Water reform and local government reform matter, but they mustn’t become another reason to pause physical work, writes Civil Contractors New Zealand Chief Executive Alan Pollard.
Infrastructure debate often focuses on the biggest and most visible projects: rail links, harbour crossings, major highways and other headline-grabbing investments. These projects matter, but the real test of our infrastructure system is more immediate and personal.
It’s whether people can turn on a tap and trust the water, whether wastewater systems work, whether stormwater is managed when severe weather arrives and whether roads remain open and communities stay connected. That’s why we need to pay close attention to the cost of stopping.
The Cost of stopping report, commissioned by CCNZ, Infrastructure NZ and Water NZ, estimated stop-start infrastructure has cost the country at least $11.8 billion between 2000 and 2025. This excludes client-side sunk costs and wider economic opportunities foregone when projects don’t proceed.
This isn’t an argument for building every proposed project, regardless of affordability or value. Difficult funding choices are unavoidable. Nor is it principally an argument about any one megaproject. It’s about how we think about infrastructure day to day and about improving the quality of our decisions.
We need to recognise stopping work also has a price, which is too often overlooked.
Councils may fund the design of several projects but construct only a few. Design is often necessary to assess options, but when no delivery follows, ratepayers have paid without receiving any benefit. The renewal, treatment or resilience problem is unresolved.
Costs arise if planning effort and equipment investment are wasted or redirected. Construction costs inflate during delays, and capability and productivity are lost when work is intermittent.
Perhaps most importantly, citizens wait longer for the infrastructure they need. The report finds inflation from deferral, productivity penalties and deferred benefits are the main ways stop-start decisions impose costs.
For water, we can redesign institutions, establish new entities and alter governance arrangements. But an organisational chart or management structure doesn’t replace a failing pipe, improve a treatment plant, or manage stormwater flow and water quality.
Water reform and local government reform matter but mustn’t be another reason to pause physical work. Delivering water infrastructure costs money, but not delivering it is much worse for society.
We still have to renew pipes, maintain networks, upgrade treatment capacity and build infrastructure for growth. Good reform should support delivery, not distract from it.
That means new water organisations need more than a legal mandate. They need live, funded, long-term capital programmes, clear asset-management priorities and procurement practices that enable the market to respond. They need to engage early with contractors and suppliers, understand regional capacity and make decisions that sustain work rather than create unnecessary gaps.
Contractors don’t mind the organisational form of their client. It’s not our role to prescribe whether services should come through councils, council-controlled organisations or regional entities. We just want those organisations to make sound, timely decisions and maintain a reliable programme of work.
Contractors construct and maintain infrastructure on behalf of central and local government clients so they see the effects of stop-start decision-making directly. When programmes are paused, workforce, plant, subcontractors and supply chains can’t sit idle until a client is ready to restart.
Specialist teams aren’t assembled at the flick of a switch; they’re developed through continuity, experience, repeated work and knowledge of regional ground and water conditions.
A long pause can mean companies lose people, equipment is moved, and regional capability disappears. When projects return to market, clients may face less competition, higher costs and longer timeframes.
A credible, multi-year, funded pipeline gives firms confidence to invest in skills, equipment, apprenticeships and better ways of working. There are positive signals, such as Watercare’s recently announced $15.8 billion plan, but we need to set a direction and stay the course.
The Cost of stopping report recommends publishing and committing to a multi-year pipeline. A more certain programme enables the sector to build capacity and efficiency, reducing costs to government and society. It also gives contractors the certainty to purchase the right equipment and train a skilled workforce.
We must stop treating maintenance and renewals as something discretionary. They’re not glamorous, but they’re central to affordability and resilience. Much of the infrastructure we’ll rely on in future already exists; it must be looked after. The report notes deferring maintenance can cost two to five times more later, and recommends renewal and maintenance spending be the last area cut.
Decades of underinvestment can’t be solved through governance reform alone. Water NZ says providers face investment challenges during the transition to Local Water Done Well, with some communities likely requiring decades to address renewal backlogs.
The NZ Infrastructure Commission’s National Infrastructure Plan (NIP) says maintenance and renewals are among the greatest investment challenges, while fragmented planning, regulatory inefficiencies and complex approvals undermine value for money.
There’s a risk of transition fatigue as local government navigates water reform, resource-management change, rates pressure, fuel cost uncertainty, housing and growth demands and council structure debates.
The worst outcome would be years debating institutional arrangements while the networks beneath our streets deteriorate.
The answer isn’t to avoid reform; it’s whether it improves delivery. We need accountability over announcing plans, but also delivering practical programmes of renewals, maintenance and projects on time and at a reasonable whole-of-life cost.
It requires procurement that allocates risk fairly and values whole-of-life asset performance, rather than the lowest price. It requires regulators and decision-makers to work coherently, so safety, environmental obligations, economic regulation and delivery realities don’t operate in separate silos.
Most of all, it requires focus on the basics. Communities don’t experience infrastructure through institutional or governance design, but through safe water, functioning wastewater systems, resilient stormwater networks and reliable transport connections.
Crews must stay in the field, contracts must keep moving, renewals must remain funded and essential maintenance must continue during reform. The worst outcome is to spend public money on delay and cancellation without achieving any public benefit.
We have a shared direction through an NIP and understand the real numbers behind the cost of stopping. Our common goal is well-constructed and maintained water networks that meet our towns’, cities’ and communities’ needs. We can’t use the latest cost pressure or reform package as an excuse to pause the physical work that keeps this country healthy, connected and resilient.
Let’s make the most of our infrastructure construction opportunities and deliver the physical networks our society needs to foster health, wealth and wellbeing.