A 30-year infrastructure plan with support across the political divide could be a game changer, considering a study that shows the high cost of cancelling or delaying projects, explains Civil Contractors New Zealand Chief Executive, Alan Pollard.
Earlier this month, the Government published its response to the Infrastructure Commission’s 30-year National Infrastructure Plan.
The plan itself identifies and addresses the major challenges that New Zealand faces with respect to its infrastructure investment – the required level of investment and how to pay for it, being smarter about where and how to invest, extracting value from the investment, aging infrastructure assets, the propensity to defer maintenance and renewals, a lack of data about existing assets and good long-term asset management plans, and fragmented and inconsistent assurance processes inhibiting good investment decisions.
In my view, this strategy has the potential to be a game changer – a concise, focused, robust plan to finally address the infrastructure challenges that past governments over many decades have “kicked down the road”.
What is also telling about the government response to the Plan is that the foreword to the document includes commitments from both the Labour Party and the Green Party to support the Plan. Though they may not agree with every detail, achieving some form of consensus on a long-term plan to address our infrastructure challenges is a major step forward. I congratulate the Infrastructure Commission for achieving this outcome, and the Government, and the opposition parties for putting this country and our communities first, ahead of any political ideology.
CCNZ’s Strategic Plan has four pillars, the first of which is advocating to achieve a bipartisan (or even ‘cross-party’) approach to infrastructure planning and investment. Our work in this space has included advocating for a consistent, well-defined and funded infrastructure work programme; connecting members and engaging with clients for transparency of their forward works programmes (i.e. our NZTA regional forward works briefings being held in partnership with the Association of Consulting Engineers – ACE); removing barriers to project delivery through submissions and appearances before government select committees; and addressing key risks as they arise (for example our response to the fuel cost escalation challenges resulting from the Middle East conflict).
For members, this advocacy work has provided all of them with an opportunity to contribute to shaping government policy or influencing government decision-making, an opportunity that wouldn’t exist without the collective voice of CCNZ. I have no doubt that our messaging to all political parties and government agencies has influenced their decisions, so the responses to the Infrastructure Plan are very positive and hugely welcome.
We will, of course, continue to be actively engaged in these discussions to ensure that the Plan is successfully implemented. Over the past 18 months, with the help of our advocacy partner Awhi Group, we have established good connections with the key infrastructure spokespeople in each of the main parties. That willingness to engage reflects that CCNZ is seen as credible, trusted and reliable. That is a good position to be in as we approach the 2026 general election.
Along with this, and consistent with our pipeline advocacy approach, CCNZ initiated a project, in partnership with our colleagues at Infrastructure New Zealand and Water New Zealand, to develop a tool to calculate the real cost of cancelling or deferring projects. This came about for two reasons.
First, history is littered with examples of incoming governments cancelling projects initiated by their predecessor governments, often due to ideological or philosophical differences and without any understanding of the economic and social consequences of doing so. This is where the current bipartisan support for the 30-year Infrastructure Plan is so significant.
Second, the current fuel cost escalation issue has highlighted inconsistent and often illogical decisions being made by local authority and government agencies to pause or cancel projects to “save money” or minimise the exposure to fuel and other input cost escalation, again without understanding the consequences of these decisions.
We commissioned leading economist Shamubeel Eaqub to complete this work. The propensity to cancel or pause projects has cost New Zealand over $11 billion over the past 20 years – that is a staggering amount.
The model enables us to enter the details of a particular project, and it will calculate the likely cost of that project being cancelled or deferred. Of course we have used assumptions to develop the model, although it has been derived on the back of Shamubeel’s extensive data sets and deep knowledge of this country’s construction sector. I am confident that it is a robust model, certainly for the conversations that we need to have with clients about forward works decisions.
It is pleasing to see the positive media and social media coverage that the model has attracted.
The model will support these conversations at a number of levels. It supports our national advocacy programme with ministers and officials; it supports conversations that branch committees are having, or plan to have, with local clients; and it supports conversations that individual contractors can have with their clients.
Part of the benefit of being a member of a national association is being able to influence the policies that will have a direct impact on project scheduling and delivery, creating meaningful opportunities for all members, large and small, to inform the work that we do. I welcome and appreciate the input that our members provide to enable us to deliver on this core benefit.
Avoiding ‘cancel culture’