A new infrastructure body will be established by the government to provide expert advice, planning and strategy to support the delivery of major infrastructure projects across the country
New infrastructure entity to help drive economic growth and wellbeing
Infrastructure Minister Shane Jones has announced a new independent entity will be established so that New Zealand will get the quality infrastructure investment it needs to improve long-term economic performance and social wellbeing.
Speaking at the annual Building Nations Symposium in Auckland in August, Mr Jones said the new entity will provide greater certainty to the industry and better advice to ministers to ensure that adequate, long-term planning and investment happens.
“This government has a firm eye on the future and not just the next few years. We’re determined to improve economic performance and social and environmental wellbeing for generations to come, and getting on top of our infrastructure challenge is key. That means ensuring New Zealand can make the timely and quality investments in vital infrastructure, such as hospitals, schools, transport networks, water and electricity. And it means being open to innovative solutions to sourcing the capital we need.”
The announcement has been widely welcomed by industry, with Stephen Selwood, CEO of Infrastructure NZ, describing it as “very positive news”.
“The minister has indicated the new entity will become a one-stop shop for investors, linking people to procuring entities and informing them about our regulatory and market settings. It will provide expert advice, planning and strategy, support the delivery of major infrastructure projects across the country, and act as the ‘golden thread’ between the various pieces of work this government is undertaking,” Mr Selwood says. “This is a major step forward for the government and a wider sector challenged by long-term pipeline uncertainty and procurement capability.”
An i-body approach
At the Building Nations Symposium, delegates heard from experts from the UK and Australia, two countries which have introduced national infrastructure bodies.
The UK National Infrastructure Commission was established in 2015 as the non-ministerial government department responsible for providing expert advice to the British government on the infrastructure challenges facing the UK. Across the Tasman, Infrastructure Australia independently assesses projects and initiatives for inclusion on the Infrastructure Priority List, the authoritative list of nationally significant infrastructure investments that Australia needs over the next 15 years.
“The ‘i-body’ model has been very successful in these two countries at reducing waste, improving long-term decision-making and supporting a much healthier and more competitive industry,” says Mr Selwood. “We expect that over the medium term, an i-body in NZ will lead a sustained improvement in the skills and capacity of infrastructure professionals within not only the government, but the private sector too, as suppliers benefit from clearer direction, greater consistency and better risk allocation. This is a real opportunity to use the government’s scale to effect a true industry-wide transformation of the way we plan, fund, finance, deliver and operate critical services.”
Civil Contractors New Zealand (CCNZ) chief executive Peter Silcock says a new infrastructure entity could potentially be of huge benefit, helping to resolve recent uncertainty over coming workflow following the change of government transport and infrastructure priorities, as well as unifying the coming efforts to improve consistency and visibility in New Zealand’s infrastructure investment.
“The proposed new infrastructure agency has the potential to provide infrastructure pipeline visibility, certainty and prioritisation across the government, as well as a clear and integrated action plan to deliver the pipeline,” Mr Silcock says. “We hope the new agency will also provide a centre of procurement excellence to improve the quality and reduce the costs of procurement, leading to greater certainty for Kiwi civil contractors and better ability to invest in our people, plant and systems.”
The creation of this entity comes at a “critical juncture” for New Zealand, with coming plans for KiwiBuild and proposed record levels of investment in infrastructure, Mr Silcock adds.
“The delivery of critical community infrastructure water, transport, energy and communications must be a key strategic priority for this government, given its stated goals. This is a critical time for New Zealand, with opportunities to achieve fantastic outcomes for our communities – or to squander more money than ever before. It is an essential time for the government to work hand in hand with industry, and an independent agency can facilitate this.”
The Treasury will now lead the development of the detailed policy working alongside key industries, and Minister Jones says he will report back to Cabinet early next year with options on how to structure the new organisation. It is anticipated the new infrastructure entity will be operational by late 2019.