Comment

Seeking clarity on infrastructure pipeline

PETER SILCOCK, CHIEF EXECUTIVE, CIVIL CONTRACTORS NEW ZEALAND

OVER THE PAST year many clients have asked CCNZ – ‘do contractors have the capacity and capability to deliver our infrastructure development programme’?

Often the focus is on whether we have enough people because issues of staff shortages and immigration are highlighted in the media.

It is a fair question to ask. Each time our answer has been the same – if you provide good visibility of the work that you have coming up, engage with the contracting industry and have a focus on quality rather than lowest price then contractors will develop the capability and capacity to do the work.

We also like to remind people that this is not just about the people on the ground. Delivering a high quality project also requires funding and financing, it requires the right equipment, technology and machinery and the right inputs such as steel, aggregates, concrete and pipes.

Put simply, that consistency of work and a clear view of what is coming up (a pipeline of work coming to market) gives contractors the confidence to invest in people, plant, technology and equipment.

We have often said that the current surge in investment in infrastructure is simply making up for years of under investment by successive governments during the 80s, 90s and early 2000s and we have stressed the importance of avoiding a boom bust cycle.

The recently formed Labour/NZ First coalition has set itself and the industry a formidable task including building 100,000 new affordable homes in 10 years, a significant investment in regional rail and a $1 billion Regional Development Fund. These things give us confidence that this government understands the need and benefit of investing in infrastructure.

It was therefore unfortunate that one of the first infrastructure specific announcements made by the new government was that the East West link in Auckland would not proceed and that the government would “refresh” the ATAP (Auckland Transport Alignment) process.

The ATAP process has only recently been completed so why does it need a refresh?

At the same time, there are few details regarding when the new housing rail and regional development work will come to market and the second tranche of the Roads of National Significance has been put on hold except for the critical Manawatu Gorge replacement.

The future pipeline of work has very quickly become murky and it looks like a significant sinkhole could open up in front of us.

CCNZ supports further investment in public transport and affordable housing but would also like to see continued investment in improving our national highways network. The reality is that the East West link was due to start next year while “refreshing the ATAP process” and getting the planning and resource consents for Auckland’s light rail projects could take years.

At the time of writing this we have asked for a meeting with ministers to discuss how we can assist the government to deliver its ambitious agenda and at the same time provide a clearer picture of the forward work programme. Including;

  • the infrastructure required to support the Kiwibuild programme,
  • the likely timing of rail developments,
  • how the regional development fund will be spent (eg. can it be used to upgrade or rebuild our ageing regional water infrastructure) and
  • quickly clarifying what capital investments will be made in our state highway network.

Given the ambitious programme we would also like to share our ideas about how we can accelerate the process to get this work to market and completed.

Getting clarity about the future work programme is important for all civil construction companies, from large multinationals to family businesses and to the people that they, subcontractors and service suppliers employ, train and develop.

This article first appeared in Contractor December 2017.

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