Like a ghost from another era the great hope for the Covid recovery, the Shovel Ready Projects programme, made an appearance at a Select Committee yesterday.
And the chair of Crown Infrastructure Partners, Mark Binns, which administered the programme more or less conceded that the projects got bogged down in the Beehive sometime in the middle of last year which is why some have even now yet to be contracted.
This is all in stark contrast to the gung-ho announcement of the programme, ironically enough, on April 1 last year.
And while Binns was explaining to one Select Committee how the Beehive had slowed the programme down, the Environmental Protection Authority was telling another Select Committee how another key element of the Government’s Covid response had also hit a bureaucratic wall, and only three of 17 fast-track development applications had so far been approved.
Ironically the-then Infrastructure Minister, Shane Jones, last year blamed delays in getting the fast track legislation approved for the slow down in the approval of the shovel ready projects.
When Jones announced the shovel ready projects last April, he said the Government had tasked a group of industry leaders to seek out infrastructure projects that would be re ready to start as soon as the construction industry returned to normal to reduce the economic impact of the COVID-19 pandemic.
Economic Development Minister Phil Twyford joined Jones for the announcement, and the pair asked Binns to have projects that would be shovel-ready’ or likely to be within six months.
“We are focused on the health and wellbeing of New Zealanders first and foremost, and we need to get through the lockdown and out the other side of this pandemic. However, the Government is also planning ahead for when that time comes,” Phil Twyford said.
“That’s why we are now developing a pipeline of infrastructure projects from across the country that would be ready to begin as soon as we are able to move around freely and go back to work.”
But the country’s Covid containment strategy moved faster than the projects.
Four weeks after Jones and Twyford made their announcement, the country went down to Alert Level Three which meant that most businesses (including construction) could operate more or less normally.
Binns told the Committee yesterday that by May the Infrastructure Reference Group had received 1926 proposals for projects totalling $134 billion.
The final report from the IRH went to the Government in May and Cabinet approved a list of 150 projects and allocated $3 billion to fund them.
Binns told the Committee yesterday that, now almost a year after the scheme was announced, Ministers had so far approved $2.3 billion of projects “and a number are already underway.”
In July last year, POLITIK reported that the election campaign and coalition politics along with bureaucracy appeared to have got in the way of the plan to announce the projects as soon as the construction sector got back to work.
POLITIK was told by Beehive sources that the Government wanted to stagger the announcements through the campaign for maximum political impact.
Answering questions from National’s Finance spokesperson, Andrew Bayly, Binns said the time pressure to get the projects approved quickly was so great the Infrastructure Reference Group did not have time to do business cases for each project.
“The mandate was for us to evaluate what construction projects were available in a region, which were of a reasonable size; were going to provide employment; were capable of getting going inside 12 months and had public interest,” Binns said.
“So it was about providing jobs for New Zealanders and quickly and getting jobs and projects out the door as quickly as we possibly could.
“So we didn’t do any cost-benefit analysis.
“We didn’t do that for obvious reasons and that we had nineteen hundred projects to evaluate inside an eight week period because that was the period we were given to report back.
“So the mandate we had and the basis for it dictated that we had to move very quickly. “
Bayly asked how projects that had been approved and actually been selected.
“I made it very clear that we were going to provide the Government with a list of projects that we thought met the bill, but the selection process was left to the Government,” Binns said.
“It was up to the government to decide which of those projects it didn’t want to approve for us to pursue.”
Ministers always knew that the Achilles heel in the whole project would be getting consents quickly for the projects so Environment Minister David Parker introduced legislation which would allow for fast track consenting for selected projects.
Since that legislation was passed last July, 17 projects have been submitted for fast track approval, but so far only three have been approved.
ACT MP, Simon Court, who grilled the Authority’s CEO, Alan Freeth, on the slow progress of the applications said the projects had met the eligibility criteria to be referred to the EPA by the Minister for the Environment.
“Their job is then meant to be simple and quick – that’s literally the definition of fast-track,” he said.
“Instead, perversely the EPA seems to have set up the sort of barriers to progress the local council consenters it’s supposed to be overriding have been famous for.”
The Government can comfort itself with the knowledge that the unemployment levels it feared last April never eventuated and that the cash that both the Reserve Bank and the Treasury injected into the economy kept the private sector ticking over enough so that the failure to get the shovel ready projects up and running was less of a negative than it might have been.