NZ's infrastructure paradox: When spending more delivers less
This uncomfortable reality was a key takeaway from last week's launch of the New Zealand Infrastructure Commission's Draft National Infrastructure Plan.
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NZ Herald
04-08-2025
- NZ Herald
NZ's infrastructure challenge: From planning to delivery
The suite of policies, legislative reforms and delivery agencies now in place or emerging has laid the groundwork for a more strategic and responsive approach to our infrastructure needs. But policy is only the beginning. The Government – in fact both sides of the House – have heard the cry for a credible infrastructure pipeline and there have been lots of announcements. New Zealand's first Health Infrastructure Plan was released in April. The Draft National Infrastructure Plan, released for consultation last month, provides a long-term roadmap for investment, identifying priority areas and systemic gaps. City and Regional Deal discussions are underway with Auckland, Western Bay of Plenty and Otago Central Lakes, with the first deal to be agreed by the end of this year. The Government has also announced plans for major infrastructure projects, including 17 Roads of National Significance. There is also – rightly – a growing recognition of the need to make the most of what we have got and to invest in asset maintenance and renewal. Government is now talking about the need for asset management plans – and we should all be loudly supporting this. We need to make asset maintenance as sexy – if not sexier – than the big new projects. We must prioritise our infrastructure spend on looking after what we already have so that each of us can drop our kids off to warm, dry classrooms, driving on pothole-free roads (not flooded by water from leaky pipes) and have access to well-maintained hospitals. This is just as important as the big new projects and political announcements on long-term programmes to look after our assets should be celebrated. Sarah Sinclair. Photo / Supplied Government is now talking about the need for asset management plans – and we should all be loudly supporting this. We need to make asset maintenance as sexy – if not sexier – than the big new projects. Sarah Sinclair These developments mark a significant shift toward a more co-ordinated and proactive infrastructure system. But they are not, in themselves, sufficient to guarantee delivery. In June, MinterEllisonRuddWatts hosted Adrian Dwyer, chief executive of Infrastructure Partnerships Australia, along with other representatives from the construction and infrastructure sector in Australia. We heard that there is an opportunity right now to capitalise on the outgoing tide of infrastructure investment in the Australian transport sector to redirect skill and delivery capability to New Zealand. We have a window of opportunity to attract the capability and capacity of the Australian market but we need to move fast. So, what's required to move from planning to delivery? The focus must be on translating our project pipeline into execution getting projects off the drawing board and into the ground and on locking in asset maintenance and renewal programmes that make the most of what we already have - and both need to happen quickly. To achieve delivery momentum on infrastructure projects we need to focus on certainty and collaboration: Certainty to give the necessary confidence ... Of pipeline: There is no doubt that the sector needs a stable. long-term reliable pipeline with political consensus. We have heard from Australian sector participants that it is pipeline and political credibility that enables the market to plan and resource. Investors just need to know what is coming in the next five years and that they are 'real' projects. This should include the new capital projects as well as long-term asset maintenance and renewal programmes – so the whole supply chain can confidently invest in people, equipment, technology and other resources. Of funding: the credibility of the pipeline relies heavily on funding certainty - longer-term funding certainty is needed for projects and long-term maintenance programmes so businesses can invest in capability, technology and resources. And if we are serious about encouraging the private sector to bring ideas, then showing the pathway to how market-led proposals (previously known as unsolicited bids) are able to be funded – and how new funding tools will be used - would really show a commitment to encouraging innovative solutions. This requires a frank discussion of how, as a nation, we are prepared to pay. We can't announce projects without being clear as to how we are going to pay for them. There's no particular magic to this: we have to pay for the infrastructure we need, so what is the best and fairest way to do this? Is it through user charges, tolls, land sales, asset sales, targeted rates, levies, normal rates or national taxes? The chances are it will be a mix of these in a way that reflects the value to our communities and the benefits that infrastructure brings both directly and indirectly. Of regulation: For infrastructure delivery, regulatory certainty is essential. Investors and developers need to know what rules apply, how long approvals will take, and what conditions will be imposed. This circles back to bipartisan support as we need to achieve a degree of certainty that legislation will not be overturned every three years. Of risk: Projects can falter because of complex, risk-heavy procurements. One key lesson from Australia is that sustainable contractual frameworks and appropriate risk allocation attracts the market. Similarly, de-risking early has contributed to Canada's success. Collaboration Between political parties: Industry participants have long been calling for a bipartisan approach to infrastructure delivery. There are encouraging green shoots from both sides of the House as politicians appear to recognise this as a roadblock to attracting private investment (with their experience and resources), but more concrete agreement is required in the form of a finalised long-term infrastructure plans and announcements. Between central and local government: We also need better collaboration between central and local government. Regional deals are an opportunity to achieve consensus on infrastructure priorities and funding tools that will provide local benefits. Transparent criteria and public engagement will be key to building trust in these decisions. With the private sector and iwi: Attracting private capital (and most notably the experience and capability it brings) is simply essential to addressing New Zealand's infrastructure deficit. We need a fundamental mind shift towards embracing private capital, whether it be international or local. And let's think about how private capital can play a part in bundled long-term maintenance programmes as well as the big new projects. We need to leverage the capabilities and resources required to fulfil our infrastructure vision. In many cases, those will come from overseas (and that's okay). We must also build on the growing recognition of iwi as sophisticated investment partners who offer a strategic advantage and a quadruple bottom-line approach that has the long-term health and wellbeing of our country and communities at the heart of their investment decisions. With communities: Infrastructure projects do not exist in a vacuum. They are there to serve communities. Public engagement is not just a legal requirement — it's a strategic necessity. Community engagement and education will help accelerate our infrastructure build. We need to get the public on board with infrastructure spend and the need to invest in asset maintenance, moving from a fixation on upfront cost to a focus on long-term gain. Articulating and quantifying the social return of infrastructure will help with this. In procurement: New Zealand needs to be open to more collaborative procurement models. A more interactive and flexible procurement process has been a key enabler in maximising value and delivering outcomes in both Australia and Canada. From vision to reality New Zealand has made impressive strides in reforming its infrastructure system. The policy settings are sound, the institutions are evolving, and the appetite for delivery is strong. But the journey from vision to reality requires more than good intentions. We need to act now, with certainty and collaboration, to enable New Zealanders to live, work, and thrive. If we get the delivery right, the benefits will be felt for generations. MinterEllisonRuddWatts is an advertising sponsor of the Herald's Infrastructure report.
Techday NZ
28-07-2025
- Techday NZ
NZ civil construction sector faces confidence drop, workforce shortage
New research from Civil Contractors New Zealand and Teletrac Navman shows that New Zealand's civil construction industry is contending with a drop in business confidence and shrinking workforce numbers, but many businesses remain focused on finding solutions. The 2025 Construction Industry Survey, now in its ninth edition, compiles feedback from sector professionals and reveals a mixed picture. Of those surveyed, 16 percent reported a positive business outlook - a significant decrease from 50 percent in 2021. Alongside this decline, 42 percent of businesses reported downsizing or laying off staff over the past 12 months, with 73 percent citing a lack of work as the industry's predominant challenge, compared to just 15 percent in 2021. Despite the difficult operating environment, almost half (47 percent) of civil construction businesses expressed confidence in their ability to withstand and overcome current challenges. Many are responding by investing in new technology and climate-resilient projects with the aim of supporting business growth and meeting community needs. Government pipeline concerns Industry leaders point to uncertainty surrounding the project pipeline as a critical factor in declining business confidence. Alan Pollard, Chief Executive at Civil Contractors New Zealand, said: "New Zealand's civil construction industry is facing a confidence crisis where a lack of work, and uncertainty is placing the long-term health of the industry at risk, but there is plenty of hope on the horizon." The National Infrastructure Pipeline, managed by the New Zealand Infrastructure Commission, currently forecasts projects worth USD $207 billion across central government, local government and private sector contributions. Despite this, Pollard says there is often a gap between forecasted investments and projects reaching the market, with many projects delayed for prolonged periods. He emphasised the need for more transparent communications regarding project opportunities and more stable investment to provide certainty for infrastructure construction workers. The impact is particularly pronounced for small and medium-sized enterprises (SMEs), which make up 60 percent of the sector. The survey found that 27 percent of SMEs expect their revenues to decrease in 2025, which is three times the number from the 2021 survey. Pollard continued: "It's never been more important for central and local government to step up with a clearer, more consistent and visible pipeline of infrastructure construction and maintenance work, rather than just announcements. We see this playing a central role in strengthening business confidence, helping to keep skilled workers in the industry, and ensuring we're ready to meet not just today's needs, but also New Zealand's future infrastructure needs." Skills and workforce challenges The survey highlights that human resources and skills are a significant issue. Seventy-three percent of respondents reported a lack of available work for contractors, up from only 15 percent in 2021. This environment increases the risk of skilled professionals seeking employment overseas or leaving the sector to maintain income security. Looking ahead, 85 percent of civil construction professionals believe that clarity around central and local government projects is needed to restore business confidence and financial stability in the sector. Climate change and infrastructure Resilience to climate change is another matter raised by respondents. Fifty-eight percent are not confident in New Zealand infrastructure's current ability to withstand climate change. Civil construction professionals are unified in calling for greater investment in resilience infrastructure, such as seawalls and stopbanks, seeing these developments as essential for community safety during flood or fire events. Role of technology Technology is increasingly being recognised as a strategy for business efficiency and growth in New Zealand's civil construction sector. More than 40 percent of those surveyed indicated that adopting technology could help improve efficiency and manage ongoing challenges. Over half of business leaders say that mandated technology assists them in securing new work, indicating a shift in how projects are approached. James French, Construction Industry Specialist ANZ at Teletrac Navman, said: "While confidence in the sector is under pressure, our research with CCNZ clearly shows that businesses that embrace digital tools and connected platforms are positioning themselves to win work and navigate today's industry uncertainty. Technology isn't just a nice-to-have for civil construction businesses – It's become a business imperative. This year's Civil Construction Industry Report revealed that 60 percent of business leaders in the sector say that mandated technology helps them win work, so its clear technology is playing a key role in building a more resilient and competitive civil construction industry." The annual report by Teletrac Navman and Civil Contractors New Zealand aims to provide data-driven insights to support the sector as it navigates changing market conditions and prepares for future demands. The 2025 survey was based on 172 responses from civil construction professionals gathered between May and June 2025.
Newsroom
26-06-2025
- Newsroom
NZ's infrastructure paradox: When spending more delivers less
Comment: A peculiar economic paradox appears to govern infrastructure development in modern New Zealand: the more we spend on infrastructure, the less we seem to get for it. This uncomfortable reality was a key takeaway from last week's launch of the New Zealand Infrastructure Commission's Draft National Infrastructure Plan.
