The infrastructure Ministers; Infrastructure Minister, Chris Bishop; Resources Minister, Shane Jones; Transport and Local Government Minister, Simeon Brown with the Prime Minister, Christopher Luxon unveiling the Fast Track Approvals Bill

The infrastructure industry yesterday issued a “hurry up” message to the Government and told it to get cracking on developing a pipeline of infrastructure projects.

The hiatus around the change of government has seen some major projects cancelled and others delayed while there is uncertainty about what will happen with the new local body driven three waters projects.

In a comprehensive survey of its members, InfrastructureNZ found that the hiatus and the uncertainty meant that the industry was fast losing confidence and was losing key staff to overseas.

This reaction is in contrast to the Prime Minister’s State of the Nation address in early February where he said that while other countries charged ahead with big investments in modern infrastructure to beat climate change and grow their economies, New Zealand was going backwards.

Prime Minister Christopher Luxon promised two key initiatives that would help boost infrastructure delivery: a fast track planning process and a new approach to funding and financing.

The fast track planning process is now before the Environment Committee and beginning to attract some heavyweight questions.

And Luxon has said the funding and finance issue will not be addressed until later his year.

Ultimately funding and finance may be the key to kickstarting the infrastructure build.

“We’ve seen, a government elected that has clearly got infrastructure building at its core,” Infrastructure CEO Nick Leggett told POLITIK yesterday.

“But the time it takes to establish that, which is involving re-orienting the priorities of the system and that has involved cancelling projects.


“That has reduced confidence.

“And, I think the survey shows reduced confidence, a lack of pipeline, which is not new and, a pretty dire fiscal situation, meaning that, there just isn’t a sense of confidence about what’s coming down the track.”

A substantial slice of the industry respondents said they lacked confidence that the pipeline of work would be sufficient to keep them going even over the next three years. 22.14 per cent said they were somewhat unconfident; 19.4 per cent neutral and 34.58 somewhat confident.

Nearly half (41.9 per cent) expected to lose more staff overseas and 39.75 per cent said the industry was ill prepared for any uplift in work.

The Government’s immediate priority in providing an answer to the industry is to free up consenting.

This being done through the Fast Track Consents Bill but that is starting to have political problems.

There are questions about conflicts of interest over one company which has been invited to apply for fast track for its developments, Winton.

Its directors include former National Cabinet Minister, Steven Joyce and Christopher Meehan who donated $153,260 to National last year.

The Auditor general, John Ryan, yesterday released his submission to the Select Committee considering the Bill which focuses on conflicts of interest..

“While the Cabinet Office Manual sets out the expectations and processes for how Ministers should manage conflicts of interest there is no legal requirement to comply with it,” the submission says.

“Given the significance of the decision-making powers in this Bill, I encourage the Committee to consider additional statutory requirements to strengthen the management of ministerial conflicts of interest.”

The Government obviously wants the new legislation to allow a high speed, unobstructed pathway for consents for infrastructure.

But with a strongly critical submission from the Parliamentary Commissioner for the Environment and now the Auditor General, the pressure on the Select Committee to put extra safeguards into the Bill is becoming much greater.

More safeguards will necessarily mean a slower process.

That may not matter as much as the Government might think because the infrastructure industry is not convinced that it is ready to implement any new approach to funding and financing as promised by Luxon in his State of the Nation speech.

Over 300 comments from industry respondents included in the survey revealed the scepticism about future funding.

“The resetting of priorities of projects and need to confirm finance and funding will create a delivery lag,” said one..

Another: “New Zealand has a lack of depth in its advisory space. For example the Government has signalled a desire to fund projects using Public private Partnerships (PPPs).

“New Zealand is not experienced as a whole in effectively establishing or managing PPPs. Many of the individuals who are experienced in them are more valuable overseas and have now left. It is not clear how New Zealand will upskill to effectively deploy the sophisticated tools required by government policy.”

Another respondent singled out the Government’s processes.

“The initialisation and procurement of infrastructure projects is the point at which the public sector and the commercial sector collide – and it’s not working,” one commenter said.

“Public servants are process-driven and more comfortable producing yet another business case rather than getting the actual project underway.

“Meanwhile, the costs of the project escalate.

“Even once,  at long last ,the project is taken to market, the procurement processes are often needlessly onerous, protracted, and expensive for the participants.

“With razor-thin margins and an increasingly uncertain pipeline of work, contractors are shouldering huge commercial risk when bidding for large-scale projects with no guarantee of their investment paying off.”

Asked what Infrastructure should be lobbying the Government for, many respondents called for work to be sped up on getting private finance into local government for infrastructure, particularly growth driven infrastructure.

At its heart the survey revealed that the infrastructure industry wants work.

Leggett, however, is optimistic that the Government is on the right track.

“The government has sent pretty clear signals that they will be looking at public private partnerships,” he told POLITIK.

“if you think about that pipeline of work that we need, not just six months into the future, but a decade into the future then if you want to make that pipe wide enough and ensure that it’s got momentum, you have to involve private capital, and new financing arrangements, and that’s part of the puzzle.”

Sop though the Fast Track legislation will help the infrastructure industry it is only one leg of the double; the other is funding and financer and already it is clear work on that is lagging behind the planning changes.

But until the Government can find the money, the infrastructure industry is going to be in limbo.