Infrastructure new Zealand MEDIA & RELEASES

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

  • 22 Jan 2016 11:57 AM | Anonymous

    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.

  • 22 Jan 2016 11:56 AM | Anonymous

    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.

  • 22 Jan 2016 11:55 AM | Anonymous

    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.

  • 22 Jan 2016 11:54 AM | Anonymous

    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.

  • 22 Jan 2016 11:53 AM | Anonymous

    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.

  • 22 Jan 2016 11:52 AM | Anonymous

    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 .

  • 22 Jan 2016 11:50 AM | Anonymous

    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.

  • 22 Jan 2016 11:50 AM | Anonymous

    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.

  • 22 Jan 2016 11:49 AM | Anonymous

    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

  • 22 Jan 2016 11:16 AM | Anonymous

    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.

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