealand’s planning, funding and governance system," Selwood says.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Housing lessons from the United States - NZ Herald

Fri, 15 Dec 2017 03:17:05 GMT

Read Stephen Selwood's article for the NZ Herald here.

Housing needs big investment in the future - NZ Herald

Fri, 15 Dec 2017 01:57:27 GMT

Read Stephen Selwood's article for the NZ Herald here.

Larry Williams Drive - Newstalk ZB

Tue, 12 Dec 2017 02:18:38 GMT

Listen to Stephen Selwood discuss current water issues from 11:46 here and the end of the interview here.

Infrastructure think tank calls for a single nation-wide water authority in NZ - One News

Tue, 12 Dec 2017 00:54:30 GMT

Watch Stephen Selwood discuss water supply management with One News here

Major reform of water sector needed

Wed, 06 Dec 2017 03:14:26 GMT

MEDIA RELEASE

"The Havelock North Drinking Water Inquiry’s second report out today demonstrates the immediate need to establish a small number of large dedicated water service providers, funded by metered water and overseen by a competent regulator," says Stephen Selwood CEO of Infrastructure New Zealand.

"The Inquiry found a serious lack of compliance with drinking water standards across New Zealand, resulting in over 700,000 New Zealanders being exposed to unsafe drinking water.

"Failures at all levels, from the legislation to governance and weak institutional capability, have contributed to a drinking water system which is dangerous, inefficient and unacceptable.

"Total reform of the water sector is required and the Inquiry’s recommendations should be implemented in full.

"Water suppliers across New Zealand are too small, under-resourced and conflicted in their provision of water services. Water regulation has been woefully weak, allowing institutional acceptance of service failure.

"While this inquiry looked specifically at drinking water, the issues are systemic across the sector including waste and stormwater services.

"A small number of benchmarked water service providers, delivering both water supply, waste and stormwater services should be established.

"Larger entities will generate the economies of scale needed to achieve drinking water and environmental standards which are currently being ignored, often because of the cost impact to councils.

"Funding of acceptable water services should be provided by metering and charging for drinking and wastewater use. Metering typically results in a 15 percent water demand reduction over the long term, with lower water consumption reducing the need for expensive new water sources, treatment and distribution networks.

"The Ministry of Health needs to urgently implement the Inquiry’s short-term recommendations and an independent water regulator must be established as the first step towards major reform of water service governance and delivery in New Zealand.

"It is encouraging to see the Government is moving quickly in response to the Inquiry’s hard-hitting findings.

"It is the duty of every Government to protect the health and welfare of its people and the Inquiry’s sobering report demonstrates a severe failure of governance has been allowed to emerge in the provision of one of the most essential public services," Selwood says.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Stephen Selwood: Affordable houses are close to places of work - NZ Herald

Tue, 28 Nov 2017 01:47:34 GMT

Read Stephen Selwood's article for the NZ Herald here.

Government sets ambitious urban growth agenda

Fri, 24 Nov 2017 01:52:31 GMT

MEDIA RELEASE

"The Labour-led Government's five point programme to address New Zealand's urban growth challenges could establish this Government as a change agent to rival the first and fourth Labour governments, but more aggressive reform of planning, governance and funding of urban growth and infrastructure will be needed," says Stephen Selwood CEO of Infrastructure New Zealand.

Transport and Urban Development Minister Phil Twyford confirmed his plans for change last night at the Infrastructure New Zealand Annual General Meeting in Auckland.

"The purpose of the urban growth agenda is to achieve competitive urban land markets, where supply meets demand and prices cover the cost of growth. Its five components to address New Zealand's chronic tangle of over-regulation, under-funding and fragmented planning are:

Infrastructure funding and financing
A pro-growth planning system
Road pricing
Spatial planning by central and local government
Legislative reform of the Resource Management Act, Local Government Act and Land Transport Management Act.

"The urban growth agenda signals a shift, not an end, in the way the Government leverages private capital to promote public policy.

"New Zealand's established and highly successful PPP model will still be considered for light rail and other transport projects, but the emphasis of this Government will clearly be on attracting private investment to support housing and wider urban development.

"The market will need to adjust, but the Government will also need to be aware that a competitive market cannot be sustained without a visible pipeline of potential projects.

"It is doubtful that the identified transport programme will be sufficient to retain skills and investment in New Zealand without urgent action to fill the void created by cancellation of the planned $1.5 billion East West project in Auckland and various social housing initiatives.

"The Government's second point in its programme, to create a pro-growth planning system, will be strongly welcomed by businesses frustrated by red-tape and institutionalised complexity built into our current system.

"That's going to require reform of the three key planning Acts, the RMA, LGA and LTMA. This is also on the Government's list of priorities, but Minister Twyford confirmed that the Government still has a preference to retaining the RMA.

“Our very strong view is that combined effect of planning system failure, complex local government structures, tortuous decision making processes and inadequate funding are at the root of New Zealand’s housing and infrastructure crisis.

"The desire to build off the past, rather than start afresh, is generally preferable. However, the "effects based" approach at the very heart of the RMA is the root cause of urban growth problems. It hands too much influence to objectors and under-represents the benefits of good planning and investment.

"A more proactive planning regime, with robust national spatial planning and leadership, needs radically different institutions, processes and funding tools.

"We look forward to working with the Government to advance these, but are challenged to see how such transformation can take place within the confines of existing statutes and local government structures and funding.

"Finally, it is very encouraging to see the Government has recognised road pricing as a key ingredient to managing urban growth and optimising the transport system.

"However, if adding capacity to the road and public transport network is not part of every option to address need, we run the risk of establishing a tax on mobility.

"Higher and higher prices will be needed to suppress travel, ultimately delivering less public benefit. The purpose of road charges is to balance revenue with incentives to optimise travel, not suppress it.

"Viewed as a package, the Government's urban growth agenda is potentially revolutionary. If successfully implemented, Auckland and other growth cities will for the first time in a generation be able to build enough homes and infrastructure to support their population.

"All cities and towns in New Zealand will benefit from more flexibility and a reset in our national attitude to growth. This is long overdue," Selwood says.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

A satellite city in the south key to funding and meeting growth

Mon, 30 Oct 2017 01:43:08 GMT

MEDIA RELEASE

“The new Government should target new housing and employment on unzoned land along the rail line through Paerata to meet Auckland’s growth challenge,” says Stephen Selwood CEO of Infrastructure New Zealand.

“Our latest report released last week examines the cost of growth in different greenfield areas around the city where land is accessible and non-sensitive and finds Paerata to be the best on balance for major new development.

“It is cheaper to service with water, energy and transport and strategically located near to employment.

“If the satellite city was supported by a $2 billion upgrade of the rail corridor, we could four-track the southern rail line, allowing non-stop commuter services from the satellite to central Auckland and work places in between.

“That would put the new city within 30 minutes of the CBD and would allow rail freight to be separated from traditional commuter services. KiwiRail could operate with a much greater degree of freedom, helping to get freight off roads.

“Being within 30 minutes of the CBD would also allow much greater densities to be achieved at the satellite than would be possible under a traditional expansive urban development approach.

“Paerata would be a genuine city. It would provide a range of housing choices and with good masterplanning would be much more land efficient and resilient in a changing climate.

“The most exciting aspect is that the city could be designed to deliver all of our aspirations for the future enabling sustainable living and leveraging technology to the fullest extent.

“We can build better, stronger communities, free from the constraints of previous decisions.

“Developing at scale, we can facilitate the shift to more advanced home construction techniques, common throughout the rest of the world. These are critical to lifting productivity and enabling supply to increase.

“Scale will also be attractive to domestic and international developers and investors.

“If the new Government was to prioritise growth in a satellite city near the rail line in the south and tie new zoning to reprioritised transport investment, we could deliver homes at around half the current cost.

“We estimate that an average new home would cost $430,000 to build. That’s including land, development, infrastructure, GST – everything except a return for risk. How the satellite was delivered, including what risks were accepted by the Government, would determine what price homes could be sold for.

“This is the full cost – not a subsidy. It’s what houses should cost if we plan well and break through some of the barriers created by our current planning-funding-governance system.

“Growth can pay for itself if it is well planned.

“The growth model we have in place at the moment not only allows development in areas which cannot affordably be serviced, it is preventing the delivery of housing at its actual, affordable cost. It is enabling sprawl on productive soil and poor quality infill in established suburbs.

"Intensification of extremely expensive brownfield land is not delivering housing at the price or speed which is required.

“Proactively targeting growth around rail is cheaper, consumes less land and will deliver faster housing.

“The satellite city model can be scaled up to take advantage of new investment and provide for Auckland growth over the long term. It can be aligned with much needed investments in education and health to deliver an exemplar city of the future, providing a better urban lifestyle than can be achieved under existing practice.

“The current incremental approach to growth management in Auckland must change. It is too slow, too expensive and is adding to congestion. Integrating urban development and infrastructure “at scale” is the solution,” Selwood says.

A copy of the Innovation City discussion document can be found here.

The Innovation City video can be found here.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Key Infrastructure Issues - Radio Live

Tue, 26 Sep 2017 02:44:48 GMT

Hear Stephen Selwood discuss some of New Zealand's key infrastructure issues on Radio Live Drive.

East West Link - Newshub

Tue, 26 Sep 2017 02:43:18 GMT

Listen to Stephen Selwood discuss the East West Link on Newshub.

New fuel pipeline unlikely to be solution

Mon, 18 Sep 2017 00:48:10 GMT

MEDIA RELEASE

“The rupturing of the Marsden to Wiri oil pipeline has identified issues in resilience planning which should be resolvable without building another pipeline,” says Stephen Selwood, Chief Executive of Infrastructure New Zealand.

“Increasing fuel storage so that the country has some redundancy in the event of pipeline damage is one option. For this to occur, asset owners need to be able to consent storage and protect assets from reverse sensitivity objections.

“Resilience investment needs to be more strongly recognised in our planning and consenting frameworks so that regulatory barriers do not discourage industry from providing the backup New Zealand needs.

“In addition, we need to ensure fuels can be transported around the country in the event of an emergency. In particular, the corridor linking Whangarei to Auckland needs to be robust and we need to have enough vehicles and drivers to respond to urgent need.

“There may also be opportunities to strengthen existing assets to make them less vulnerable to disruption. Recent reporting suggests signage may have been poor near where the damage to the pipeline occurred. Keeping infrastructure corridors well-maintained is a priority and should be monitored.

“Technology is a vital part of the solution. 3D mapping tools and Building Information Modelling (BIM) can be used to maintain a detailed understanding of where assets are located. Better systems for obtaining, holding and accessing this information are required.

“Major supply problems suggest contingency planning has been inadequate. This is a significant rupture, but not one which should sit outside the bounds of good resilience planning.

“It is unclear exactly who is or should be accountable for ensuring the security of supply in the event of a disruption.

“Major parties have voiced support for the creation of an Infrastructure Commission. Taking a strategic leadership position on activities like resilience monitoring, preparation and reporting would be a core activity of such an entity,” Selwood says.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Marked contrast in transport policies between two major parties

Fri, 08 Sep 2017 03:18:27 GMT

MEDIA RELEASE

The release today of the National Party’s transport policy provides the opportunity to compare its priorities with those of the Labour Party, announced last month.

The majority of investment from the National Party has been dedicated to state highway and regional road improvements across the country, along with continued investment in growing public transport.

National has today confirmed its previous announcement that will deliver a $10.5 billion addition to the state highway network through a revamped Roads of National Significance programme.

An additional $600 million will be spent on road safety improvements and earthquake-affected Kaikoura roads will be rebuilt. Penlink and the billion dollar Mill Rd project in Auckland will be delivered as state highways. National has not specified a figure, but has indicated it will accelerate regional road projects, and points to its previous record of investing $200 million to do so.

In contrast, Labour is placing most of its investment on inter-regional rail services and investment in light rail in Auckland.

It has committed to kicking-off a rapid regional passenger service between Auckland, Hamilton and Tauranga, completing a third rail line in Auckland and retaining electrification between Hamilton and Palmerston North. Should evidence support it, Labour will look to electrify other key parts of the rail network and reopen mothballed lines.

Labour will invest an extra $3.3 billion in light rail and busways in Auckland over the next 20 years, but will dial back the East West Link connecting Auckland’s motorways. It will commit $100 million to Christchurch public transport and consider light rail for Wellington.

Labour has not announced any further capacity or safety improvements for the state highway network, but has committed to quickly rebuilding the Manawatu Gorge Rd. It is not clear whether planned projects state highway improvements, including the Warkworth to Wellsford Road of National Significance, will be delivered.

However, Labour has made more funding available for transport projects of regional importance by doubling the funding range of $70-$140m to $140-$280m.

National has committed to the delivery of the third main trunk line in Auckland, as well as to rebuild rail infrastructure affected by the Kaikoura earthquake. It is also investing $267 million over three years in Auckland and Wellington commuter rail and will work with Auckland Council on a mass transit solution between the CBD and Auckland Airport and complete route protection.

Labour has not specified funding for cycling and walking, but has indicated that both, along with rail, will be eligible to apply to the NLTF for national funding.

National will continue to implement its $333 million cycling programme.

National has also indicated that it will support coastal shipping, increase electric vehicle uptake and strengthen airport links.

Labour has not announced policies on electric vehicles or airport links, but has committed to developing a national freight and national ports strategy and will move to implement the ‘Sea Change’ strategy to revitalise coastal shipping.

Funding these improvements looks set to exhaust the National Land Transport Fund. Labour has indicated that it will levy a 10 cents per litre fuel tax in Auckland to fund its programme. National will fund its investment from existing sources and continue investigating road pricing.

Labour has highlighted increasing congestion, liveability and economic development as the key drivers for its transport policy.

National emphasises productivity and growth, safety and congestion relief as the predominant benefits of its programme.

“Neither party has identified longer term operational costs from their policies, nor provided evidence that their policies will actually deliver on promises to reduce congestion and support economic development.

“The fact that we have such contrasting national investment priorities across our major parties is an indictment on our evaluation and prioritisation processes, which should be objective.

“We spend tens of millions of dollars every year on complex modelling and evaluation of projects and their benefits which should, in theory, depoliticise transport priorities and deliver the right projects for the job.

“That two such different approaches can be promoted indicates a lack of evidence is present in our decision making.

“An objective and independent body such as a New Zealand Infrastructure Commission is urgently required to investigate and analyse transport and other infrastructure priorities for New Zealand,” Selwood says.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Irrigation changes needed to deliver prosperous and resilient rural areas

Tue, 05 Sep 2017 02:12:11 GMT

MEDIA RELEASE

"The change to the constitution of Crown Irrigation Investments Limited (CIIL) to allow it to fund water storage projects that directly lead to environmental benefits is a very positive step and should be extended to recognise resilience and social benefits as well," says Infrastructure New Zealand, Chief Executive Stephen Selwood.

"To date, existing rules guiding the government's irrigation investment arm have placed a too narrow focus on direct economic benefits.

"This has resulted in disproportionate emphasis on maximising land use productivity and insufficient recognition of wider economic, social and environmental benefits.

"Widening the criteria to include the full scope of costs and benefits from irrigation is critical.

"Other benefits not currently adequately recognised include enhancing the resilience of rural areas in the face of climate change, supporting employment and improving the quality and amenity of freshwater resources.

"In the immediate term, this means wider economic and social benefits, including increased regional employment and improved freshwater swimming quality, will be better reflected in the reasons the public invests in irrigation infrastructure.

"We also know that irrigation is increasingly being used to improve environmental performance by recharging aquifers, guaranteeing minimum river flows and flushing systems.

"These benefits are of the utmost importance over the long term as rainfall patterns shift in response to climate change.

"Yet resilience is not currently a significant driver for irrigation investment, and even environmental factors are approached from the perspective of mitigating effects rather than improving environmental performance.

"Assessing the full spectrum of costs and benefits over the long term is a core infrastructure activity and needs to be included in CIIL’s brief," Selwood says.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Resource Reform NZ calls for wider reform of resource management system

Mon, 04 Sep 2017 02:54:10 GMT

MEDIA RELEASE

A group of like-minded organisations, called Resource Reform NZ, is calling for a far-reaching review of the current resource management system.

The announcement made today by The National Party, to establish a review of the current urban planning system, recognises the current problem but does not go far enough.

The group is adamant that reform of the resource management system needs to go much further. It recommends this is best addressed through cross-party consensus on the issue by a politically independent process, such as a Commission or similar.

Resource Reform NZ, is an alliance of EMA, Environmental Defence Society, Infrastructure New Zealand and Property Council New Zealand. The group is seeking prosperity for all New Zealanders through the development of an integrated governance, planning, funding and delivery system to guide resource management and national economic development.

"We know New Zealand’s prosperity is being held back by the current framework the wider planning system operates within. It is no longer fit for purpose, and is why we find ways to work around the current system when we want to deliver the infrastructure that the country so desperately needs," says Stephen Selwood, Chief Executive, Infrastructure New Zealand.

"The current uncoordinated planning system is driving increasing housing unaffordability, the high cost of commercial development and reliance on outdated funding mechanisms such as rates and council debt. That means we’re simply not building enough, quickly enough with the quality and innovation needed to develop the cities and standard of living we all expect in the future," says Connal Townsend, Chief Executive, Property Council New Zealand.

"The environment is suffering too. The Resource Management Act is our pre-eminent environmental law. Yet the cumulative effects of permitted land use activities over the lifetime of the Act have led to a slow but significant deterioration of the quality of our streams, rivers and lakes," says Gary Taylor, Executive Director, Environmental Defence Society

"For business these issues are also stifling the ability to grow and expand. Which in turn, also impacts employees and the families. Looking into the future, we face even bigger challenges in how we manage and respond to demographic changes, advances in technology, rising consumer expectations and climate change," says Kim Campbell, CEO, EMA.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Cross party consensus needed on Infrastructure Commission

Fri, 01 Sep 2017 01:31:22 GMT

MEDIA RELEASE

"The National Party’s announcement today that, if elected, it will set up an independent National Infrastructure Commission should have cross party support," says Infrastructure New Zealand Chief Executive, Stephen Selwood.

"Establishment of such a body will bring New Zealand’s infrastructure practices up to speed with Australia, the UK, Canada and other leading countries.

"The UK’s National Infrastructure Commission was established in 2015 to provide independent, strategic thinking, analysis and advice to address the UK’s long-term infrastructure needs.

"A New Zealand infrastructure commission needs to be charged with equivalent responsibility. This would include investigating and recommending responses to our most pressing issues in housing, freshwater quality and congestion, in addition to oversight of project delivery, procurement, and the national infrastructure pipeline.

"The size of the infrastructure workload ahead means we have to make the most of every dollar spent. Having a public entity working in New Zealand's best interests and with expertise in project delivery is critical.

"National’s announcement today is focussed on leveraging private sector capital and expertise through Public Private Partnerships.

"PPPs are an important component of any rational infrastructure delivery programme, but the Commission needs to encompass all forms of project delivery, regardless of whether or not private capital is involved.

"Successive surveys by Infrastructure NZ and other evidence shows that New Zealand’s infrastructure procurement can significantly be improved and international experience shows there are billions of dollars of benefit from doing so.

"Having our best and most experienced people involved when the Government buys large and complex assets like motorways, railways, schools, and hospitals minimises the risk of mistakes and capitalises on the investment opportunity.

"It’s not only individual projects which will benefit from a new body. A clear and committed national infrastructure pipeline has for many years been an industry priority. Businesses who deliver assets on behalf of governments need to know what’s ahead and if the Commission can provide greater certainty around this it will make a big difference to investment and productivity in the sector.

"These are the reasons why Canada, through Partnerships BC and Infrastructure Ontario, the UK, through the Infrastructure and Projects Authority and Scottish Futures Trust, and Australia through Infrastructure NSW and Major Projects Victoria have all picked up the model.

"Some of the greatest benefits could be realised from using the Commission to assist local government with its $50 billion infrastructure programme. Bundling council projects and supporting our smallest infrastructure providers with specialist knowledge will reduce project overruns and help provide better services at lower cost to ratepayers.

"For the Commission to be successful, it will need arm’s length independence from the Government, like the Commerce Commission or Reserve Bank, to ensure that it acts apolitically in New Zealand’s long term interests.

"A specialist infrastructure body is a really positive step forward for New Zealand. It is a bi-partisan response to New Zealand’s infrastructure needs and should receive cross-party support," Selwood says.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Specialised procurement agency key to unlocking value across $125 billion infrastructure programme

Wed, 16 Aug 2017 21:36:59 GMT

MEDIA RELEASE

"There is now broad agreement across the infrastructure industry that consolidating public procurement expertise in an arm’s-length specialist agency is critical to meeting New Zealand’s investment programme," says Stephen Selwood, CEO of Infrastructure NZ.

"We’ve seen a definite shift across industry over the past 12 months. Now, four out of five of the people most heavily involved in designing, building and providing infrastructure services to government and councils believe a specialist procurement agency would be “effective” or “highly effective” in lifting performance.

"A separate poll conducted at the release of the survey findings found a staggering 96 per cent believed we cannot continue to procure infrastructure the way we are.

"We have enormous resource challenges in front of us. If we are to successfully deliver the $125 billion infrastructure programme over the next 10 years and make the most of new services, the way we plan, fund, procure, deliver and operate these services must be as good as it can be.

"The industry survey identifies major opportunities for improvement across the sector. Many agencies are excessively focused on price over long term value. Projects are poorly phased to the market in boom bust cycles. A limited range of procurement options are being used that fail to draw on the experience and capability of the industry. Contract law is being rewritten on almost every project and risk is being unfairly transferred to contractors resulting in poor outcomes and unnecessarily high costs to the client.

"There are examples of good practice across the country.

"NZTA came out on top as the country’s top procurer of infrastructure services for the third year in succession. Its work on bodies like the Road Efficiency Group and SCIRT has delivered efficiencies through scale, partnership, new delivery models and an advanced understanding of risk.

"NZTA is held in high regard by the industry because its staff are experts at what they do. They understand how best to allocate risk. They focus on value rather than cost and match the procurement method with the job to be done. They also proactively engage suppliers to ensure the forward work programme is clearly signalled in advance to maintain a healthy, competitive market that has capacity to deliver.

"But with 20 District Health Boards, 78 councils, transport, education, housing and other public institutions all procuring major capital assets independently, skills are too widely distributed and processes too fragmented.

"New Zealand does not have the capacity to harness best practice and transfer it efficiently from one project to the next.

"Every country we compare ourselves to has responded to this challenge with a specialised collaborative procurement body.

"Whether it’s Partnerships BC in Canada, Infrastructure NSW in Australia or the Scottish Futures Trust, other jurisdictions have realised huge benefits by consolidating expertise in a fit-for-purpose entity which assists public bodies with project procurement.

"Public bodies responsible for delivering services remain in charge. The difference is that they have experts in project procurement helping them along the way.

"In its first year of operation the Scottish Futures Trust delivered £111 million of added value from just a £4.3 million budget. The UK has recently achieved a 15 per cent saving on infrastructure spending by focusing on best practice procurement and collaborative working.

"If we could achieve a much more modest 5-10 per cent improvement in delivering New Zealand’s $125 billion capital intentions plan, we could secure $6-12 billion of infrastructure value above and beyond what we’re planning.

"That’s five or six Waterview Connections or enough to address the entire backlog of water supply and wastewater investment nationwide.

"Benefits come from standardising contracts and processes, picking the right model for the job, allocating risk effectively between client and suppliers, sequencing projects to align initiatives and optimise capacity, packaging projects to achieve economies of scale, and ensuring the whole asset process from planning to delivery and operation is performed efficiently.

"Between the public and private sectors we have the skills and the capability. Experts in the Ministry of Business, Innovation and Employment, Treasury, NZTA and other agencies are funded already. Bringing these experts together with procurement and delivery specialists from the private sector into a dedicated and highly focused centre of expertise would enable New Zealand to emulate the results we see in other countries.

"It’s a huge opportunity and one which the incoming government should embrace immediately," Selwood says.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Reform of resource system required

Thu, 10 Aug 2017 04:46:24 GMT

MEDIA RELEASE

EMA, Infrastructure New Zealand, Property Council New Zealand and the Environmental Defence Society’s call for a cohesive strategy to drive reform of the country’s resource management and planning systems seems to have gained momentum.

The coalition of these organisations says their jointly funded research and first-hand experience of the current system clearly demonstrates it is failing its environmental goals and New Zealand’s prosperity is being held back. Change is now urgent.

Views expressed at EDS’s Tipping Points conference reflects this. Today, the Green Party called for a formal review of New Zealand’s environmental management and planning laws, if it was in Government.

"The evidence of our failure is clear. Escalating housing unaffordability, groaning infrastructure and a slow but significant deterioration in the quality of monitored streams, rivers and lakes are just some examples," says Gary Taylor, CEO, Environmental Defence Society.

Collectively the coalition is calling on the Government, whatever its make-up post-23 September, to be bold, visionary and initiate a broad review covering of the system as a whole.

"A Royal Commission is one way to do that. As a coalition, we are open to other ways to provide a broad and independent review that can cut through political sensitivities, accommodate the diverse perspectives of multiple stakeholders and provide binding outcomes," says Kim Campbell, CEO, EMA

""The problems are wider than the RMA, reaching into New Zealand’s system of local government, the role, form and resourcing of councils and how infrastructure is planned and funded," says Stephen Selwood, Chief Executive of Infrastructure New Zealand

Having consulted extensively, the coalition recognises that whilst many New Zealanders agree there is a need for change, they differ on how to achieve it.

"What is needed, in our view, is a first principles review of our central and local government planning, funding and environmental resource management system. This review must also bring together and draw upon the experience and insight of business, environmental, community and political voices," says Connal Townsend, Chief Executive Property Council New Zealand.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Long term funding tools for Auckland welcome

Sun, 06 Aug 2017 03:45:00 GMT

MEDIA RELEASE

"Labour's commitment to solving Auckland's long term transport funding challenge is a big step forward," says Stephen Selwood CEO of Infrastructure New Zealand.

"The region is facing an annual deficit of around half a billion dollars to fund the agreed programme. Labour will introduce a 10 cents per litre regional fuel tax, which will levy around $160 million per annum, and deploy targeted rates to fund the remainder.

"Carefully applied targeted rates in particular could be transformational in Auckland. Over the past few years we've seen major public transport investments materialise as property value increases, but had limited scope to capture that value and use it to fund the programme.

"A key concern for business has for many years been the lack of certainty for transport investment in Auckland. The projects are there on paper, but without funding certainty it is difficult for everyone from property investors to transport suppliers to gear up for opportunities ahead.

"As long as funding is provided on a case by case basis, the investment programme is less a forward work plan for industry than a political football which increases investment risk.

"Risks are priced into projects and we all pay more for roads, rail, homes and buildings.

"We hope that the vital East-West Link does not become a case study on this issue.

"The project has a very strong business case, including a benefit cost ratio approaching 2.0, but with its benefits accruing to freight and industry it has struggled to receive popular support.

"Agreeing a forward work plan and providing a stable funding regime to deliver that programme when required is critical to meeting Auckland's growth needs.

"If Labour's approach provides this certainty, it will be warmly received by everyone," Selwood says.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

A $2.6 billion boost for Auckland and New Zealand

Thu, 03 Aug 2017 23:28:18 GMT

MEDIA RELEASE

"The Government’s $2.6 billion commitment to Auckland’s overwhelmed transport system is a well-balanced package of investment in road, rail and bus. Combined with consents for the East-West strategic link, expected later this year, this will deliver benefits inside and outside the boundaries of our largest city," says the CEO of Infrastructure New Zealand, Stephen Selwood.

A billion dollars has been committed to developing the Mill Rd corridor, which will duplicate a large portion of State Highway 1, freeing up New Zealand’s most important freight corridor and providing for new housing development.

A further $100 million has been allocated to construction of a third rail line through the busiest part of the rail network. Recent analysis has shown this will deliver a strong economic benefit by improving freight access to and from port facilities and reducing interruption to commuter services.

"Both these projects are about reducing the choking effect Auckland is having on national transport movements and will deliver wider supply chain benefits to the national economy.

"The remaining and greater share of the investment is to be committed to rapid transit in the west, east and south via a new busway to growth areas in the north-west, an injection into the long delayed AMETI eastern busway and electrification of rail from Papakura to Pukekohe.

"This is a comprehensive response to NZIER’s finding that congestion is costing all of New Zealand around $2 billion every year.

"One project not featured in today’s announcement is the critical East-West Link. We’ve all experienced the positive benefit of the Waterview Connection, but the only new strategic capacity we’re assuming on the isthmus over the next 30 years is the East-West Link.

"This vital corridor will deliver almost $2 of benefit for every dollar invested by opening up New Zealand’s most important industrial zone.

"These benefits do not even include the resilience of connecting State Highway 1 and State Highway 20, the value of retaining long term capability to connect further east or the environmental benefits of fixing up a former rubbish dump on the edge of the Manukau harbour.

"It is vital that resource consents for this project are granted. Once in place, the East-West Link and other projects announced today will have a lasting positive impact on movements to, from, through and within our largest city," Selwood says.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Economic boost of $1.3 billion if Auckland roads decongested

Wed, 02 Aug 2017 04:00:00 GMT

MEDIA RELEASE

Productivity in Auckland could be boosted by at least $1.3 billion per annum if use of the roading network could be optimised.

An NZIER report commissioned by the EMA, Auckland International Airport Ltd, Infrastructure NZ, Ports of Auckland Ltd and the National Road Carriers Association took a detailed look at the social and economic costs of congestion to Auckland’s lifestyle and economy.

The report found that if Auckland’s road network could operate at its designed capacity during week days it would benefit the Auckland economy by nearly $3.5 million per day. Sick days cost the New Zealand economy $1.5 billion per annum - fixing Auckland’s congestion illness would be like finding a cure for the common cold and immunising the entire country against the flu.

The funding organisations are united in the view that there is a pressing case for decongestion measures to be introduced in Auckland now, not in the 6-10 year time frame currently being contemplated by both central and local government.

All agreed the size of the productivity prize and liveability gains for Auckland and the scale of the problem demanded action.

NZIER took a sophisticated model that can break down the impact per business sector and applied Auckland Transport’s latest 2016 traffic flow information to the problem that is increasingly strangling Auckland and its economy.

“What business is telling us and what we’re seeing in the numbers is that congestion has worsened exponentially in the past three to five years,” says Kim Campbell, CEO, EMA.

“Our EMA members who took part in focus groups put the productivity loss in the 20-30% bracket so what the above figures show is the average productivity loss across the entire population of Auckland.”

Some of the highlighted costs were:

• Hiring 20% more staff to carry out the same volume of work

• Trucking firms making fewer runs over fixed routes over longer time frames to deliver less volume of product with a near 30% productivity loss

• Service firms establishing depots around the city, at significant costs, to meet service promises i.e. one-hour replacements or deliveries

• Trucking firms refusing to deliver to some parts of the city described as black holes for their vehicles

According to Infrastructure NZ CEO Stephen Selwood, the actual productivity gains may be even higher.

“We know this estimate is conservative. The model only measures congestion on five of seven days and of course, business is a seven-day a week operation. It also only values leisure trips at less than half the value of work time, a value I’m sure many Aucklanders would agree undershoots the cost.

“I’m also very concerned that the Auckland Transport Alignment Plan (ATAP) only sets its sights on not making congestion worse in the next 30 years and its 10-year time-frame for introducing congestion charging is just too far away.”

Ports of Auckland CEO Tony Gibson stressed the report showed a need for a multifaceted approach to reducing congestion to boost productivity.

“Congestion is making life worse for all of us, so we need to act now. There is no one answer to the problem, we need to attack congestion with everything we’ve got: investment in road, rail, public transport, technology, demand management and so on. We also need to be much smarter and think further ahead in how we plan transport for the future.”

National Road Carriers Association CEO David Aitken also highlighted lifestyle issues caused by congestion as a fundamental difficulty for recruiting in the freight sector.

“The Road Freight sector has seen increasing congestion for some years. The fact that travel times have increased 47% in just three years and is only going to get worse if we don’t do something is a clear sign we need to be thinking about solutions and taking actions now. Productivity has declined in an already tight market.

“Five years ago a truck driver could make a living on about 50 hours per week, but now with congestion that’s up to 70 hours a week and people do actually want to spend time with family rather than sitting in Auckland traffic. At a time when it’s hard to get drivers, we are losing them as they don’t want to be sitting in congestion all day.”

While all of the CEOs acknowledge that better progress is being made than has been the case in the past, authorities need to demonstrate a much greater sense of urgency.

That Auckland experiences worse congestion than cities up to five times its size is an indictment on poor planning and inadequacy of investment which goes back decades. Neither Auckland nor New Zealand can afford to let the problem get any worse. We must act now to realize the social and economic opportunities that decongesting Auckland presents.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Crown Infrastructure Partnerships initiative could transform infrastructure and housing delivery

Sun, 23 Jul 2017 21:49:00 GMT

MEDIA RELEASE

"The 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.

"Timely delivery 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.

"Traditionally 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 mortgages.

"Instead, home owners will pay for the infrastructure services over time through targeted rates on their properties.

"The Crown 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.

"Re-purposing Crown Fibre Holdings into Crown Infrastructure Partnerships in New Zealand is a very smart move.

"Crown Fibre 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 broadband.

"Successful 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.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Wairarapa a step in the right direction but underlying national challenges remain

Wed, 19 Jul 2017 01:44:27 GMT

MEDIA RELEASE

"It is positive to see the Local Government Commission has put forward a sound proposal for the Wairarapa, but the ongoing piecemeal approach to reform is not tackling the wider national issue of whether councils can plan, fund and meet long-term local needs," says Stephen Selwood Chief Executive of Infrastructure New Zealand.

The Commission has proposed that the existing Masterton, Carterton and South Wairarapa district councils be brought together into a single Wairarapa District Council. The new entity will have a single mayor, elected at large, and 12 councillors elected across seven wards.

Wairarapa will have the choice of either accepting or rejecting the Commission’s proposal, likely in a poll next year.

"The Commission’s proposal will deliver a more capable and better resourced council for the area. The larger entity will have improved capacity for strategic planning, a bigger balance sheet to support investment prioritisation and will be able to speak with a louder, united voice on behalf of all of Wairarapa.

"We agree with the Commission that these benefits can be realised whilst maintaining local representation and identity through community boards.

"In our view, community boards should be delegated with appropriate powers and funding at the local level to support community needs.

"This proposal is definitely a step forward for Wairarapa.

"But it is still not clear whether the new 40,000 resident entity will be sufficient to meet long term challenges. Nor is it clear what the solution is for New Zealand’s 64 other territorial authorities, most of whom find themselves facing exactly the same issues as the Wairarapa.

"Population aging across virtually all of New Zealand is constraining the ability of councils to increase rates at the same time as billions of dollars of infrastructure comes up for renewal. Together with increased expectations for environmental performance, greater health and safety requirements, stronger heritage protections and other directives from central government, growth councils are responding by underfunding new development and impeding housing supply.

"The whole system by which councils are funded, the responsibilities they have and the decisions they are required to make is unsustainable and needs to be revised.

"Meeting long term challenges requires governance structures which allow effective planning supported by resources and delivery capability. This is as true for councils in the South Island as it is in the Wairarapa and rest of the North Island.

"What is required is a first principles review of local government’s role in New Zealand, how councils are resourced and what the optimum structures are for meeting 21^st century needs," Selwood says.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Housing Infrastructure Fund welcome but much more is needed

Tue, 11 Jul 2017 02:40:06 GMT

MEDIA RELEASE

"The Government’s $1 billion financing of much needed growth infrastructure is very welcome, but infrastructure requirements nationwide are now in the tens of billions and better planning, funding and delivery systems are required to meet the challenge," says Infrastructure New Zealand's Chief Executive, Stephen Selwood.

"The Housing Infrastructure Fund (HIF) is a helpful component of the Government’s housing response. The allocation of government debt to New Zealand’s fastest growing regions will improve the supply of serviced land where it is most needed.

"Today's announcement combined with recent budget commitments to infrastructure investment is positive but a lot more is required.

"Analysis by the Office of the Auditor General consistently shows that councils across New Zealand are struggling to maintain and renew existing assets, let alone provide for growth.

"In Auckland there is a $400 to $700 million transport funding gap that must be bridged, and a 7000 home construction deficit accumulating every year. Against that, the 10,500 homes announced this morning will add just 1000 homes a year.

"Addressing infrastructure challenges which sit at the heart of New Zealand’s housing supply issues demands more than one-off loans.

"The private sector is going to need to step up and for this to happen there needs to be certainty that public infrastructure will be funded and delivered in a timely way.

"A clear and committed pipeline of projects will give infrastructure and home construction companies the confidence to invest in resources needed.

"Government plans for Urban Development Agencies must also be accelerated. This could unlock opportunities for urban development at scale where development is master planned to integrate fully with transport and infrastructure services.

"New transport funding tools like road tolls are needed sooner rather than later.

"We desperately need to improve governance and streamline our planning and decision-making processes. The current approach to planning, funding and delivery of housing and infrastructure is not working.

"While the HIF and budget allocations help in the short term, a longer term response which addresses the failed planning, governance and funding system in New Zealand is urgently needed," Selwood says.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Infrastructure NZ report highlights opportunities to streamline infrastructure decision making

Thu, 08 Jun 2017 03:30:00 GMT

MEDIA RELEASE

"New Zealand can make best use of the Government's $32 billion infrastructure commitment over the next four years by streamlining plans and institutions, including specialist procurement, environment and water regulation agencies and a top down national spatial planning framework," says Stephen Selwood CEO of Infrastructure New Zealand.

The findings are set out in an Infrastructure NZ report released today which follows a delegation to Scotland in March this year.

"Over the last two decades, the Scottish have completely transformed infrastructure planning, funding and delivery.

"They've established innovative and effective institutions at the national level which support and guide central and local government infrastructure delivery.

"The UK National Infrastructure Commission, Scottish Futures Trust, Scottish Environmental Protection Agency and Scottish Water are all bodies which could be employed here to rationalise and improve infrastructure planning, funding and delivery.

"Initiatives based on Scotland’s National Planning Framework and hub, City Deal, tax increment financing and Growth Accelerator programmes would each help align central and local decision making and enhance collaboration with the private sector.

"The Scottish system is simpler, more transparent and reduces conflicts of interest across the public sector.

"The extensive infrastructure investment that New Zealand is planning over the coming years will need to be well-managed if we are to tackle the growth challenge. The best elements of Scotland's decision making system are worth replicating," Selwood says.

The key findings for New Zealand set out in the report are:

We could improve public understanding of infrastructure challenges and better support national investment by establishing an empowered national body charged with identifying infrastructure needs.
Scotland's plan-led approach gives greater certainty and better balances strategic priorities with local interests than New Zealand's effects-based RMA system.
We could save money and improve infrastructure performance by establishing an independent centre of expertise for project procurement, integration and public private partnerships.
A specialist central agency could work in partnership with local government to consolidate procurement and provide immediate and substantial benefits for water and tourism infrastructure.
Public and environmental health could both be improved across New Zealand by consolidating wastewater and water supply delivery at a regional level.
Auckland’s Watercare could be sold to fund Auckland growth with minimal impact on the cost of services and improved strategic capability.
Dedicated independent regulators are more informed and take an outcomes-focused strategic view of the sector which results in better services.
Local government can be incentivised to align investment priorities with national outcomes by using the UK City Deal approach.

A full copy of the report can be accessed here.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Future demand management must not come at the expense of mobility and urgent investment

Wed, 07 Jun 2017 03:30:12 GMT

MEDIA RELEASE

"Infrastructure New Zealand welcomes today’s announcement that the Government and Auckland Council will investigate road pricing, but is concerned that the Terms of Reference over-emphasise demand management and do not recognise the constraints current funding is placing on both near and longer term investment," says Stephen Selwood CEO of Infrastructure NZ.

"Mobility is central to social and economic well-being. Imposing prices at a level which makes travel prohibitive should not be the goal.

"We need to find an appropriate balance between raising the revenue necessary for investment whilst also managing demand more effectively across the transport system.

"Prices should be set at a level that encourages people to think about travelling at a different time, in a different way or in another mode rather than at a level which is not affordable and where mobility is suppressed.

"Organisations including business and community groups, the AA and public transport associations are all integral to winning support for change.

"We strongly recommend that the governing parties undertake a very proactive engagement process to ensure support.

"While a fair and robust pricing system is developed for New Zealand over the medium term, a near-term solution to Auckland’s funding challenge must be identified.

"The easiest way to implement pricing in the short term would be tolls on the motorway. Using existing technology and priced dynamically, motorway tolls would balance demand and provide a stepping stone to full road pricing," Selwood says.

Investment in irrigation welcome

Thu, 18 May 2017 01:44:01 GMT

Media Release

"Infrastructure New Zealand welcomes new Government support for economically and environmentally sound irrigation proposals, but equity investment is preferable over debt funding to maximise public benefit," says chief executive of Infrastructure New Zealand Stephen Selwood.

The Government today announced $90 million of new funding for irrigation would be included in Budget 2017, including additional grant funding of $27 million and a capital boost of $63 million.

"Dependable water supply has a major impact on agricultural productivity, incomes and, in turn, the sustainability of New Zealand’s rural sector. Communities with poor access to employment, declining school rolls and population decline can be reinvigorated and all of New Zealand shares in the benefit of new investment and stronger exports.

"The obvious limitation is assurance that additional water supply and related land use change does not lead to net environmental degradation.

"Where robust environmental analysis demonstrates irrigation can be provided within the limits of the receiving area, it is critical that other hurdles are reduced.

"Uncertainty about when and to what degree farmers will take up water contracts increases investor risk, raising the cost of irrigation schemes and making water more expensive. This has the reinforcing effect of disincentivising farmer uptake and delaying further investment which otherwise will deliver a sustained economic and social benefit to New Zealand.

"It is in such instances that Government intervention is essential.

"Where the Government acts solely as a lender of last resort, it does not solve the problem at the heart of irrigation. Loaned money must be paid back at an agreed rate on agreed terms, meaning the risk of water uptake remains with investors and projects struggle to move forward.

"Where the Government acts as a co-investor to get projects over the line and realise public benefits, as it has done with the immensely successful Ultra-fast Broadband initiative, very positive outcomes can been achieved.

"In irrigation, the Government has an opportunity to invest capital in proportion both to its commercial risk exposure and the wider social and economic benefit to communities.

"If today’s announcement signals that the Government is ready not only to lend but to invest in a stronger rural economy, then it is very welcome," Selwood says.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Step change in infrastructure needed to support new housing

Tue, 16 May 2017 01:49:22 GMT

Media Release

Step change in infrastructure needed to support new housing

"News that the Government will build 34,500 new homes in Auckland over the next decade is to be applauded, but a step change in infrastructure funding and investment will be required to ensure Auckland networks can accommodate this growth," says Stephen Selwood chief executive of Infrastructure New Zealand.

"Auckland is in immediate need of housing and today’s announcement is a serious commitment to addressing prolonged under supply. Last year only around 7,000 homes were built in the region, so an extra 3,500 per annum over the next decade is substantial.

"The construction of 13,500 social housing units where 8,300 currently stand represents a major increase in housing for those in chronic need. The other 20,000 the Government intends to build will be targeted at the more affordable end of the spectrum, which has for many years been under-supplied.

"This is very good news, but Auckland’s infrastructure networks cannot accommodate this development by continuing business as usual.

"A 34,500 home development is a city of 100,000 people – that’s somewhere between a Palmerston North and a Dunedin. A vast service network underpins this much housing; Palmerston North City alone has over 550km of roads, 1,000km of water pipes and 30 schools.

"The Government estimates that 34,500 homes is equivalent to three and a half houses on every street in Auckland. Typically, that means an additional seven cars in every street. Already Auckland’s transport networks are bursting at the seams and all projections are that congestion will get much worse.

"The Government earlier this month signalled it was going to come to the party with an $11 billion commitment to infrastructure through Budget 2017, but it is still not clear how the Auckland Council will meet its growth obligations.

"A 2015 study by the Centre for International Economics on the cost of residential infrastructure estimated that a new home built on redeveloped land costs the Auckland Council on average $30,000. This figure excludes big city-shaping investments like the City Rail Link.

"The Government’s announcement today adds a $1 billion bill to a council which is already at the limit of what it can borrow. If new development triggers the need for regional scale infrastructure like light rail or a new busway, the cost to the Auckland Council will easily be two, three or four times this figure.

"The city really is at a critical juncture. Infrastructure is urgently needed to address the backlog and accommodate new growth.

"Obvious steps to addressing this challenge are:

Prioritise housing development next to train and busway stations

Invest in traffic light optimisation and intelligent traffic management systems

Rapidly develop park and ride facilities

Streamline planning consents for power, water, telecommunications and social infrastructure that support the developments

Recycle capital tied up in existing assets into new infrastructure

Enable urban development agencies to rezone, acquire and aggregate land and use the increased value to fund infrastructure

Expand private investment in infrastructure through PPPs and large scale development opportunities

Introduce road pricing sooner rather than later to both manage demand and generate revenue to pay for transport infrastructure

"It’s great to see the Government enabling housing development at scale but parallel development of infrastructure to support all of the new houses will be key to success," Selwood says.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Government's $11 billion infrastructure commitment a big step forward

Thu, 27 Apr 2017 01:52:40 GMT

Media Release

Government's $11 billion infrastructure commitment a big step forward

"The announcement that Budget 2017 will allocate a further $11 billion in new capital infrastructure is very welcome. It will be essential that this new funding unlocks local and private capital to accelerate much needed infrastructure investment," says Stephen Selwood CEO of Infrastructure New Zealand.

"The Government’s announcement today increases planned new capital investment to 2020 from $3.6 billion to $11 billion, but leaves details of project priorities till the May Budget.

"This is a massive increase and the largest capital investment commitment by any Government since the 1970s.

"But it must be said that New Zealand’s growth challenge is the highest it has ever been and meeting population demands requires the services for a city larger than Nelson to be added every year.

"Added to the growth challenge is New Zealand’s historic under-investment in infrastructure. The reality is that it would not be difficult to spend $11 billion in 2017 alone.

"The Government’s commitment to the Kaikoura rebuild, along with its $1.5 billion contribution to the CRL, a further $1.5 billion in the East-West link, a billion more on each of Mill Rd, the northern busway extension and the northwestern busway, $400 million on Penlink, plus state highway improvements in the regions is enough to consume all $11 billion, let alone much needed investment in health, education and housing nationwide.

"To get full value out of national resources, the Government is going to need to use its funding to unlock private investment.

"A shift to debt funding strategic projects represents good fiscal management and in this regard it is pleasing to see the Government looking further at public-private partnerships.

"ACC, NZ Super, iwi and domestic and international institutions are looking to invest in New Zealand’s infrastructure and it makes sense to accelerate projects which meet demand for housing and services.

"In addition, the Government has already demonstrated the value of capital recycling, via the partial sale of the energy generation companies in particular, and a similar strategy could be adopted by Auckland, Christchurch and other councils to bridge the infrastructure funding backlog.

"Priority should also be given to projects where developers and land owners who benefit from land value increases contribute to infrastructure investments.

"The combination of public and private capital is central to delivering the infrastructure needed to support New Zealand's growth," Selwood says.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Case for change to build New Zealand’s prosperity

(Past member) — Wed, 05 Apr 2017 01:08:05 GMT

Media Release

Case for change to build New Zealand’s prosperity

The need for a cohesive strategy to drive reform of the country’s resource management and planning systems is now vital for New Zealand’s prosperity, says a coalition of like-minded organisations.

For some time the EMA, Property Council New Zealand, Infrastructure New Zealand and the Environmental Defence Society have been working together to build a case for change on how to provide for the nation’s growth and development within acceptable environmental limits.

The Productivity Commission’s report on urban planning has made a very useful contribution to the developing debate on these issues. While it addressed concerns around the Resource Management Act, and the challenges faced by towns and cities, its terms of reference were narrow.

The coalition of these organisations say a sound basis for reform has now been established and there is emerging interest amongst politicians for a long-term examination of the way we should manage the environment and development.

Now it is time for national leadership on this issue. The coalition recognises there is no quick fix as the problem is complex, system wide and embraces many interests.

As well as improving the core law, the coalition is looking for an improved framework to address the related components of planning, funding, governance, monitoring and enforcement.

The way forward needs to have cross-party support, be independent, have integrity and deliver a result which can meet the needs of New Zealand now and in the future. The process to deliver this could be something along the lines of a Royal Commission, or an inquiry of a similar nature.

“The frustrations of the business community with the current system are well documented. Which is why over the past year or so, we have diligently worked to broaden the debate. I think as a nation, we are ready to have this debate, and work towards an evidence-based solution that will address these concerns,” says Kim Campbell, CEO, EMA.

“We have clearly identified the issue, and laid the groundwork for change. The next step is have a process which will enable the design of a fully integrated planning, funding and delivery system,” says Stephen Selwood, Chief Executive of Infrastructure New Zealand.

“There is clear evidence that the current system is not producing good environmental outcomes. By working together as a group, we can ensure that before rushing to our favourite solutions we focus instead on creating an inclusive framework within which to develop the new way forward for our country,” says Gary Taylor, CEO, Environmental Defence Society.

“We need to stop tinkering with the RMA and undertake bold forward thinking changes to the whole planning system. We cannot let our 21st century cities be held back by outdated 20th century thinking,” says Connal Townsend, Chief Executive, Property Council New Zealand.

ENDS

Media inquiries to:
Val Hayes, External Relations Manager, EMA 021 615 549

Productivity Commission report demonstrates need for a Royal Commission

(Past member) — Tue, 28 Mar 2017 22:04:01 GMT

Media Release

Productivity Commission report demonstrates need for a Royal Commission

"The Productivity Commission report released today identifies many of the key issues confronting urban development in New Zealand, but its recommendations fail to align planning, local government decision making powers and funding", says Stephen Selwood, Chief Executive of Infrastructure New Zealand.

"The Commission recommends regions develop spatial strategies while districts make funding and investment decisions. This is little changed from the current process where regions develop policy statements and districts fund growth. It also replicates failed planning practices under the old Auckland governance regime.

"As long as the responsibilities for planning are separated from responsibilities to fund and deliver plans, implementation will be subject to the vagaries of local, fragmented politics, not the needs of the region.

"Much more fundamental change is required to enable effective urban development and regional growth. We need a system where national, regional and local plans are aligned. Regions must be able to plan for growth, have the necessary funding to enable timely investments and be able to work effectively with central government, business, iwi and local communities.

"A key part of the problem today is that districts are under resourced and don’t have the funding, capacity or incentives to go for growth. Fragmented decision making, and the sheer number of councils involved makes it even more difficult.

"Although the Commission identifies these as issues, it does not propose a fully developed set of recommendations to address them. Councils, for example, already have the ability to use different rating systems to better capture value improvement. The fact that they by and large do not suggests other factors are at play. Little in the report gives confidence that these factors will be addressed.

"Traditionally, discussions of local government structure and funding have failed, which may explain why the Commission has not addressed these controversial issues.

"Fundamental reforms of this significance require a national discourse along with community and organisational input, in depth evidential-based research and objective evaluation.

"While the Commission has made a useful contribution, a Royal Commission into planning laws, local government structure and funding would be an appropriate next step to designing a fully integrated planning, funding and delivery system", says Selwood.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Breakthrough in infrastructure and urban development announced

(Past member) — Tue, 14 Feb 2017 03:45:51 GMT

media release

Breakthrough in infrastructure and urban development announced

"The announcement that urban development authority legislation will be fast tracked and the identification of an indicative route for the Warkworth to Wellsford motorway are major steps forward for infrastructure and growth," says Stephen Selwood CEO of Infrastructure New Zealand.

"Building and Construction Minister Dr Nick Smith has proposed legislation to fast track the redevelopment and regeneration of urban areas to better meet housing and commercial needs.

"This will potentially enable authorities to aggregate land, roll out infrastructure and interface with private developers and contractors to lift housing supply at a scale which could be transformational.

"Traditional development is clearly inadequate to keep pace with growth. This has resulted in new housing without coordinated infrastructure.

"Some of the key advantages of an urban development agency are the ability to aggregate land at scale, master plan development, integrate infrastructure, and promote opportunities for private investment.

"Added to this news is the announcement of the indicative alignment for the 26 km four-lane Warkworth-Wellsford motorway. This will create a seamless connection from Cambridge south of Hamilton to the southern boundary of Northland.

"The long-throttled economic potential of our northern most region will be unlocked by a reliable, resilient, faster and safer corridor to the major markets and ports of New Zealand.

"Current timelines would see a confirmed route progressed to the designation and resource consenting phase as early as this year, meaning major regulatory barriers could be overcome by 2018. This would allow a construction start from that point forward, although funding is yet to be confirmed and there are no set timeframes for shovels in the ground.

"It’s very encouraging to see the Transport Agency approaching the Wellsford motorway as a component of a much grander vision for Northland’s integration into the New Zealand economy.

"A priority now will be working out ways to connect Northland sooner and getting empowered urban development agencies to work in our high growth cities," Selwood says.

ENDS

For further information or comment, please contact Stephen Selwood on 021 791 209

NZ Local Government Magazine feature: Local government, planning & funding reform

(Past member) — Tue, 14 Feb 2017 01:09:59 GMT

Infrastructure NZ Chief Executive Stephen Selwood wrote a feature for Local Government Magazine's Perspectives 2017 issue.

In this column last year, I wrote that the requirements being placed on local government to protect the environment, grow the economy, deliver local services and keep rates down were incompatible. I called for a Royal Commission into the activities, resourcing and structures of local government to sort out the problem. This year, I’m going to review what’s happened in the space to underline why such an inquiry is urgently needed.

Download the full article here

New Zealand's infrastructure priorities for 2017

Fri, 25 Nov 2016 00:40:24 GMT

"Responding to Auckland’s growth challenge and fixing planning legislation and local government funding and structures are the top infrastructure priorities for New Zealand in 2017," said Stephen Selwood CEO of Infrastructure New Zealand.

The priorities were confirmed last night at Infrastructure New Zealand’s Annual General Meeting in Auckland.

"Congestion in Auckland is disproportionate to the city’s size and is rapidly deteriorating. Of greatest concern, travel times along the State Highway 1 motorway corridor have increased by 30 per cent in just the last three years and are projected to get much worse.

"Earlier this year Infrastructure New Zealand produced a video of the already unacceptable state of congestion, which can be accessed here.

"Major works underway on the Central Rail Link and motorways must continue at pace and the next tranche of projects to deal with 50,000 more people per annum brought to market.

"Chief among these is the East West Link.

"The Onehunga Penrose manufacturing and industrial zone employs approximately 68,000 people and contributes $4.6 billion a year to New Zealand’s economy, but the current transport connections into and through the area are either incomplete or highly congested.

"The East West Link is essential to enabling movement between state highways 1 and 20 and fixing congested access into and out of Auckland’s premier industrial zone.

"When the Waterview Connection comes on early next year, it will be vital for resilience and efficiency of the network that traffic can move between the two key corridors as easily as possible.

"But we mustn’t forget that efforts to deliver on Auckland’s transport priorities can only be successful if we have an aligned growth plan which focuses development in areas where the transport system can accommodate it.

"Guest speaker Deputy Mayor Bill Cashmore highlighted the financial constraints facing the city and how these are impacting the ability to fund the transport investment needed to support Auckland’s growth.

"Infrastructure New Zealand favours capturing value created by public investment in infrastructure and putting tolling in place to both raise funds and manage demand. These are among options that need to be explored sooner rather than later.

"Beyond Auckland, fragmented and unnecessarily complex governance structures, complicated and disintegrated planning laws and insufficient funding are frustrating local government’s ability to deliver the infrastructure needed to support regional development and growth.

"A freshly elected parliament in 2017 provides an opportunity to undertake a first principles review of our infrastructure and local government, planning, governance and funding arrangements nationwide.

"What’s needed is a fully integrated planning, governance, funding, regulation, delivery, and resource management system that is much more responsive to change and that will drive regional social and economic development, improve environmental outcomes and strengthen local democracy and community engagement.

"This will require much more than constant tinkering with existing legislative, governance and funding systems.

"A first principles review of our governance, funding and institutional structures should be a priority for the newly elected government in 2017," Selwood says.

ENDS

For further information and comment contact Stephen Selwood on 021 791 209

Potential for innovation in social housing delivery in Christchurch

Thu, 24 Nov 2016 00:45:36 GMT

"The Government’s proposed transfer of up to 2500 state houses in Christchurch to community housing providers will allow older homes to be rejuvenated and may also be used to incentivise new approaches to social housing delivery in New Zealand," says Stephen Selwood CEO of Infrastructure New Zealand.

"It is very positive to see the Government advancing opportunities for innovation in the provision of social housing at a scale. The offer will be attractive to both domestic and international providers.

"Tenants will be pleased to know that there will be no reduction of social housing units and that they may have an opportunity to move into a brand new home.

"As in other parts of New Zealand, state house land in Christchurch is under-capitalised, typically occupied by old, cold and expensive to maintain houses sitting on large sections.

"More intensified development will enable new homes to be built that are both energy efficient and better designed to meet the needs of social housing tenants as well as offering the opportunity to expand the supply of affordable houses in Christchurch.

"The value capture opportunity might also enable community housing organisations to provide greater support for those who may have mental, physical, dependency or other difficulties.

"But it is highly unlikely that it can be used for all three of these desirable outcomes.

"Given the high cost of tendering for these types of transactions, not for profit housing providers want to ensure every bidding dollar is well spent.

"It will therefore be essential that the Government is clear about its priorities when it releases information to potential providers next month.

"In overseas jurisdictions like Canada, government agencies often use a “scope ladder” or outcome focussed approach when tending these kinds of projects. The scope ladders set out the list of outcomes the government desires within a pre-determined affordability threshold.

"That way, instead of tendering the lowest price to deliver the minimum acceptable standard of service, bidders are incentivised to deliver the best outcomes they can within the affordability limits that the government has set.

"If that threshold delivers better outcomes for less money than the cost of the current system then taxpayers, tenants and the Government are assured that they are getting value for money. A win-win opportunity," says Selwood.

ENDS

Major rethink on transport and urban intensification needed

Mon, 21 Nov 2016 23:29:34 GMT

Auckland must urgently revise transport priorities and the Unitary Plan to better align where people live, work and how they move around, otherwise gridlock will bring the city to a halt, according to a new report from the New Zealand Council for Infrastructure Development.

We launched the study of Aucklands transport challenge last year to provide independent input into the Government and Auckland Councils review of transport investment priorities the Auckland Transport Alignment Project (ATAP). The analysis is also central to NZCIDs submission on the Proposed Auckland Unitary Plan.

ATAPs first report, released in February, showed that by 2026 State Highway 1, as well as other critical parts of the network, will be in gridlock all day every day.

If that were allowed to happen, the Auckland economy will grind to a halt and liveability would be seriously degraded.

Projects like the Waterview connection and public transport improvements now underway buy a little bit of time. But we need to act more swiftly if we are to avoid gridlock within a decade.

A significant part of the problem is that the proposed Unitary Plan and Special Housing Areas allow urban infill and development which cannot be economically served by transport and don't allow sufficient density adjacent to rail and busway stations.

This forces car dependency and makes congestion much worse than it needs to be.

To decongest Auckland and improve liveability the report recommends that we must:

Substantively revise land use provisions as set out in the Auckland and Unitary plans to target intensification around public transport and sequence growth to match transport availability
Loosen residential development and height restrictions in areas with quality public transport access and strengthen restrictions in areas without it
Enable satellite city development at scale beside rail with a focus on the Pukekohe to Manukau corridor
Develop mixed use "live, walk and work" communities
Improve the frequency and convenience of public transport services to major centres of employment, education and entertainment
Vastly increase park and ride facilities and provide express bus services across the public transport network
Deliver new capacity across the road network with a focus on fixing traffic pinch points and rigorously evaluate all options, including an eastern-aligned harbour crossing connecting to an eastern corridor
Implement road pricing to increase network capacity, fund ongoing improvement and accommodate electric vehicles
Promote teleworking and work from home initiatives leveraging digital connectivity
Invest in leading edge intelligent traffic management systems
Embrace and leverage new car technology wherever possible, but recognise that it does not yet provide a silver bullet solution to Auckland's transport issues
Ensure land use and transport policy is adaptive to technological and other changes as and when they become clear

Auckland can have a road system which moves and a reliable high quality public transport network which gets people to work on time.

But to achieve that outcome we need to sort out the Unitary Plan to target high amenity intensification around public transport, increase motorway and arterial network capacity, leverage new technology to the max and price the network to manage demand and fund new investment, Selwood Says.

NZCIDs Transport Solutions for a Growing City report is available for download here

Keeping Auckland Moving - a ten-minute video on problems and solutions to gridlock is available here

Australia New Zealand Infrastructure Pipeline Launched

Thu, 27 Oct 2016 11:00:00 GMT

The Australian and New Zealand Governments today launched the Australia & New Zealand Infrastructure Pipeline (ANZIP), developed by Infrastructure Partnerships Australia in partnership with Infrastructure New Zealand and the NZ National Infrastructure Unit. http://infrastructurepipeline.org/

"ANZIP provides a detailed and informed picture of upcoming greenfield and brownfield infrastructure investment or major construction opportunities, across the two countries", says Infrastructure New Zealand Chief Executive, Stephen Selwood.

"This new, dedicated and independent resource segments greenfield and brownfield infrastructure from early stage, prospective projects or divestments, through to final contract award.

"In this way, ANZIP provides infrastructure investors, contractors and jurisdictions with a clear picture of likely and confirmed infrastructure activity, across Australia and New Zealand.

"ANZIP provides improved transparency about what infrastructure activity will occur where – and also provides a likely or confirmed time line – allowing the market to prepare the financial and human resources needed.

"ANZIP is a central portal, with links through to government planning documents, budgets and other materials and resources to provide a dynamic, holistic view of the infrastructure pipeline", Selwood Says

ANZIP is focused only on major infrastructure activity, above the following thresholds:

Australia:
Construction projects: > AUD$300m
Investable greenfield & brownfield: > AUD$100m

New Zealand
All greenfield and brownfield projects and divestments: > NZD $100 million

Infrastructure New Zealand launched

Tue, 25 Oct 2016 02:52:07 GMT

New Zealand's peak infrastructure body, the New Zealand Council for Infrastructure Development has relaunched as Infrastructure New Zealand.

"Infrastructure New Zealand better reflects the wide range of priorities facing the organisation today, including transport funding, project procurement and regional governance and planning reform," says Infrastructure New Zealand chief executive Stephen Selwood.

"When NZCID was created 12 years ago, New Zealand's infrastructure challenges were of a different kind. We had severely under-invested in assets critical for economic and social development for a generation. We needed investment and we needed it urgently. Our entire organisational focus was on infrastructure development.

"Pleasingly, as a country we have since tackled many of our most urgent priorities. We've invested in our electricity backbone, ramped up investment in transport networks across the country and transformed our telecommunications sector from a global laggard to world leader, for example.

"But significant opportunities for improvement remain.

"Lifting capability in public procurement of major projects has potential to save the country billions of dollars over coming years. Getting land use and pricing right could make our transport dollars go much further – especially in Auckland. Revising infrastructure responsibilities so that asset owners have the resources and capability to deliver could see a step change in service delivery in the provinces.

"Our new name - Infrastructure New Zealand – better encapsulates our role as New Zealand’s peak infrastructure industry body.

"Our immediate priorities will be to focus on the really challenging issues that continue to hold New Zealand back including:

- The need for reform of our planning laws and institutions to better align infrastructure planning, funding and delivery
- The need to shift to road pricing to fund much needed transport investment and manage traffic demand more effectively
- Lifting procurement capability across the industry
- Accelerating the use of private capital to deliver better outcomes across the sector

"The new logo represents a connected New Zealand. It symbolises networks across transport, energy, water, telecommunications and social infrastructure.

"It also symbolises our strong desire for effective partnerships between the public and private sectors to deliver better outcomes for all of New Zealand," says Selwood.

Infrastructure New Zealand can be found at www.infrastructure.org.nz and contacted at 09 377 5570.

Dynamic Motorway tolls needed to speed up Auckland and bridge funding gap

Wed, 19 Oct 2016 21:30:00 GMT

"Introduction of dynamic motorway tolls in Auckland would help decongest our road network and provide the quickest, most efficient and most equitable way to bridge the annual $400m transport investment funding gap", said Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

"Speaking at the annual Building Nation’s Symposium in Auckland this morning, Selwood shared the business sector’s concern that the proposed timeframe for addressing Auckland’s transport issues was far too long.

"A 10 year wait for road pricing as suggested in the recent Auckland Transport Alignment Project (ATAP) report leaves the agreed investment programme $4 billion short and, if not addressed urgently, congestion will become chronic.

"An immediate solution to funding and congestion is required.

"Introducing a dynamic toll on the motorway system at a price which maximises traffic flows would allow more traffic to use the motorway at faster speeds, providing a direct benefit to users, and help bridge the $4 billion ten-year funding gap.

"The optimum speed which maximises traffic flows is between 80km/h and 60 km/h. At those speeds you can travel 20 kilometres on the motorway in just 15 or 20 minutes.

"When speeds rise above 80 km/hr, safe drivers increase the gap between themselves and the car in front. While travel times are faster, the overall traffic flow is reduced.

"And when speeds drop to just 20 km/h - the typical average speed in the morning and evening peaks - it takes an hour to drive the same twenty kilometres.

"That’s a waste of everyone’s time and money and is a huge cause of frustration for Aucklanders.
Dynamic tolling would allow authorities to adjust the price up and down to maximise traffic flow on the motorway and reduce demand on local roads.

"Those who choose to pay benefit from a faster trip. Those who don’t have options to drive free on other roads, take public transport, walk or cycle. Others may choose to share their car to reduce the cost of the toll or travel at different times.

"Motorists will set the price by their collective action.

"A system like this could be introduced within a few years using existing number plate recognition technology – like we have on the Northern Gateway toll road. There’s no need for a tracking device in every car or satellites in the sky to implement such a scheme.

"Motorists will be advised of the current price on their phones before they leave. Variable message signs would also inform motorists well before they reach the motorway on-ramps.
Revenue from the tolls would be used to bridge the $400 million per annum funding gap identified by ATAP.

"Encouragingly, a 2015 Colmar Brunton survey of 5000 Aucklanders found 57 per cent preferred the use of motorway tolls to fund transport investment than rates and fuel taxes.

"A dynamic tolling system on the motorway will raise the funds needed for investment, without disincentivising travel and provide users a direct benefit in travel time savings. A “win-win” solution," Selwood says.

For further comment, please contact Stephen on 021-791 209.

Valuing the role of the construction industry in New Zealand

Wed, 19 Oct 2016 00:10:51 GMT

PwC Report, ‘Valuing the role of construction in the New Zealand economy’ shows construction similar to value of the wine industry at 8% GDP

The PwC report released today called ‘Valuing Construction in the NZ Economy’, sees construction leap into the fifth largest sector by employment (178,000 FTEs) and contribute 8% of the country’s GDP - establishing its place as a major generator of NZ economic growth.

The report, commissioned by the Construction Strategy Group (CSG) and the NZ Construction Industry Council (NZCIC), highlights the extent to which the construction sector is a driving force in the New Zealand economy and where both future opportunities and challenges lie. Crucially the PwC report makes a series of key recommendations (for Government, Industry and consumers) covering changes that would improve the productivity and performance of the industry in order to better sustain its long term growth.

Download the report here

Peak Infrastructure Symposium Looks to the Future

Mon, 10 Oct 2016 02:29:09 GMT

New Zealand’s peak infrastructure industry conference, the NZCID Building Nations Symposium, will bring over 400 industry leaders together in Auckland next week to debate infrastructure of the future.

"With the world in a constant state of change, there has never been a more poignant moment to look to the future and see what it means for infrastructure," says NZ Council for Infrastructure Development chief executive Stephen Selwood.

"Digital technologies provide a platform for an array of opportunities we are only beginning to understand. Autonomous vehicles have received plenty of attention, but just as important are the systems which will connect driverless cars to each other, to traffic signals and to authorities monitoring and operating the road network.

"The shift away from fossil fuels will revolutionise movement, as well as electricity demand and leading energy companies are already preparing for a future where solar and batteries complement transmission and distribution.

"Increasing digital communication capabilities are already shortening the distance between New Zealand and the world, opening up new industry opportunities to supplant employment in sectors soon to see a robotic revolution.

"Bringing all these technologies into the built environment and smartening up our cities is going to be a rapidly evolving public sector. Tailoring procurement, attracting investment and removing regulatory impediments to social, economic and environmental progress will be key challenges for public agencies over coming decades.

"A fantastic line up of speakers will seek to inspire visionary thinking and examine the infrastructure implications of future mobility, infrastructure funding, the future of work, smart cities and smart infrastructure," Selwood says.

Key note speakers include:

• Deputy Prime Minister the Hon Bill English who will set out Future Capital Intentions for the New Zealand Government;
• Transport Minister the Hon Simon Bridges and the Secretary General of the International Transport Forum will discuss transport infrastructure of the future;
• Dave Ferguson, President, Nuro and former Principal Engineer, Computer Vision and Machine Learning Lead for Google Self-Driving Cars will present on future mobility and the impact of driverless cars;
• Chief Executives of the major public and private sector infrastructure companies in New Zealand will discuss the opportunities and challenges presented by global trends in technology, demographics, energy and climate change;
• Leader of the Opposition, Andrew Little, will present Labour’s vision for infrastructure
• The new Mayor of Auckland Phil Goff will set out his plans for the super city.

The NZCID Building Nations Symposium will be held next week in Auckland at the ANZ Viaduct Events Centre on the 20th and 21st October.

Details are available here or at www.nzcid.org.nz/buildingnations.

For further comment, please contact Stephen on 021 791 209.

ENDS

ATAP report signals time to think outside the box

Thu, 29 Sep 2016 23:00:50 GMT

The much anticipated Auckland Transport Alignment Project final report released this afternoon underlines the scale of Aucklands growth challenge and signals an opportunity to better integrate transport and development in our largest and fastest growing city, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

The landmark ATAP process has aligned central and local governments approach to transport in our largest city. Positively, we now have agreement across key agencies as to what the transport problem in Auckland is, what sort of response is required and how much it will cost.

However, the agreed findings are cause for some considerable concern.

Congestion has slowed speeds on the Auckland motorway by 9 per cent in just the last three years. The best case scenario is that congestion across the network will decline ten per cent more over the next decade before road pricing is introduced.

If an additional $4 billion of investment cannot be found, congestion will worsen by closer to 20 per cent.

Even with the delivery of the CRL, AMETI and new priorities in the form of a north-western busway and extension to the northern busway, public transport mode share will barely exceed 10 per cent during the morning peak by 2026.

Despite this growth in public transport, little new capacity has been identified for the strategic road network beyond some limited widening. This means that the next million people to Auckland are expected to be accommodated on the existing motorway network, with only the extension north of uhoi, an East-West expressway across Onehunga and a new harbour crossing in the third decade.

It is difficult to see how Aucklands road network, which is declining so rapidly today, can accommodate the weight of 30 years more growth.

ATAP proposes addressing this problem by levying congestion charges of up to 30 cents per kilometre across the isthmus in peak periods in place of petrol tax. But this does not address the funding challenge and raises significant political and equity issues, which still have to be resolved.

Perhaps the biggest question left open by ATAP, however, is just why a three-fold increase in transport spending in the last decade has resulted in such a rapid decline in congestion performance.

The answer to that question remains outside the studys terms of reference, but is the direct consequence of dis-integrated planning statutes which has allow growth to occur out of step with transport investment.

The Unitary Plan has very successfully provided the development capacity Auckland needs, but was not under any requirement to target that growth into areas where it could be serviced by transport.

ATAP and our wider transport agencies must now meet growth across all parts of the city at once and its not surprising that budgets cant keep up.

The ATAP work provides a compelling need to identify how we can target growth in Auckland to avoid severe transport challenges in the short and medium term.

Government and Council need to be partnering with private developers to up the scale and lower the building costs of new homes near rapid transit to take pressure off locations without transport options or road capacity.

The current allowance of growth across the city will, without concerted focus from all parts of government, overwhelm transport systems and budgets and we must act quickly to avoid undermining the citys productivity and livability, Selwood says.

For further comment, please contact Stephen on 021 791 209

ENDS

Effectiveness of NZ’s resource management system is questioned

Wed, 28 Sep 2016 06:15:35 GMT

Ground-breaking research on how the current resource management system is failing the environment was released today [28 September 2016]

Download report here

The research commissioned by the EMA, New Zealand Council for Infrastructure Development, Property Council New Zealand and conducted by the Environmental Defence Society (EDS), revealed that the environmental outcomes of the Resource Management Act (RMA) have not met expectations.

In a surprising twist, four very different and diverse organisations are united in the view that the RMA and wider resource management system is not delivering for the environment nor for business.

The research, conducted by EDS Senior Policy Analyst Dr Marie Brown, revealed that 81% of respondents believed the environment had declined since 1991.

While the business side of the argument was well developed and the business industry organisations had strongly advocated that the current system was a handbrake on development and productivity, what was missing from the conversation was an empirical element relating to the environmental impact.

The ground-breaking EDS research found that the RMA had not met the environmental outcomes expected of it, and that the wider issue of how the nation’s resources are managed was suboptimal.

A little more than one third of respondents said the RMA had not achieved its environmental goals, while the majority felt it had only been partly successful in doing so.

A lack of national direction has limited the potential of the resource management system to effectively and efficiently achieve its environmental goals.

"We undertook this research on the basis that the commissioning parties accepted the proposition that we need to manage natural resources subject to environmental bottom lines and limits. So getting an understanding of how well the present system delivers on that aspiration seemed a useful contribution to the wider reform discussions," says Gary Taylor, Chief Executive, Environmental Defence Society.

"It’s time to put the party politics aside, and have a mature debate about how we as a nation want to effectively manage our resources to fully protect the environment and drive productivity. There is no quick fix solution on offer here. The issues are much wider than the Act itself. They include other planning laws, institutional arrangements, capacity and resourcing. Tinkering with the RMA will not address these issues - a wider systemic review is needed," says Stephen Selwood, Chief Executive, New Zealand Council for Infrastructure Development.

"The Property Council has always known the RMA is failing cities and our long standing experiences of the housing crisis nationwide confirms this. The report validates that this failure extends to the natural environment as well. Our opinion is firm, a comprehensive review of the environmental protection and urban planning is needed so they succeed together," says Connal Townsend, Chief Executive, Property Council New Zealand.

"What’s important is that we, as a nation, need to seriously explore the options for change and not just rush to ill-informed solutions. The options may be legislative, they may be institutional and they may be around process - whatever they are it’s important that we marshal a new era for resource management," says Kim Campbell, CEO, EMA.

Major opportunity to expand social housing

Mon, 26 Sep 2016 22:54:34 GMT

"Further improving the Government's housing reform programme requires clarity of vision, specificity on outcomes sought, a clear development pipeline, reduced bid costs and long-term certainty of revenue streams," says Stephen Selwood, CEO of the New Zealand Council for Infrastructure Development.

"That was the key message delivered to a who's who of New Zealand's assisted housing market Tuesday night in Auckland.

"The state housing model we pursued for many decades is not working. Assets are sitting under-utilised or are in poor condition and the people living in these often damp and badly configured homes have no pathway to housing independence.

"The Government, community housing associations, development community and housing investors all agree there is an opportunity to expand the supply of housing for those who cannot participate in the open market, while better meeting their housing needs.

"The ultimate goal is to deliver affordability to more people, and assist those who are ready to move from state dependence to independent living, but for that to occur, existing state housing tenants need support.

"Thats where the community housing sector can play a vital role. But in order to get community housing off the ground, the largely non-profit and consequently under-capitalised sector needs long term revenue certainty and its investment partners need a steady flow of opportunities in order to sustain a market.

"The Government has spent the last few years building up its capacity to oversee a growing community housing sector and there is a strong desire from housing providers that we quickly transition to a pipeline of development opportunities.

"For this to happen, there is a need for clarity of vision, clear and long term planning by government, reduced costs of bidding and, of greatest importance, certainty over revenue streams to provide investment confidence. This will release private capital to build more homes.

"Changing policies from one government to the next undermines the sustainability of social housing and the industry calls on all parties to build a consensus around the long term development of the community housing sector," Selwood says.

For further comment, please contact Stephen on 021 791 209.

ENDS

CRL partnership a major step forward for unified council

Wed, 14 Sep 2016 07:07:02 GMT

The announcement that the Auckland Council and the Government have reached an agreement on funding and governance of the $3 billion City Rail Link is a major step forward in the delivery of New Zealand's largest ever public transport project," says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

The agreement, which clarifies role responsibilities and cost sharing, will allow the project to progress into construction, ready for operation in 2023.

The partnership reflects the significant benefit of focussed regional leadership and a unified council structure.

It is difficult to see how agreement to progress a project of this scale and tomorrow's scheduled release of the Auckland Transport Alignment Project (ATAP) final report could have been possible without governance reform in Auckland.

A united Auckland has called upon the Government to respond to a regional priority and enabled a single interface to negotiate a comprehensive delivery arrangement.

With funding confirmed, central agencies can work with the council's transport arm, Auckland Transport, to ensure the project is delivered efficiently and effectively.

As the lead client organisation, CRL Limited will now be in a position to undertake proactive market engagement to ensure the right skills can be sourced and project risks allocated optimally.

New Zealand has not delivered a project of this scale and complexity before and there is significant interest from both here and overseas.

Given the risk of operating a construction project of this size in a CBD environment, attracting the best capability will be essential. Transferring too much risk to private partners will result in price increase, while not enough will reduce the incentive to maximise project opportunities.

One major such opportunity regards urban redevelopment around stations to offset some of the capital or longer term operational costs of the project.

Providing the very best governance capability in the Special Purpose Entity overseeing project delivery will be central to ensuring success," Selwood says.

For further comment please contact Stephen Selwood on 021 791 209.

ENDS

Failed planning system only part of the problem

Fri, 19 Aug 2016 07:02:26 GMT

In its blue sky review of the New Zealand planning system, the Productivity Commission has correctly found that the planning system is failing, but their recommendations for change will not succeed without governance and funding reform, says Stephen Selwood chief executive of the New Zealand Council for Infrastructure Development.

The Commission observes that the principal planning laws the Resource Management Act 1991, the Local Government Act 2002 and the Land Transport Management Act 2005 are now complex to the point of incoherence and that New Zealands urban planning system overall lacks clarity, focus, responsiveness and is not achieving its objectives.

Their identification of the primary purpose of urban development planning enabling development and change; providing development capacity; and ensuring people and goods can move around is especially welcome.

The Commissions frank assessment that the urban planning system is failing is clearly evidenced by house prices at unacceptably high levels and chronic congestion in our largest city. But unbalanced regional development and poor environmental outcomes across New Zealand demonstrate that the problems are much broader.

The reality is that we have not managed development, growth or cumulative effects on the environment well in New Zealand for a very long time.

Looking to the future, the Commissions recommendations for spatial planning and pricing on land and infrastructure will be essential to successfully reforming the planning system, but it is difficult to see how these changes can take place in the absence of an honest discussion around funding and responsibility.

Fragmented governance prevents effective spatial planning. How can development be allocated if individual councils responsible for funding infrastructure do not have the resources or desire to accommodate growth?

How can an individual council be forced to provide for growth and reprioritise existing investments in accordance with a wider vision?

Who benefits and who should pay when a council on one side of town provides for growth, while another on the opposite side shirks its responsibility on the basis of residential opposition or refuses to fund the required infrastructure?

Spatial planning cannot take place on a sub-regional scale. It cannot be effective unless the plan can be supported by infrastructure. And no regional spatial plan will succeed unless the biggest infrastructure and service provider central government participates in plan development and explicitly commits to funding services in agreement with the plan.

The planning, governance and funding of urban growth and regional development cannot be reformed in isolation.

The Commission has comprehensively demonstrated that planning is not functioning effectively in New Zealand. But, in addition to fixing the planning laws, a much more fundamental review of local and central government responsibilities, structures and funding will be needed to address the core problems that have been identified, Selwood says.

For further comment, please contact Stephen on 021 791 209.

ENDS

Defence signals $1.7 billion infrastructure programme

Fri, 19 Aug 2016 01:02:19 GMT

The 15 year regeneration of the defence estate announced today provides an example of effective investment management that other public agencies should replicate, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

The Defence Estate Regeneration Plan identifies a $1.7 billion capital works programme over the next 15 years, including detailed project pipeline to 2022.

Following up on the strategic White Paper released earlier this year, the regeneration plan provides estimates of capital allocations by area, giving clarity to local as well as national contractors about what is required in the short-medium term.

Acknowledging weak asset management in the past, Defence will adopt an integrated approach to renewing assets across its 81,000 hectare estate, including outsourcing and alternate delivery models on a project-by-project basis.

This is textbook asset management and must be commended.

While Defence may be one of our more capable investment managers, as revealed through Treasurys Investor Confidence Rating Scheme, it has also clearly benefitted from strong Government funding commitment.

Not every Government agency is in a position to impartially review its assets, identify weaknesses and book a 15 year regeneration programme.

Instead, we often see major asset owners reliant on annual funding commitments which rise and fall with the economy and having to compete other public agencies within budget constraints.

In such an environment, it is virtually impossible to manage assets efficiently or signal future capacity requirements to key suppliers. New projects are cut according to budget provisions, undermining whole-of-life project evaluation, and maintenance is deferred until such time as funding is available, even if that means a higher final cost to the taxpayer.

The Defence regeneration plan demonstrates what public agencies with future funding confidence and a long term planning horizon can achieve.

It is vitally important that this confidence is not shaken by unexpected funding revisions in the future and that other sectors are given similar operational support to honestly review their assets, develop and publish a long term asset management plan and deliver on that plan over the long term, Selwood says.

A copy of the Defence regeneration plan can be found here.

For further comment, please contact Stephen Selwood on 021- 791 209.

Tamaki Notice of Intent

Wed, 10 Aug 2016 01:00:46 GMT

TRC has now issued a Notice of Intent to procure via GETS advising of the release date of an Invitation for Expressions of Interest (EOI) for phase one of the development programme (10 August). The notice also provides details of a subsequent market briefing following the EOI release.

You can find more detail and subscribe to the notice at:

https://www.gets.govt.nz/TRDC/ExternalTenderDetails.htm?id=17735350

For more information please contact:

Jeff Valenzuela
JV Public Strategies
021 043 7669

Puhoi-Warkworth PPP enables growth and transfers risk

Tue, 02 Aug 2016 00:59:07 GMT

The Puhoi to Warkworth motorway partnership between the New Zealand Transport Agency and the Northern Express Group has accelerated investment in critical infrastructure for North Auckland and Northland, while protecting the taxpayer from construction blowouts, says Stephen Selwood chief executive of the NZ Council for Infrastructure Development.

The consortium of ACC, HRL Morrison & Co, Macquarie, Fletchers and Spanish construction giant Acciona has become the preferred bidder to construct the 18.5 km Road of National Significance.

We can now expect construction to get underway on this vital link by early 2017, perhaps a decade or more faster than if the project had been constrained by traditional funding limitations.

In leveraging private finance, the road will get built sooner, bringing forward the benefit of improved connectivity for areas north of Auckland.

By tying private capital to the deal, NZTA will be guaranteed a fit for purpose road for 25 years and problems which arise will be absorbed by the private consortium and not shifted onto taxpayers.

Enabling this project to proceed as a PPP is a big step forward for the economy of Northland, which, when the motorway is complete, will enjoy faster and safer access to its major markets. Northerners can expect immediate and sustained investment in their communities, just as those living north of Wellington have experienced since Transmission Gully was announced.

The opportunity now will be to develop a plan to further extend the motorway north, ultimately to Whangarei," Selwood says.

For further comment, please contact Stephen on 021-791 209

Unitary Plan presents major transport challenges

Fri, 22 Jul 2016 06:59:34 GMT

"The Unitary Plan recommendations released today by the Independent Hearings Panel provide a significant increase in development capacity, but will seriously exacerbate congestion in Auckland if development occurs in areas not well supported by public transport," says Stephen Selwood, Chief Executive of the New Zealand Council for Infrastructure Development.

"The Plan permits urban in-fill across almost all of the current urban area, as well as significant apartment living adjacent to key transport corridors.

"Density beside rail and busway corridors makes sense, especially for those that work in the city.

"But, increasing household density without corresponding and viable public transport alternatives will result in increased car density and cause much worse congestion.

"Modelling undertaken as part of the Auckland Transport Alignment Project shows that on current plans congestion in Auckland will be much worse in 2026 than it is today.

"The Panel's recommendations allow a marked increase in density in areas that do not have viable public transport alternatives. This will make congestion an even more serious problem than has been anticipated by ATAP.

"Motorways and arterial roads are of particular concern. Additional motorway capacity and widening of arterial roads will be essential to avoid Auckland grinding to a halt. A marked increase in public transport funding will also be essential.

"Funding that level of investment will require new ways to raise revenue and manage demand.

"If future urban areas were developed in a way that enabled high density living close to work, this would be a much more effective way of providing for growth than allowing in-fill in areas not well supported by transport capacity.

"The Hearings Panel has done a fantastic job in providing capacity to meet urgent housing needs. The opportunity for the incoming council is to provide much more targeted growth around public transport corridors and make provision for integrated residential and employment development in future urban areas," Selwood says.

For further comment, Stephen can be reached on 021-791 209.

ENDS

Implementation plan needed for $1bn housing infrastructure loan

Sun, 03 Jul 2016 06:45:46 GMT

"The Governments $1 billion interest free housing infrastructure loan will accelerate infrastructure and land development, but clarity of the implementation plan setting out how the funds will be released and how the debt will be repaid is now urgently needed, says Stephen Selwood, chief executive of the NZ Council for Infrastructure Development.

"If development levies are used, this will transfer risk to developers and result in higher section prices.

On the other hand, if targeted rates are used, this will reduce development risk and home owners will pay for infrastructure over time, rather than in section prices, making houses more affordable to purchase.

"This kind of approach is similar to schemes internationally, known as tax increment financing, where government or councils borrow to invest in infrastructure and the debt is repaid from the "incremental" tax revenue that results from growth.

"The debt is clearly linked to a specified development area and repayment is directly connected to the additional tax revenue that results from the investment.

This would be a useful model for the Government to use in New Zealand as it provides transparency between where the money is invested and how it will be repaid.

"The Governments proposal to establish urban development agencies with the power to aggregate land is another important element to increasing supply.

Matched with investment in the infrastructure needed for large scale development, this could make a significant difference to housing supply.

New Zealands traditional home by home construction sector does not have capacity to keep pace with demand. But if significant land holdings can be aggregated, this will be attractive to large scale developers in New Zealand and internationally.

In combination, interest free infrastructure loans and urban development agencies could make a material difference to housing supply and improving housing affordability, but an implementation plan is now urgently needed, Selwood says.

For further comment, please contact Stephen Selwood on 021 791 209.

ENDS

Watercare's ability to charge for services enables timely investment in infrastructure

Fri, 01 Jul 2016 00:51:28 GMT

Watercare's new asset management plan released this week demonstrates the value of having a strategically capable specialist infrastructure provider with the ability to set prices to fund growth," says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

"Aucklands water Council-Controlled Organisation (CCO) 20 year asset management plan details a $4.9 billion fully funded capital spend over the next decade aligned with the Councils vision for growth. Approximately $3 billion will be directed towards wastewater provision and $2 billion towards water supply.

In addition, some $2.6 billion will be allocated to operational spending, signalling a total $7.4 billion spend overall by 2026 and $18.4 billion over 20 years.

Investment over the next decade will ensure provision for a further 195,000 dwellings across the region on top of present capacity for 45,000 more dwellings, exceeding population growth projections.

Timely investment ahead of demand will help unlock developable land and take pressure off house prices.

The ability to look out 10 and 20 years and produce a fully funded investment programme is made possible by Watercares consolidation of activities inside a special purpose, non-profit council company resourced by user charges.

Having the ability to charge customers directly to fund future investment to support growth is fundamental to the success of this model.

Compare this situation to other publicly owned entities like Auckland Transport and dozens of council funded water programmes where investment decisions are more influenced by politics than by good asset management.

Auckland faces a transport funding gap of up to $20 billion over the next 30 years having assumed a legacy of underinvestment that goes back some decades and cant use prices to raise revenue or send price signals to users. The result is congestion.

Many local authorities across the nation have water renewal and upgrade programmes that remain unfunded. Local politicians are fearful of ratepayer reaction to rates increases so arent funding investment needed to meet basic levels of service.

Although Watercares AMP does not contain a detailed investment pipeline, this is something Watercare will no doubt develop over subsequent iterations.

Comprising one third of New Zealands urban water sector, Watercare has the capacity to send strong forward signals to the supply market and drive best value from appropriately scaled business partners.

This kind of CCO model is worthy of serious consideration by other Councils, many of whom lack the scale, expertise and funding needed to enable timely investment in water infrastructure services, Selwood says.

Watercares 2016-36 AMP can be found here

For further comment, please contact Stephen Selwood on 021 791 209

ATAP balanced in concept but benefits and costs must be assessed

Tue, 21 Jun 2016 00:49:24 GMT

Media Release
22 June 2016

"The Auckland Transport Alignment Project Interim Report released yesterday sets out a logical theoretical case which balances investment, technology and demand management, but rigorous analysis of the costs and benefits of each approach is required to determine the optimum mix that will get Auckland moving," says Stephen Selwood chief executive of the New Zealand Council for Infrastructure Development.

"The ATAP process is a landmark in local and central transport cooperation made possible by the 2010 restructure of Auckland governance which has allowed a single interface between the region and Government across key issues.

"What should not be lost in the discussion is that we have the Government and Auckland Council sitting down to nut out the tough issues with the result that the Council has now strengthened its stance on tackling congestion and the Government has recognised the potential of pricing roads.

"Both parties should be commended for progress thus far, but momentum retained to ensure Auckland gets an outcome which reflects the wants and needs of transport users as well as their ability to pay.

"The purpose of a transport network is to enable the movement of people and goods and it is the responsibility of officials to achieve this at the lowest overall price. Demand management is an opportunity to get the most out of networks, not discourage travel.

"Further analysis is needed to demonstrate that demand management proposals deliver a net economic, social and environmental benefit, which is much broader than just managing down congestion.

"Something still to be addressed through ATAP is determining the feasibility and timing of technology. There are as many analyses showing road demand will increase, for example, as fall with the emergence of innovations like driverless cars.

"Given that the New Zealand vehicle fleet is on average around 14 years of age, from a technological and affordability perspective some solutions remain many years, possibly decades, away.

"Options like traffic signal phasing, are ready to go now and need to be accelerated. Other technologies like electric vehicles will lower the cost of travel and provide increased mobility. We wouldn't want road pricing to reduce the benefits that these sorts of technology have to offer.

"In the NZCID report, Transport Solutions for a Growing City (click here), we identified poor integration between transport, development and density as major factors in worsening congestion. Much of Auckland's road network is not configured to meet intensified land use and Unitary Plan provisions which allow development in such areas without delivering public transport are increasing cars per kilometre of road, making congestion worse.

"Growth should be targeted around rapid public transport and ATAP should provide feedback to the Unitary Plan panel on the impacts of different growth allocations on transport.

"The challenge for the next phase of ATAP is to identify the optimum mix of investment, technology, land use and pricing that Aucklanders can afford and will support," said Selwood.

For further comments please contact Stephen Selwood 021-791 209.

Social Infrastructure winner from 2016 budget

Thu, 26 May 2016 00:46:15 GMT

Social infrastructure is the clear winner from Budget 2016, with significant allocations made in housing, corrections and education, indicating that 2017 will be the year for investment in transport, particularly in Auckland, said New Zealand Council for Infrastructure Development Chief Executive Stephen Selwood.

Schools have taken centre stage in this years budget, with $700 million over four years committed to build 480 new classrooms. This amount includes $328.9 million of capital funding and $20.2 million of operating funding over the next four years for school PPPs which have been shown to provide better outcomes for students and teachers.

Social housing will also receive a much needed boost with close to $250 million over four years committed to increase social housing places in Auckland providing emergency shelter.

In addition, $100 million has been allocated to enable housing development on Crown land in Auckland. The finer details have yet to be announced but there is potential to use this funding to leverage private residential development at scale.

Hospital improvements are not yet clear, but DHBs have received a large increase in spending of around $400 million per annum.

Transport spending announcements have focused on the regions and Marlborough, Gisborne and Taranaki will welcome reconfirmation of over $100 million of road improvements.

Bigger challenges in our large cities, many of which have Roads of National Significance projects under construction, have not been tackled in this years Budget.

Massive investment in Aucklands transport networks is desperately needed to cope with growth. But with the Auckland Transport Alignment Project yet to determine the agreed investment programme, it comes as no surprise that there was no money for transport in Auckland in this years budget.

With long awaited Government commitments to the Central Rail Link and East West Connections investments, our expectation is that 2017 will be a big year for transport in our largest city.

In the meantime, this budget will do a lot to addressing existing demand and future growth needs for social infrastructure investment across the country, Selwood says.

For further comment:
Stephen Selwood
021 791 209

Infrastructure industry forum highlights opportunities to improve capital investment in New Zealand

Tue, 24 May 2016 00:41:43 GMT

A major gathering of 100 of New Zealands capital procurement specialists yesterday in Wellington unanimously agreed that there are significant opportunities to improve value for money for tax payers and rate payers through better investment decision making and procurement practices, says New Zealand Council for Infrastructure Development CEO Stephen Selwood.

The NZCID led forum, Institutionalising Best Practice in Capital Procurement, was a multi-sector collaboration hosted by Deloitte, cosponsored by AECOM and opened by Finance Minister Bill English. It brought together many of the best minds across the public and private sectors to investigate how capital procurement can be managed to maximise the value of infrastructure investment.

Central and local government will spend $100 billion over the next ten years, $10 billion per annum, investing in infrastructure, according to the national infrastructure Capital Intentions Plan. Its imperative that this money goes into projects which meet customer needs and deliver the outcomes intended.

A five to ten percent improvement in performance outcomes, similar to that being achieved in other countries, signals an opportunity to deliver $5 to $10 billion in value to rate payers and tax payers over the next decade.

The results of an NZCID industry survey of public procurement proficiency, released at the forum, e choed findings from last years survey, with the New Zealand Transport Agency emerging again as the top public procurement body. Virtually all other agencies, from councils to district health boards and other social service providers, were rated average or below average.

John Bridgman, the New Zealand Managing Director of global engineering services giant AECOM, observed that the cost of procuring professional services in New Zealand is 80% more than Europe, twice the cost of the USA and three times the cost of Asia.

Much of that is due to major projects being broken into piecesto fit capital budgets and separate bidding processes for design and construction. Project size is half that of Europe and USA, one third the size of China and one sixth that of the Middle East.

This data suggests there is potential to drive value through better procurement processes and economies of scale.

"Deloitte Partner Linda Meade emphasised that it is critical all options are tested before an investment decision is made and that the preferred option must demonstrate that it will deliver the desired outcome.

"Geoff Hunt,Chief Executive Officer of Hawkins Group,noted that the greatest opportunity to create value in projects is in the design phase, but the primary focus was so often on squeezing costs through competitive bid processes and without sufficient contractor involvement.

It is of no surprise that when surveyed not a single person in the room considered that continuing along the same procurement path is acceptable.

All delegates recognised that Treasury and MBIE initiatives were having a positive effect but much more could be done. Lifting skills in the sector and expanding professional development was universally supported.

There was agreement on the need for strong collaboration across central agencies to decide how best to provide support and capability to those who need it most. Ideally, this would be a central and local government partnership.

The forum was split on whether or not a specialist support agency should be established, but half felt this option should be implemented. In NZCID's view, this is sufficient support to warrant Government giving this option serious consideration. Selwood says.

Decision to keep Huntly operating in NZ's best interest

Sun, 01 May 2016 00:27:11 GMT

The announcement today that Genesis will retain the strategic electricity reserve at Huntly may not please everyone, but the importance of ensuring a stable electricity supply close to demand centres is paramount, says Stephen Selwood of the New Zealand Council for Infrastructure Development.

The Genesis decision gives the market a further four years to achieve an economically sustainable balance of peak and base load capacity to ensure the security of supply.

Theres no doubt that the overwhelming majority of New Zealanders including those who sit in the decision-making rooms of the Beehive, Genesis HQ and the generation and electricity network companies would love to substitute coal for a renewable electricity source.

However, this aspiration must be balanced against the practical realities of supplying critical electricity to homes and businesses when required.

Renewable sources are often difficult to turn on and off to meet peaks and troughs in demand.

Unless we want to regulate when people can turn on the lights, heat water, cook a meal or earn a living, we must have a reliable backup and coal and gas do this well.

Providing sufficient peak generation is a critical objective of an efficient and lower cost electricity system. The alternative is to overbuild less reliable sources, pass the cost onto consumers and still expose the country to the vagaries of wind, rain and sun.

Its worth noting that the decision to keep Huntly operational for a further four years does not necessarily mean the units will be turned on for the majority of this period. In fact, most of the time theyll be turned off.

Yet they will still contribute to a more resilient and flexible system in the face of uncertainty.

Up until a few years ago, electricity grew in a fairly constant trend with economic growth, but innovations led by heat pumps, solar panels and technology are changing this relationship.

Add to the mix the emergence of electric vehicles combined with the risk that supply will increase by 12 percent almost overnight should Tiwai Pt be closed and the next decade of electricity demand becomes impossible to predict.

If the extension of the Huntly reserve can help insulate the country against supply constraints and high wholesale electricity prices, which the market clearly thinks it can, then four more years of intermittent coal generation is the best all round option, Selwood says.

Specialist agencies key to delivering public infrastructure on time and on budget

Sun, 10 Apr 2016 22:28:00 GMT

These agencies demonstrate that significant value can be created when government departments and city and district councils that dont have dedicated capability in house are provided access to specialist support in major project delivery.

In New Zealand it is not unusual to find public agencies like government departments, health boards, councils and other public agencies suddenly thrust into having to invest tens and sometimes hundreds of millions of dollars replacing or constructing new buildings, plant or facilities with little or no experience in major project delivery.

Having access to the support provided by a specialist dedicated group of experts enables public agencies to focus on delivering core services (like teaching kids and providing healthcare for example) rather than refining procurement models and managing tender processes.

Meanwhile the specialist support agency is able to transfer knowledge across sectors from one project to the next and become a centre of excellence for the purchase and delivery of major public assets.

The time, cost and efficiency of infrastructure delivery improves as more sophisticated and fit-for-purpose procurement models evolve from a team of career experts.

Canadas results speak for themselves. Specialist procurement agencies are consistently delivering projects on time and on budget across the public sector and achieving added value or savings of 10% or more over traditional public sector delivery methods.

If New Zealand was able to cut whole of life asset costs on planned projects above $30 million by half that amount, savings would total almost $4 billion over the next decade.

That is money which could either go into projects which we cannot currently fund or into delivering a new level of service to businesses, residents and communities.

NZCID recommends that a special purpose public agency focused on major project procurement as a standalone activity should be investigated by the Government.

If modelled on Canadian exemplars, the agency would operate independently, with its own CEO reporting to an experienced Board responsible to the Finance Minister.

The Minister would determine whether or not procurement could be delivered in house or whether the guidance of the procurement agency would be needed, using Cabinets existing Investment Management and Asset Performance framework.

The agency would pursue a partnership approach to procurement, operating alongside central and local service providers, helping to guide departments through complex procurement processes. It would then undertake a monitoring function to ensure business case expectations are being met.

The scale of this opportunity combined with the likelihood that it can deliver significant value makes centralising and specialising procurement a priority public policy initiative and one which should be investigated with urgency, Selwood says.

Infrastructure Update

Thu, 21 Jan 2016 23:08:36 GMT

The National Infrastructure Unit released its latest publication issue #23, click here to read the newsletter.

Regulation at any price?

Thu, 21 Jan 2016 23:07:37 GMT

Media Release
December 2015

"The Commerce Commission has just spent three years identifying the appropriate price Chorus can charge service providers for accessing the copper network and concluded an amount in line with common sense, but at a high cost to all participants," says Stephen Selwood Chief Executive of the New Zealand Council for Infrastructure Development.

"In late 2012 the Commission reviewed the price Chorus could charge for copper network, as required by law and in line with a new approach to estimating the fair cost of providing copper to homes and businesses.

The outcome of the first stage decision was that, instead of charging Spark, Vodafone and other service providers $45 per month per broadband customer, Chorus could only charge them $32.45 per month. Thats because $32.45 was considered approximately what it would cost to roll out the same infrastructure in Denmark and Sweden which were the only broad international comparators available.

"The anticipated drop in revenue meant that hundreds of millions of dollars were wiped of Choruss share price, international investors who could not understand what was going on departed in significant numbers and Chorus was left refinancing capital to roll out fibre at higher lending rates. The necessary cost cutting decisions which followed led to redundancies and other cut backs.

"As provided for under the Telecommunications Act, Chorus appealed this decision and asked for what should have been done in the first place - an actual estimate for what it would cost to roll out copper (or the modern equivalent, fibre) in New Zealand, including real costs like trenching almost every street across New Zealand and gaining the necessary consents and approvals to do so.

"This work has now been completed and the Commission has concluded that the fair price for providing copper services per unit is $41.69. This price takes into consideration the regulatory, market and physical costs of delivering telecommunications infrastructure in New Zealand.

"It is also in line with the actual costs of rolling out fibre, a number which was well known to all sector participants before the review of Choruss copper pricing was initiated.

"The bottom line is that, after three years of price and investor uncertainty, rollercoaster share prices and millions of dollars of public and private time, consumers are not really any better off.

"While we would all like the cost of phone lines and the internet to be lower, asking Chorus shareholders to subsidise public consumption is neither fair nor sustainable.

"As a country, if we want to reduce the cost of broadband and other infrastructure services, we have to reduce the actual costs of digging dirt and installing equipment.

"One way to do this is by reducing the cost of capital needed to fund long term infrastructure and that means improving the uncertainty and unpredictability of regulation.

"Lets hope that the Telecommunications Act review currently underway, and the RMA planning and consenting changes proposed in the Resource Legislation Amendment Bill now before the Select Committee, lead to better processes and outcomes for the future." Selwood says.

NZ benefiting from private sector operation of prisons

Thu, 21 Jan 2016 23:06:43 GMT

Media Release
November 2015

"Private sector operation of prisons provides the opportunity for better outcomes in prisoner management and rehabilitation, irrespective of recent issues at Mt Eden prison," says NZ Council for Infrastructure Development chief executive Stephen Selwood.

"Serco and it's consortium partners successful design, construction, financing and management of the new Auckland South Correction Facility at Wiri is an exemplar of the benefits that can flow through to Government departments and agencies," he says.

"The Public Private Partnership is specifically structured to reduce recidivism and improve life opportunities for prisoners," he says.

"The need to reduce recidivism is a critical imperative. Sixty per cent of our prison population are recidivist offenders among the highest in the developed world.

"The Government has set a target of reducing re-offending across the justice system by twenty five per cent by 2017. The Secure Future Consortium is incentivised to reduce the re-imprisonment rate to fifteen per cent below other prisons.

"If we want to improve services then we need private operators working alongside and in partnership with Government agencies and departments.

"Providing opportunities for new ways of doing things should always be encouraged," he adds.

"Accountability is also a critical element for any private and public sector operator but it is vital that the private sector is judged by the same criteria as a Government-owned entity, in this case the Department of Corrections," says Selwood.

"Introducing collaborative partnerships where both public and private operators are incentivised to continually improve performance but held to account when things go wrong is the right way to deliver better outcomes for prisoners, their families and society as a whole and represents global best practice in prison management," Selwood says.

Productivity Commission investigation critical to tackling the big issues

Thu, 21 Jan 2016 23:06:05 GMT

Media Release
9 December 2015

"The Productivity Commissions Better Urban Planning issues paper zeroes in on some of the biggest issues that contribute to rising housing costs, congestion, infrastructure deficiencies and poor environmental outcomes, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

"The Commission is seeking feedback on changes to the principal laws which guide urban planning and development the Resource Management Act, Local Government Act and Land Transport Management Act.

"District plans, council long term and annual plans, regional transport strategies and a range of other essential public documents which determine rates and transport spending, as well as what your community looks and feels like all fall under these three Acts.

"Currently decisions about land use planning and consenting for development, roads, water and other critical infrastructure are made under the RMA. But decisions about public investment for these same activities are made under the LTMA and the LGA.

"Different Acts mean different time frames, processes and agencies. This creates opportunities for policy misalignment, the most obvious of which is inadequate infrastructure to support growth.

"Achieving better environmental outcomes, reducing complexity and compliance costs and integrating growth management will require substantive change from the status quo.

"It is therefore pleasing to see the Commission tackle hard questions around whether the environmental protection components of the RMA need to be separated from the planning components and what role the biggest service provider in the country the Government should play in planning.

"Yet even a flawless prescription from the Commission will not be enough to overhaul unstably high house prices, declining environmental performance and an infrastructure investment bow-wave if the institutions making decisions at the end of the day are under-resourced, poorly incentivised and incapable of delivering on the aspirations of their communities and the country.

"A council can plan all it likes for growth to concentrate in one area, but if the roads and water services are not in place to meet that growth, nothing is going to happen. Government can preach all day about the need for councils to release land, but as long as councils shoulder the cost of new development while the Government hoards the upside, the outcome is never going to be optimal.

"Ideally, institutions which make and enforce planning decisions should be the same as the institutions who bear the cost of those decisions.

"A regional spatial planning approach to infrastructure and development which balances social, economic, cultural and environmental outcomes and receives the buy-in of central government is the Holy Grail of integrated planning, but unless the moneys there to back plans up, delivery will continue to undershoot aspiration," Selwood says.

Incremental changes to RMA welcome...

Thu, 21 Jan 2016 23:04:40 GMT

Incremental changes to RMA welcome, but first principles review of New Zealand's planning laws still needed

Media Statement
26 November 2015

"The Resource Legislation Amendment Bill introduced by Environment Minister Dr Nick Smith today addresses several significant problems with the Resource Management Act (1991), but further substantial reform of New Zealand's planning laws is needed to link land use planning under the RMA and infrastructure funding and delivery under the Local Government Act and the Land Transport Management Act," says Chief Executive for NZ Council for Infrastructure Development, Stephen Selwood.

"The changes announced streamline process, standardise templates for planning, promote collaboration in plan making and will speed up the development of National Policies and Environmental Standards. These changes are all welcome and should receive cross party political support.

"NZCID is pleased to see the proposed increase in compensation under the Public Works Act (1981). Where land is acquired for a public work the bill proposes a payment of up to $50,000 non-land related compensation for land owners whose home is acquired under the Public Works Act.

"However the fundamental problem with planning laws in New Zealand is that land use planning and resource management decisions are made under the RMA while decisions about investment and infrastructure to support land use decisions are made under the Local Government Act (LGA) and the Land Transport Management Act (LTMA).

"Plans without money are almost not worth the paper they're written on.

"While NZCID supports the enactment of this Bill, we are also encouraging all political parties to support a fundamental review of planning laws in New Zealand that would integrate urban planning, development and investment and improve environmental outcomes.

"During the 24 year history of the RMA we have seen poor environmental outcomes in terms of fresh water quality, biodiversity and weak performance on climate change imperatives while the development community have been frustrated by the litigious, complex and disintegrated decision making processes which have held back sustainable growth.

"An obvious pathway forward would be to merge the planning components of the RMA with the planning and investment components of the LGA and LTMA and develop an Environmental Protection Act as a separate law dedicated to delivering high environmental outcomes for all New Zealanders," Stephen Selwood says.

For further comment:

Stephen Selwood, CEO
021 791 209
09 377 5570

Environment and Housing reports need for law reform

Thu, 21 Jan 2016 23:03:43 GMT

Environment and Housing reports underline need for planning and environmental law reform

Media Statement
22 October 2015

Two separate reports released yesterday provide timely and compelling evidence that the Resource Management Act is failing in its fundamental purpose to promote sustainable management of natural and physical resources, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

The Environment Aotearoa 2015 report finds that despite 24 years since enactment of the RMA key environmental indicators relating to freshwater quality, climate change and biodiversity are below standards that most New Zealanders would expect.

The Productivity Commission, meanwhile, who released their much anticipated final report into land supply for housing, found that RMA planning and investment decision making is an impediment to residential land development and supporting infrastructure.

If the environmental protection provisions of the RMA are not providing improved environmental outcomes and also not adequately providing for housing and infrastructure, what is the Act achieving?

The environmental protection and planning components of the RMA should be separated to provide for an effective environmental protection Act and a national planning and governance framework which supports housing, infrastructure, growth and development consistent with national environmental standards.

It is a matter of national urgency that the RMA together with the other major planning statutes the Local Government and Land Transport Management Acts undergo a first principles review to investigate whether we have an effective planning and environmental protection system in place.

The evidence provided to date suggests we do not, Selwood says.

NZCID has released a report Integrated Governance, Planning and Delivery which calls for a review of the New Zealand system of planning and decision making, which can be accessed here.

Hawke's Bay "No" vote highlights need to rethink role of local government

Thu, 21 Jan 2016 23:02:57 GMT

Media Statement
16 September 2015

It is disappointing but not surprising that local residents turned down a proposal to restructure Hawkes Bay governance when the debate around amalgamation pitched administrative cost savings against loss of community identity and history, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

Whilst operational savings and limiting rates increases are always worthwhile objectives, the real opportunity from strengthened governance is lifting the economic performance of the regions more jobs, sustainable development and greater prosperity.

By empowering a regional mayor and council to interface directly with central government and business, champion the region, set a single strategic direction and implement that direction with a consolidated asset base and specialised labour force, regions can attract back growth and regenerate their communities.

This message was lost in the debate because local government purpose, incentives, funding, investment and legal frameworks are misaligned.

Minister Bennett has asked councils to rededicate themselves to jobs and sustained growth, but the Local Government Act makes no such provision. Under the Act, Councils are there to enable democratic local decision making and deliver infrastructure, regulate and provide community services.

The principal local government laws the Resource Management Act, the Local Government Act and the Land Transport Management Act require them to conform to a maze of statutory processes while they face intense political scrutiny to keep rates increases to a minimum. Consequently local government attention is much less focussed on delivering strong local economies and building vibrant communities but more on administration, managing negative effects, balancing the budget, and dealing with the costs rather than the opportunities of growth.

Attempts to change governance structures without incentivising councils to go for growth, giving them the funding tools to implement direction and aligning planning, regulatory and wider implementation laws will not work.

Whats needed is a first principles evaluation of the role of local government, of local government structures and funding and of the legal framework in which they operate.

Unless the whole local government system is improved, regions will continue to struggle with population aging and decline, stagnant growth, poor economic performance and loss of jobs and opportunities to the big cities.

We need a strong partnership between central and local government, business, iwi and our communities if we want our regions to grow, but strong partnerships require aligned governance and leadership.

Supporting regions with appropriate funding tools and incentives, effective planning and regulatory frameworks and good governance will not only set the priorities right for local communities, it will provide residents and voters with the confidence that change will lead to a better outcome, Selwood says.

Government-Council Partnership for Christchurch positive but risky

Thu, 21 Jan 2016 23:01:34 GMT

Government-Council Partnership for Christchurch positive but complexity of structure remains significant risk

Media Statement
25 September 2015

Its encouraging to see the Government and Christchurch City Council forming Regenerate Christchurch as a joint partnership to oversee the future of the Christchurch rebuild. But the creation of three public agencies to deliver urban redevelopment risks creating implementation challenges, says NZ Council for Infrastructure Development head Stephen Selwood.

The establishment of an independent board to oversee a new jointly owned Regenerate Christchurch entity will add expertise to the decision making process and will help depoliticise development decisions.

This is welcome. However, as principally a planning, engagement and monitoring agency, Regenerate Christchurch will be one step removed from delivering the outcomes everyone in Canterbury wants to see.

Actual delivery will be vested in two other agencies a Crown owned company reporting to the Minister and Development Christchurch Limited which will be governed by an independent board appointed by the Council.

Key issues that will need to be reconciled across all three agencies includesourcing governance and leadership expertise, sequencing of construction activity, cash-flow management, interfacing with users and investors and general commercial engagement, procurement and contracting.

Getting the very best talent in place is a permanent challenge for any major redevelopment undertaking. Attracting the very best expertise across three organisations is going to be difficult.

A single, integrated delivery agency with requiring authority status and reporting directly to a joint Government and Council appointed board would have been simpler.

We will have to wait to see how responsibilities and accountability will be apportioned among the three agencies. It will be important to understand how the Board of Regenerate Christchurch reporting to the Minister and the Council will hold CrownCo and Development Christchurch Limited to account when they also individually report to the same Minister and Council.

Funding and financing responsibilities are also going to have to be well considered. If delivery agencies cannot operate flexibly to take advantage of property and other dynamic opportunities as they arise and instead are beholden to slow, process-driven public decision making practices, the tax payer is going to pick up a bigger share of the tab in the long run.

Theres a fantastic opportunity to truly deliver something unique in Christchurch that all New Zealanders can be proud of, but its unclear whether that outcome requires such a complex governance model. Given a decision has been made to run with three agencies, the focus needs to be on installing the right leadership, responsibilities and accountabilities to bring all components together, Selwood says.

Significant opportunities to improve urban development in New Zealand

Thu, 21 Jan 2016 23:00:53 GMT

Media Statement
August 26, 2015

New Zealand has an opportunity to significantly improve urban development according to leaders across the infrastructure sector.

Stephen Selwood, Chief Executive of the New Zealand Council for Infrastructure Development (NZCID), says we need to lift our vision to be internationally competitive in big city development projects.

We surveyed key decision makers including senior central and local government officials and infrastructure construction, design, finance, professional advisors and service leaders across all sectors at the recent NZCID Building Nations symposium in Christchurch.

Most delegates (49 percent) consider that New Zealand is improving but remains well behind global best practice. Just six percent think New Zealand is at the leading edge while 29 percent feel we are in catch-up mode and 16 percent say we are still at the start line.

Making better use of private capital and integrating transport solutions and urban development are areas of greatest opportunity.

The decision to set up a specialist urban development agency in Auckland, Development Auckland, is seen as a very positive step.

Getting governance right for the $40 billion Canterbury Rebuild is also seen as being key to success. Almost half (49 percent) are fairly confident that governance arrangements to oversee the next phase of the Canterbury Rebuild will work and 12 percent are very confident. But importantly, 43 percent are not confident that governance arrangements will work. Key concerns centre on proposals for two development agencies one run by the Christchurch City Council and another run by central government. Its really hard to integrate development and synchronise decision making and capital programmes when multiple agencies are involved, each with separate budgets to manage.

Seamless delivery necessary for Christchurch CBD

It is critical that the Christchurch central business district (CBD) redevelopment is completed seamlessly across the Crown and council's respective asset holdings.

We favour one fully capitalised urban development agency for Christchurch, jointly owned by central Government and the Christchurch City Council, which can then recruit the very best capability to deliver the next phase of the rebuild. The agency will need to be totally attuned to market needs, have the strongest possible procurement capability and have capacity to effectively manage capital project delivery and whole of life costs of public assets.

An NZCID survey of procurement across principal public agencies rates overall performance as being average. The New Zealand Transport Agency rated highest overall at four out of five. Having a forward works pipeline, a clear focus on the end goal, maximising value for money over least cost tenders, and adopting standard contracts and evaluation methods were seen as the key areas for improvement in procurement across the industry.

Selwood says that feedback on the national infrastructure plan released at the symposium showed a need for central Government and local council growth and investment strategies for Auckland, Christchurch and the regions.

Recycling of assets needed for development

There is significant opportunity to use private capital to accelerate infrastructure delivery and urban development in New Zealand including recycling of assets sale or partial sale of existing assets to build new assets to support growth and development.

Delegates are keen to see positive action on planning law changes beyond the Resource Management Act, the Local Government Act and the Land Transport Management Act, Selwood says.

Consistent direction on long term infrastructure strategy is seen as critical. Two thirds of leaders at the Building Nations symposium saw political risk the risk that elected leaders will change infrastructure strategy and policies as being a significant risk adversely affecting infrastructure investment and decision making.

Development agency positive step for Christchurch

Thu, 21 Jan 2016 23:00:23 GMT

Media Statement
2 July 2015

The Prime Ministers announcement that an urban development-type agency will be established to oversee the Christchurch central city rebuild is positive, but a jointly owned Crown and Council agency will be key to success and will better facilitate transition to local ownership, says Stephen Selwood of the New Zealand Council for Infrastructure Development.

It is critical that the CBD redevelopment is completed with urgency and delivered seamlessly across the Crown and Councils respective asset holdings.

It is also crucial that the development agency is totally attuned to market needs, has the strongest possible procurement capability and can effectively manage capital project delivery and whole of life costs of public assets.

We are pleased to see decisions have not yet been made on the form of governance between the Crown and Council for a redevelopment authority, as agreement across the two parties is critical to the long term success of the initiative.

A single Crown-owned agency that is solely tasked with delivering Crown projects risks excessive focus on minimising upfront capital costs to the Crown while transferring risk for whole of life operational costs to the Council without adequate Council input and oversight in the initial project delivery.

Separate Crown and Council development agencies would be even less desirable.They would compete to recruit and retain the highest calibre expertise, would face difficulties in sequencing projects to market and would risk duplication of resources.

A jointly owned development agency governed by an independent professional board therefore seems a logical step. This would require the Crown and Christchurch City Council to agree the outcomes to meet tax and ratepayer expectations, set the budget and empower the development agency to get on with the job.

Separating the operational aspects of the rebuild from political processes will be essential given the proposed five year time horizon of legislation. Christchurch residents could potentially see one change of Government and two changes of council within that time.

A further critical issue will be resourcing the agency sufficiently to avoid regular cap in hand trips back to authorities. Funding and revenue allocations must be identified and agreed as part of the establishment of Regeneration Christchurch.

"A jointly owned independent delivery agency is typical across equivalently sized redevelopment initiatives and is consistent with global best practice, Selwood says.

State highway strategy needed beyond three years

Thu, 21 Jan 2016 22:59:51 GMT

Media Statement
30 June 2015

A no surprises National Land Transport Programme maintains the Governments momentum in the transport sector for the next three years, but its time to set out a clear long term investment strategy for the state highway system to meet future inter-regional and intra-regional travel demand, says Stephen Selwood of the New Zealand Council for Infrastructure Development.

Three years for any major state highway project is a blink of an eye. The East-West Connection in Auckland was identified as a regional priority over three years ago, but a preferred option has only just been released for public feedback. It will be another three years before the first spade hits the ground on the main component.

Currently we have little visibility of what pressures the state highway system should expect beyond three years, where and what the pipeline is to address emerging demand.

The problem is now acute in Auckland where all available evidence demonstrates future state highway planning is inadequate to meet growth.

Multi-billion dollar investment in the Western Ring Route and elsewhere across the Auckland network gets the region to where it should have been some time last decade. It wont meet the needs of another Wellington and another Christchurch moving into Auckland over the next three decades.

What is the plan for Aucklands motorway network beyond Waterview and the East-West Connection?

The current picture is bleak with todays speeds and performance dropping significantly across the network and congestion moving into the inter-peak.

Network performance is also challenged for those regions and territories not supported by the Roads of National Significance programme.

How is the state highway programme going to promote growth and productivity in New Zealands agricultural engine room and what is the sequence of priorities?

Its time NZTA came up with a long term national state highway strategy that meets the needs of regions across New Zealand and supports economic and population growth of another one million people in Auckland," Selwood says.

Scale, vision and an overhaul of planning legislation needed

Thu, 21 Jan 2016 22:58:12 GMT

Scale, vision and an overhaul of planning legislation needed to address housing problem

Media Statement
19 June 2015

The Productivity Commissions comprehensive report into land for housing underlines the need for a major revision of New Zealands overall planning framework. In the meantime, Aucklands housing shortfall could be addressed with a new compact greenfield satellite city aligned to the rail network, funded off land value improvement and financed with private capital, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

The Commissions report demonstrates just how imbedded the many challenges are which over two decades have seen New Zealands housing affordability plummet.

The common thread tying together each of the major issues identified by the Commission regulation, infrastructure funding and delivery, spatial planning, public engagement and central and local government coordination is New Zealands dysfunctional planning and governance framework as set out in the Resource Management Act, Local Government Act and the Land Transport Management Act.

The Acts were conceived separately and never designed to work together. As a result, transport decisions are made which inhibit urban development. Land use decisions are made which add to congestion. We have local government objectives which conflict with central government policies and central government directives which heap costs onto financially constrained local bodies.

The three Acts the RMA, LGA and LTMA must be subject to a first principles review with the objective of harmonising planning and decision making across New Zealands two levels of government.

Getting the incentives and objectives across government right will help councils and the Crown align their objectives, ensuring above all that sufficient land is available and ready for development.

Thats going to take some time, which is why the Commissions call for an urban development agency is so important.

As we design more effective governance, planning and legal frameworks to meet the needs of future generations at the national level, an urban redevelopment agency can seek out a nearer term response for the urgent housing need in Auckland.

A public agency that is market focused and geared to engage private capital, innovation and expertise is critical to bridging the gap between public resource management activities and property market needs.

Acting on behalf of both the Crown and Auckland Council, an urban development agency must be empowered to, at the very least, aggregate land to enable development at scale.

The agency could engage the development community to target a major new city on greenfield land, proximate to rail where land value appreciation can be leveraged.

A very successful initiative like this is underway in Springfield, just outside Brisbane.

There, a city the size of Pukekohe but with a population equivalent to Hamilton is under construction. Because it has been masterplanned to accommodate that level of density, rather than retrofitted around an existing incompatible urban form, much better transport, environment and social outcomes are being targeted.

Committing to tens of thousands of new homes over the next two or three decades, built to modern tastes and consistent with expectations for quality public transport, urban living and sustainable design, and urban development agency working in partnership with major private developers can deliver the types of outcomes both the Government and Auckland Council, as well as residents, demand, Selwood says.

Time to rethink local government and RMA reform

Thu, 21 Jan 2016 22:57:34 GMT

Media Release
10 June 2015

The Local Government Commissions announcement that it would move to strengthen local government in the Hawkes Bay at the same time as backing down on recommendations for Wellington and Northland demonstrates the need for a first principles rethink of what local government does, why and how, something a Royal Commission is best placed to investigate and which must include stalled discussions on the role of the Resource Management Act and other planning laws, says Stephen Selwood CEO of the NZ Council for Infrastructure Development.

The Commissions decisions are set to entrench different governance structures, roles and activities in different regions with net costs to New Zealand as a whole.

The Local Government Commission was at risk of having its decisions reversed by local referenda driven by local politicians. Had the Commission been in a position to recommend strengthened governance for Wellington and Northland, New Zealand could have begun the transition to a consistent national and regional spatial planning and implementation framework supported by local boards at the grass roots level.

This would be consistent with international best practice and would help align central and local government on major planning and investment decision making.

It would also facilitate private activity and investment while enhancing community participation and decision making through local boards.

It would have delivered a superior outcome for NZ Inc. Instead, much more narrow interests have been allowed to prevail.

The result is an unfolding piecemeal governance scenario with large regional councils like Auckland providing clear direction and a single voice on major issues, whilst small councils like Kaipara next door struggle to sustain the expertise necessary to provide modern public services.

A Royal Commission is now required into local government in New Zealand.

Only a Royal Commission can access the resources and maintains the mana necessary to complete a full first principles review of local government across New Zealand.

Such a review would align well with another stalled reform process, that of the Resource Management Act 1991.

Currently, we have councils making plans under the Local Government Act, large aspects of which are actually implemented under the RMA and transport Act. We have rules under the RMA which impede the plans of councils developed under the LGA and proposals under the RMA which are not funded because council spending falls under the jurisdiction of the LGA.

The whole thing is a complete mess.

Until we achieve alignment over what it is we want local government to deliver and how, it will be very difficult for the Local Government Commission to make sound recommendations which mobilise the support of communities.

That process cannot happen without the LGA, RMA and Land Transport Management Act being part of the same discussion, Selwood says.

Leveraging private capital and design innovation on Puhoi-Warkworth

Thu, 21 Jan 2016 22:56:36 GMT

Leveraging private capital and design innovation on Puhoi-Warkworth will make the budget go further

Media Statement
27 May 2015

A safer, more reliable and resilient road connecting Northland to the world is a step closer following the Minister of Transports announcement today that the Puhoi to Warkworth Road of National Significance will proceed as a public private partnership if the market can provide as good value for money as Transmission Gully, says Stephen Selwood CEO of the NZ Council for Infrastructure Development.

For a privately financed bid to succeed, the Transport Agency is going to have to be sure the design and construction of this vital road connection delivers a superior level of service to what can be achieved under a more conventional model it will have to be safer, stronger, faster and better.

Thats what is being delivered through the countrys first transport PPP along Transmission Gully, a project that last weeks flooding shows cant come soon enough.

The potential for a PPP to get better value for the tax payer is not limited to the requirement that Puhoi-Warkworth be superior to a conventionally procured project.

Financing major capital procurement through debt smoothes the funding pathway, promotes intergenerational equity and avoids boom-bust cycles in the construction sector which has been a significant handbrake on productivity in recent decades.

Use of debt funding means there will be more capital available in the National Land Transport Fund in the near term to resource other transport priorities across the country.

If Puhoi to Warkworth was totally funded out of pay-go annual revenue streams, then this priority billion dollar project would not only starve regions across the country of much needed transport investment in the medium term, it would take at least two years longer to deliver forgoing substantial economic growth opportunities in Northland in the meantime.

There has been strong market interest both locally and globally in this project following the success of Transmission Gully. Robust competition will help drive the efficiencies needed to generate whole of life cost savings which in turn are required to demonstrate better value for taxpayer money.

Critics of PPPs incorrectly compare the whole of life cost of PPPs to conventional costs to build an asset. This ignores long term maintenance and repair charges and mistakenly attributes the value of a dollar today to a dollar twenty years from now.

The process transport authorities will now undertake will be to challenge the PPP market to deliver a 30 year road solution at better value than 30 years of conventional contracts.

Without some combination of improved service delivery and cost savings, a PPP will not proceed and thats exactly the right process, Selwood says.

Leadership key to reversing poor performance rating for local government

Thu, 21 Jan 2016 22:55:44 GMT

Media Statement
20 May 2015

Local governments representative body LGNZ should be commended for taking proactive steps to lift the performance of the sector, following the release of concerning national survey results which rated councils just 3 out of 10 for overall performance, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

The 2014 Colmar Brunton survey of 2400 residents and 600 businesses found that a strong majority of New Zealanders believe that local government is important, but also revealed a poor reputation for local government overall. Residents and businesses rated councils just 3.2 out of 10 for communication and interaction, 2.8 out of 10 for performance and 2.6 out of 10 for leadership.

The results should serve as a wakeup call to our 78 councils.

All councils are struggling to balance service costs with expectation pressures, a tension which is going to increase as growth pressures require the need for investment in some areas while demographic change limits capacity to pay for core services in others.

This survey suggests councils need to radically rethink the way they deliver services, engage with residents and lead their communities forward.

It is therefore encouraging to see local governments peak body outlining a priority programme to improve public understanding of local governments critical role and performance of the sector.

NZCID supports the six priorities proposed:

1. governance, leadership and strategy;
2. financial decision-making and transparency;
3. asset management and infrastructure;
4. engaging with business;
5. communicating and engaging with public; and
6. building a stronger relationship with central government.

However, the one aspect LGNZ has not identified is whether the current size and number of councils is appropriate to address the issues and future challenges.

Local government has a potentially significant role to play in leading the social, economic and environmental development of our regions, but in order to perform this role adequately it requires fit for purpose structures, resourcing capability and the confidence of its constituents.

The results of this survey demonstrate the need for councils to dramatically up their game and suggest a need for transformational change to meet current and future challenges across the local government sector, Selwood says.

Waikato councils leading the way

Thu, 21 Jan 2016 22:54:35 GMT

Media Release
12 May 2015

The Hamilton City and Waipa and Waikato district councils should be commended for looking at innovative ways to improve services to ratepayers at lower costs, says Stephen Selwood of the New Zealand Council for Infrastructure Development.

The three councils agreed to co-fund the independent study into different wastewater, water supply and stormwater management options in 2014.

The Cranleigh authored report released yesterday identifies close to half a billion dollars of savings over the next thirty years and $107 million over the next decade, if the three councils were to transfer water assets and management to a council controlled organisation.

These three councils are planning to spend $764 million on water services over the next ten years, so a saving of $107 million or 14 per cent is very significant.

Savings would come on top of better water services for residents. The report found that the CCO model would contribute to:

- a stronger and much more resilient waters network across the sub-region;
- improved compliance with environmental and drinking water standards;
- a greater likelihood of attracting and retaining key waters staff;
- the creation of a regional water centre of excellence; and
- the ability to better harness and maximise the economic potential of the region.

The findings are consistent with experience elsewhere, including in Scotland, Tasmania and Auckland.

In Scotland, a publicly owned special purpose water company has achieved 40 per cent savings in operating costs whilst dramatically increasing capital investment in water infrastructure to provide better services to users.

Closer to home, Watercare has realised $104 million in savings per annum following its consolidation of water services in Auckland, at the same time as scale has enabled upgrades to Rodney and Franklins infrastructure that was not affordable under the former council structure.

Its encouraging to see Waikato councils front-footing emerging challenges and seeking out new opportunities, Selwood says.

Housing announcement has potential to revitalise Tamaki

Thu, 21 Jan 2016 22:53:55 GMT

Media Statement
30 April 2015

The transfer of 2800 state houses to the joint Auckland Council-Government owned special purpose body, the Tamaki Redevelopment Company, will result in the biggest investment in the Tamaki community since the 1950s and presents the opportunity to revitalise the communities of Glen Innes, Panmure and Pt England, says Stephen Selwood of the New Zealand Council for Infrastructure Development.

Decades of underinvestment by successive Governments managing state housing through a single national provider has failed to deliver safe, warm and healthy housing, let alone a vibrant local economy, secure neighbourhoods and a bright future for residents.

The transfer of assets to the Tamaki Redevelopment Company (TRC) together with access to a $200 million loan initiates a process to achieve each of these outcomes.

As an independent redevelopment company, TRC will be less fettered by public policy processes and departmental silos which slow down decision making and impede engagement with communities, investors and the development sector.

TRC will be able to get things done.

And it will be able to do this more efficiently than in the past. In owning all the stock and having capital at the ready, the Company will be able to implement a master plan for Tamaki, aggregate public and, where possible, private properties, redevelop at scale and maximise land value in what is a very desirable part of the city.

Even using conservative estimates of 7500 new properties in Tamaki over the next 20 years, the Company will be able to sell or lease two new houses for every new social house it develops, thereby significantly increasing housing supply and retaining the same number or more homes for people in need.

Thats not just good news for tenants and home buyers, who will be the direct beneficiaries of new housing, but also for the taxpayer, as less public money will be required to deliver new warm, dry homes.

But it remains unclear how the Government will deliver on all of its objectives through this policy.

If community revitalisation is to be front and centre of this initiative, which everybody agrees it should, there must be a pathway and provision of funding to support social housing tenants to transition from dependence to independence.

How will the Government integrate its policies, programmes and funding to achieve this?

In order to maximise the value of land, reduce risk and attract private capital to the area, the Government must provide confidence that the neighbourhoods of Tamaki will be attractive places to both live and invest in.

That requires strong commitment up front, in the terms of reference for the redevelopment, and accountability and funding to deliver on those objectives.

The transfer of responsibility to TRC is a good first step. What is now required is for TRC to proactively engage with investors, lenders, developers and social support service providers in a clear and transparent manner and seek innovative and integrated proposals for the redevelopment of Tamaki.

"A public private partnership focussed on delivering community uplift, and integrating private capital, innovation and expertise with social support services provided by community housing organisations and/or commercial providers, would be a logical solution.

"That is the strategy employed by Government in the Wiri prison PPP which targets reduced recidivism rather than just building another jail.

The business case process now underway must take a broad social and economic approach which values wrap around service provision, including the impact of good social support on land values and community wellbeing.

If the Government, council and Tamaki Redevelopment Company work together with the community and in partnership with the private and third sector to deliver a great place to live, the value of land and the potential of the community can both be fully realised," Selwood says.

Survey findings demonstrate Aucklanders are willing to pay

Thu, 21 Jan 2016 22:52:31 GMT

Survey findings demonstrate Aucklanders are willing to pay for better transport services and reduced congestion

Media Statement
17 April 2015

Colmar Bruntons survey of Auckland views on transport investment demonstrates a strong willingness to pay for better outcomes. The onus now is on the Auckland Council and Government to agree on objectives and deliver an aligned transport investment, land use, pricing and funding strategy that reduces congestion and supports the shift to public transport, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

Almost 60 per cent of Aucklanders say they are prepared to pay more to improve Aucklands transport system, compared to less than a third who are happy to continue business as usual. A similar number, 57 per cent, prefer that new transport funding is levied through a $2 average motorway charge, while just 31 per cent support new investment through increases to rates and fuel taxes. The survey questioned over 5000 respondents through February and March this year and has a margin of error of +/- 1.4%.

These are compelling numbers derived through a rigorous independent survey.

The Auckland Council has successfully brought Aucklanders over the line on the need to invest more in transport and even identified a mechanism to fund that investment.

However, there remains substantial work to do to ensure that additional investment meets the expectations of residents and the Government.

An earlier Colmar Brunton survey indicated that the top two priorities to achieving the worlds most liveable city was to improve public transport and reduce traffic congestion.

Yet even with the Councils preferred Auckland Plan investment programme in place, several key transport outcomes worsen noticeably in the future. Of particular concern is that congestion is not projected to improve beyond delivery of the Waterview Connection and in fact will deteriorate significantly beyond 2025.

Thats not what residents are thinking when they agree to open their wallets.

The only way of delivering on the strong message conveyed to decision makers through the Colmar Brunton survey is for the Auckland Council and Government to get round the table and agree an optimum demand management, land use and investment strategy.

The Council must be willing to review its Auckland Plan programme, including the release of brown and greenfield land for housing supply and transport priorities, as a means to persuading the Government to pass necessary legislation.

If the Government and Council can reach an accord on transport and urban development supported by a road pricing regime which optimises the transport network, we have a very good chance of delivering the worlds most liveable city, Selwood says.

Opportunities to deliver better outcomes for Aucklanders include:

Project reprioritisation the sharp projected increase in congestion post 2025 and improvement post 2035 demonstrates resequencing is necessary,
Project optimisation more needs to be achieved from the key investments,
Road pricing variable pricing delivers a more efficient network and stronger economy,
Development control and prioritisation brownfield development must be concentrated around rail and busway stations and staged to align with transport investment,
Value capture property value improvements due to infrastructure and zoning decisions must be retained to fund services,
Leveraging technology - the plan must fully exploit opportunities, from remote working and intelligent transport networks to electric and fully automated vehicles .

New Zealand must up its game on mega infrastructure

Thu, 21 Jan 2016 22:50:57 GMT

New Zealand must up its game on mega infrastructure project planning, funding and delivery

Media statement
12 March 2015

New Zealand must continue to up its game on infrastructure and development by becoming more ambitious and coordinated in its approach to investment if we want to compete with global infrastructure leaders like Australia and the UK for skills and capital, says Stephen Selwood, chief executive of the New Zealand Council for Infrastructure Development.

Large steps have been taken in recent years to enhance New Zealands infrastructure capability. Initiatives such as the creation of a National Infrastructure Unit have resulted in improved understanding of national infrastructure needs and strengthened central monitoring and oversight.

One of the most significant changes is the current and planned investment in very large city and nation building mega projects like the Canterbury rebuild and Aucklands City Rail Link and Waitemata Harbour Crossing.

Where global infrastructure leaders like Australia and the UK are heading, however, goes far beyond the approach taken in New Zealand, to date,

Visionary thinking and integrated planning and delivery at scale are achieving transformation of economic and social systems around investment and providing a magnet for global skills and capital.

Projects are planned and implemented to deliver society-wide social and economic outcomes. Currently the focus is almost entirely on delivering jobs, homes and growth working within a sustainable development framework.

The commitment to delivering outcomes keeps officials and the public focused on the bigger picture. Funding availability, consent prescriptions and other inputs are not inconsequential, but they are subordinate.

Globally significant transport projects like the 17 billion Crossrail, 50 billion HS2, A$14.5 billion WestConnex and A$8 billion Northwest Rail Link and major urban regeneration initiatives like Nine Elms in London, Salford Quays in Manchester and Barangaroo in Sydney are exemplars of global best practice.

New centres from communities to mixed use residential and commercial projects to internationally significant business centres are master-planned, funded and delivered as combined infrastructure and development partnerships.

Financial and economic business cases are underwritten by job creation, value uplift through regeneration and improved connectivity.

Central and local agencies work together to achieve joint policy objectives. Local enterprise partnerships between local government and business are focused on growth in the regions working collaboratively with government. Planning arrangements align all levels of government.

Unlike New Zealand where planning and funding constraints so often define project conceptualisation, the promotion of outcomes above processes ensures funding and design follows strategy and innovation is incentivised.

Because of the pressure that outcome-driven nationally significant projects place on budgets, they are financed to the greatest extent possible by private capital not only domestically, but from the Middle East, Europe, Asia and the world.

The private sector is a partner in planning and funding. Major public transport infrastructure receives heavy subsidies from land developers who benefit from improved accessibility.

Public investment is used to de-risk or catalyse private investment aligned to public objectives. This shifts the burden of cost as far as possible to private investors who directly benefit from improved services and away from taxpayers for whom benefits are more widely spread.

The complexity of decision making and expertise required to match public service outcomes with private property market expectations has resulted in an almost complete shift to independent decision making bodies. Special purpose companies or independent statutory agencies oversee project procurement and delivery in established markets, not Government departments which are influenced by often slow and unpredictable political decision making processes.

In both Australia and the UK the potential of public agencies to promote national objectives through carefully conceived provision of essential services in partnership with the private sector is well advanced on current practice in New Zealand.

If New Zealand is to advance global best practice in nation building infrastructure and attract the worlds best and brightest, NZCID makes the following recommendations:

- That the existing effects-based approach to urban development planning be replaced with an outcomes-based approach emphasising the opportunity to promote sustainable development

- That integrated development at scale be promoted as a means to achieve transformation of regions and communities and attract global private capital and expertise.

- That the Government lead national urban development policy and investment with a revised planning framework guided by national and regional spatial planning.

- That all national and regional urban development initiatives be assessed on their capacity to deliver positive economic, social and sustainability outcomes and be prioritised according to opportunities to leverage property value uplift to offset public spending.

- That master planning of major urban developments become a statutory requirement and a commitment is made to local and central government and private sector collaboration on site planning, funding and delivery

- That attracting private investment become a key objective of development initiatives.

- That independently governed specialist procurement agencies be established and existing agencies developed to ensure best practice in project delivery and implementation.

Waikato Expressway underlines opportunity to leverage growth

Thu, 21 Jan 2016 22:50:03 GMT

Media Statement
10 March 2015

Completing the Waikato Expressway including starting the Hamilton and Huntly bypasses and Longswamp section this year will realise important productivity and safety benefits for New Zealand, but begs the question why we dont accelerate more transport investment through debt funding major capital projects, says Stephen Selwood, Chief Executive of the NZ Council for Infrastructure Development.

This is one of the busiest sections of State Highway 1 linking the Auckland, Hamilton and Bay of Plenty regions. The Upper North Island has shown rapid growth over the last three decades and will comprise over 60 percent of the nations population and economic growth the future, yet it will have taken us almost three decades to complete the expressway which was first started in 1992.

Completion of the four lane expressway corridor will reduce travel times between Auckland and Tirau by up to 35 minutes; significantly reduce the number of fatal and serious injury crashes on one of the busiest stretches of the state highway network; increase the highway's capacity and passing opportunities; reduce traffic impacts and congestion within smaller communities like Huntly, Ngaruawahia and Cambridge; reduce fuel costs and contribute to economic growth.

Assuming a relatively high 6% discount rate, the benefit cost ratio (BCR) for the full corridor is 2.4 with economic benefits of $5 billion dollars exceeding costs of around $2 billion.

The completion of the strategic network will enable new commercial and industrial development adjacent to the highway including the recently consented Ruakura inland port at Hamilton.

All of these benefits could have been delivered much sooner if the expressway had been debt funded rather than relying on drip feeding capital investment on a pay as you go basis.

"This is the model that is being used to deliver Transmission Gully and is under consideration for the Puhoi to Warkworth Expressway to Northland.

It doesnt make sense to defer economically beneficial projects like the Waikato Expressway for want of capital, especially when investment in large projects forces a reduction in essential renewals and maintenance programmes, as is currently the case. It would make sense to debt fund more major capital projects and toll the roads to enable debt to repaid.

At a discount rate of 6%, any project with a BCR exceeding one is economically viable. But with a BCR exceeding two, the costs of delay in completion of projects like the Waikato Expressway vastly exceed the costs to borrow and toll.

While it is good to see this important strategic route finally proceed, it would make sense to enable debt funding of other transport projects, particularly those with strong economic development opportunities. This would free up the National Land Transport Fund for much needed maintenance and renewals work across the country and enable faster economic growth in the regions, Selwood says.

United Wellington Council a once in a lifetime opportunity

Thu, 21 Jan 2016 22:49:11 GMT

Media Statement
26 February 2015

"Reorganising local governance across the Wellington region will improve democratic decision making by giving the new Greater Wellington Council and Local Boards the tools to engage with residents and deliver on their expectations for infrastructure, community and regulatory services," says the New Zealand Council for Infrastructure Development in its submission to the Local Government Commission.

"The capacity of a unified local authority to plan strategically for the region as a whole, prioritise investment in transport and water according to greatest need and resource that investment vastly exceeds the ability of fragmented smaller councils to deliver local services.

"As local government representative body LGNZ points out in its recent funding report, Specialised regional organisations for land transport and the three waters would allow these infrastructure assets to be managed as a network. Costs and benefits would be spread across the network, and trade-offs could be made based on the best choices for the network as a whole, rather than being separated by political boundaries.

"Small councils acting independent of their wider geographical context are not well positioned to realise regional opportunities and lack the scale to implement.

"Shared services and regional collaboration can deliver improvements, but a single council for Wellington stands to deliver more efficient and effective infrastructure, regulatory and community services to its residents and businesses.

"Importantly, it also provides the opportunity to strengthen local representation through effective Local Boards.

"Under the Local Government Commissions proposal, council expertise across regional activities including economic development, transport, water, planning, regulation, funding and environmental management can be consolidated, leaving elected officials to do what they do best engage their communities, understand their concerns and feed this in to regional decision making.

"The Commission, through its final decision should consider increasing the number of local boards to further facilitate direct public participation in the overall decision making process.

"It should also strengthen its position on Council Controlled Organisations, taking into consideration the benefits of separating technical and operational decisions from strategic.

"Reorganising governance in Wellington provides a once in a lifetime opportunity to deliver the best of both worlds - strengthened regional planning and implementation and improved local democracy," Selwood says.

For further comment:

Stephen Selwood, CEO

Auckland Unitary Plan needs to provide for growth of Port

Thu, 21 Jan 2016 22:16:37 GMT

Media Statement
30 January 2015

The Prime Ministers announcement earlier this week that state housing would be significantly modernised is welcome news, but without private development expertise is not likely to achieve the Governments objectives, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

Decades of underinvestment and politicised management of New Zealands state housing service has left an astonishing one-third of the $18.6 billion of state housing stock either in the wrong place or of the wrong configuration to meet need. Of the remaining two-thirds, an undisclosed number would not meet developing requirements for a rental Warrant of Fitness.

It is extremely difficult to reach any other conclusion than that the traditional approach to managing the Governments housing portfolio and providing homes for people in need is not working.

It is therefore encouraging to see the Government looking at different ways to provide better homes for better value.

As outlined this week, the Government intends to boost the community housing sector by extending maximum housing subsidies to approved providers and, over the next year, selling between 1000 and 2000 state houses to the third housing sector to provide a social housing alternative to compliment the activities of Housing New Zealand. In addition, the Government will be considering how best it can redevelop larger holdings of Housing New Zealand property to deliver more affordable housing.

These changes should see a stronger, more financially secure community housing sector emerge which can reinvest in new units. The localised and more hands on approach to tenancy management provided by organisations like the Salvation Army, iwi or other groups will not only see better stock delivered but an improvement in support given to tenants.

The opportunity to add private sector capital, construction and development expertise will grow capacity to deliver social and affordable housing at a scale not seen before in New Zealand.

Redeveloping Housing New Zealand stock will enable the Government to leverage land value to offset the cost of new homes.
Unfortunately, this policy which has huge potential to deliver new social and affordable housing, improve outcomes and achieve much better value for money for tax payers has not been well understood.

In some areas like Tamaki in Auckland, existing Housing New Zealand stock is 50 or more years old and in immediate need of replacement. By aggregating the large sections allotted in the aftermath of the Second World War, three, four or five new units can be delivered on the same amount of land. The number of social houses can not only be retained but potentially even doubled with remaining units sold privately.

This approach carries two benefits. One is financial. Income from the sale of private units can be used to fund more and better social housing.

The second is that by integrating social and private housing units the stigma of state housing can be dispelled. Bundling wrap around social support services into new development can target truancy and anti-social behaviour at the community level to help foster liveable, healthy communities.

But these opportunities will only be realised when the old privatisation dogma is rejected and when the Government, community housing associations and private sector capital, construction and development markets work together in partnership.

These kinds of innovative relationships provide a real opportunity to tackle the social and affordable housing challenge and should be welcomed, Selwood says.

Partnership key to tackling New Zealand's social housing challenge

Thu, 21 Jan 2016 22:15:42 GMT

Media Statement
30 January 2015

It is extremely difficult to reach any other conclusion than that the traditional approach to managing the Governments housing portfolio and providing homes for people in need is not working.

It is therefore encouraging to see the Government looking at different ways to provide better homes for better value.

The opportunity to add private sector capital, construction and development expertise will grow capacity to deliver social and affordable housing at a scale not seen before in New Zealand.

This approach carries two benefits. One is financial. Income from the sale of private units can be used to fund more and better social housing.

These kinds of innovative relationships provide a real opportunity to tackle the social and affordable housing challenge and should be welcomed, Selwood says.

Unified council key to realising potential of Wellington region

Thu, 21 Jan 2016 22:14:55 GMT

Media Release
4 December 2014

The Local Government Commissions decision to recommend a unified Wellington region supported by local boards will strengthen the capitals decision making, improve delivery of essential services and attract central government and private sector investment to the region, says Stephen Selwood of the New Zealand Council for Infrastructure Development.

The Commissions proposal gives Wellington the tools to compete. It provides the opportunity to lift vision beyond current parochial boundaries and put in place a structure to support regional growth and development. Partnership between urban centres and the rural hinterland, as well as between the region, central government and business will all be fostered.

The Greater Wellington Council will have one Mayor elected at large across all of the new Wellington region, supported by 21 councillors and 60 local board representatives. It will oversee assets of $13 billion, making it the second largest investor in the region, and empowering it with the resources to implement regional strategic direction.

And the Commissions proposal does this without compromising local decision making. The Commissions eight local boards will give communities of interest strong representation within the Greater Wellington Council. Whether or not the local board boundaries provide the best representation of local communities and whether they will have sufficient delegated authority and funding will be topics for further debate.

The Commission has put forward an excellent proposal. Residents of the Wellington region should be excited at the potential for the future under this proposal for regional government, Selwood says.

Variable Motorway Use Charge best way to fund and manage Auckland's transport system

Thu, 21 Jan 2016 22:12:38 GMT

29 October 2014

"A variable motorway user charge of around $2.00, higher at peak and lower off peak, is the best way to fund and manage Aucklands transport system," says Stephen Selwood Chief Executive of the NZ Council for Infrastructure Development.

This follows release of the Independent Advisory Body (IAB) report to Auckland Council on future transport funding options for Auckland. The report identifies two possible pathways rates and fuel tax increases and tolls on new roads or charging motorway users a toll of around $2.00 on average per trip.

Managed correctly, variable charging will enable motorways to run much more smoothly, like they do in the school holidays.

People will choose to travel at different times, go another way, ride share, walk, cycle or take public transport. That means those who pay the toll will benefit through a faster trip on the motorway meaning better productivity for business and less time wasted in log jammed motorways for commuters.

"The money raised will support new investment in motorways, local roads, walkways and cycle ways and public transport services that would not otherwise be possible. The more people who choose alternatives to motorway travel because of the tolls, the better it will be for motorway users who choose to pay a toll.

From a New Zealand perspective, the most important thing to note is that the economic benefits of Motorway User Charges are more than three times greater than the Rates and Fuel Tax pathway. Thats because direct charging changes behaviour more significantly than increases in general taxes, Selwood says.

Doing nothing or deferring a decision would be unwise

The work of the Independent Advisory Body clearly shows that failure to raise the extra $300 million per annum needed to invest in the future transport system will lead to serious congestion across Auckland, much worse than today. While investment and charges will not solve congestion in a growing city, they will enable us to manage growth far more effectively, Selwood says.

The longer we take to decide, the bigger the problem in the future will be.

The IAB did not specifically recommend either of two funding pathways - rates and petrol taxes or a motorway user charge but it clearly sees merit in the motorway user charge because it will both raise the money needed and help reduce congestion on the motorway system.

There will be a need to add capacity to some arterial roads to handle additional traffic but the transport modelling shows that traffic diversion onto arterial roads is manageable.

The system will use number plate recognition technology identical to that already in use on the Northern Gateway toll road.

Cordon schemes like London and Stockholm were discounted because, unlike motorway charges, there would be no option to go another way, the camera gantries would have high visual impact in local communities and cordons would seriously distort travel behaviour inside and outside of the ring.

Polls indicate support for tolls

Backing motorway charges over rates and petrol tax increases is consistent with a Horizon market research poll commissioned by NZCID in 2012 which clearly showed that Aucklanders will support low level variable tolls on Auckland's motorways, if this reduces congestion and helps fund major transport projects.

The survey of 1016 Aucklanders analysed the impact of congestion on people's lives and probed into how much they might be prepared to pay to address the problem.

Tolls were the only funding method surveyed attracting majority support, both in principle and for different prices charged for peak, inter-peak and off peak travel. Across the whole group, 63% supported for tolls in principle and 36% were opposed.

Tolling in principle was supported by 47% of those who use the motorway system twice a day or more. This in-principle support arises following an explanation that:

a range of options for tolling the motorways was being considered
higher tolls in busy periods would incentivise commuters to drive at different times, use different routes, car pool, take public transport or walk or cycle
this would reduce traffic on the motorways, meaning faster journeys for users of the tolled network, and tolls would also raise revenue for investment in new transport solutions including roads and public transport services.

The survey found that congestion is already having a big toll on people and business. Large numbers of respondents believed traffic congestion is getting worse (57.3%) and even more (70.9%) believed it will get worse in the future.

Greatest adverse impacts respondents listed were increasing fuel costs (70.9%), longer commuting times (67.6%), reducing time for other activities (61%), causing stress (60.8%) and stopping respondents and members of their households from travelling at certain times (50.4%).

The survey showed that people support the need to invest in Auckland's transport system and that they understand that pricing the motorways at different amounts by time of day will positively influence when and how people travel.

"In that sense direct user pay tolls looks to have a much more positive reaction than simply increasing rates and petrol taxes and putting tolls on new roads.

We would encourage Aucklanders to provide that feedback to Auckland Council when it consults on which of the two funding pathways it is considering," Selwood says.

Strategy for Auckland's East West Connection Unclear

Thu, 21 Jan 2016 22:11:54 GMT

Media Statement
3 October 2014

Transport agency proposals to address East-West traffic flows released for public consultation yesterday will help address urgent freight needs in the Penrose-Onehunga area in Auckland. But the long term solution must be one which connects Aucklands commercial and industrial heartland in Penrose, Mt Wellington and East Tamaki and also caters for planned residential intensification and growth from the eastern suburbs to the airport, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

In order for Aucklanders to provide worthwhile feedback on the proposals it is essential that they understand the full benefits and costs of each option and the long term strategic implications.

The options proposed are concentrated on the Onehunga-Penrose catchment zone which, while still the largest in terms of employment, represents just one fifth of the $11 billion per annum generated across the industrial zones bordering the Manukau Harbour and Tamaki Estuary. Little information has been provided, to date, on the benefits, costs and strategic implications of the alternatives proposed.

Connectivity to East Tamaki as well as further south to Mangere and on to the airport is not planned for improvement in these proposals, except through improved bus movement.

How these areas will be connected into the future has great bearing on what the appropriate solution is for this first phase of investment.

One option considered in earlier analysis included a motorway south of the Manukau Harbour. It provided long term connectivity not only between the industrial areas, but for all communities in the east of Auckland accessing employment and the airport.

It was almost immediately terminated following public reaction, leaving a northern Manukau Harbour solution as the most politically acceptable. However, given that the proposals released yesterday provide no new east west connectivity for Glen Innes, Panmure, Howick, Pakuranga, Botany and the industrial areas of East Tamaki and Mt Wellington it is not clear how existing and projected growth demand in these areas will be addressed.

Too often major projects in New Zealand are developed in a piecemeal fashion and modified and reduced to satisfy environmental and local interests without adequate consideration of strategic implications or the relative cost of lost accessibility and reduced economic efficiency.

The East-West connection is a critical corridor linking not just the two busiest stretches of motorway in the country and three of the largest employment zones, it is a strategic link on the national highway network providing long term resilience and capacity for all road users crossing the city from east to west.

It is critical that this project is seen as a strategic east west link for Auckland. That means providing adequate capacity to and through Aucklands industrial heartland and supporting network connectivity region-wide, Selwood says.

Jointly owned urban development agency for Christchurch worthy of consideration

Thu, 21 Jan 2016 22:10:37 GMT

Jointly owned urban development agency for Christchurch worthy of consideration

Media Statement
2 September 2014

Given the strategic importance of the Canterbury rebuild, it is logical that the transition from emergency governance arrangements is overseen by the Prime Ministers office, but to maintain momentum in the city centre an expert development agency is an option that should be investigated, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

CERA has successfully overcome immense challenges in the wake of the devastating Canterbury earthquakes.

With the emergency response function of CERA largely addressed and the rebuild underway, it is appropriate that longer term governance arrangements are now investigated.

Ultimately, responsibility for communities affected by the earthquakes will need to be restored to local authorities. Migrating CERA into the Department of Prime Minister and Cabinet will help ensure CERA remains focused on the recovery while options are considered.

However, as the Governments role in Canterbury gradually becomes less overt, and as local authorities, particularly the Christchurch City Council, assume wider responsibilities, there is a risk that politics begins to impede progress.

In no place is there likely to be greater potential for cross-governance friction than in the central city. The scale of central government investment there is such that the Government can never fully extract itself from decision making processes, something the city council will increasingly find impedes its efforts to deliver its objectives.

The Government is either going to have to surrender some decision making authority over national resources to a local authority or a third party acting on behalf of both institutions.

Given the success of specialist urban redevelopment agencies overseas, including in Australia, it makes a lot of sense that such an organisation be considered to undertake delivery of the central city Blueprint on behalf of the Government and Christchurch City Council.

Aside from depoliticising such an important and sensitive issue, establishing an independent dedicated body will facilitate appointment of highly skilled specialists in urban redevelopment, procurement and delivery who understand market drivers and can deliver on identified outcomes.

These have not traditionally been the kind of skills maintained by government and after the central city rebuild is complete it is not likely that these skills will be required further.

The Governments announcement that it will appoint a body to provide advice on transition arrangements provides the opportunity to objectively consider all options for the effective governance, procurement and delivery of the Canterbury rebuild.

A jointly owned local and central government urban development agency with independent governance and specialist procurement and delivery capability is an option worthy of detailed consideration, Selwood says.

Asset recycling - a smart option for Christchurch and Auckland

Thu, 21 Jan 2016 22:09:54 GMT

Media Statement
1 August 2014

The Christchurch and Auckland councils should embrace the highly successful asset recycling approach employed in Australia to alleviate community concerns over needed asset sell-downs, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

Asset recycling partial or full sell-down of capital in existing assets to fund identified new assets for the community has been used successfully in Australia to deliver much needed investment in the face of initial public concern.

For example, the sale of Newcastle Port was eventually embraced in New South Wales after it was made clear that proceeds would be directed into infrastructure and the rejuvenation of Newcastle city.

The public were thus able to consider in a tangible way whether they wanted a revitalised central city and new and better infrastructure or maintain ownership in the port.

This approach is a smart alternative for ratepayers in Christchurch and Auckland and was highlighted by Cameron Partners in their report on options for managing Christchurchs financial challenges, released today.

By recycling capital tied up in existing assets Christchurch will improve its capacity to invest in a productive, innovative and world-class city.

The Auckland Council could accelerate investment in much needed transport infrastructure by doing the same.

What local communities demand is transparency. They need clear understanding of what assets will be sold, where and how the money will be reinvested, and what the social and economic payback will be. What the national community demands is that locals contribute fairly towards projects which call upon national resources but which also have significant local benefits.

Asset recycling gives the community this choice. If Australia is anything to go by, politicians will be pleasantly surprised at the level of community support for asset recycling, provided the benefits exceed the costs, Selwood says.

Transmission Gully PPP brings innovative approach

Thu, 21 Jan 2016 22:08:25 GMT

Transmission Gully PPP brings innovative approach to transport infrastructure investment in NZ

Media Statement
29 July 2014

After many decades of frustration, Wellingtonians can now look forward to a resilient and efficient roading connection to the rest of the North Island, due in large part to alternate financing arrangements which overcome institutional barriers to major transport investment, says Stephen Selwood, CEO of the New Zealand Council for Infrastructure Development.

The billion-dollar Transmission Gully mega-project is a vital link in the Wellington Northern Corridor Road of National Significance, providing a much more effective strategic connection between Wellington city and the territories north of Paekakariki. Employment centres, activities and, potentially, entire industries will be made possible by improved connectivity between the lower North Islands population centres and Wellingtons central business district, port and airport.

The new corridor will replace the fragile coastal segment of State Highway 1 north of Tawa which is vulnerable to both flooding and earthquakes, and will save many lives on what is currently one of the most hazardous stretches of road in the country.

Despite the clear strategic merit of this project, Transmission Gully has been deferred for decades because of its comparative high cost. Conventional cost-benefit analysis does not adequately recognise regional growth potential, land use and other transformational benefits which lie at the very heart of Transmission Gully and the pay-as-you-go National Land Transport Fund is not geared for billion-dollar projects which consume such a disproportionate share of annual resources.

The Governments elevation of inter-regional investment through the RoNS initiative and NZTAs expansion of transport evaluation to recognise the importance of strategic corridors like Transmission Gully both deserve commendation for overcoming the barrier posed by narrow economic analyses.

The funding challenge was overcome by the first ever use of private finance in a New Zealand transport project.

By employing a public-private partnership or PPP model, NZTA are able to leverage private capital to advance Transmission Gully as a single project. Not only does this enable the economic, safety and strategic benefits of the project to be brought forward, but the successful Leighton-led consortium have been able to demonstrate over the past year that efficiencies in project delivery and risk transfer away from tax payers has been sufficient to offset the cost of private debt.

This is a significant innovation in transport infrastructure investment in New Zealand. It caps off a mixed week following the Environmental Protection Authoritys consent for Puhoi to Warkworth, but cancellation of approval for the Basin Flyover.

Maybe its time to go to the market and seek innovative solutions to solving transport connectivity across, around or under the Basin Reserve in Wellington? Selwood asks.

Old "pavlova paradise" thinking a hurdle to affordable housing target

Thu, 21 Jan 2016 22:07:38 GMT

Media Release
3 July 2014

New Zealand will not achieve the governments target to build 35,000 affordable homes in six years unless we throw out old ways of thinking, says New Zealand Infrastructure chief.

Stephen Selwood, Chief Executive of Infrastructure New Zealand is speaking at this weeks Community Housing Aotearoa conference in Nelson and says the old ways of building homes, house by house and builder by builder have got to go.

Our culture has been around the quarter acre pavlova paradise. A single house on a single section built one by one, block by block. But if we really want to reduce the cost of housing we need to reduce the amount of land we consume, build up instead of out and shift to modular construction of new homes at scale. We should be looking at developments of five hundred or more homes at a time. We need to be creating new communities to achieve the transformation we need.

Stephen Selwood says New Zealand is lagging behind countries such as Australia and Canada where strong partnerships between community housing organisations and private sector developers have been successful in creating mixed tenure mixed development communities at scale.

In New Zealand, he says there is resistance to intensified redevelopment exemplified by the objections to Auckland councils unitary plan.

People have not seen what good urban development looks like and when you start talking about intensification it conjures up student apartment developments in Aucklands CBD or high rise isolated tower buildings in Britain and people dont want a bar of it.

He says New Zealand needs good examples to show there is a good way of achieving intensification. A model development on land in Tamaki offers an ideal opportunity.

The Creating Communities redevelopment of 270 new homes in Northern Glen Innes is a good start. The initiative will create more housing choices in the area including homes for first home buyers and for the general market, as well as 78 new state homes. A key part of the plan is to build on strengths of the community that exists in Glen Innes, encouraging new opportunities, and enhancing a greater sense of community pride and belonging.

Id like to see this kind of development extended further with strong partnership between the development industry, equity investors including iwi, the banks and community housing organisations providing place management and wrap around support services for those who need it.

In Glenn Innes, we need to create a whole new community thats a nice place to live, affordable to buy into, has good amenities around it and provides good social interaction. There needs to be a mixture of private and social housing and mixed tenures alongside amenities like shopping, parks, and relative proximity to jobs, he says.
Stephen Selwood says the government could provide state housing land and go to community housing organisations and private sector providers and ask them what it would take to deliver what is needed.

He says more leadership from government is needed to support interest from the community and business sectors. Government will also need to provide subsidy through transfer of existing state housing stock or commitment of existing social support budgets to fund the provision of necessary wrap around services for socially disadvantaged tenants. But if existing budgets can be redeployed to deliver better long term results that has to be a good outcome for government and the local communities.

The government is slowly making changes with its support for community housing organisations creating a competitive model to the traditional Housing New Zealand model, but could do more to put long term funding and settings in place.

Community Housing Organisations are doing a fantastic job. We need more partnerships between them and our urban property developers who specialise in this redevelopment delivery model at scale. Lets test the model.

GPS presents opportunity to take transport policy towards the next century

Thu, 21 Jan 2016 22:06:47 GMT

Media Statement
16 June 2014

The draft 2015 Government Policy Statement reaffirms the Governments commitment to transport investment and will continue the countrys progress towards an internationally competitive transport system. But one cant help but wonder whether an opportunity to establish this GPS as the new global benchmark in forward planning has gone begging, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

The GPS in fact signals a slight easing of investment, with total targeted expenditure in 2021/2022 $150m less than that projected in 2012, though this figure does not include projects such as Aucklands City Rail Link which, appropriately, is likely to be funded through general Crown accounts. Once included, Government spending on transport over the next decade will be a record breaker.

Thats good news for commuters and for freight. Lifting investment has had large positive impacts in Auckland, where the first Road of National Significance has already been delivered, and many further regions stand to benefit from improved access over coming years.

This GPS is also notable for acknowledging the potential for new funding and delivery mechanisms, including road pricing and private finance. These activities are essential to leveraging public investment and improving efficiency over the network.

But while this draft GPS is, like many of its predecessors, a commendable improvement on previous iterations, it remains a product of the past. It presents a future of conventional road, balanced against traditional safety, public transport and other objectives which are increasingly distant from the transport revolution currently occurring across the world.

Vehicles that run on electricity, talk to one another and drive themselves are the future. They will be cheaper to run, reduce journey times and offer unprecedented flexibility to meet 21st century needs. They will break down the existing interface between public and private vehicles and revolutionise the way people and societies interact.

Although these vehicles and other technological advancements remain a long way from car yards, it is imperative that rules, guidelines and institutions are in place to manage their arrival. Establishing this back office support will take time and issues including privacy and vehicle autonomy will have to be tackled in the next decade.

This GPS can start the transition to a new transport paradigm or it can reproduce past approaches. The promise of transport solutions that are better on the environment, better for people and places and better for business suggests the sooner we in New Zealand look to the future, the better it will be for everyone, Selwood says.

Project Pipeline Major Milestone for Canterbury

Thu, 21 Jan 2016 22:04:29 GMT

Media Statement
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

Hon Gerry Brownlee, Minister for Canterbury Earthquake Recovery:

Thu, 21 Jan 2016 22:03:35 GMT

Hon Gerry Brownlee, Minister for Canterbury Earthquake Recovery, released a media statement today:

"Canterbury Earthquake Recovery Minister Gerry Brownlee says feedback provided to the New Zealand Council for Infrastructure Development (NZCID) by stakeholders in Christchurchs rebuild will help inform the governments ongoing work programme".

To read the full release: http://www.beehive.govt.nz/release/nzcid-report-useful-guide-recovery-work

Reports show need for improved water service delivery by councils

Thu, 21 Jan 2016 22:02:39 GMT

Reports show need for improved water service delivery by councils

Media Statement

14 April 2014

The recent release of the Ministry of Healths Annual Report on Drinking Water Quality and a stormwater report commissioned by the Auckland Council provide two further reminders of the need for better scrutiny and accountability in meeting drinking water, wastewater and stormwater standards in New Zealand, says CEO of the New Zealand Council for Infrastructure Development Stephen Selwood.

While freshwater issues have succeeded in penetrating the public debate, leading to a number of positive initiatives including the Land and Water Forum and the Land Air Water Aotearoa monitoring website, these reports highlight immediate issues of urban water service quality and accountability which are not receiving the attention they deserve.

Pleasingly, Local Government New Zealand is leading a project to create a nationwide data framework for water infrastructure which seeks to share best practice, reduce costs and adopt innovative practices in water service delivery. This work needs to be completed with urgency, but ultimately requires a national discussion and Government buy-in to overcome the size of the challenge.

Consistent with the previous study in 2011/12, the Ministry of Healths latest report reveals, once again, quite serious problems with drinking water in areas serviced by smaller providers. Just 22 per cent of residents living in small water zones of 101-500 people and 37.8 per cent of those in minor zones of 501-5000 people received drinking water that met all national standards.

That performance can be compared to large zone populations above 10,000, where drinking water met standards for 86.7 per cent of residents.

"The New Zealand Herald today reported that stormwater performance may in some cases be even worse. Around $10 billion is required to fix Aucklands stormwater system over the next 50 years. In the meantime, runoff from homes, roads and gardens will continue to pollute many popular swimming, food collection and coastal activity areas.

Both reports provide revealing insights into the reasons why and how New Zealands urban water sector is the worst performing infrastructure category identified in the National Infrastructure Plan 2011.

But they also suggest potential benefits of scale and specialisation in the provision of water services.

Aucklands water supply and wastewater services are delivered under a single, vertically integrated provider able to leverage economies of scale to improve strategic capacity, focus and implementation.

Watercare is, however, unique in the New Zealand context, being empowered through legislation, resourced through metered water charges and directly accountable to deliver water supply and wastewater services.

As a result, Auckland performs strongly across indices such as water supply. But in a related service activity such as stormwater, where responsibility and accountability is diffused within the council structure and where resourcing is an annual competition for limited funds with transport, parks and other activities, performance is much less exemplary.

Whether or not stormwater can and should become a function of a dedicated three waters agency like Watercare is unclear, due to the unpriceable nature of stormwater provision. What is demonstrable is that specialised agencies delivering water services at scale are generally more effective than distributed models with complex governance arrangements.

Such was the finding of the Government-appointed Local Government Infrastructure Efficiency Expert Advisory Group anda 2012 report by PWC and GHD commissioned by NZCID and Water NZ.

Its positive to see reporting now catching up with performance, but if New Zealand is to really lift its game in the water service sector, a closer look at structures and resourcing models will be required, says Selwood.

Reports show need for improved water service delivery by councils

Thu, 21 Jan 2016 22:01:11 GMT

Reports show need for improved water service delivery by councils

Media Statement
14 April 2014

That performance can be compared to large zone populations above 10,000, where drinking water met standards for 86.7 per cent of residents.

But they also suggest potential benefits of scale and specialisation in the provision of water services.

Such was the finding of the Government-appointed Local Government Infrastructure Efficiency Expert Advisory Group anda 2012 report by PWC and GHD commissioned by NZCID and Water NZ.

Auckland productivity dividend must be realised

Thu, 21 Jan 2016 21:59:29 GMT

Auckland productivity dividend must be realised to justify city shaping infrastructure investment

Media Statement
21 February 2014

An independent review of Aucklands planning framework by international consulting firm SGS Economics and Planning released today identifies a lack of city shaping infrastructure investment as the principal impediment to achieving a quality compact city. The report recommends that the productivity benefit from investment, demand management and urban intensification needs to establish the case for expanded co-investment and policy reform by Central Government.

We commissioned this study to gain a better understanding of how successfully programmes, policies and investment plans developed over the past three years by the Council are delivering on the Auckland Plan vision to make the city the Worlds Most Liveable, said Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

SGS found that governance reforms have equipped Auckland with the most evolved metropolitan governance structure of any city in Australasia.

Auckland has a united voice on regional issues and has the critical mass to make trajectory shifting decisions in its own right.

The Auckland Plan sets out a compelling and demonstrably achievable vision for Aucklands spatial development.

However, SGS found that the Auckland Plan objective of a quality compact city was unlikely to be achieved without increased investment in city shaping infrastructure, identification of the means to fund that investment and policy reform to support road pricing and value capture mechanisms.

On current plans there simply is not sufficient investment in transport infrastructure to support a transition to an efficient and competitive higher density urban form, Selwood said.

To reverse many decades of low-density, motor-vehicle oriented growth will take much more than the city rail link and other projects prioritised in the Auckland Plan.

This finding helps explain why transport modelling of future land use and transport investment completed last year showed Aucklands congestion worsening significantly over the course of the next thirty years, even with all proposed investment committed.

But rather than retracting the compact city vision, SGS call for analysis of the productivity benefit that is expected from urban transformation. Where the Auckland Plan vision can be shown to boost national productivity, GDP and aggregate tax revenues there is a strong case for co-investment from central government. Increased economic performance more generally also substantiates the case for new funding sources, such as road pricing and value capture, which are key to achieving the Auckland Plan vision.

Better understanding of these benefits may also help foster community and local board support, which has so far been an impediment to the scale of intensification proposed.

We hope that this report will stimulate a joint Government and Council work programme to identify the productivity dividend that can be achieved through optimal investment in city shaping infrastructure. In NZCIDs view, this requires vast improvement in integrating transport investment and land use development, including more targeted densification to support major investment in public transport, and implementation of road pricing and value capture mechanisms.

While the united Auckland Council is making great progress, stronger alignment and unity of purpose between central government and the Council is needed if the productive potential of Auckland is to be truly realised, Selwood says.

To view the report please contact us.

Project information and better procurement essential

Thu, 21 Jan 2016 21:53:13 GMT

Project information and better procurement essential to raising construction productivity and value

Media Statement
16 December 2013

The Productivity Partnership-commissioned National Construction Pipeline released recently is an important step to understanding the scale of New Zealands building and infrastructure challenge, but to lift the performance of the sector the future work programme must be project specific, well sequenced and utilise best in class procurement capability, says NZ Council for Infrastructure Development chief executive Stephen Selwood.

Its encouraging to see well-evidenced information being produced and published on the projected value of the forward work programme in key regions and nationally and across residential and non-residential sectors.

Knowing, for example, that the Canterbury rebuild will likely peak in 2015 and remain elevated until 2018 will give contractors in the region the confidence to take on or up-skill staff, suppliers to gear upandstudents the option to pick up a trade for a very positive period ahead.

"But bringing projects to market in a well-sequenced cogent programme, making timely decisions, providing transparent communication of information to suppliers and service providers and conforming with stated bidding processes and timelines is also key to unlocking value.

"Already, there are several instances where investors and major construction firms have made considered decisions to withdraw from the rebuild having to that time funded business development and taken part in market briefings, bid processes and being otherwise prepared to engage in competitive processes.

"Given the significance of the forward work programme, adopting best practice procurement is critical if the Government and Council are to extract best value for tax payers and rate payers.

"The Auditor General recently endorsed procurement practices used by the SCIRT alliance (Stronger Canterbury Infrastructure Rebuild Team), and NZ Transport Agency is generally regarded as a leader in procurement of major projects in New Zealand. Both provide good examples to follow.

"A dedicated high performance procurement agency acting on behalf of both Government and the Christchurch City Council remains an option worthy of consideration - especially noting that CERA has only two years to run under current statutory arrangements.

On the national front, large contractors and other corporates will be able to use the National Construction Pipeline information to develop strategies for capital raising, product development, labour specialisation and market positioning.

But if the businesses involved in meeting New Zealands infrastructure, housing and commercial building needs are to have the capacity available when required, much greater transparency at the project level is required.

The timing of large projects, such as when requests for proposals will be released and what the intended construction timeframes are, as well as potential procurement options, are all essential to a market which has to deal with lumpy, complex investments requiring long lead-in times.

The market can operate in an environment where projects are announced with little warning, arrive in clusters followed by periods of relative calm and where expectations for finance requirements or project bundling are frequently thwarted.

But its a question of, at what cost? Boom-bust project procurement is not only inefficient for the industry it results in much higher costs for clients. Firms invest short term, underinvest in training and incur significantly increased costs of scaling up and scaling down to meet market demands. Inevitably prices rise in the boom and firms go bust when the project pipeline stops.

Since the public sector has long term certainty over revenue sourced from taxes, rates and charges it is in a unique position to plan and implement asset replacement and renewal on a medium term horizon and be ready to profit from counter cyclical investment.

The better the planning, the better will be the value for money for tax payers and ratepayers.

Thats why as much detail as possible is required about not only the aggregate value of work expected across the building and construction sector, but also detail about the type and expected timing of projects and how they will be procured.

A lot of expectation now hangs over the release of Treasurys much anticipated Ten Year Capital Intentions Plan, due out early next year, and continued improvement to procurement in Christchurch, Selwood says.

One Hawke's Bay will strengthen local and regional decision making

Thu, 21 Jan 2016 21:51:08 GMT

One Hawke's Bay will strengthen local and regional decision making and service delivery

Media Release
2014

Unifying the Hawkes Bays five councils to create a single Hawkes Bay unitary authority supported by nine councillors and 37 local board representatives across five wards will strengthen local decision making and better meet the long term needs of the regional community, says Stephen Selwood of the NZ Council for Infrastructure Development.

Under existing governance arrangements, ownership and decision making rights and responsibilities are so fractured that they undermine local democracy.

All residents of the region, for example, share ownership and shape decision making for the Port of Napier, but only the residents of Napier and Hastings possess the same rights over the Hawkes Bay airport. Napier meanwhile, carries responsibility for managing McLean Park and Hastings has to maintain local roads to and around its major manufacturing plants so that residents outside the district can get to work.

Yet, one would have to question how less dependent a resident of Wairoa is on the airport or why a Central Hawkes Bay rugby fan should be less responsible for maintaining McLean Park.

Bringing these interdependent entities under a single regional umbrella and recognising the common facilities and activities of residents will enhance regional decision making for everyone in the Hawkes Bay.

The Hawkes Bay Council, which will include rural and urban representation in proportionate numbers, will be accountable for services to the whole region not just to the urban centres as has been suggested by some local commentators. That will require councillors to recognise and support the interdependency between town and country.

Local decisions, meanwhile, can be passed over to community boards, strengthening the ability for residents to influence those decisions which truly are theirs to make.

Restructuring the region as proposed by the Local Government Commission will not just improve democratic decision making, it will also better reflect the economic relationships binding the area.

The split between the two more urbanised territorial authorities, Napier and Hastings, and the two more rural districts, Wairoa and Central Hawkes Bay, unfairly reflects the important role that the hinterlands play in supporting urban centres and is unhealthy for the future of the region.

Manufacturing plays a greater role in the Hawkes Bay than in any other region across New Zealand, but that industry is heavily dependent upon produce sourced from rural areas in and around the urban centres.

It is not economically sustainable to sit back and watch as the Wairoa district loses a further 17 per cent of its population over the next 20 years while Hastings grows almost 10 per cent.

A central decision making body with the scale and expertise to identify issues, implement solutions and seize opportunities is much better placed to address the long term challenges of the two rural districts and continue to foster growth in Napier and Hastings.

The Auckland example shows just how much impact a single voice for a region can have on the investment decisions of central government and the attractiveness of a destination for capital. Separate and sometimes opposing tourism, marketing and economic objectives across the Hawkes Bay are fracturing the message conveyed outside the area and reducing investment opportunities.

What the region sorely needs is strong, unified leadership, a single plan and the capacity to deliver. Current governance arrangements inhibit progress and it is positive to see the Local Government Commission is taking the bold steps necessary to improve the future for all Hawkes Bay residents, Selwood says.

One Northland Council a win-win

Thu, 21 Jan 2016 21:40:41 GMT

One Northland Council a win-win for local decision making and regional prosperity

Media Statement
12 November 2013

The Local Government Commissions proposal to unify the four councils of Northland to create a single Northland Council unitary authority achieves the best balance between promoting local decision making and meeting the long term needs of the regional community, says Stephen Selwood of the NZ Council for Infrastructure Development.

Northland is currently confronted with a number of sizeable challenges and the region often features at or near the bottom of national social-economic indices.

NZCID research shows that lifting regional productivity requires strong central and local government focus and full participation and engagement with the private sector, iwi and local communities.

It requires leaders committed to long term vision and planning, unity of purpose, ability to fund, effective regulation and the expertise to implement strategy.

The option proposed today by the Commission will see the Mayor of Northland and nine councillors deliver that leadership and vision in partnership with seven community boards and a Maori Board.

Community Boards will reflect the diversity of Northland and be empowered to make decisions on matters directly affecting their respective communities.

A future transition agency will take on the question of whether major council services, such as transport and water, are best performed in-house or by an independent council controlled organisation.

A single unitary council for Northland provides the best of all worlds the opportunity for unity of purpose focussed on realising the full potential of the region; the development of one regional plan; a single governing body to work in partnership with government and the private sector, the provision of scale in the delivery of roads, water services and regional infrastructure; and most importantly, the retention of strong local democracy and representation for iwi and communities.

In short, this is a win-win for local decision making and regional prosperity and is a potential template for regions across the country, Selwood says.

Review key to keeping UFB partnership on track

Thu, 21 Jan 2016 21:39:52 GMT

Media Statement
8 November 2013

"The Government has made the right decision in commissioning an independent assessment of Chorus financial capability to deliver its contractual obligations under the UFB public private partnership," says Stephen Selwood, chief executive of the New Zealand Council for Infrastructure Development.

"The essential issue here is whether or not Chorus will be able to absorb a $10 per month reduction in copper wholesale pricing, as required by the Commerce Commission, and still deliver ultra-fast broadband to most New Zealanders.

"There are two conflicting views on this. On the one hand the Coalition for Fair Internet Pricing say that Chorus can and should absorb the cost. On the other hand, the Governments partner Chorus says that the lost revenue will have a very significant impact on their capacity to deliver ultra-fast broadband to most of New Zealand as they are contracted to do.

"If Chorus is right, the cost to all New Zealanders of the loss of social and economic benefits that a delay in UFB roll out would inevitably cause needs to be carefully considered.

"Also to be weighed in the balance is further write off of shareholder value for over 30,000 kiwi investors and consequential loss of investor and financial market confidence.

"When the impact of the pricing reduction is clear, significant questions over whether the Commerce Commission pricing determination is reasonable still remain, as does Choruss right to require a full cost review.

"The Government represents all New Zealanders as a partner with Chorus in the roll out of UFB.

"The independent review provides Government the opportunity to determine the financial impact on Chorus of the Commerce Commission's decision and inform whether or not and how it might intervene in a way that is in the best long term interests of consumers.

"At the end of the day, the sooner this issue is resolved, the sooner we can focus on the real opportunity how NZ levers the return from this investment in ultra-fast broadband infrastructure - the better it will be for everyone."

Northern Corridor Road of National Significance demonstrates major...

Thu, 21 Jan 2016 21:30:43 GMT

Northern Corridor Road of National Significance demonstrates major benefits to Wellington and lower North Island

Media Statement
22 October 2013

Updated project information on Wellingtons Northern Corridor Road of National Significance (RoNS) released today by NZTA indicate that the Wellington Airport to Levin route upgrade will deliver some $3 billion in benefits to the region over 40 years, providing $1.60 back for each dollar invested.

Its encouraging to see revised data on the project confirming positive economic benefits for this important strategic link, said Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.

The project summary published today demonstrates exactly why this project is essential for the future growth and development of the Wellington region.

The morning journey to the CBD from Levin will be 40 minutes faster on completion of the route. Aside from the obvious benefits provided to freight and commercial traffic, a reduction of this scale puts more people within working distance of the capital.

The direct impact will be an estimated 865 permanent jobs created in the region but, indirectly, a larger labour pool from which to draw employees means employers have a greater chance of finding the right person for the job. We now know that this leads to productivity improvements which are not easily reflected in analysis.

Interestingly, however, the economic imperative behind the Northern Corridor is as much about resilience and safety benefits as it is about travel time savings and jobs.

The importance of providing a safe route to access New Zealands severely earthquake-prone political centre and third largest city in the event of natural or man-made disaster cannot be over-estimated. Even a moderate shake today could see State Highway 1 out of commission for up to 6 months.

Safety too will receive a big boost. The existing road is among the worst accident black spot corridors in New Zealand with one serious injury or fatal crash per year for every five kilometres of road. The new road will be built to modern safety design standards and is expected to save up to 40 lives over a five year period.

As a long-term strategic investment for the region, the Northern Corridor will be the most significant since the airport was redeveloped in the 1950s. When completed in the 2020s, the high quality road will become a major stimulus to growth and source of resilience for Wellington and the lower North Island, Selwood says.

2014 potentially a pivotal year for New Zealand infrastructure

Wed, 11 Mar 2015 12:33:42 GMT

Media Statement
17 October 2013

The National State of Infrastructure 2013 report released today signals good progress has been made over the past 12 months to address New Zealands infrastructure deficit and that, while challenges remain, New Zealand now has the necessary frameworks in place to identify issues and address problems, said NZ Council for Infrastructure Development CEO Stephen Selwood.

The report records progress across all infrastructure sectors, from direct Government investment in transport and telecommunications, to improved planning and regulation in our major cities, further progress with Public Private Partnerships (PPP) including the first transport PPP (Transmission Gully), and expanding the use of the Better Business Case methodology, among others.

It is also really encouraging to see the developments underway in the local government sector, especially plans for a Centre of Excellence, a range of new initiatives to deliver a stronger evidence base for Urban Water, and the innovation and improved investment analysis in the management of roads and maintenance.

However, NZCID agrees with the findings of the National Infrastructure Advisory Board that while good progress is being achieved significant challenges remain.

In particular, opportunities exist to greatly enhance alignment between the land use proposals of the notified Auckland Unitary Plan, the investments outlined in the Integrated Transport Plan and the strategic vision of the Auckland Plan.

Finding means to both fund the transport investment programme and manage transport demand in Auckland must be resolved with urgency.

In Christchurch, interagency coordination still needs to be improved and a well sequenced pipeline of projects remains a critical priority. In contrast, the rebuild of water and road infrastructure is a real highlight in Christchurch, notwithstanding questions over the standard it is being built to and who should pay.

At the national level, irrigation is progressing, but the industry needs a much broader spectrum of support if the many earmarked projects around the country are to proceed.

While there are real challenges facing authorities and industry, what must not be ignored is that these issues are now being identified, articulated and the necessary frameworks are in place to address them. Stepping back five years, there was no established, independent authority like the National Infrastructure Advisory Board or the National Infrastructure Unit in Treasury to highlight problems and no mechanism other than political direction to overcome obstacles.

Later this year, the National Infrastructure Unit will publish the long awaited ten year capital intentions plan, which will go a long way to providing the level of investment certainty required to attract foreign and domestic capital to sectors that are crying out for it.

Adding together the capital intentions plan, ongoing refinement of Aucklands Unitary Plan and the ramp up in Christchurch, we anticipate that 2014 will be a pivotal year for New Zealand infrastructure," Selwood says.

Changes to local government planning a step in the right direction

Wed, 11 Mar 2015 11:36:13 GMT

Media Statement
28 August 2013

Changes announced today by Minister for Local Government Hon Chris Tremain will improve linkages between councils long term asset management and strategic planning and should also lead to better quality public engagement. But to maximise the effectiveness of local authority services, development of a 30 year spatial plan to guide and manage growth should be undertaken alongside long term infrastructure investment planning, says Stephen Selwood CEO of the NZ Council for Infrastructure Development.

While long term asset management across councils is generally good, it is not uncommon to see robust plans being compromised by annual budget processes, causing projects around the country to be deferred, down-sized or cancelled in an effort to limit short term rates increases.

Consequently, we see good quality asset management practices compromised by electoral cycles, creating a bow wave of investment that future ratepayers have to meet.

The Local Government Infrastructure Efficiency Expert Advisory Group, in its report to Government released earlier this year, recommended moving to a regional planning scheme with a firm hierarchy of long and short term plans.

Thirty year spatial plans would set out a long term growth strategy. The infrastructure strategy would ensure that the investment and renewals programme supports planned development backed by good asset management practice. Council long term plans would then provide the ten year budget allocation to allow implementation of the strategy. Annual report processes would monitor progress and provide transparency to ratepayers.

The planning changes identified today will help address the disjoint between long term community and council aspirations and implementation. Better presentation of data and improved engagement processes should also help communities to participate in planning and strengthen support for investment programmes not only within but across electoral cycles, says Selwood.

Local government amalgamation key to lifting New Zealand's performance

Wed, 11 Mar 2015 10:37:37 GMT

Media Statement

22 July 2013

Speaking at the annual Local Government New Zealand conference today, New Zealand Council for Infrastructure Development CEO Stephen Selwood called for a transition to strengthened regional governance nationwide through local government amalgamations.

"Regions matter, says Selwood. New Zealand is the sum of its parts and, to quote Minister Joyce, the ability of regions around the country to provide economic opportunities and jobs for people that live in each region add up to the ability of the country as a whole to do the same.

As a small, isolated nation, we need to realise the full potential of our regions which underpin our national economic performance

Currently 67 sub-regional city and district councils and 11 regional councils plan, regulate, control, fund and deliver essential infrastructure that supports our economy and local communities

Most of those councils are very small. Many face challenges of declining and aging populations. Many more struggle to attract and retain the technical, commercial and financial capability needed to realise the full potential of the regions they serve.

Too often the sole focus of communities is on containing increases in rates and not regional economic growth and development. Too often there is a rural urban divide rather than a true understanding of the dependencies between town and country.

To compound these issues further, New Zealand's principal planning laws, the Resource Management Act, the Local Government Act and the Land Transport Management Act are complex and contradictory. While linkages exist, the Acts were never designed to work together. Consequently, there is often poor alignment between strategies, long term plans, funding, and regulation needed to deliver infrastructure in a timely way.

In this context it is hardly surprising that infrastructure investment has so often failed to keep pace with development needs or deliver value for money over time. Nor is it surprising that real economic growth across most regions has been disappointing.

NZCID commends the initiatives underway to benchmark performance and agree shared service arrangements, including joint ventures and clustering. But, we have strong doubts whether the pace of change is sufficient or that the goodwill and political commitment that is necessary will be sustained over time.

We favour full council amalgamations using the two tier unitary council model used in Auckland as a template for governance reform across the nation.

The power of one council united around one vision, one plan, one voice and the size and scale to be able to influence government policy and to implement and deliver are already plainly evident.

Similar to Auckland, we envisage reform of local government in New Zealand into twelve or so provincial unitary councils based largely on regional council boundaries. These provincial councils would be supported by empowered local boards with delegated authority to levy targeted rates for local amenities and services where there is community support.

When combined with puplicly owned utilities to deliver water, roads and regional facilities, reforms to planning laws to provide for spatial plans, and enhanced national guidance and leadership, the two tier unitary council model provides a good balance between leadership and local democracy, vision and strategy, scale and specialisation.

The latest rounds of local government and planning law reform will tweak incremental improvement of our complex planning laws. Increasingly we will see councils start to work together or even amalgamate. Generally speaking that is a good thing. But the pace of change is very slow.

Wouldnt it be so much better if we could lift our vision beyond the back yard and effect change aimed at fully realising the full potential of our regions, working in partnership with central government, the private sector, iwi and local communities.

Its time for bold moves in local government and planning law reform and that means addressing the structures which have held back the progress of our regions, says Selwood.