Infrastructure new Zealand MEDIA & RELEASES

Our media releases keep you up to date with the latest infrastructure developments in New Zealand.

  • 26 May 2016 12:46 PM | Anonymous

    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

  • 24 May 2016 12:41 PM | Anonymous

    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.

  • 01 May 2016 12:27 PM | Anonymous

    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.

  • 11 Apr 2016 10:28 AM | Anonymous

    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.

  • 22 Jan 2016 12:08 PM | Anonymous
    The National Infrastructure Unit released its latest publication issue #23, click here to read the newsletter.

  • 22 Jan 2016 12:07 PM | Anonymous

    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.

  • 22 Jan 2016 12:06 PM | Anonymous

    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.

  • 22 Jan 2016 12:06 PM | Anonymous

    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.

  • 22 Jan 2016 12:04 PM | Anonymous

    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

  • 22 Jan 2016 12:03 PM | Anonymous

    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.

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