Balancing our infrastructure upgrade

By Peter Silcock, Chief Executive, Civil Contractors New Zealand.

Many of you will have breathed a sigh of relief at the announcement of a series of major transport projects to fill what was starting to look like a large gap in the infrastructure pipeline.

The NZ Upgrade Programme announced in January includes road and rail projects ranging from the Whangarei-Port Marsden upgrade in Northland, PenLink and Mill Road in Auckland, Tauranga Northern Link in the Bay of Plenty, to the Otaki to North of Levin extension of the Kapiti Expressway, and the Melling Interchange in Wellington. It amounts to $6.8b of transport projects.

The work proposed sits outside the existing National Land Transport Programme. It’s a political statement from the coalition government to restore projects relegated from NZTA’s priority list as a result of the government’s shift in strategic direction away from highways two years ago.

In many ways, it’s a response to calls from our industry.

It provides much-needed continuity for civil contractors as major projects like Transmission Gully, Puhoi to Warkworth and sections of the Waikato Expressway wind up. But the lack of work proposed for the South Island so far is a concern, with little more than a smattering of work announced across Queenstown and Christchurch to replace the Kaikoura rebuild and Christchurch motorway projects.

It’s hard to tell whether this approach is a deliberate lack of balance in favour of areas facing high population growth or a bid from the government to buy more time for a well-considered selection of southern projects.

So far, the government has placed welcome emphasis on shovel-ready projects, with many state highway projects coming back into the mix. Because of this, it will be interesting to see what projects are announced in May to form the remainder of the NZ Upgrade Programme.

We’re told much of the remaining $4b is earmarked for regional projects, but we don’t know what it’s been put aside for just yet. Will we see more efforts to catch up with Auckland’s growing infrastructure deficit? Or will we see the Petone to Granada link road back in the mix to link up with Transmission Gully. Or will the Woodend Bypass be brought forward to help fill the workflow gap in the south?

There are a few answers to these questions. One is the short to medium term answer – that it’s important for contractors to have continuity so they can retain and support their workforce. Along with safety outcomes and the fact that it’s close to shovel-ready, this is a strong reason for something like Woodend – or even the full Belfast to Pegasus motorway extension – to go ahead.

Alternately, will we see a range of ambitious and innovative Provincial Growth Fund projects? Or something completely different, like re-routing the power generated at Manapouri from the Tiwai Point smelter back to the main grid, or even Christchurch commuter rail?

Rail has seen a significant funding boost. While this seems a positive move, we’re only at the beginning. The government has remembered the rail network, but rebuilding expertise in an industry that was on the brink of extinction not so long ago will take time. While there may be appetite for the concept of commuter rail in Christchurch and its satellite cities, I doubt there’s similar appetite for a repeat performance of Auckland’s light rail proposal.

CCNZ will be working hard to get funding invested in the regions of NZ that most need investment and continuity of work as projects wind up. Contractors who are concerned about the work pipeline in their regions should make their opinions clear to their local MPs – Labour, National or otherwise.

There’s nothing like a bit of political pressure to get things back on track, especially when there are valuable votes at stake, and I expect to see sparks fly at our political panel during our national conference in July. Now renamed The Contractors Conference, this will be a great chance to gauge who has the vision to really deliver on infrastructure promises.

That brings us to the long-term answer. Infrastructure is a key issue in this election, but we need a long-term solution, not just a bunch of election promises the next party or parties in power could shut down or accelerate.

While we welcome the NZ Upgrade announcements because it fills the gap created by this government’s previous decisions, we are in desperate need of a coherent national plan for infrastructure. Responsibility for this lies with the newly-created NZ Infrastructure Commission, which has been charged with the creation of a 30-year plan and priorities for the country’s infrastructure.

Don’t get me wrong, the NZ Upgrade Programme is great news. The industry will step up to make the best of opportunities on offer, as we always have. But building true industry capacity and capability takes time and confidence for businesses to invest in long-term certainties rather than election year promises. The work between now and 2030 could be locked and loaded. Right now, we could be planning for projects in 2030 and beyond. Just think of the possibilities.

The 30-year plan is in the works, but it won’t come to light until 2021.

So, when we think about what to ask for in the leadup to the election, it pays to think not just about what short-term opportunities are viable, but also the need to create long-term continuity of work for civil construction’s businesses and people, enabling contractors to build necessary industry capability and capacity to get the job done for decades to come.