Auckland Unlimited: Broadly speaking, what is the role of infrastructure commission in the sector?
Ross Copland: The commission has three core areas of focus, the first being to publish a 30-year national strategy for infrastructure in September 2021. This will have a sector-specific lens, looks at crosscutting themes, and provide recommendations to address the country’s infrastructure deficit alongside recommendations to address climate change.
Secondly, we have an advisory function for major projects (over $50 million), high-risk projects and projects that have a strategic fit with the commission’s purpose, such as reform of the investment management system managed by Treasury
And our third area of focus is maintaining an up-to-date list of projects in the Infrastructure Pipeline.
How is the Infrastructure Pipeline looking for the next 10–15 years for New Zealand and what do you anticipate to be Auckland’s share?
The current pipeline is valued at $47 billion and we are constantly updating the list, working with more and more agencies to collect and share project information. The current pipeline contains circa 1,610 projects from 82 organisations. $24 billion are transport projects, $16 billion are under construction and we’ve got substantial work coming in water, health and education.
Forty-five per cent of the total value in the current pipeline is for projects in the Auckland region, which is also where four out of the seven $1 billion-plus projects are located.
Are there any major areas where substantial changes are anticipated in the sector?
The reform of the Resource Management Act (1991) – the country’s planning and consenting framework – is being led by the Ministry for the Environment and is a significant area of change that will impact most parts of the sector.
Also, the reform of our water sector(drinking water, wastewater, stormwater) is under way by the Department of Internal Affairs and local government teams. Currently predominantly managed by local government, the Three Waters Reform Programme will create a new, centralised water services regulator and will consolidate the number of entities delivering water services. It may also lead to changes in the pricing of water services across New Zealand.
Do you anticipate direct, private participation in infrastructure transactions by capital providers in the near future?
There is a mix of public and private ownership of infrastructure in New Zealand – for example, Wellington Airport is roughly two-thirds privately owned by Infratil.
Direct opportunities for private capital come through periodically. It is acknowledged that the public sector can’t fund all infrastructure projects, so there is likely to be more focus on how private capital can participate in the development of new infrastructure over the years ahead.
The commission also coordinates the New Zealand Public Private Partnership (PPP) Programme related to the construction of a new asset, or enhancement of an existing asset.
What are some key aspects that inbound companies such as developers, technology providers, supply chain, skills, etc., should be considering while participating in the sector?
For a new entrant into New Zealand, they need to be aware of, and culturally versed in, the high degree of importance of the Treaty of Waitangi for government and Māori iwi relationships.
We are known for our high ratings internationally for stable, non-corrupt and well-structured institutions and government, making New Zealand a very easy country to do business in. However, we can struggle to get agreement on long-term plans that meet our future infrastructure needs, and consents for projects which impact on environmental or landscape values have proven difficult to obtain. Providers need to be aware of some of the challenges, such as distance from international supply chains and the constrained labour market.
What is the availability of local skills in New Zealand and are there barriers for entry, especially in some specialised skills needed for infrastructure?
Right now, it is a real challenge to bring in skilled labour because of the COVID-19 crisis and capacity limits on processing people through quarantine facilities. We are working with colleagues in government to see how we can streamline the process for specialist labour.
With the $4.5 billion COVID crisis stimulus package announced by government in June 2020 on top of the $12 billion investment in the New Zealand upgrade programme announced last year, we hope vaccines will lead to more fluid access to international resources and specialist labour to enable delivery of the pipeline of existing projects.
The sector has traditionally been marred by low productivity leading to a high cost of delivery and time overruns. What part will innovation play here and what plans does the commission have as a catalyst for change?
To be a catalyst for change we need to redefine the way we plan, pay for and build infrastructure over the next 30 years. At the commission, we’re looking to play our part in that process through the development of the 30-year strategy, our advisory role on major projects, and the visibility the pipeline provides, along with participation in key policy developments that impact infrastructure.
Innovation will come from thinking differently about the way we do things, and we can do that in lots of ways. Can we collaborate and plan projects across and within sectors so we maximise the benefits? Do we need to default to built solutions or can we consider how non-build solutions achieve similar or better results at a lower cost? And we need to ensure best-practice procurement is being observed in order to avert higher delivery costs and delays.
What is New Zealand’s long-term vision for building and infrastructure?
Our focus is to improve New Zealanders’ lives through better infrastructure. And as the government’s lead advisor on this, we bring an objective, non-partisan approach to the advice we give while considering the environmental, social and well-being outcomes for our communities.
The focus of the strategy is to engage with New Zealanders involved in the infrastructure supply chain to lift productivity, improve the quality of investment decisions, and reduce the impact of infrastructure on our environment and communities. It’s important that we develop infrastructure that meets the changing needs of New Zealand, taking into consideration demographics, climate change and digital disruption.