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The revolution takes hold. . .

. . . replacing us INFRASTRUCTUREBUILD.COM YEARBOOK 2018

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2018


CHANGES ARE HERE…

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Three life-changing tech trends in 2018 Digital skills, smarter homes and medical drone deliveries will be major tech developments that will significantly impact lives of Kiwis, says NZ Tech Chief Executive Graeme Muller

INFRASTRUCTURE

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hile tech talk is often about issues such as robots stealing jobs or virtual reality worlds, New Zealanders may be overlooking how to capitalise on some of the advances. “Possibly the biggest tech trend is the growth in demand for people with skills in digital technologies. “These skills are not hard to learn and come with a median salary that is twice the national average,” Muller says. “The nationwide Digital Skills Study released at the end of last year found digital jobs are increasing twice as fast as graduates are being created. “The median annual salary is now $82,000, almost twice that of the average Kiwi,” he says. “Learning how to write software, design processes, manage data or any of the hundreds of other tech jobs in demand is the way to go for anyone looking to develop a secure income in 2018. “This year we will also see the launch of the digital technology curricula in all New Zealand schools where students from year one will start to learn how computers work and how to control them,” says Muller.

Digital jobs are increasing twice as fast as graduates are being created Smarter homes

“The second trend that will sweep across key parts of New Zealand are smarter homes. Usually smart homes talk is about fridges that order your food but this is more important. “Last year’s House Condition Survey found that about half of

New Zealand homes suffer from under heating, damp and mould, all of which are contributing to poor health for many Kiwis. “In fact, one study last year estimated that 1600 deaths during last winter could be attributed to cold damp housing. “A simple solution, developed by Kiwi social enterprise Whare Hauora, is a low-cost sensor which lets people know the temperature and dampness of their rooms and it can even be set up to monitor mould levels. “All houses should have healthy home sensors if we want to reduce strain on the health budget and improve the lives of Kiwis.

Drone deliveries

Delivery trials for medicines to rural communities

“Finally drone deliveries are going to a major cost saver to the country and will eventually decrease traffic on our roads. “When Dominos New Zealand delivered a pizza by drone in 2016 we were told to expect the service to be a commercial reality in 2018, Muller says.

“The technology is ready, with drone delivery trials successfully occurring all over the world. Regulations remain the sticking point. “Globally, New Zealand’s regulatory environment for drones is considered progressive compared to those in the northern hemisphere who face greater security considerations,” says Muller “Last year New Zealand’s Civil Aviation Authority cleared the way to conduct autonomous beyond line of sight drone trials in the country’s newest 874 square kilometre restricted airspace, dubbed incredible skies, in Northland. “Trials are being conducted by Medical Drones Aotearoa for the delivery of prescription medicines to rural communities. “It might be another couple of years before we see hundreds of flying delivery vehicles over our cities, but 2018 should see the launch of the first specialised services,” Muller predicts.

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Busy year for local authorities

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Life-changing tech trends

Digital skills, smarter homes and medical drone deliveries will impact the lives of kiwis

Last year LGNZ launched two major projects across climate change and water

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Need for top-down support

Poll suggests awareness of initiatives to tackle gender diversity in infrastructure is low

The buck has stopped here

Homelessness, housing unaffordability and no expectation that housing supply will meet demand in growth centres is the product of three decades of infrastructure system failure

Safe to drink Autonomous vehicles save lives

Domination of driverless transport within 30 years, helped by an algorithm to ensure autonomous and manually driven vehicles get along in peace, driving on roads made of recycled plastic from the ocean. KPMG reports on those countries most prepared for the challenge

Goodbye to nearly 40 percent of jobs by 2033. What you can do

Software dispatches camera-equipped drones to investigate security event

Robotic vertical inspection

Climbing robots enable precise, accurate and safe remote inspection of non-ferromagnetic surfaces

Komatsu surveying drones

SMART-CONSTRUCTION survey will be used for volume calculations and future design work after survey for C&R Developments in Silverdale

Iplex trenchless piping

Experience and innovation, product quality and client support

Procurement and tendering trends

RFT documents continue to improve with tighter focus on questions that reflect the differentiators for the suppliers, based on the risks and opportunities of each specific project

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YEARBOOK 2018

Red Cross training

Courses for your workplace or specialised field of work. Book on a public course, or arrange an exclusive group course at a time and place that suits you

To help you safely manage your workplace chemicals, Responsible Care NZ delivers cost-effective and specialist Certified Handler training

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22-23 &2

Life savers in disaster zones

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Plotting currents and rip tides

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Drones used to detect human vital signs in war zones and natural disasters

Robust drug testing programme

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GPS drifters monitor rip currents while high-tech drones enhance the findings from above

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The National Safety Show

Largest trade event for the health and safety industry back in Auckland July 3-4.

WorkSafe agenda

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Managing Editor Geoff Picken 021 250 7559 geoff@infrastructurebuild.com

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50-51

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Employers simply can’t afford the effects that drug and alcohol abuse can have in the workplace

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Summits for health and safety leaders, hazardous substances, health and wellbeing and occupational health. Auckland March 26-27

Workplace chemical safety

Talking rubbish

A pressing need to discuss the serious issue of managing physical refuse in our communities

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Prepare for artificial intelligence

Security surveillance

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Unless there are significant changes to the way drinking water is regulated there is a serious risk of another contamination. The start of major reform in the drinking water sector is likely to get underway this year

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Safety 360 summits

Watchdog for the Health and Safety at Work Act sets its agenda for 2018. Enforceable undertakings rather than prosecutions are hardly a gift

Crime and punishment

The District Court has not yet adopted a consistent and uniform approach to assessing culpability under the HSWA. Duncan Cotterill’s Graeme Tanner and Joseph Price examine the punishments on offer

Publisher Mike Bishara 027 564 7779 mike@infrastructurebuild.com

10-11 & 25

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15-17

The secret to Andrew Patterson

The youngest winner ever of the NZIA gold medal is responsible for some of the country’s most distinctive and exciting buildings

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NZ Property Council

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Green Stars for Westpac Barangaroo

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Chief Executive Connal Townsend sets out the agenda for 2018

The fit-out in Tower Two of Barangaroo’s International Towers Sydney has received the highest number of Green Star points achieved by any office fit-out in Australia

Design & Pre-press Michael Curreen 021 029 20234 michael@infrastructurebuild.com

Published by Media Solutions Ltd PO Box 503, Whangaparaoa Auckland 0943 09 428 7456


The Property Report • Colliers David Hand introduces five themes common to Asia, Australia and New Zealand property markets

Content Partners

Cover

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• In Asia, China, Japan, South Korea, Hong Kong and Singapore should all report higher or sharply higher growth in 2017 although modest slowdowns look probable for 2018

3 Leigh Auton Auton & Assoc Page 9

Sir Michael Barber PwC Page 27

Caroline Boot Clever Buying Page 40

Delivery Drones

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• Migration trends in Australia have had a profound impact on Australian property markets. Record low interest rates, below target inflation and anaemic income growth are a set of economic circumstances rarely seen in Australia and continue to drive growth

27 Dave Cull Local Govt NZ Page 44

Barry Dyer Responsible Care Page 22

Kerrie McEwen Plan A Page 40

Artificial Intelligence

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• New Zealand investment groups will dominate rural property purchases while overseas buyers will chase urban assets instead for better returns

28 Hamish Glenn Infrastructure NZ Page 48

David Hand Colliers AsiaPacific Page 67

Kirk Hardy TDDA Page 54

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• In the New Zealand specific report Colliers Mark Synnott expects a bounce in the commercial property markets

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• The capital’s CBD office vacancy has dropped to record new lows, highlighting an acute shortage of office space that is especially apparent in the prime sector

Drone Security

29 Graeme Muller NZ Tech Page 3

John Pfahlert Water NZ Page 50

Nicole Rosie WorkSafe Page 12

Mark Synnott Colliers NZ Page 72

Graeme Tanner Duncan Cotterill Page 15

Connal Townsend Property Council Page 43

Life Saving Drones

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• 2017 provisional office sales for New Zealand reached just over $1.85 billion across 397 properties, with the Auckland region recorded the largest share

Vertical Inspection Robots

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• The distinction between ‘core’ and ‘flexible’ space needs as mobile disruption continues to reshape workplaces in 2018

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Joseph Williams Duncan Cotterill Page 15

Mike Bishara Media Solutions Publisher

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Michael Curreen Media Solutions Digital Content

Komatsu Surveyors Original material published online and in this magazine is copyright, but may be reproduced providing permission is obtained from the editor and acknowledgement given to Media Solutions. Opinions expressed are those of the authors and may not necessarily be those of Media Solutions Ltd. ISSN 2324-3163 (Print) ISSN 2324-3171 (Online)

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Smart transport demand smart responses The future of transport in New Zealand is sustainable and smart

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ome 1.3 million people died last year in car accidents worldwide, close to the size of the population of Auckland. Autonomous vehicle fleets should result in a 90 percent reduction in the number of fatalities on our roads “Data based, customer-centric and intelligent vehicles will change the transport environment beyond recognition over the next 20 years,” then Ministry of Transport Deputy Chief Executive Andrew Jackson told a conference last year. In Wellington city, for example, the convenience and comfort of commuting by private car in 2016 meant 70 percent of Wellington commuters were willing to pay a daily $14 premium over and above the cost of public transport. The relative costs will be reversed by 2035, as the forecast

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price of using fleets of autonomous, electric vehicles for the daily commute will reduce to $1.50 each way. “Given these figures, we expect to see a much greater number of private fleets transporting people around cities,” Jackson predicts. This will also change the government’s transport role, and it may no longer need to continue the current approach of providing funding for private transport and regulating for carbon from passenger transport. “Instead, the focus of government will be managing demand on the network to ensure lower prices do not clog up the network. “Government will provide both physical and virtual infrastructure, and it will need to consider its role in achieving health outcomes as the temptation to be driven increases.”

YEARBOOK 2018 INFRASTRUCTUREBUILD.COM

The decrease in costs of EVs and their low running costs means that these autonomous fleets will be electric. “Traditionally we have had separate regulators for different modes of travel. But all are moving towards autonomous control. “This in turn begs the question of how we will build the capability to regulate this new technology,” says Jackson. “Will we need a single cross-agency capability to regulate intelligent vehicles cross land, sea and air? There is also the question of who should deliver the virtual infrastructure to support the new mobility services. This is often referred to as Mobility as a Service (MaaS) and there is often confusion about what this means, says Jackson There are five different levels of MaaS. The first two levels relate to the interface with the customer information of available transport choices and common payment platforms. “The next three relate to the transport system itself: coordination of the various transport services (will the bus timetable connect with the rail timetable?), management of the services in the form of pricing and finally the integration of the services delivered by all of the different providers.

“Will there, for example, be “one algorithm to rule them all?” Jackson asks. Even if the outcome is only half as good as some hope, this still suggests that this is a future worth working towards, says Jackson. His faith in the future of smart, sustainable transport is further strengthened by the success of experiments such as an agentbased simulation of current transport patterns in Lisbon that reviewed real trips on a detailed transport model. The three-mode configuration comprising the metro, shared taxis and taxibuses showed no congestion even at peak time – in fact, vehicles per kilometre was 37 percent lower than at present. Vehicle emissions were also significantly lower, some 34 percent lower than currently due to the reduced number of vehicles per kilometre, with even better figures predicted medium and long term thanks to faster fleet turnaround. The study also found that demand-responsive transport generates much more equitable levels of accessibility across the city. Retaining some private car trips reduces the overall transport system efficiency but facilitates public acceptance and transition into a system mostly based on shared rides.


Autonomous vehicles on plastic roads

INFRASTRUCTURE

Constructing a road from recycled plastic in a matter of days which lasts three times longer than conventional roading is closer than you think

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he PlasticRoad was conceived by Dutch company VolkerWessels' subsidiary, KWS, after a study of some of the road-related problems faced by urban areas. The study included an examination of societal problems such as plastic waste, extreme precipitation, consolidation of the subsoil, an increasing need for mobility and a crowded subsurface. There were also increasingly

stringent requirements for future roads. Clients were increasingly demanding more functionality from roads which raised the question of whether traditional asphalt is still the answer to requirements, says KWS. Roads should have an increasingly longer lifespan, shorter construction and maintenance time, be more sustainable, achieve ever-higher noise

reductions and also be financially competitive. These questions and conditions inspired the idea of the PlasticRoad. A road made from 100 percent recycled plastic waste from the ocean made complete sense. Some 54 percent of plastic worldwide is still incinerated or used in landfills and only 14 percent is recycled. It is estimated 8 billion kgs of it ends up in the

ocean every year. Road constructor KWS, plastic recycling expert Wavin and oil and plastics giant Total are today working together on the circular application development of plastic roads . This is in line with the Cradle to Cradle philosophy, not only the case for plastic waste, but also for the PlasticRoad elements themselves. These can be re-used and recycled.

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Is New Zealand ready for an autonomous vehicle future? New Zealand scores relatively highly on a major global index to measure autonomous vehicle readiness, a major new report finds

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he 2018 KPMG Autonomous Vehicles Readiness Index (AVRI) evaluates the preparedness of 20 countries globally for the introduction of self-driving vehicles, and highlights best practice to help countries accelerate AV adoption. The index evaluates each country according to four pillars that are integral to the adoption and integration of autonomous vehicles: • policy and legislation • technology and innovation • infrastructure • consumer acceptance. Overall, New Zealand ranked 9th out of 20 and second only to Singapore on policy and legislation, with high scores for AV regulation. New Zealand also ranked higher overall than Australia, which was 14th in the study despite trials planned or taking place in several cities including Sydney, Melbourne, Perth and Adelaide. However, the report adds that 8

Australia needs improvements to its roads and electric charging infrastructure to improve its AV readiness. KPMG notes that there are no specific legal requirements for cars to contain drivers in New Zealand and the government is generally supportive of the technology. New Zealand also has a strong reputation as a technology test-bed and consumers that are relatively accepting of new technologies. “New Zealand is affluent and large enough to support meaningful product trials, but small enough to prevent teething troubles damaging the reputation of a technology or company,” notes KPMG Director, Deal Advisory Jesse Phillips. “Microsoft, Facebook and drone delivery company Flirtey have used it as a development lab. “Christchurch has hosted the world’s first fully AV trial at an international airport.”

YEARBOOK 2018 INFRASTRUCTUREBUILD.COM

Low marks

However, New Zealand scores lower on technology and innovation, with no AV company headquarters, patents or investment found in the research. It also scores lower on infrastructure, ranking in the bottom five due to low levels of 4G coverage outside populated areas, few electric charging stations and middling ratings for road quality and road infrastructure. “Low-cost mobility provided by AVs will bring benefits in productivity, income and quality of life,” says KPMG Deal Advisory Director Istvan Csorogi. “But it will also bring major challenges, for example in ensuring that AVs are safe, and our roads and cities are built with AVs in mind.” “Infrastructure is a big issue in New Zealand – we need to invest in transport and mobile communications to address some of the issues facing our major centres such as congestion, and to sup-

port new technologies such as electric vehicles.” “Planning for an AV future is important, because it is not a question of if, but when AVs become ubiquitous. “Investment decisions made today can help or hinder our future adoption,” says Csorogi. “Partnerships between government and the private sector can speed technology development, and also help to meet public policy objectives. “It is important to engage all stakeholders – government, business and citizens – with AV planning, as it will impact many aspects of life in the future.”

Clear leader

However, New Zealand has a long way to go to match The Netherlands, which is the clear leader in AV readiness and could serve as a virtual roadmap for AV development and introduction. The Netherlands ranks within the top four of each of the four


second only to Singapore in terms of consumer acceptance, with three-quarters of the population living in areas that are testing AV technology. Consumer survey data finds the Dutch are less accepting of AV technology than other countries, a finding that is true of several of the best-developed countries and may reflect citizens’ satisfaction at the existing forms of transport.

The Netherlands received the maximum score for regulations and government investment in AV infrastructure; approving testing in 2015, taking the lead in establishing the Declaration of Amsterdam through which EU countries agreed to speed the development of self-driving vehicles and approving a bill to allow AV trials without a driver in February last year.

Swiss algorithm merges manuallydriven and automated vehicles Though it’s certain that self-driving vehicles are here to stay, the transition from a handful of autonomous and connected cars today to a true smart system by 2030 is less certain Researchers working on the European AutoNet2030 project believe it can be achieved by combining driving assistance technologies and inter-vehicle communications. They have recently shown that it is possible for vehicles with or without drivers to operate in high-speed, multi-lane traffic autonomously under real-life conditions. This is a key step in the ongoing shift towards autonomous driving. Researchers from Switzerland’s École Polytechnique Fédérale de Lausanne (EPFL) have developed an advanced algorithm for automated vehicles operating alongside manually-driven vehicles. Convoys are managed using control software based on EPFL’s algorithm Distributed Intelligent Systems and Algorithms Laboratory (DISAL). Thanks to a communication protocol based on Wi-Fi, vehicles can now share information among each other. This, combined with an array of driving-assistance devices – GPS, lasers, video cameras and other sensors – gives vehicles the ability to drive completely on their own. Though a widely-touted option is to have automated vehicles travel in convoys, the AutoNet2030 researchers propose a cooperative and distributed system. Out goes the leader, as each connected vehicle communicates directly with other vehicles in the immediate vicinity. They then adjust their speed and position independently of each other. Each vehicle also benefits from its neighbours’ eyes, effectively enjoying 360 degree perception. What’s more, there’s no upper limit to the size of the convoy in theory, since each member positions itself independently.

Countries most ready for autonomous vehicles

In mathematical terms, the algorithm uses information that it receives from the agents’ sensors to guide the convoy’s movements in real time. The convoy automatically and constantly reorganizes when, for example, another vehicle joins or leaves it, it changes lanes, or it adapts to target speeds. Finally, as part of the AutoNet2030 project, they managed to get to real vehicles on the road.

The Dutch government is investing EUR90 million (NZ$151.823 million) in adjusting more than 1,000 traffic lights across the country to communicate with vehicles and is backing a plan to establish automated trucks running from Rotterdam to other cities. The country also has by far the highest number of electric vehicles of the 20 countries in the index at present – 6.39% in 2016 and nearly double the number of second-placed Sweden – and has a high number of AV companies based in the country on a population-adjusted basis. Though scoring relatively poorly on AV-related patents and investments, there has been a recent uptick in public-private partnerships, which are further accelerating the development of automotive expertise and innovation capacity. The latter include the Automotive High Tech Campus in the Eindhoven area and the connected TU Eindhoven University, which has a specific smart mobility faculty. “The Dutch ecosystem for AVs is ready,” claims KPMG Digital Advisory Manager in the Netherlands Stijn de Groen. “The extensively-used Dutch roads are very well developed and maintained and other indicators like telecoms infrastructure are also very strong. “In addition, the Dutch government Ministry of Infrastructure has opened the public roads to large-scale tests with self-driving passenger cars and lorries.”

According to the AVRI, the 10 countries most prepared for the future of autonomous transportation of those researched are: 1. Netherlands 2. Singapore 3. United States 4. Sweden 5. United Kingdom 6. Germany 7. Canada 8. United Arab Emirates 9. New Zealand 10. South Korea Read the full report here.

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pillars and number one on infrastructure, most likely due to its heavily-used, well-maintained road network and high-quality wireless network. It also has by far the highest density of electrical charging points, with 26,789 publicly available points in 2016 – more than Japan has for a road network more than eight times its length. The Netherlands also comes


SAFETY NEWS

Sponsored Article

The National Safety Show 'Best trade show in Australasia' returns July 2018 Hot off the heels of winning Best Trade Show in Australasia*, organisers of The National Safety Show, New Zealand’s largest trade event for the health and safety industry, are excited about its return to Auckland in 2018

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n early July, The National Safety Show returns to the ASB Showgrounds with a wide range of National and International exhibiting suppliers already confirmed and ready to showcase their latest technology, innovative products and service solutions. “Workplace safety is constantly on the minds of all good businesses these days,” says Tony Waite, Events Director of The National Safety Show, “and all are looking for ways to protect their workers, their reputation, and their business. “No other event can deliver such a range of new products, technology, and innovative solutions all under one roof,” says Waite. Following it’s highly successful and award- winning 2017 event The National Safety Show will 10

YEARBOOK 2018 SAFETYNEWS.CO.NZ

once again be co-located with the 30 year strong buildnz | designex, New Zealand’s largest build, design and construction industry trade show. The natural alignment of the two shows will be even more relevant in 2018 as buildnz | designex is themed around ‘Delivering KiwiBuild’ - the Labour Government’s plan to build 100,000 high quality and affordable new homes. Phil Twyford, recently appointed Minister for Housing and Urban Development and Transport, and Jenny Salesa, Minister for Building and Construction, will both front buildnz | designex 2018 - outlining the KiwiBuild plan. They will sit with a panel of industry leaders to collaborate and work through the challenges of

meeting the Government’s target to deliver 100,000 homes. A major part of that work will be ensuring that the hundreds of businesses that will be involved in KiwiBuild provide a safe and

healthy work environment for their workers and to ensure they are compliant across all health and safety (H&S) policies and procedures. The prior show’s attendance


drew more than 5,000 audited trade attendees and early registration numbers are already showing growth potential. Industry professionals from around the nation are expected to visit across each day of The National Safety Show, to attend a busy schedule of safety seminars, as well as discover the latest and greatest safety solutions available. Just some of what’s on offer includes: • an extensive educational Seminar Programme addressing the most pressing issues the industry is facing today. These free seminars and workshop series will cover topics such as: • Health and Safety at your Workplace presented by Site Safe • The Importance of Drug and Alcohol Testing in the Workplace presented by Advance Diagnostics • Both Safety ’n Action and Red Cross are confirmed to be running Interactive Workshops on how to better prepare you and your team for workplace health and safety An exclusive visitor and exhibitor offer will be available with St John as they will be running significantly discounted NZQA Accredited First Aid Courses on site. Visitors can pre -book to attend at www.safetyshow.co.nz and with two courses on offer these workshops are essential for any sized business. Limited spaces

are available so contact Sandi Mulder sandi@xpo.co.nz now to book. In addition to a busy seminar series there are a number of new and returning features including the H&S Advisory Lounge. Hosted by all the key industry associations including Worksafe, Sitesafe, New Zealand Institute of Safety Management, ACC, Health and Safety Association NZ and EMA, the advisory lounge is set in a relaxed environment where visitors can access education, support, personal and confidential FREE advice from each of the relevant associations. There’s no other event in 2018 that will host all of New Zealand’s leading H&S Associations under the same roof and at the same time. This is your one chance to have any of your H&S questions answered privately and confidentially. An expanded Health Hub returns creating an interactive and hands on experience for business owners and managers to experience first-hand the benefits of having a healthy workforce and how the supporting of their staffs physical and mental wellbeing leads to increased productivity and a stronger business focus. The Health Hub will also provide Occupational Therapists and Ergonomic Specialists to help with queries you might have relating to staff members health and well-being. The newly introduced Innova-

ployees physically, mentally and economically safe. If you want to be in front of thousands of professionals with safety problems needing solutions, then you need to be at The National Safety Show. With a comprehensive programme of free to attend professional development seminars, special features, networking opportunities, show-only specials, and the opportunity to win a huge array of prizes - this is the one event the industry won’t want to miss. If you’re interested in promoting your products and services to a qualified and targeted industry audience, now would be the time to come on board! No other industry event has the scale or ability to reach over 5000 qualified industry professionals that are estimated to visit the National Safety Show 2018. *buildnz |designex and the National Safety Show 2017 are winners of Best Trade Show in Australasia at the Exhibitions & Events Association of Australasia – Awards for Excellence.

The National Safety Show is to be held at the ASB Showgrounds in Auckland from July 4-5, 2018. For more information contact Exhibition Manager Sandi Mulder on 027 46 555 67 or sandi@xpo.co.nz Visitors can register to attend for free at www.safetyshow.co.nz

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tion Quarter is a dedicated area of the show with both new and returning exhibitors showcasing a myriad of amazing technology that is revolutionising the industry. “The National Safety Show is targeted to deliver a high quality audience – people who know that their business is dependent on the best safety products and technology available and have come with the specific goal of finding new suppliers and keeping up to date with the industry,” Waite says. “With over 79% of visitors stating they hold direct authority or influence buying decisions and nearly 72% seeing something at the exhibition they were likely to purchase, suppliers can rest assured that The National Safety Show will deliver a positive ROI. “This is a trade-only event and is a must-attend on the calendar of everyone serious about their business. “It’s also the only place in New Zealand where those in the industry can see the very latest technology and developments over just a few days. There’s a strong social and fun element too, where visitors and exhibitors make excellent industry contacts and network with their peers at the on-site cafés. Suppliers from all over the country and the world have already committed time and expert people to ensure that those working in safety in New Zealand have access to the tools, equipment, and services that will keep New Zealand’s industries and its em-


SAFETY NEWS

Reflections on the first year in the job Last year – 2017 – was a huge year for WorkSafe and for me personally in my first year as chief executive, Nicole Rosie reveals

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his job is an opportunity to make a difference, leading an organisation that is working to get New Zealanders home healthy and safe at the end of each working day. This passion for making a difference to health and safety is shared by the people who work for WorkSafe across the country. WorkSafe has continued to concentrate its effects on the four sectors where we can make the biggest difference to their unacceptably high fatality and serious injury rates – agriculture, construction, forestry and manufacturing.

Risk management

During the course of the past year or so, we have started talking more about risk management. This is fundamental to improving health and safe outcomes and necessary, as the Health and Safety at Work Act 2015 (HSWA)

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requires business to ensure health and safety of workers and others exposed to work activity risks. We have realised that the traditional approach to health and safety – the focus on training, operational procedures and PPE – do not work because they largely rely on people not making mistakes as they go about their work. To be effective, we need to be looking at higher-end controls such as elimination, substitution and engineering to manage risks. While all risks need to be managed, we encourage businesses to pay particular attention to the critical ones; the things that could result in death, a life shortening illness or severe permanent disability. Focussing only on the causes of high-frequency and low consequence incidents will not prevent the less frequent but more severe

harm from occurring. In fact, only about 15 – 25% of critical risks share underlying causes with typical lost time injury events. Broadly speaking, critical risks are: • Acute (e.g. tree felling, forklifts, quad bikes, tractors, falls) • Work-related health (e.g. asbestos, silica, dust, chemical exposures) • Catastrophic (e.g. explosions, fires, chemical interactions, ammonia) Critical risk isn’t actually defined in our legislation; however, it is a pragmatic and effective approach for businesses to check all risks are identified and sufficient effort and focus goes on the more serious risks. Risks identified as critical require a more emphasis to implement elimination, substitution or engineering controls. Late last year, we were able

to announce that the government’s interim target of reducing work-related fatalities and serious injuries by 10% was met at the end of 2016. The focus is now on ensuring we can achieve the overall 25% reduction by 2020. Momentum continues to build to a point where I believe we are now on the cusp of seeing the benefit on the factory/farm/ office or shop floor of significant culture change in how businesses approach health and safety. There are a couple of key interconnected pillars to this culture change.

Leadership

As the regulator, WorkSafe’s role is to lead, influence and leverage the health and safety system to improve workplace health and safety outcomes. What we have been seeing recently is that more business leaders are stepping forward because they can see the most effective way to bring about positive change in health and safety is to lead on it in their respective industries. Industry groups such as the Business Leaders’ Health and Safety Forum has continued to have an increasing influential presence in the business community. In fact, the forum has just signed up more than 30 core government


Critical Risks Acute examples are tree felling, forklifting, quad bikes, tractors, falls Work-related health examples are asbestos, silica, dust, chemical exposures

agencies to join its membership. This cross-fertilisation of public and private leadership in health and safety adds real clout to bring about change. The Forestry Industry Safety Council also continues to work at improving forestry safety outcomes and the Agricultural Leaders Health and Safety Action Group, established at the end of 2016, is also making inroads in rural industries when its sector leaders realised they could achieve more results by working together. And in construction, sector leaders are now also working towards setting up a group unified by a common desire to bring about real change in health and safety on building sites.

WorkSafe is closely involved with these all these organisations – as well as industry bodies and unions - further strengthening ties between industry and the regulator. What we are all doing is integrating health and safety into the normal way of doing things whether it be legislation, regulations, business models or charters. In other words, there is recognition that we are all on the same team in terms of wanting health and safety to improve.

Engaging and communicating

HSWA puts the expectation on businesses to engage meaningfully with their staff on health and

safety matters and to ensure their staff feel able to speak up about concerns they may have. Businesses and leaders who genuinely engage with their staff in health and safety decision-making will tell you that both business and health and safety performance improve. It makes sense that the two would be intrinsically linked. As an example, we’ve heard from several industry membership organisations, that businesses which have embraced this inclusiveness have found productivity has increased. Again, it makes sense that workers have invaluable knowledge at ground level which can make a big difference to profit margins in business tap into that resource. An additional benefit is that a worker who feels they have made a positive contribution go home happy, healthy and safe.

health strategy. Following on from work to raise awareness of health risks of working with dust, we are working to launch a suite of guidance on noise-induced hearing loss prevention. We have several other health risk initiatives in the pipeline. We’ve also ensured that work-related health issues form part of business risk management. In 2018, we are continuing to focus on our priority sectors, leadership and engagement, and work-related health to ensure we have a sustained improvement in health and safety that builds on the positive momentum that we have been seeing. It’s worth noting that indicative performance for 2017 suggests that is flattening. This is the start of the journey, not the end.

Healthy work

As we know, as both health and safety practitioners and news consumers, it’s the deaths and serious injuries at work often attract media and public interest. That’s understandable given the ripple effects these tragedies have on our communities and business. The “health” in health and safety has a much broader effect on our workforce. A typical worker is 15 times more likely to die from work-related ill-health than a work-related safety incident. As many as 30,000 cases of serious ill health each year and an estimated 600-900 people die each year from work-related ill health. These are sobering statistics that I think about often. Over the past year, we have continued to work on work-related health initiatives in our 10-year

Click here Nicole Rosie talks to The Canterbury Rebuild Safety Charter after 6 months in the job Nicole Rosie is Chief Executive of WorkSafe New Zealand, the primary workplace health and safety regulator with over 550 staff based across New Zealand SAFETYNEWS.CO.NZ YEARBOOK 2018

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SAFETY NEWS

Catastrophic examples are explosions, fires, chemical interactions, ammonia


Commitment to better safety Enforceable undertakings are a serious weapon in WorkSafe’s arsenal as the regulator seeks to improve the country’s alarming work safety record

SAFETY NEWS

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erious health and safety breaches resulted in WorkSafe initiating 417 investigations in the 12 months ending 30 June 2017 All were launched with the possibility of being accepted under the umbrella of an enforceable undertaking -- an agreement between WorkSafe and employers which stemmed from the Health and Safety at Work Act (HSWA) 2015. An enforceable undertaking is a legally binding agreement between WorkSafe and the duty holder. Its purpose is to focus on how employers can fix an alleged breach and/or prevent a re-occurrence and it can be a welcome alternative to prosecution. WorkSafe decides whether to accept requests for an undertaking after considering issues such as the seriousness of the risk and the harm caused. However, employers should be sure they can comply before reaching an agreement. Its findings are legally binding, and breaches can bring fines of up to $50,000 for an individual or $250,000 for a company. Other factors include reparation payments for any injuries, with WorkSafe aiming to balance the fairness to all parties, and for costs. The undertaking will also require improvements in conditions and/or practices to a level above the minimal level. Agreeing to an undertaking does not constitute an admission of guilt by employers but all undertakings accepted must be published on the internet -- together with reasons for acceptance. WorkSafe’s ethos is summed up in its 2016-17 annual report: “Being credible, fair and propor-

tionate are fundamental principles that inform our enforcement approach. “We take an open and transparent approach to how we use our enforcement tools, so duty holders clearly understand what is required of them.”

Diverse decisions

The diversity of cases accepted is reflected by the following examples contained in the report. In November 2017 WorkSafe accepted an undertaking from Directionz Limited, a company that installs and maintains road signs. This followed a May 2016 incident with an angle grinder in which an employee lost an eye. The worker was cutting bolts off a post on a bridge using a portable grinder when the blade disintegrated. Fragments hit the worker’s face and penetrated the safety glass. The left eye had to be removed. WorkSafe Manager Technical Programmes and Support, Simon Humphries, said the decision to accept this enforceable undertaking offered benefits beyond compliance, which would be valuable for the workplace, the industry and the community. He added: “The incident has prompted major reform and rectifications in the standard operating procedures and safety protocols of Directionz. “The enforceable undertaking will see a more vigilant approach to monitoring changing work conditions – from methodology, the type of equipment used, and the personal protection equipment used by workers.”

Directionz Limited committed to initiatives amounting to at least $229,674 including the following: • providing financial reparation to the victim • deploying a more highly qualified Health, Safety, Quality and Environment Co-Ordinator to oversee improvements in health and safety systems • providing Incident Cause Analysis Method training for regional managers • having all staff complete and pass the CONSTRUCTSAFE programme and SiteSafe passport

faced costs of at least $85,000. WorkSafe's report said the school would make compensation payments to the boys, while St Kentigern’s board of trustees formally apologised ‘for the harm caused to all the families involved’. The deputy chairman said: “Saint Kentigern accepts that it should have done more to acknowledge the seriousness of what happened immediately after the accident. “The injuries were not minor. The injuries were significant and life -threatening. “Restorative justice sessions would be held involving the school, the boys and their families.” An enforceable undertaking is clearly an effective – if often expensive – alternative to prosecution in many cases. Many of the incidents investigated proved too serious for an enforceable undertaking, however, and led to 73 prosecutions – with 88% of the 66 completed being successful. The regulator is clearly making inroads into New Zealand’s work safety toll, which costs the country an estimated $3.5 billion a year in the social and economic costs of deaths, injuries and ill health arising from work. However, the real toll is paid by the families, friends and co-workers of those who are killed, seriously injured or experience work-related ill-health. WorkSafe's goal is to transform New Zealand’s workplace health and safety performance by meeting the government’s target to reduce workplace fatalities and serious injuries by 25% by 2020.

“The enforceable undertaking will see a more vigilant approach to monitoring changing work conditions” • making a donation to the Blind Foundation. Another case involved Zespri, which voluntarily paid $250,000 – including $25,000 to the victim’s family and the bulk going towards safety measures – after a fatal quad-bike accident at Tauranga in 2016. Zespri also pledged to fund measures to improve safety and establish a tertiary scholarship for accredited health and safety studies.

Barbarous blade

A leading educational institution was also subject to an enforceable undertaking after two students at Auckland’s exclusive Saint Kentigern College were injured during a simulated throat-cutting scene in a production of Sweeney Todd when their necks were sliced with a prop razor blade. Agreeing to the undertaking meant that Saint Kentigern College avoided prosecution but still

Saint Kentigern College, Zespri and Directonz accepted an enforceable undertaking, which is a legally binding agreement between WorkSafe and the duty holder

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When the Health and Safety at Work Act 2015 (HSWA) came into force in April 2016, there was much discussion about the new enforcement measures introduced to ensure duty holders complied with their obligations, Graeme Tanner and Joseph Williams note

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he HSWA signalled a clear legislative intent to ensure duty holders under the HSWA were held accountable where acts or omissions in a workplace caused, or created an undue risk of, harm. Among other enforcement measures available, the HSWA significantly increased the maximum fines for breaches of health obligations over those previously available under the Health and Safety in Employment Act 1992 (HSEA). Enforceable undertakings were also introduced to provide an alternative to prosecution in appropriate cases. The various enforcement measures pursued by WorkSafe New Zealand (WorkSafe) over the past 12 months and sentencing trends that have emerged through the District Court in relation to health and safety prosecutions offer an indication of the likely trajectory of health and safety prosecutions going forward.

Fines

Over the last 12 months, as health and safety prosecutions

under the HSWA have started to make their way through the system, the District Court has had occasion to consider the maximum fines now provided for breach of duty under the act. In doing so the District Court has had to consider how the legislative intent of the HSWA should be reflected in sentencing determinations. Under the HSEA, the preferred approach by the courts in addressing the quantum of fines for breach of duty was to address the culpability of the duty holder for the breach of duty by applying three bands as adopted in the High Court decision of Department of Labour v Hanham & Philp Contractors Limited: Culpability Band

Fine

Low Culpability

Up to $50,000

Medium Culpability

$50,000 to $100,000

High Culpability

$100,000 to $175,000

The Court also noted that fines up to the previous statutory maximum of $250,000 could be imposed in cases of extremely high culpability, effectively creating a fourth band for appropriate cases. Once culpability was assessed, the courts would then adjust any fine imposed with reference to aggravating or mitigating factors. This approach allowed for a level of consistency and uniformity in how fines were assessed by the District Court under the HSEA. The HSWA instituted far more punitive fines than those provided under the HSEA. For example, under section 47 of the HSWA, which deals with reckless conduct in respect of duty, an individual who is not a person conducting a business or undertaking (PCBU) can now face a fine of up to $300,000 or 5 years imprisonment, or both. A PCBU or one of its officers could face a fine up to $600,000 or 5 years imprisonment, or both. Any other person (i.e. a company) could face the maximum penalty of $3 million; a sum six times higher than the maximum fines

available for equivalent offences under the HSEA.

Emerging trends and inconsistencies

Unsurprisingly, the introduction of significantly higher maximum fines under the HSWA caught everyone’s attention at the time that the act was introduced, particularly given the potential of these higher fines to cripple a company’s operation. However, while that potential remains intact, the District Court has not yet adopted a consistent and uniform approach to assessing culpability bands since the introduction of the HSWA. In WorkSafe New Zealand v Budget Plastics (New Zealand) Limited an employee’s hand was partially amputated when caught in the auger of a plastic extrusion machine. WorkSafe submitted the bands from Hanham should be transposed across the full spectrum of available fines under the new regime. The Court responded with concerns that such broad bands would make it difficult to achieve SAFETYNEWS.CO.NZ YEARBOOK 2018

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SAFETY NEWS

Enforcement measures a live wire


SAFETY NEWS

consistency and result in a starting point that is “too high”. Judge Large commented that “it was not for the District Court to make sentencing guidelines”, before finding that culpability was moderate due to a variety of factors including the risk of injury, the injury itself and the foreseeability of harm. He adopted a starting point of between $400,000 and $600,000. After adjustments, including an assessment of the company’s financial capacity, a fine of $100,000 was handed down. In the more recent case of WorkSafe New Zealand v Rangiora Carpets Limited an employee slipped off the side of a mezzanine floor through a false ceiling and suffered a number of broken bones and a laceration to her head. Judge Gilbert’s approach was to assess the amount of reparation, fix the amount of the fine, consider an ancillary order and then make an overall assessment as to the proportionality of the total imposition and reparation of the fine. In this case Judge Gilbert expressed further concern that the three and four band approaches to assessing culpability advanced by WorkSafe would compromise consistency by allowing significant movement within each band. He therefore proposed a six-

band approach with smaller incremental bands ranging from low ($0 to $150,000) to extremely high ($1,100,000+). In adopting this approach, Judge Gilbert imposed a starting point for a fine of $300,000 which was ultimately reduced to $157,500 following consideration of mitigating factors. However, in a further sentencing in October 2017, Worksafe New Zealand v the Tasman Tanning Company Ltd, the District Court departed from the six-band approach above, instead preferring four-bands, consistent with that adopted in Hanham under the earlier HSEA, with necessary adjustments to take into account the maximum fines imposable under the HSWA. Culpability Band Fine Low

$0 to $400,000

Medium

$400,000 to $800,000

High

$800,000 to $1,200,000

Extremely High

$1,200,000 to $1,500,000

In Tasman Training Company, the starting point for the fine was

set at $700,000 with the final amount set at $385,875 once aggravating and mitigating factors were taken into account, including prior health and safety record, an early guilty plea, co-operation with WorkSafe and remorse. However, the Court’s approach differed again in WorkSafe New Zealand v Dimac Contractors Limited from November 2017, where the Court adopted the six-band approach to culpability provided in Rangiora, rather than the four-band approach in Tasman Training Company. Overall, while this first wave of prosecutions under the HSWA show a general shift towards higher fines, and a willingness by the District Court to adopt culpability bands consistent with the approach endorsed by the High Court under the previous health and safety legislation, we have yet to see a uniform approach to culpability bands emerge. Instead, the District Court has repeatedly noted its preference for guidance from the appellate courts in relation to sentencing under the new regime, making this an area to watch with continued interest in the year to come.

Financial capacity

While there remains uncertainty regarding the application of culpability bands in respect

of sentencing decisions, the HSWA is clear on the role that the Sentencing Act 2002 plays in the process of calculating a final figure for a fine, from the initial starting point. In this regard, the courts are obliged to take into account a number of other factors, including the extent of the harm (or risk of harm), the safety record of the duty holder, and the financial capacity of the duty holder to pay a fine. A clear theme that has emerged from the early prosecutions under the HSWA is the particular relevance that the District Court is attaching to a duty holder’s ability to pay any fine imposed. Financial capacity of the relevant duty holder was a key factor in assessing the fine in Budget Plastic, Rangiora Carpets and Dimac Contractors, with the Court in each case either reducing the final fine or allowing for payment plans to meet the fines ultimately imposed by the Court. In considering the issue of financial capacity, the Court noted in Rangiora Carpets that, except in the most serious cases, involving egregious and/or repeat offending, the Court is unlikely to impose a fine large enough to force a business to close its doors. The Court also noted that where the defendant’s financial ability means that it is unable to meet both the cost of a fine and reparation, reparation is to be given primacy. While this approach is consistent with the principles of the Sentencing Act, it will be interesting to see whether the appellate courts place the same weight on financial capacity, or whether higher fines are adopted in the knowledge that they may put small or medium businesses out of business.

Enforceable undertakings

Duty holders under the HSWA held accountable where acts or omissions in a workplace caused, or created an undue risk of, harm

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Enforceable undertakings are the other significant (though less publicised) change brought under the HSWA. These are legally binding agreements between a duty holder and WorkSafe to ensure that the duty holder undertakes to fix health and safety breaches and/or prevent like breaches from occurring in the future. They act as an alternative to prosecution that the duty holder can propose to WorkSafe, who can then accept or deny the proposal. In reaching an agreement on an


Increased fines and enforcement measures have almost certainly resulted in increased industry awareness

enforceable undertaking, WorkSafe will take various factors into account such as the seriousness of potential harm, the views of any victims or workers associated with the breaches and conduct of the duty holder as well as their history of health and safety compliance. It is important to note that proposals to enter into enforceable undertakings will not be taken lightly and should not be viewed as an ‘easy way out’ for non-compliant duty holders. Any proposed measures will ensure that the duty holder does not merely comply with minimum standards but significantly improves their systems and processes. In addition to non-financial measures, such undertakings ordinarily involve significant financial outlay, with the costs associated with enforceable undertakings so far ranging from $70,800.63 to $249,500 (not taking into account legal expenses). To date, WorkSafe has accepted eight enforceable undertakings

and it is likely that this number will continue to grow in the next 12 months in relation to cases where offending is deemed “serious but isolated”. That said, it appears unlikely WorkSafe will afford repeat offenders with questionable health and safety records the opportunity to adopt enforceable undertakings.

Looking Ahead

As we continue to progress under the new health and safety regime we are likely to gain a lot more clarity from the courts and WorkSafe regarding their assess-

sociated with such undertakings to date, we expect that they will remain an attractive alternative for duty holders going forward. While it is somewhat difficult to forecast the type of situations that will lend themselves to this measure, the current climate indicates that we are likely to see more enforceable undertakings entered into in cases of isolated breaches of duty by duty holders, where the duty holder can reasonably be expected to abide by the agreed undertaking(s) and has a good health and safety record. With regard to fines, as seen through the early health and safety prosecutions under the HSWA, while the District Court has recognised the statutory intent of the act and been willing to impose higher fines in appropriate cases, it has yet to adopt a consistent approach to culpability bands as was seen under the previous regime. At some point in the near future we expect that the appellate courts will be called on to consid-

“the District Court has not yet adopted a consistent and uniform approach to assessing culpability bands since the introduction of the HSWA” ment of appropriate enforcement measures. When looking to enforceable undertakings, these can be expected to continue to serve as an effective alternative to prosecution in appropriate cases and, despite the financial outlay as-

Graeme Tanner is an associate and Joseph Williams a solicitor at Duncan Cotterill, a full service law firm with locations in Auckland, Wellington, Nelson and Christchurch

SAFETYNEWS.CO.NZ YEARBOOK 2018

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SAFETY NEWS

er sentencing for offences under the HSWA which will likely result in some much-needed guidelines in this area. This may well include an assessment of both appropriate culpability bands in respect of the increased fines under the HSWA as well as a consideration of the impact that the financial capacity of a duty holder ought to have on any fine imposed by the courts. Ultimately, while the new enforcement measures appear to be trending towards fulfilling the underlying purpose of the HSWA, there remains a level of uncertainty that hangs over health and safety prosecutions. With that said, increased fines and enforcement measures have almost certainly resulted in increased industry awareness of the importance of health and safety, and as more clarity is established at law, duty holders are likely to gain greater clarity on how to fulfil their obligations, and the consequences if they fail to do so.


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SAFETY NEWS

The past three years have seen a massive shakeup in health and safety with changes to the regulations, attitudes and protocols needed to handle workplace incidents


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Opportunity to improve workplace chemical safety

Lessons to be learned Another year and another opportunity to apply our experience and new-found wisdom to both ongoing and emerging challenges

SAFETY NEWS

Globally, 2017 is memorable for a number of things we might rather forget. Ongoing armed conflict, spreading famine, the out of control refugee problem, an optimistic world business environment, a new nuclear threat, ‘Brexit’, daily evidence of extraordinary, increasingly severe weather events attributed to global warming. Add to that China’s growing geopolitical and economic influence, perhaps best demonstrated by the’ One Belt, One Road’ project linking Asia to Europe , the plastic waste fouling our oceans, ‘Trumpmania’, ‘Jacindamania’ and the born-again Comprehensive and Progressive Agreement for Trans-Pacific Partnership , formerly the TPP. The chemical industry continues to consolidate production in fewer mega multi-nationals, jostling to dominate product sectors. Collaboration with UN Environment is focusing on emerging economies to improve sustainability by enhancing chemical safety and addressing plastic pollution, particularly throughout Africa. Our unique Responsible Care safety, health and environmental protection initiative, delivered through 63 national associations, continues to improve management of the chemicals which ensure our quality of life. Locally, our new Labour-led coalition government which inherited a comparatively healthy economy featuring historically low unemployment, inflation and interest rates, now grapples with campaign promises to resolve social inequities, child poverty, inadequacies in healthcare, immigration, delivering free tertiary education, the housing shortage and world peace, all while addressing concerns about balanced and union-friendly employment

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YEARBOOK 2018 SAFETYNEWS.CO.NZ

Responsible Care Chief Executive Barry Dyer legislation. What can we look forward to in our own increasingly riskaverse and regulated society? Business confidence plummeted, apprehensive about the implications of implementing employment law promises. MBIE warns the reforms could reduce productivity and job opportunities by imposing higher costs on businesses. Reality is reflected in a plethora of Royal Commissions, inquiries, committees, consultations and studies, postponing any action well into the future. Employment priorities include raising the minimum wage, extending parental leave, pay equity legislation (due midyear) and restoring the right of union representatives to enter workplaces to promote membership. Following fierce lobbying, removing the 90-day trial period for new employees has been dropped for SMEs - businesses with fewer than 20 employees (97% of all businesses). The decision not to prosecute anyone following the collapse of the flawed Christchurch CTV building underscored accusations about not holding individuals accountable for fatalities at Cave Creek, Erebus, Pike River, the Icepak Coolstore fire, contamination of the Hastings water supply and the Marsden Point pipeline failure. Corporate manslaughter legislation, deemed a failure in the UK but apparently “reasonably workable” in Canada, is reportedly on Justice Minister Andrew Little’s ‘to do list’. Meanwhile, we still have chemical safety to deal with.

The advent of revised Hazardous Substances regulations in December passed largely unnoticed. Despite constant reference to “new regulations” compliance obligations continue largely unchanged

H

undreds of business operators turned out for a free Responsible Care NZ workshop, eager for accurate and practical advice, indicating an unsatisfied demand for assistance and education. Attendance highlighted the need to provide particularly harassed, time-poor SMEs unable to access, correctly interpret and successfully implement complex regulations, with clear and concise compliance advice. In response to pleas of “just tell me what I have to do and how to do it”, inviting enquirers to “read the regulations” is falling well short of the industry educational expectations arising from WorkSafe NZ’s Statement of Intent 2016-2020. While 130,000 businesses are reportedly captured by the Hazardous Substances and Major Hazard Facilities regulations, the official mantra of “600-900 persons seriously harmed each year by unwanted exposure to chemicals in their workplace” presumably applies to all 530,000 workplaces? If so, how is this major danger to be comprehensively addressed? Regrettably, some ‘improvements’ in the HSWA Hazardous

Substances regulations intended to “simplify compliance” will have a detrimental effect on workplace chemical safety. More workplace inspectors are promised but enabling employers and particularly SME operators to successfully progress beyond basic compliance to site-specific chemical safety issues remains the challenge. Downgrading the flawed but effective HSNO Certified Handler requirement undermines an invaluable capability, thus depriving businesses, particularly SMEs, of an immediate source of workplace chemical safety and compliance advice, a safe chemical handling capability and emergency response knowledge – critical when a chemical incident occurs. Instead, PCBUs and struggling SMEs must now devise their own solutions to ensure employees are competent to safely handle the chemicals they work with – a major problem for under-resourced SMEs. Importantly, a workplace inspector and compliance certifier will find verifying an employee’s chemical handling expertise more difficult and time consuming than simply inspecting a current Certified Handler certificate.


The controversial Major Hazard Facilities regulations at last require chemical plants to determine if local Fire and Emergency NZ (FENZ) detachments have the required capability to deal effectively with a major site or transport chemical incident. So where to from here? To help solve the in-house chemical compliance dilemma, Responsible Care NZ delivers cost-effective, specialist, Certified Handler standard training, complete with a certificate. Internationally, chemical industry leaders are moving away from relying on lagging indicators of safety performance in favour of identifying safer work practices and workplaces, by responding to workers’ suggestions about improvements. WorkSafe NZ warns against business operators falling victim to uninformed and always expensive ‘consultants’. Chemical suppliers continue to help customers achieve workplace chemical safety aspirations through product stewardship initiatives Sought after Responsible Care NZ site compliance assessments are non-threatening, effectively capturing chemical safety perfor-

mance in a variety of workplaces. A proven strategy is government agencies collaborating with proactive industry associations to best achieve workplace safety aspirations. SMEs rarely join associations, however they all obtain their chemical requirements from suppliers, benefiting from product stewardship advice and cost-effective industry compliance initiatives. Responsible Care NZ extols less regulation in favour of enabling business operators to be increasingly self-sufficient, using cost-effective products and services such as site compliance assessments and specialist training. Our focus is keeping people safe around the chemicals we encounter every day, by once again adding value to businesses. Proven, collaborative and cost-effective initiatives to raise awareness and improve workplace chemical safety performance include: • Joint agency and industry-focused local compliance workshops at times convenient to SME operators. • WorkSafe NZ inspectors distributing free copies of us-

er-friendly ‘compliance tools’ such as the Storage of Hazardous Substances HSNO Approved Code of Practice and posters explaining GHS pictogrammes. • Supporting industry initiatives such as product stewardship. • Referencing industry ‘compliance tools’. • Upskilling workplace inspectors in chemical safety. • Encouraging ‘no blame’ reporting of incidents. • Acknowledging successful, proactive industry compliance initiatives. • Restoring the status of Approved Industry Codes of Practice. A refreshed and energised government strategy for improving workplace chemical safety is both welcome and essential if we are to improve sub-standard performance and learn from our successes and shortfalls. Perhaps replacing the export of our plastic waste by revisiting a state-of-the-art high temperature incinerator to also bolster our energy generation? Significant financial rewards for innovative reduction of waste? The chemical industry continues to lead by example, helping to

ensure essential chemicals encountered at work and at home are safely managed, thereby safeguarding employees, communities and our beleaguered environment. Expanding beneficial government- industry partnerships helping business operators ‘do the right thing’ with minimal fuss and expense should be ‘a no brainer’. Conscientious business operators can add value by sourcing accurate, cost-effective workplace chemical safety advice and compliance tools from their suppliers, industry partners and Responsible Care NZ. Chemical suppliers are ‘Impatient optimists’. We know we can all collectively do better through continuous improvement and we are committed to helping you become an exemplar for workplace chemical safety, this year and every year.

Responsible Care is a global, voluntary chemical industry initiative developed autonomously by the chemical industry for the chemical industry. www.responsiblecarenz.com (see also Inside Front Cover) 04 499 4311

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To help you safely manage your workplace chemicals, RCNZ delivers cost-effective and specialist Certified Handler training


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Komatsu Surveyors

Drones are lifesavers in disaster zones Pioneering research from the University of South Australia has shown for the first time that drones can be used to detect human vital signs in war zones and natural disasters

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niversity of South Australia researchers have successfully trialled unmanned aerial vehicles to measure heart and respiratory rates using remote-sensing imaging systems, while hovering three metres from humans. The research was carried out under a collaborative agreement with the Defence Science and Technology (DST) Group and published in Biomedical Engineering Online. Video footage from the drones can detect changes in human skin tone and minute head movements to read vital signs, providing a low cost, accurate and convenient way to monitor heart rates without physical restrictions, researchers say. The breakthrough could have many applications, including triaging disaster victims in earthquakes, detecting security and terrorism threats at airports, and remotely monitoring heart rates of premature babies in incubators. Under the supervision of Professor Javaan Chahl, UniSA PhD students Ali Al-Naji and Asanka Perera carried out a number of experiments with 15 healthy individuals, ranging in age from 2-40 years, in both indoor and outdoor settings, and within close range of the drones. The results were as accurate as traditional contact methods – ECGs, pulse oximeters and respiratory belts – that are currently used to monitor vital signs. “This is the first time that video from a hovering UAV has been used to measure cardiorespiratory signals,” Chahl says. The experiments were performed within three metres of humans but researchers expect the drones to capture information at much greater distances once the technology is further developed.

Heart monitors

The drones could help detect potential terrorists in public spaces, merely by measuring anomalies in their heart rates, according to Chahl, a Professor of Sensor Systems in UniSA’s School of Engineering. “A person who is about to engage in violence will probably have anomalous behaviour and physiological signs. “They might be highly agitated or unnaturally calm and in many cases they might be under the influence of drugs. “There is a good chance that our system can detect these anomalies.” In the developing world, expensive disposable electrodes could also be replaced with this technology to monitor vital signs remotely and eliminate the temptation to reuse the electrodes which can spread horrific skin infections between neonatal infants. Aged care facilities may also benefit from the imaging systems which could be placed in strategic locations to monitor older people’s heart and breathing rates, Chahl adds. “Obviously there are privacy and ethical issues around this technology that need to be resolved before it becomes common practice, but there is enormous potential to use machine vision systems to benefit society, particularly in the biomedical sphere. “I expect we will be using this software in everyday life in the next decade.”

To see footage of the drone experiments, click here


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researchers have successfully Share ideas, network, and learn fromtrialled industry leaders. unmanned aerial vehicles to measure heart and respiratory rates using To better understand regulatory change within the industry. 28 remote-sensing imaging systems, while hovering three metres from humans. The research was carried out under a collaborative agreement with the Defence Science and Technology (DST) Group and Drone published in Biomedical Engineering Security Online. Video footage from the drones can detect changes in human skin tone and minute Contact us today and ask us abouthead ourmovements promotion to read vital signs, providing a low cost, accurate and convenient Simply quote ISN when enquiring 29 way to monitor heart rates without physical restrictions, researchers say. The breakthrough could have many applications, including triaging disaster Sandi Mulder, Exhibition Manager victims in earthquakes, detecting security Life Saving and terrorism threats at airports, and resandi@xpo.co.nz Drones motely monitoring heart rates of premature 09 976 8355 / 027 465 5567 babies in incubators. Under the supervision of Professor Javaan Chahl, UniSA PhD students Ali Al-Naji and Asanka Perera carried out a number 30 of experiments with 15 healthy individuals, ranging in age from 2-40 years, in both indoor and outdoor settings, and within Co-located with buildnz | designex close range of the drones. The results were as accurate as tradiwww.buildnz.com Vertical tional contact methods – ECGs, pulse Inspection Robots oximeters and respiratory belts – that are currently used to monitor vital signs. “This is the first time that video from a hovering UAV has been used to measure 32 cardiorespiratory signals,” Chahl says. The experiments were performed within three metres of humans but researchers expect the drones to capture information at much greater distances once the techKomatsu nology is further developed.

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Heart monitors

The drones could help detect potential terrorists in public spaces, merely by measuring anomalies in their heart rates, according to Chahl, a Professor of Sensor Systems in UniSA’s School of Engineering. “A person who is about to engage in violence will probably have anomalous behaviour and physiological signs. “They might be highly agitated or unnaturally calm and in many cases they might be under the influence of drugs. “There is a good chance that our system can detect these anomalies.” In the developing world, expensive disposable electrodes could also be replaced with this technology to monitor vital signs remotely and eliminate the temptation to reuse the electrodes which can spread horrific skin infections between neonatal infants. Aged care facilities may also benefit from the imaging systems which could be placed in strategic locations to monitor older people’s heart and breathing rates, Chahl adds. “Obviously there are privacy and ethical issues around this technology that need to be resolved before it becomes common practice, but there is enormous potential to use machine vision systems to benefit society, particularly in the biomedical sphere. “I expect we will be using this software in everyday life in the next decade.”

To see footage of the drone experiments, click here

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Vertical Inspection Robots

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Komatsu Surveyors

Drones are lifesavers in disaster zones Pioneering research from the University of South Australia has shown for the first time that drones can be used to detect human vital signs in war zones and natural disasters

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niversity of South Australia researchers have successfully trialled unmanned aerial vehicles to measure heart and respiratory rates using remote-sensing imaging systems, while hovering three metres from humans. The research was carried out under a collaborative agreement with the Defence Science and Technology (DST) Group and published in Biomedical Engineering Online. Video footage from the drones can detect changes in human skin tone and minute head movements to read vital signs, providing a low cost, accurate and convenient way to monitor heart rates without physical restrictions, researchers say. The breakthrough could have many applications, including triaging disaster victims in earthquakes, detecting security and terrorism threats at airports, and remotely monitoring heart rates of premature babies in incubators. Under the supervision of Professor Javaan Chahl, UniSA PhD students Ali Al-Naji and Asanka Perera carried out a number of experiments with 15 healthy individuals, ranging in age from 2-40 years, in both indoor and outdoor settings, and within close range of the drones. The results were as accurate as traditional contact methods – ECGs, pulse oximeters and respiratory belts – that are currently used to monitor vital signs. “This is the first time that video from a hovering UAV has been used to measure cardiorespiratory signals,” Chahl says. The experiments were performed within three metres of humans but researchers expect the drones to capture information at much greater distances once the technology is further developed.

Heart monitors

The drones could help detect potential terrorists in public spaces, merely by measuring anomalies in their heart rates, according to Chahl, a Professor of Sensor Systems in UniSA’s School of Engineering. “A person who is about to engage in violence will probably have anomalous behaviour and physiological signs. “They might be highly agitated or unnaturally calm and in many cases they might be under the influence of drugs. “There is a good chance that our system can detect these anomalies.” In the developing world, expensive disposable electrodes could also be replaced with this technology to monitor vital signs remotely and eliminate the temptation to reuse the electrodes which can spread horrific skin infections between neonatal infants. Aged care facilities may also benefit from the imaging systems which could be placed in strategic locations to monitor older people’s heart and breathing rates, Chahl adds. “Obviously there are privacy and ethical issues around this technology that need to be resolved before it becomes common practice, but there is enormous potential to use machine vision systems to benefit society, particularly in the biomedical sphere. “I expect we will be using this software in everyday life in the next decade.”

To see footage of the drone experiments, click here


INFRASTRUCTURE

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How to survive against the reality of artificial intelligence Within 15 years, artificial intelligence will take over 38 percent of jobs in the United States

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hat will employment look like? Which jobs will disappear and what does all of this mean for education? According to Sir Michael Barber, former advisor to Tony Blair and former Chief Education advisor to Pearson, “it’s not just what jobs will exist and what won’t. “It’s about what parts of current roles will be automated and what won’t.” He notes that we will still need doctors and lawyers but that “machines will often be more accurate” in terms of diagnosis and determination. In terms of changes for global education, Sir Michael notes that “the combination of great teachers and sophisticated AI could be transformative,” but warns that change leaders will “miss the point” if they believe educators will

have to “choose between teachers and AI.” He believes that “fewer, more sophisticated teachers will combine with machines that relieve them of drudgery and provide a powerful evidence base for their teaching. He notes that students will need “high standards in the basics, a good knowledge of history, social science, literature and science,” and that “everyone will need an ethical perspective and a personal sense of ability to contribute.” Sir Michael talked recently with CM Rubin about what we should be doing to prepare for the realities of artificial intelligence and found a positive spin with a return to importance of a Liberal Arts education. Read the full article here.

Sir Michael Barber is a world-leading authority on education systems and education reform. He has served as Chief Education Advisor to Pearson, head of the global education practice at McKinsey, advisor to former Prime Minister Tony Blair. Picture courtesy IoT For All,

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nternational patents are well underway for the software that can dispatch camera-equipped drones to investigate any external security event. “Simply put, our software will enable drones to be the first-response security guards of the future,” says director Mike Marr. VigilAir works closely with the Civil Aviation Authority (CAA) to develop the equipment, systems, and processes to provide a safe and effective service. The product and service operate under a current CAA certification, with work underway to rapidly expand the operating parameters. The company spent years pioneering the use of drones with new technology for security purposes, including self-funding its own research and development. VigilAir is an SaaS, infrared product that integrates drones into existing electronic security systems. It’s suited to large outdoor sites such as retail and industrial parks, hospitals, university campuses, schools, ports, prisons, and town centres which are at risk of burglary, vandalism or security breaches. A security drone will also act as an effective deterrent. When not flying, the drone sits in an enclosure – dubbed a nest – located on a business site. When alerted by an alarm sensor trigger, it will be dispatched to fly over the site to investigate, record and live-stream high definition video footage to whoever’s monitoring the action. The drone may include a thermal or infra-red camera, and bright LED floodlights to illuminate any intruder and record the scene. The hovering drone may sound a siren or even talk to the intruder using a two-way communications system. Before leaving the nest, the VigilAir SaaS system checks the weather data, then the drone flies a pre-determined flight route that’s geo-fenced to preserve neighbours’ privacy and comply with flight regulations. A future release will allow the drone to be further manoeuvred to follow any fleeing suspects, capturing images of them and their vehicle license plate number. It then returns to its nest to recharge. “After considerable R&D, innovation and years of trials, not to mention processing technology and software patents, to now be able to unleash the product onto the international market is really exciting. He says to be able to fly a rapid response drone literally directly into a crime, and to record and transmit all that’s happening, has huge advantages over a traditional on-theground security response. “And we’ve designed it to be user-friendly. Security guards, whether on site or operating remotely, will be able to use the system and it’s one that can already ‘talk’ to 99 percent of all existing electronic security systems. “As you can imagine this is all a lot safer than dispatching a guard on foot to check out a security problem. “Drones will help catch perpetrators as everything’s recorded which is gold for any eventual prosecutions. And importantly, the ongoing cost will be lighter on operational budgets,” Marr says. 28

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Software product will undoubtedly disrupt the security industry Kiwi-owned and operated VigilAir has launched its semiautonomous aerial surveillance drone technology onto the global market

VigilAir is completing reseller agreements with two major international corporations, providing a channel for product export and on-going support. “We’re very confident in its success. We’ve done exhaustive searches and cannot find anything to compare with VigilAir’s system worldwide. It’s truly a global first with unlimited potential.” VigilAir’s interest in drones doesn’t stop at security. “While their use for aerial photography is well established, considerable potential remains in core sectors like agriculture, construction and forestry. “Our drones have assisted the police in search and rescue operations in hard-to-reach terrain like cliffs and crevasses. And we’ve done all sorts of work from inspecting the Auckland Harbour Bridge to looking for leaks on the roofs of central city buildings.” As well as inspecting infrastructure and assets, smart drone technology is used for Infrared imagery to track heat-loss and to create 3D models that are dimensionally correct to a few centimetres.

VigilAir was invented and developed by ASG Technologies – a technology incubator established three years ago by TPT Group. “To now launch a semi-autonomous ‘eye in the sky’ solution, incorporating an on-site drone with cloud-based SaaS software, is a long way from how we initially viewed drones – as flying CCTV cameras to support the fixed ones.” And for the future: TPT is advancing robotic technology with the intent of one day launching fully autonomous ‘foot patrol’ robots to work in conjunction with its security drones.

Click to see aerial security surveillance


Click to watch a video about the Emsisoft & SLSNZ project

Coming to grips with currents and riptides

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rownings worldwide have reached epidemic levels. To help turn the tide Emsisoft, an internet security software provider, and Surf Life Saving New Zealand (SLSNZ) partnered up last summer for a research project to accurately map the rip currents and their behaviours. “Emsisoft’s support enabled us to carry out the trial at Mt Maunganui and develop a user-friendly method for lifegaurds to map out rip currents on their beach and be able to gather more accurate data which will lead to a better understanding of the workings of rip currents at different locations," says Allan Mundy, SLSNZ National Lifesaving Manager. "If someone should get swept away in a rip, having the knowledge and understanding of the currents in that particular location will help narrow down the search area." Together the partners launched GPS drifters into the sea off Mt Maunganui to plot GPS data and map the rip currents and their behaviours. They measured the physical layout of the (topographic) headland rip current across a range of different swell, tidal and wind conditions.

If researchers understand how malicious rips and currents behave, accidents can be prevented and struggling swimmers can be rescued even faster – and more safely GPS data was enhanced with the help of Emsisoft-sponsored, high-tech drones to accurately map the same rip currents and observe their behaviours from above. The joint project aimed also to raise awareness of the unknown dangers of surfing, both in the water and online, and the importance of using technology to help understand and prevent accidents in the future. The custom-made drifters performed as they were expected to, acting as a swimmer caught in a rip but the information gathered “proves that rips don’t work exactly the way we thought,” says Mundy. “The trial proved just how powerful rips are. Even with minimal surf, the drifters travelled very fast. “One of the drifters broke away from where it was predicted it would go and went half a kilometre down the beach in the opposite direction. "This emphasises the transient power of rip currents and the danger rips pose to the public,” he says. The drones provided by Emsisoft are adding further weight to the research. According to Mundy the recorded observations such as those captured by the drones will continue to aid in the mapping of these changeable waters and the swimmers caught in them. “Footage taken at the trial clearly depicts the long sweeping range of the surface currents from above and tracks the drifters visually

across the headland. The findings have been added to a database which will assist in future current predictions during missing persons searches and the method will be used to set a data standard for future research on additional sites around the country "Protecting web surfers from all sorts of internet threats requires a very similar approach to what the guys on the surf beaches do,” says Christian Mairoll, Chief Executive of Emsisoft. “We are both looking out for potential dangers to protect people from common threats they encounter."

How it works:

A GPS unit is attached securely to the top of the drifter which records rip direction and rip current velocity. The drifter itself is a weighted ballast container that is specifically designed to sit at the top of the water column (just below the surface) and travels in a rip due to the three fins which pick up the current. To mimic a patient drifting under the water (subsurface currents) the drifter has a ballast chamber which when flooded will allow it to behave similarly to a submerged body in the water. In this application, the GPS unit is attached to a floating buoy that allows for the signal to be transmitted. Visit www.emsisoft.com/en/surfprotection

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Kiwi flies high in Europe with state-of-the-art robotic tech Invert Robotics provides non-destructive inspection services using mobile climbing robots. The proprietary robotic platform can be used for the inspection of mission and business critical assets in the dairy, food and beverage, aviation, petrochemical and industrial chemical markets

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he robotic inspection solution allows clients to manage and minimise their exposure to risk, be it risk of harm to employees/contractors using manual inspection techniques, risk of unplanned production downtime or risk of product/environmental contamination due to inadequate inspection quality. Invert Robotics’ climbing robots enable precise, accurate and safe remote inspection of non-ferromagnetic surfaces such as stainless steel, carbon fibre, aluminium and glass. The robots are equipped with high definition cameras and other sensor technology that allow equipment to be assessed for cracks, defects and malfunctioning components.

a safe and efficient alternative to traditional manual inspection techniques such as scaffolding and rope access,” says Robertson. “Conventional maintenance typically requires a technician to physically enter and/or traverse the asset to visually inspect it and either identify defects or confirm working order. This process is time-consuming, inefficient, prone to human error and can deliver low quality data, whilst also being a hazardous work practice. “Invert displaces these human inspection methods enabling remote inspection of critical assets in an efficient and safer manner, as well as providing more consistent and scientifically based results. In fact, our robot operators stay safely on the ground at all

"Invert’s climbing robot platform is the first in the world to enable the remote inspection of non-magnetic surfaces" Defects invisible to the naked eye, that are not yet a problem, can be detected allowing for more precise planning of maintenance work and capital expenditure. Inspectors are fed real-time video during the inspection that allows immediate and highly accurate analysis. An automated report is delivered immediately to clients and a formally reviewed report is delivered within 3 days of an inspection. A spin out of New Zealand’s University of Canterbury in 2011, Invert Robotics technology was developed by founder and Chief Technical Officer James Robertson and his team, who transformed the initial concept into a viable product. “Invert’s climbing robot platform is the first in the world to enable the remote inspection of non-magnetic surfaces and offers 30

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times and we can often perform an inspection in half the time. “Our robotic technology also offers a number of advantages over drone inspection which is a relative newcomer to the market. The primary advantage is that by being in contact with the surface we are inspecting, our robots can utilise a range of sensor technology like ultrasonic crack and thickness testing, or eddy current testing. "Drones simply can’t do this and the robots don’t have any of the stability or battery life issues that go hand-in-hand with drones. The other major advantage is that our robots can operate in areas drones can’t, for example, secure airspace at airports or in poor weather conditions. As a result, we are finding the robots are desirable in a number of industries.” Invert’s robotic inspection


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solutions are already being used by the major Australian and New Zealand dairy companies such as Fonterra, Synlait and Murray Goulburn and are attracting interest from the food and beverage manufacturing industry globally with companies such as FrieslandCampina and Heineken adopting the technology. “We are in the final stages of deals with an international airline and a large aircraft maintenance organisation. And we have

our sights on façade cleaning [glass-covered sky scrapers], energy, petrochemical and mining industries – all of whom use large, mission critical, non- magnetic assets,” says Invert Robotics Managing Director Neil Fletcher. European operations are expected to be the lynchpin for the company, which hopes to report a quadrupling of revenue in the 2017/18 financial year, just as it did in 2016/2017. The company has opened an

office in the Netherlands and is poised to open premises in Germany and Denmark to enhance its Christchurch head office operations. Fletcher attributes the company’s success to date to a combination of internal expertise and market conditions in Europe. “We’ve been able to demonstrate a point of difference over our competitors in terms of time, quality and cost,” he says. “Demand for the robot in Europe

Click to watch the video.

has been particularly strong partly due to a stricter adherence to health and safety regulations there but also for our ability to have mission-critical assets back on line sooner. “The product represents a significant innovation in a market where consumers are always looking for new technology and future benefits,” Fletcher says. Operating a business from New Zealand, when most of its growth and activity in Europe is a challenge. “We are lucky to have a phenomenal team who collectively advance the company by identifying strategic customers and winning them over with our cutting-edge technology. “This has been invaluable because a challenge for us in the past has been getting non-believers to even take a look at our robot – many didn’t believe it could stick to surfaces, let alone move smoothly along them. “Once people see our robot in operation, they are quickly converted. The accuracy, efficiency and the value-adding environmental and safety benefits of robotic technology make it an obvious choice as consumer demand for product safety, brand integrity and transparency grow,” Fletcher says.

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remote site management, to deliver more efficient, productive and cost-efficient construction processes. Major industry issues, including skills shortages, demands for increased construction site productivity, finite resources and project management pressures were key factors behind the development of iMC technology,” says Marsh. Currently available across dozer and excavator models as well as drones, iMC has already shown its ability to deliver significant

costs and whole-of-life costs, better material yields, reduced fuel consumption, and greater machine availability and uptime “And because an iMC-equipped machine means simple operation for all operators no matter what their experience levels, we get greatly improved operator performance,” he says. “All Komatsu iMC machines are capable of operating on multiple sites with all OEM type UHF or UHF digital base solutions, including network corrections through a network base solution.” Komatsu’s iMC system for dozers allows these machines to carry out both bulk and final trim dozing in fully automatic mode from start to finish, delivering final grade performance and accuracy. The result is significantly increased productivity and efficiency – up to twice as productive as dozers fitted with conventional third-party machine control systems according to users, while reducing the cost of each metre of material moved. Four different machine-control-operating modes allow operators to best match performance to the application, covering cut-andcarry, cutting, spreading and final trim grading. In addition, construction progress can be checked using an integrated as-built mapping display, which collects surface data by continuously measuring actual elevations as the machine operates. Likewise, Komatsu’s iMC PC210LCi-10 excavator enables operators to achieve optimum speed to final grade accuracy with minimal inputs, while eliminating the need for manual grade checking. “With iMC on the PC210LCi-10, operators can focus on moving material efficiently, without having to worry about digging too deep or damaging the target surface,” says Marsh. “This delivers over 60 percent improvement in work efficiency compared with conventional construction processes.” As part of its iMC and SmartConstruction solutions, Komatsu offers integrated autonomous Unmanned Aerial Vehicles (UAVs) or “drones” for survey and site management, using EVOX3x

Cambridge-based contractor C&R Developments recently completed a drone survey at Winstone’s Flatop Quarry, where it has been undertaking overburden removal and rock selection for two years improvements in efficiency and productivity for contractors compared with conventional construction processes. iMC is designed to let operators focus on moving material efficiently – from bulk excavation to final trim – without having to worry about over-excavation or damaging the target surface – vastly speeding up site earthworks, while delivering greater precision and accuracy. Currently covering a range of four dozers and one excavator, each model in Komatsu’s iMC range incorporates as standard a factory-installed fully integrated 3D GNSS (global navigation Satellite System) machine control system. “IMC allows contractors to complete bulk dozing and excavation, along with grading and final trim operations faster and to closer tolerances, with fewer passes to achieve finish grades or excavation profiles,” says Marsh. “It also allows far more efficient machine use and less rework – just dig or grade it once, then move on,” he says. “In addition, because all 3D design data is held within an iMC machine, we can greatly decrease times required for staking, survey and even final inspection, as well as allowing contractors to complete multiple tasks with one machine.” Other benefits, says Marsh, include lower machine operating

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he survey was offered as part of Komatsu’s SMARTCONSTRUCTION concept and will be used for volume calculations and future design work. “The point cloud data we have received is obviously a lot more dense than our typical GPS rover survey, which makes it a lot more accurate,” says C&R Surveyor Steve Ross. “It was very interesting to see this new technology in use; it makes traditional methods look highly obsolete in terms of safety and efficiency,” he says. “In addition, the field work was completed in around 15 minutes compared with several hours using a rover.” C&R Developments is one of New Zealand’s leading civil earthworks and bulk earthmoving contracting companies. The company owns and operates a large selection of medium to heavy plant able to undertake the most demanding projects under the most stringent environmental standards. It currently has 94 Komatsu machines in its fleet, including 49 rigid dump trucks, 11 articulated dump trucks, and 23 excavators, along with various other types of equipment. Komatsu’s SMARTCONSTRUCTION drone service offers full project and data collection integration, not just with Komatsu and other machines, but across entire sites and projects. “Industries that can benefit immediately from this service include civil construction, quarrying and mining. “We have already added value to a number of clients across all three sectors,” says Aaron Marsh, Komatsu’s National Technology Solution Expert Manager – Construction, and head of Intelligent Machine Control (iMC) at its Smart Centre. “It’s also designed to allow a high degree of integration to our Komconnect application, and realtime as built-file management and reporting through our iMC technology.” Komatsu iMC is part of the company’s SMARTCONSTRUCTION concept, which brings together a wide range of technology solutions, including drones and


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precision 3D mapping drones through Skycatch. “Drone capability enhances Komatsu’s total site solution for our customers,” says Marsh. “It is fully integrated with the Skycatch cloud platform, using the EVO3x precision 3D mapping drone, which is the only commercial quadcopter capable of creating 3D point clouds with sub-5cm accuracy without the use of ground control points. “This technology delivers quick, reliable and accurate survey for all earthmoving, quarry and mining applications, adding value to our integrated iMC operations,” Marsh says. “It can record current as-built data, plus cut-and-fill volume reporting, incorporating class leading technologies such as terrain following, for increased accuracy on entire flight plan and improved end results. “It allows for unprecedented visibility into work site progress,” he says. “In addition to being integrated into our iMC technology offerings, it’s also capable of working alongside Komatsu’s autonomous haulage systems. “This means we are able to offer total end-to-end site planning, management and construction solution for our customers now, tomorrow and in the future,” Marsh says.

Get centimetre accuracy, no GCPs required, with Komatsu high precision UAV surveying

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YEARBOOK 2018 INFRASTRUCTUREBUILD.COM

Online collaboration and communication, including: • Frequent map updates for improved safety and coordination with outside agencies • File exports for data manipulation, reporting and site meetings.


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INFRASTRUCTURE PROCUREMENT

Among local councils and infrastructure contractors the Iplex name is synonymous with product quality and reliability, client support and new ways of looking at perennial problems

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plex Pipelines developed RestrainTM PVC sewer pipe specifically for gravity sewer applications using trenchless techniques for the installation, repair or replacement of underground infrastructure. It is manufactured from PVC-U (unplasticised polyvinyl chloride) and is a rubber ring jointed, SN16 PVC-U sewer pipe, utilising a threaded spigot and “low profile” threaded socket. This provides axial end load restraint to ensure joint integrity using trenchless installation techniques. Restrain is compatible with both solvent weld and rubber ring jointed DWV PVC-U sewer pipe and fittings. Pipe lengths can be customised to suit the installation or project requirements from one metre to six metres long. Restrain is available in nominal diameters DN100, DN150, DN225 and DN300. It is suitable for installation by a range of trenchless methods including horizontal directional drillin, pipe reaming or pipe eating, pipe-bursting static, hydraulic or slitting, micro tunnelling horizontal auger boring and slip lining.* The product can be used with a range of installation technologies or site requirements, proving a simple connection to maintenance chambers and service laterals. Bi-directional installation capability means the pipe can be pushed or pulled into place to suit 36 42

installation methods. Each installation method has its own unique technique – detailed installation instructions by method can be found on www.iplex. co.nz/trenchless+technology/ restrain.html Restrain meets industry manufacturing and performance standards and is is independently certified in accordance with the test requirements of AS/NZS 1260. Iplex Restrain is certified by StandardsMark licence SMKP20184 as conforming to AS/ NZS 1260:2009 – PVC-U pipe and fittings for drain, waste and vent application. The rubber sealing ring performance under NZ/SZS 1260 eliminates the risk of leakage and root intrusion. All Restrain PVC sewer pipe is manufactured with a minimum pipe-ring-bending stiffness of 16000 N/m.m and is classified as SN16. Iplex Pipelines NZ Ltd is itself certified by Licence QEC4169, satisfying the requirements of ISO 90001:2008 (Quality Management Systems).

Hydraulic design

Where a sewer pipeline is flowing full under gravity conditions the method of determining the pipe size is similar to that used for pressure pipes. The grade of the pipeline gives the allowable head loss but special attention should be given to Continues on page 44

YEARBOOK 2018 INFRASTRUCTUREBUILD.COM


Case Study: Northland College Kaikohe Restrain™ Segmented DN150 PVC-U pipe enables quick installation with minimal impact

INFRASTRUCTURE

Northland College went through a $14 million rebuild in 2016-17 after reaching a dilapidated state. Whangarei based design and construction firm A-Line carried out this extensive rebuild. The new building layout required rerouting of the existing stormwater infrastructure – installing a new ~42m pipeline between a new manhole and existing storm water pipe. The proposed pipe route originated in a brand new school courtyard – with existing concrete walkways, and existing underground services. Therefore a trenchless installation methodology utilising pipework that would have minimal impact on the existing infrastructure was a highly preferred option. There was also a short time window of one day to carry out the installation which eliminated the possibility of carrying an open cut installation – from excavation to reinstatement with the allotted time window. Restrain™ ticked all of the boxes. A small exit pit was created in the school courtyard with similar sized thrust pit ~42 m away. Careful investigation of existing services was carried out prior to the drilling operation. The pilot hole was drilled successfully followed by back reaming and installation of 6 m sections of Restrain™. Iplex provided on-site installation support during the job – advising on suitable installation tools & equipment, as well as demonstrating correct installation technique. The drilling contractors North Drill, Whangarei ,were very experienced in using polyethylene pipe and ducting, and had not used Restrain™ previously. The pipeline installation took place during December 2017 and the North Drill crew were impressed with the efficient installation outcome using Restrain and were able to meet their tight installation deadline.

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• Water reticulation and transmission mains • Sewerage reticulation and carrier mains • Trenchless pipe systems • Chemical and process water circuits • Slurry and tailings pipe systems • Waste and vent plumbing • Stormwater and subsoil drainage systems • Horticultural irrigation systems • Broad acre irrigations systems

INFRASTRUCTUREBUILD.COM YEARBOOK 2018

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the effect of entry and exit losses at structures such as manholes as these may be significant.**

Structural design

Restrain sewer pipes are defined as flexible pipes – designed to deflect slightly under load. Hence they utilise surrounding soil strength, as well pipe stiffness, to oppose the vertical loads. The structural design of Restrain sewer pipe conforms to the requirement of As/NZS 2566.1 – Buried Flexible Pipelines Structural Design.**

INFRASTRUCTURE

Pipe grouting

Where it is necessary to pressure-grout the annulus between Restrain pipe and a host pipe during slip lining, it is important to ensure that the grout is introduced so as not to damage the Restrain sewer pipe. The grout must be introduced to the annulus as evely as possible and must not exceed the Restrain pipe’s maximum safe grouting pressure.** It is strongly recommended to “cap off” the fill the Restrain pipe with water prior to grouting. This reduces the effects of grouting pressure and heat of hydration of the grout during curing. It may be possible to stage the grouting process in two or three lifts , allowing the grout to solidify in the annulus to the spring line before the top section is filled.

Bore hole and drill mud

The bore hole dimensions vary depending on the installation methodology being use, native soil type, additives used to produce drilling mud, drill mud viscosity, reamer type/style and pipe diameter. The contractor or driller is responsible for determing bore hole diameter and drill mud type before drilling commences. Drill mud is an important component of successful installations. It is used to stabilise the bore

hole, assist in the cutting process, cool down the transmitter, carry spoil out of the bore hole and lubricate the bore hole for reducing the frictional resistance of the product being pulled into the bore hole. The Restrain sewer pipe may be field tested after installation , in accordance with the relevant parts of these industry standards: - NZ$4404:2010 Appendix C2, clause C2.2 - AS/NZS2566.2 section 6 - AS/NZS2032 section 7.3

Iplex Pipelines NZ Ltd Technical Services: Frank O'Callaghan - 027 495 4523 Jay Roy - 027 572 1305 Stacy Dixon - 027 4495 010 * Restrain should not be used with pneumatic or concussive pipe bursting equipment. It is not suitable for pipe ramming or impact moling. ** Contact Iplex Pipelines directly 0800 800 262 or visit www.iplex.co.nz for Restrain flow capacity and structural design of trenchless installations.

Case Study: Totara Heights Auckland Low Impact installation with Restrain segmented gravity stormwater pipe installed in new subdivision A new residential subdivision required a quick and low impact installation of a gravity storm water pipeline from a new manhole to a discharge point ~81 metres on the edge of the property boundary. A steep sloping section with pre-existing surrounding retaining walls, along with a deep level to the proposed pipe invert meant that an open cut installation was impractical for the sloped (and retained) section of the installation site. A trenchless installation methodology was heavily favoured. Heavy construction in the adjacent property imposed restrictions on the temporary set-down of a long pipeline, which meant a solution utilising a fused PE pipe was impractical. Iplex Restrain™ was a perfect solution in this situation. Three metre Restrain DN225 SN16 PVC-U pipe sections with threaded sockets and spigots were lowered into a safely shored pit; installed one section at a time and pulled through the drill hole. In all 21 sections of pipe were installed from the manhole location to an intermediate location after the retaining wall. The remaining six sections of pipe were installed in shallower ground using an open cut installation methodology. The contractors were very experienced in using polyethylene pipe

38

YEARBOOK 2018 INFRASTRUCTUREBUILD.COM

in trenchless installations, but had not used Restrain™ previously. Iplex was able to provide on-site installation support during the job, providing guidance on suitable installation tools and equipment, as well as advising on specific aspects of Restrain. Contractor Pipeworks’ team was impressed with the efficient installation outcome using Restrain and pleased with the positive end result. The pipeline installation took place during January 2018.

Click to see easy installation techniques


INFRASTRUCTURE

There is more to Iplex than pipe manufactured and delivered to your project site. Talk to us about what you need. Iplex Pipelines, manufacturing and supplying PVC, PE and GRP pipeline solutions to the New Zealand Market.

0800 800 262 www.iplex.co.nz

INFRASTRUCTUREBUILD.COM YEARBOOK 2018

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INFRASTRUCTURE

Procurement and tendering trends – what to look out for 2017 in review

I

t was a busy year! Over 1000 opportunities released on GETS across all sectors in New Zealand; the rise of prequalification; and a move away from the traditional physical ‘tender box’ by some clients. There’s keen interest from both clients and suppliers in improving procurement capability within public sector organisations – to encourage tendering processes that are ethical, compliant, effective and cost-efficient. Everyone can see the need for more aligned, smarter tendering processes! Nutting out how to do this is the next challenge! Here’s our review of the key influences on tendering in 2017.

Increasing use of GM–RFx templates

Since their introduction in 2016, 40

MBIE’s suite of Government Model RFx Templates saw plenty of use during 2017 by government agencies. Even some local councils adopted them. Easily identified by the heading ‘This opportunity in a nutshell’ near the start, the templates aim to provide practical, easy-to-navigate, plain English templates for routine types of procurement. We applaud those procurement managers who are taking the time to customise the templates for their specific contract or project. The best examples focus on questions which are targeted and specific, so that suppliers can be evaluated and differentiated according to quality, risk and value-for-money. On the flip side, we’ve seen some organisations releasing RFx documents to market using these templates with almost no customisation. The worst offenders have released a mish-mash of

YEARBOOK 2018 INFRASTRUCTUREBUILD.COM

confused instructions and irrelevant questions – needing effort on both sides of the procurement table to deal with extra Notices to Tenderers and Clarifications, which adds unnecessary time and cost to bidding.

Prequalification panels

A definite trend which continued in 2017 was the release of prequalification panel RFPs. Auckland Transport, the Ministry of Education, Housing NZ, and Wellington City Council amongst others have been active in this space. While some panels remain ‘open’ for evaluation over the course of the coming year or longer, others had strict submission deadlines – suppliers needed to quickly understand submission requirements and respond accordingly, or face missing out on future opportunities.

The continued rise of (multiple) H&S prequalification systems

An increasing number of clients are now requiring suppliers’ Health & Safety systems and practices to be assessed by external parties. With a number of different domestic and international prequalification providers available, this can mean significant unnecessary extra costs for suppliers to keep up with multiple assessment requirements. Inevitably, those costs end up being paid from the public purse. For example, towards the end of the year, Housing New Zealand’s method for assessing contractor Health and Safety changed. Tenders listed on GETS after 1 November 2017 include a pre-condition which requires respondents to have registered and completed an Impac PREQUAL health and safety assessment. Another example is Auckland Transport,


Continued use of online response platforms

where ISNetworld (ISN) is the provider of the Health and Safety Prequalification system.

Litigation and court cases

Early on in 2017, we saw the country’s largest bribery case conclude in February and two prison terms handed down. Several months later a supplier won a legal challenge to a council’s tendering processes. Both are sobering lessons for local authorities to get their processes and their paperwork right – and for tenderers to make sure they’re also playing by the rules. While Government’s Rules of Sourcing provide a sensible framework for ethical procurement practice, it is disappointing that many procurement professionals are not familiar with them and do not apply them routinely. There are few effective channels for suppliers to safely bring non-compliances to the attention of authorities, unless they are brave enough and have deep enough pockets to instigate a legal challenge. With the Rules of Sourcing now well established since their launch five years ago, we believe it’s time that government took a serious look at encouraging - and

More and more government agencies are now using online ‘portals’ to manage their tenders. Their advantages include that they provide a convenient audit trail for recording the submissions received; reduce the chances of a tender getting ‘lost’; eliminate geographic barriers that impact on tender delivery timeframes and costs; and enable streamlined communications with suppliers. While online submissions reduce costs associated with graphic design and printing of bids, there is a catch for tenderers if they haven’t taken the time to prepare properly and understand what’s required before uploading their response. Many tenderers will be familiar with RFTs which limit the number of pages in the Non-Price Attributes section of a bid. In some online portals this goes a step further with very tight restrictions on character count. At its strictest, we’ve seen a 2000-character limit per question (yes, that’s characters and not words – and we’re already over 5,000 characters so far in this article). In this situation, every word counts. For bid managers, the time required to distill responses down to essential but compelling content can often be underestimated. It’s no easy task, and for those that are facing a tight deadline and trying to get on with their day jobs, it’s another hurdle to overcome. A far better mechanism to get a consistent and sensible level of detail in the responses is for RFTs to give a guideline on the number of pages (or paragraphs) expected in the response. This is more workable and flexible for suppliers to respond to, and achieves a pragmatic result that helps evaluators in comparing responses.

A focus on social outcomes and sustainability

It’s heartening that price is becoming less and less important as the key factor in winning a tender. Too many government

procurements have ended up with false economies through awarding tenders to cheap (and therefore, often poor-quality) suppliers. There’s a sensible shift towards quality-based attributes and balancing risk and opportunity to deliver true Value for Money. Local and central government clients are also increasingly aware of the need to meet their social obligations. The recent Auckland Transport Physical Works Supplier Panel ROI is a good example: respondents were asked how they would support AT’s sustainability objectives in future physical works projects. Reducing greenhouse gas emissions, improving water quality outcomes during construction, valuing Māori, supporting Pasifika development, and supporting local business – all of these featured in AT’s ROI document as areas for respondents to address.

First graduates for the new Procurement qualifications

Damien Wood, Development Engineer for Whanganui District Council, and Marion Henton, Senior Planner for Bay of Plenty Regional Council Toi Moana, made history when they were the first graduates in the NZ Certificate in Infrastructure Procurement Procedures. The Level 6 qualification was previously known as the CPP or NZTA Qualified Evaluator qualification. The updated version made some important changes – by extending application to all of government procurement; incorporating Government Rules of Sourcing; and focusing on procurement planning. This qualification is now the benchmark for government procurement professionals. The qualification stands out as being achievable on-the-job for procurement professionals with busy schedules involving practical procurement activities. Because assessment is through mentoring, coaching and working with experienced and qualified procurement assessors, organisations that have candidates working through it gain a double whammy. The assessment mentoring has been instrumental in leveraging change not only for the individuals who work through the qualification, but also for their colleagues and departments. Since its introduction in 2016, the uptake from procurement staff engaged in all kinds of infrastructure contexts is growing

fast. At the time of writing, more than 80 people are undertaking assessment, and many more are expected to sign up in the next few months.

Challenges and expectations for 2018 Politics

A key question has been to consider what the Labour government will mean for procurement and tendering (in infrastructure and other sectors). Prime Minister Jacinda Ardern has indicated a shift away from Roads of National Significance projects in favour of regional infrastructure, public transport links and social housing. We’ve already seen the EastWest Link suspended – despite years of detailed planning resulting in eagerly anticipated tender documents just weeks away from release to the market. The Labour government has indicated a preference for diverting funds into light rail. Rail to Auckland airport appears to be a priority; and rail to Northland and/or moving Auckland’s port is also being debated. Although those all may well be worthy projects, a re-prioritisation on infrastructure projects will prompt a hiatus in infrastructure construction while the new government assesses priorities and goes through the extensive detailed feasibility and planning processes that are needed in the lead-up to breaking ground. The announcement of increased investment in our regions will be welcomed by many, though. This brings consideration of how the substantial funds to be invested regionally will be prioritised; and what will be done to ensure those funds are spent wisely. Many smaller provincial towns and regions struggle to attract and retain procurement professionals; hence we hope that our new government will underpin their regional investment initiative by supporting development of procurement skills in those areas.

New tools and techniques for procurement The 2017 year has seen some interesting developments in procurement techniques. Stronger focus on sustainable, quality outcomes needs to be backed up with procurement tools and techniques that deliver on that promise. RFT documents continue to improve – with tighter focus on questions that reflect the differ-

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INFRASTRUCTURE

ultimately enforcing - compliance by public sector organisations in their tendering activities. Requiring procurement professionals managing major projects to be qualified - as the NZ Transport Agency has for several decades - is a constructive way to address this issue. We discuss this in more detail later in this article.


to align and standardise the approaches and techniques used at the coalface of procurement. While conferences and forums discuss broad concepts of category management and pipeline management, many RFTs still ask irrelevant questions, allocate weightings and risk without proper planning, and bear little or no regard for value for money or sustainability.

PROCUREMENT

Until New Zealand requires procurement professionals to be trained and qualified in practical, effective and cost-efficient tendering methods, the efforts invested in strategic procurement will not deliver better Value for Money

entiators for the suppliers, based on the risks and opportunities of each specific project. The era of recycled RFT documents with generic questions is definitely on the wane, as procurement professionals focus more time into effective procurement planning; design project-specific questions that challenge suppliers to plan; and customise the solution they offer to drive the best value. Over the year, we have seen solid uptake of the Anchored Scales concept for tender evaluation scoring. Borrowed from the education sector (which has used similar methods for standardising assessment of capability for many decades), this method drives tender evaluators to define their scoring system in factual terms in the planning stages, rather than leaving it to the subjective and often variable opinions of the evaluators once they have reviewed the responses. It has not been easy to gain acceptance of Anchored Scales – they take time and effort to put together when planning a procurement process. But the benefits achieved far outweigh the initial investment. Not only can there be greater transparency in the RFT to guide suppliers on what will score high, but tender evaluations are far faster, more consistent and more defensible. Incorporating sections in RFT documents that provide guidance on the scoring systems (without giving everything away!), and definitions of minimum conformance standards, have enabled both suppliers and clients to minimise the time wasted in lost 42

causes. Armed with this transparency, only compliant responses are submitted and received, saving both parties valuable time and money. There have also been interesting developments in tender evaluation methods. The Price Quality Method – developed by the NZ Transport Agency and used for over a decade – provides transparency of the amounts that will be paid for additional quality. Over the past two months, we have seen a further development of this suite of tools. The SQP25 spreadsheet tool developed by Clever Buying provides a powerful way of using the quantified ‘risk costs’ on a project to determine ideal weightings for each of the non-price attributes and the price. This adjunct to the Price Quality Method will be rolled out over the next year, to provide robust and defensible rationales for attribute weightings that support – where appropriate – selection of quality suppliers whose prices are not the cheapest.

processes within NZ Government Procurement, to form a unified, coherent model for best practice procurement across all public sector organisations? There are signs that NZ Government Procurement and the NZ Transport Agency are working more closely together, at least at a strategic level. It’s great to see the NZ Transport Agency’s Procurement Manual – the bible of smart buyers in the public sector – amended to incorporate Government Rules of Sourcing. However, we believe there is more to be done to align those great models. Infrastructure New Zealand’s bold vision for a centralised independent procurement agency has gained support through this year – however, we firmly believe that the ‘top down’ approach of strategic procurement leadership embodied in that vision should be complemented with efforts

What’s enlightening but not well recognised is that the tools to achieve that consistency and tangible change are already there – within the NZQA Procurement Qualification mentioned earlier in this article. That qualification – if mandated for sizeable government procurement as it is for the NZ Transport Agency – would drive immediate and tangible results. Qualified tender evaluators know how to focus procurement on delivering real value for money. They also understand how to comply with Government Rules of Sourcing and ensure ethical, fair and transparent evaluation of the scores of government tenders that are released to the market every week. Our government spends $41 billion every year on infrastructure. For a tiny fraction of that amount, we could leverage efficiency in procurement process and many times the ROI invested, by achieving better value for money in the goods and services procured for NZ Inc.

A proven formula for better procurement capability

It is well established that the NZ Transport Agency leads the field, both nationally and internationally, in procurement. That’s not to say that the Agency is at all complacent – there’s always room to improve. However, we also know that procurement capability across New Zealand is patchy. Wouldn’t it be wonderful if the skills and processes that have been proven within the Transport Agency were combined with the

YEARBOOK 2018 INFRASTRUCTUREBUILD.COM

Caroline Boot of Clever Buying and Kerrie McEwen of Plan A offer insight to all stages of the procurement pipeline – and draw on experience from tendering in over 30 countries, to training tender evaluators in best practice procurement methods. See www.PlanAWriters.com for more tendering resources, or www.cleverbuying.com for procurement training courses, tools and advice.


New Zealand is currently experiencing unprecedented levels of economic growth, Connal Townsend observes

T

here are many ways to prioritise funding infrastructure projects in a growing economy. The previous National government focussed on roads which they saw as strategic for economic growth. The new government clearly understands the provision of infrastructure is crucial to developing sufficient homes for the growing population and are planning to deliver broader multi modal solutions. We see benefits in both approaches.

National’s strategic roading

The last government took the approach of prioritizing funding towards “Roads of National Significance”. The projects they took on will certainly make a significant contribution to economic growth and continue to benefit the country for years to come. In Auckland, the major projects National prioritised include the Victoria Park Tunnel and the Western Ring Route. A major part of the Western Ring Route, the Waterview Connection and Tunnel opened in July 2017, completing the links to the airport from the north and west, much to the delight of locals as congestion has been dispersed. These major developments make it easier for goods and services to move steadily throughout Auckland. They also assist nationally by providing links between Auckland Airport, Ports of Auckland and inland freight hubs across the upper North Island. In short, these roads will reduce the cost of doing business in Auckland and throughout the country. Further south the Waikato region is set to welcome a four-lane highway from the Bombay Hills to south of Cambridge. The Waikato Expressway, which

is being built in seven sections, is due to be completed by the end of 2020, and will reduce travel times between Auckland and Taupo by 35 minutes. In Wellington, the Northern Corridor improvements will mean the travel times on SH1 between Wellington Airport and north of Levin are more reliable. With a total length of approximately 110km when finished, this route will improve connections to Wellington’s port, CBD, airport and hospital. Additionally, on top of the 8000 jobs created for its construction, the project is likely to create an extra 850 permanent jobs in the region. With the earthquake has come significant challenges for Canterbury and its infrastructure. The ambitious, Christchurch Roads of National Significance programme is currently underway and has been injecting over half a billion dollars into Canterbury economy. Once complete, it will provide critical access to and from the Christchurch CBD, Christchurch International Airport and the Port of Lyttelton.

Labour’s holistic infrastructure

With a new government comes a new approach to infrastructure, and a move to focusing very much on people, and their quality of life. We support this holistic approach. The schemes currently being considered focus on investing in public transport, which we support. The plans initially focus on Auckland, where the greatest need is, but they also intend to look at the regions. We welcome the goals of decongesting Auckland, and the use of more public transport options. The new government intends to

invest in more electric trains and will electrify the current tracks to from the Auckland CBD to Pukekohe. They are also looking into building light rail from the CBD to Auckland Airport. We believe it will be important for the government to prioritise good urban design around the new transport hubs that are created, including parks and shopping centres to make sure they are user friendly, and places people enjoy going to. The City Rail Link (CRL) has been an objective of the Auckland Plan from the start. The new government are picking up where the last government left off, which is great. The project is part of a vision of opening up Auckland and constructing routes across the central suburbs through to the airport, West Auckland, and later extended to the North Shore. Our Auckland Executive applauds these goals and intends to work closely with the new government to help achieve them. Rightly, the new government aren’t just focusing on Auckland. They intend to look at creating a passenger rail service linking what is known as the “golden triangle”, between Auckland, Hamilton, and Tauranga. In Wellington they are fast-tracking a feasibility study on rapid transit to the airport, which is likely to consider a light rail option. They are also intending to invest another $100million in capital investment into greater Christchurch and a multi-modal public transport system, including commuter rail as a first step.

Funding and financing innovations?

This government is interested in looking into different methods of financing infrastructure to get it started and moving quicker.

Building communities

The new government’s goal is to build more houses, but we need them to remember that it takes more than just houses to build communities. In order for communities to thrive they need parks and shopping centres; places for people to work and places to recreate. In order to construct the new infrastructure the government is planning at pace, we encourage them to lessen the red tape needed for these projects to get going. Our members will be the people building both the houses and infrastructure the government would like to see. We look forward to working closely with the new government to help them achieve those goals.

Connal Townsend is Chief Executive of the Property Council NZ, which represents the interests of the commercial property investment industry – including commercial, industrial, retail and property funds PROPERTYANDBUILD.COM YEARBOOK 2018

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PROPERTY & BUILD

Economic growth provides fresh opportunities

Currently they’re looking at options such as collecting a regional fuel tax, infrastructure bonds, targeted rates, and techniques aimed at capturing the capital value uplift of properties near the new developments. Public Private Partnerships will continue to be an excellent way of ensuring these projects progress at pace. The new government are going to be taking a completely new approach to how funding is prioritised, and it will be interesting to see how this affects infrastructure projects. The Prime Minister announced in February this year that she wants New Zealand to be the first country in the world to assess all bids for budget spending against new measures that determine not just how spending will impact on GDP, but also on natural, social, human, and possibly cultural capital. It will be interesting to see how this new innovation will work in practice.


A busy year for local authorities Last year saw Local Government New Zealand (LGNZ) launch two major projects across climate change and water, Dave Cull reports

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ther milestones included the election of a new President and Vice President to lead the sector, and work begin on advocating for the policy changes we need with the new government. Across our policy priorities, refined at the start of the year to five key areas, there have been a number of positive steps taken which will help us progress our work to improve outcomes for our communities and New Zealand.

ed to our concerns, including the establishment of the $100m Tourism Infrastructure Fund and the establishment of Crown Infrastructure Partners to co-invest

Zealand faces, including from climate change, a more strategic and comprehensive approach across the country is needed. In our communication with the new government we have reiterated the need for climate change adaptation and mitigation work to be considered in tandem, and that local and central government need to develop a joint response to the risks, challenges and opportunities of climate change. LGNZ’s proposed Local Government Risk Agency remains, in our view, critical for increasing local capacity and developing a consistent standard of risk management. We held positive talks with the previous government on supporting the LGRA, and this has been flagged as an outstanding issue with the new government.

“A long-term, sustainable funding line for infrastructure remains a goal for local government”

Infrastructure - Ensuring infrastructure and associated funding mechanisms are in place to allow for growth and maintenance across housing, building, transport, broadband, tourism-related, three waters and flood control infrastructure

This has been a key area of focus for local government for several years and in 2017 was again confirmed as the highest priority for councils. Whether experiencing significant growth or other challenges, like booming tourism or a limited ratepayer base faced with expensive renewals, finding alternative ways of funding infrastructure is increasingly urgent. Last year saw a number of initiatives introduced which respond-

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up to $600 million alongside local councils and private investors for housing developments. But it is not enough and more needs to be done. A long-term, sustainable funding line for infrastructure remains a goal for local government. We have welcomed the new government’s new Tax Working Group, and the commitment to reviewing the drivers of local government costs and its revenue base.

Risk and Resilience – Understanding and addressing risks from natural hazards and other events – both for infrastructure and to support resilience in the economy and our communities

Events like the Kaikoura earthquake and the Edgecumbe flooding further put the spotlight on the need to improve readiness for hazardous events to reduce community and economic risks. Given the substantial risks New

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Environmental – Leading and championing policy and working alongside central government, iwi and stakeholders to deal with the increasing impact of environmental issues including climate change, the quality and quantity of New Zealand’s freshwater resources, and biodiversity Climate change and water are among the top priorities for local government. The climate change and Water 2050 projects launched in 2017 are key pieces of work that will make significant contributions to how councils and communities respond to the challenges posed by these connected issues, particularly to our infrastructure. The climate change project comprises a number of pieces of work focused on both adaptation and mitigation. A primary aim of the project is to create a firm policy and legal base to support councils in their work.

Over the next year this will include a report on local government infrastructure and assets at risk from impacts of sea level rise, and quantification of replacement value, and a review of the state, value and management of river control, flood protection and drainage schemes managed by regional authorities. The Water 2050 project is designed to highlight the important role councils play in water management and protection, and advocate for policy change to improve their ability to do this effectively and improve the outcomes for our communities and the country. It has a focus on allocation, quality, infrastructure, cost and funding and governance. It aims to create a coherent framework that: • recognises the interlinked nature of all aspects of the water value chain • leads to integration of policy across allocation, quality, infrastructure, cost and funding and governance, in particular reconciling the setting of standards with the cost of achieving those standards • and identifies a suitable governance framework for water policy.


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Social – Working alongside central government and iwi to address social issues and needs in our communities, including an ageing population, housing supply and quality, and community safety Housing, always a key issue for local government, is becoming

the concern for many councils across the country, whether they be metro, provincial or rural councils, and will be the subject of a new piece of work in 2018. The lack of affordable and social housing, and the overall poor quality of rental housing, is having a growing impact in our commu-

nities. Another key issue affecting many rural and regional councils has been a loss of community policing, reduction in police availability for less serious crime and safety issues. In response to these concerns the previous government committed in 2017 to increasing police resourcing for rural and provincial New Zealand by 140 officers. The promise of this new resource was welcomed by rural councils.

in 2018. In late 2017 LGNZ and Wellington City Council hosted the second New Zealand China Mayoral Forum, following the inaugural event in Xiamen in 2015. This brought together 12 Chinese mayors and vice mayors form large and mid-sized cities and over 30 New Zealand mayors and chairs for trade and cultural discussions. Education, tourism and primary industries were the key discussion topics.

Economic – Developing a range of policy levers to address and fund economic development and growth across all of New Zealand LGNZ is working with its member councils to develop a better understanding of the state of local government economic development services so we can ensure these services deliver strong value to local regions and communities. As councils are starting to see stronger growth, economic development presents new challenges, and the key concern for many councils now is ensuring any growth is sustainable and ongoing. Work on this will progress

Dave Cull is president of Local Government New Zealand, which represents the interests of 78 local authorities in New Zealand

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Need to champion diversity from the top A recent poll conducted at a Women’s Infrastructure Network event suggests that awareness of initiatives to tackle gender diversity in the industry is low

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ddressing unconscious bias was one of the key issues raised, with 46 percent of respondents citing this in their top three areas to address. “It’s clear that we need to do better in promoting gender diversity – not only from an equity perspective but also from a skills, knowledge and capability perspective,” says Chief Executive of Infrastructure NZ Stephen Selwood. “I’m not surprised by the results but disappointed that so many [respondents] were unaware of initiatives underway in their organisations to improve the number of women in leadership positions, given the extensive industry focus on this issue.” The Women’s Infrastructure Network (WIN), was launched by Infrastructure NZ in October 2016 with the aim to increase the number of women in leadership roles, grow the visibility of women, and to provide a networking and support group for women in the infrastructure sector. The results of the survey show that the under-representation of women is perceived as a real issue for the infrastructure industry. Many organisations have goals to increase the representation of women but progress is slow to moderate at best.

“The poll showed that, from an industry perspective, many women aren’t aware of what their organisations might be doing to tackle gender diversity,” says Darryl-Lee Wendelborn, Managing Director of Beca New Zealand. We know this is markedly different for some other sectors that are further down the diversity and inclusion path and should be a rallying cry for us to do more. “Raising awareness of unconscious bias is a starting point to help us understand what might be driving our everyday decisions, which can aid behaviour change in terms of driving diversity and inclusion,” says Wendelborn. “Training not only raises awareness about our own behaviours, but also focuses attention on the topic generally. It gets people talking about diversity and inclusion, why it’s important, what they learnt and helps them to share experiences around the topic. The impact of training can very quickly multiply.” Selwood thinks the unconscious bias is more about familiarity with the way things are rather than unconscious sexism, but “calling either out can be quite confronting. “The better way to address the issue is to demonstrate success through role models and the con-

certed promotion of the benefits of diversity. We need to create a sense that organisations are missing out on skills, talent and insight if they don’t have gender balance in their work force. Hence, championing diversity from the top is key.” The poll respondents agreed, highlighting the need for more senior women in leadership positions and the role of senior men in championing diversity. “Visibility of role models, specifically at the leadership levels of an organisation, is critical for both attracting and retaining minority groups in an organisation,” says Wendelborn. “We underestimate the impact of an organisation’s image - what people can actually see - and what that portrays to a potential candidate or current employee thinking about their future. This is why some organisations will look at having targets (not quotas) at senior levels.” The industry is predominantly male, so it makes sense to get the vast majority understanding and advocating for change according to Craig Price, President of Engineering New Zealand. “Women already know the value of having women in the industry [so] I was pleased to see senior men championing diversity

Women’s Infrastructure Network diversity polling results

ARE WOMEN ADEQUATELY AND APPROPRIATELY REPRESENTED IN YOUR ORGANISATION?

YES NO

Total Responses Unique Participants

DOES YOUR ORGANISATION HAVE A GOAL TO INCREASE THE NUMBER YEARBOOK 2018 INFRASTRUCTUREBUILD.COM OF WOMEN IN LEADERSHIP POSITIONS?

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as one of the top three things that could help overcome barriers to women in infrastructure." Flexible working was also noted as one of the key enablers to change. “Mainstreaming flexible working is well known as enabling a cultural shift that enhances work life and productivity for everyone when implemented well,” says Wendelborn. “In particular, flexible working supports primary carers in the workplace who, for the time being, are more often women.” For flexible working to be a true enabler, Selwood believes a change in mindset is needed. “Flexible working arrangements are key. But that requires leaders to shift thinking from hours worked to outcomes achieved. “That’s quite a transition for some as so many of our employment norms are wrapped around the traditional 9 to 5 working day. Technology and generational change will be key to breaking through on these issues.” The poll provides a benchmark for where things are at now, and what needs to change, he says “I’m quite encouraged by what I see is already happening across the industry. The sector might have been slower to start but the skills shortage requires firms to think more creatively to attract, retain and develop women in their workforce. The growing number of successful organisations doing this will create a snowball effect,” says Selwood.

Womens Infrastructure Network In partnership with Infrastructure NZ, WIN hosts events, advocates for greater representation of women in the sector, and provides opportunities and tools for women to connect with each other. Over the last year, WIN has set up three chapters in Auckland, Wellington and Christchurch, with a fourth in the pipeline for Otago. WIN has a nationwide membership of more than 530 women.


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Infrastructure at turning point INFRASTRUCTURE

Every year since the major economic reforms of the late 1980s and early 1990s, New Zealand’s headline infrastructure message has been the same, says Hamish Glenn

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regular litany of “we didn’t invest enough last year to meet need and we need to invest more next year, otherwise there will be problems down the road”. This time, things have changed. Unfortunately, that is not because New Zealand has finally ramped up and is adequately providing the transport, water, energy, telecommunications and social infrastructure we need to meet growth. It’s because we’ve finally reached that point “down the road”. Homelessness, housing unaffordability and no expectation at all that housing supply will meet demand in growth centres is the product of three decades of infrastructure system failure. We simply have not delivered enough infrastructure to enable developers to build homes, to say nothing of the congestion constraining our economy, the contaminants in our rivers or the risks in drinking water from your kitchen tap. It is an awful situation we find ourselves in. Indeed, it is so bad that more – even a lot more – of the same is no longer feasible. It is within this context that the new Labour-led government has signalled that change is on the way. The most significant from an infrastructure perspective relates to the government’s Urban Growth Agenda. The five-point plan led by Housing and Transport Minister

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Phil Twyford is designed to get more competition and flexibility into housing and infrastructure delivery. It will do this by: 1. Changing the way infrastructure is funded and financed 2. Developing a pro-growth planning system 3. Introducing road pricing 4. Advancing spatial planning by central and local government 5. Reforming the Resource Management Act, Local Government Act and Land Transport Management Act. This is a comprehensive programme and, if successfully implemented, there is little doubt that it will address the key problems which have been plaguing the infrastructure system for three decades.

Key question

The big outstanding question is, “when?” Changes to infrastructure financing could be implemented in the nearer term, but changes to funding will carry significant ramifications for local government. With either higher or lower revenue and lesser or more responsibilities, local government entities themselves will need to be reviewed. Reinventing New Zealand’s patchwork of miniscule rural councils and under-resourced cities is long overdue but will take a decade or more to effect. A limited form of road pricing, such as motorway charges, could be introduced in the short term, but indications are that author-

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ities prefer a comprehensive system. Everyone agrees a comprehensive system is the future, but it too will require the best part of a decade to implement. The remaining three pillars of the Urban Growth Agenda are planning related. Even if enacted today, they will also likely take a decade or more to materially improve the housing and investment situation. It is possible that the government could make radical changes in the shorter term, for example, by removing metropolitan limits and densification controls, but such decisions will affect property rights. No democratic government feels comfortable making these sorts of decisions without following due (and protracted) process.

New authorities

Only the prospect of urban development authorities (UDAs) appear at this stage to offer a shorter-term impact. Legislation is appropriately being prioritised and should be in place later this year. UDAs will need to be able to cut through regulatory barriers and access plentiful finance. How the government enables this in the short term without being perceived to have overstepped its mandate will be critical to the success of the whole Urban Growth Agenda, Kiwibuild and the government itself. In Auckland, UDAs will have to prioritise greenfields development if affordable housing is to be delivered on a reasonable

timeframe. Brownfield redevelopments will encounter strong local opposition where the character and feel of communities is impacted and retrofitting infrastructure will be time consuming. Both issues will constrain the speed of supply when homes are needed urgently. Not only slower supply, but higher costs will also be experienced in brownfield areas. Even in more economical neighbourhoods, like Henderson, land costs up to $10 million per hectare. Greenfield land around Auckland can be purchased for under $500,000 per hectare, knocking as much as $200,000 off the cost of building each new home. A satellite city would be both faster and cheaper to deliver and would help reduce concerns about urban sprawl and access to employment. The first UDA should be established on unzoned land near rapid transit. The Urban Growth Agenda is not the only thing the government is doing to reset the infrastructure system.

Big announcements

Two big announcements are expected later this year. The first relates to the government’s billion-dollar regional development fund. Infrastructure policy in recent times has prioritised projects on the level of economic impact. This has tended to favour existing growth patterns so that smaller, lower growth territories


fact that no one body is responsible for it? Treasury, MBIE, the Office of the Auditor General and a vast array of departments, agencies and organisations across central and local government and the private sector look after parts of it, but nobody has oversight as to whether the system is working as a whole. We need a New Zealand Infrastructure Commission (NZIC) to monitor, report and act, where directed by government, to address long term New Zealand’s infrastructure needs.

practices would incentivise the industry to invest in the people, skills and technology needed to lift productivity.

5. Enable scale development of housing and infrastructure Focussing the Kiwibuild programme to the south of Auckland in the form of a satellite “innovation city” connected by rapid rail to Manukau, Southdown, Penrose, Newmarket and the city would make better use of limited resources. Rezoning land

increase efficiency of our road networks, raise funds for new investment and incentivise public transport use and walking and cycling. The quicker we ask users rather than tax payers to pay, the smarter our investment decisions will be and the better use we will make of our existing infrastructure.

9. Corporatise water service delivery

The evidence shows that councils across the country, especially in rural areas, are really struggling to maintain their water infrastructure networks. Corporatisation of water services would enable significant efficiencies through economies of scale, staff specialisation, standardisation and, if introduced with volumetric charging, a direct link between revenue and investment.

“. . . not delivered enough infrastructure to enable developers to build homes, to say nothing of the congestion constraining our economy, the contaminants in our rivers or the risks in drinking water from your kitchen tap”

Ten tips

Infrastructure New Zealand has identified 10 priority actions that are critical to enabling growth and addressing some of the country’s most pressing infrastructure issues, both in the near and longer term:

1. Establish an independent NZ Infrastructure Commission

Could one of the causes of failing infrastructure stem from that

2. Direct the NZIC to lead a national review of resilience of NZ’s strategic networks

Flooding, power and energy supply disruption, long term road closures, contaminated water and the apparent frequency of “one in one hundred-year events” are all symptoms that our nationally and regionally significant networks are not as resilient as they should be. The NZIC should be charged with undertaking a national review and leading ongoing industry oversight of the resilience of our infrastructure system.

3. Instruct the NZIC to establish a procurement centre of excellence to lead best practice in capital project delivery

A dedicated procurement centre of excellence, working in partnership with public agencies, is needed to lift procurement. Avoiding cost blow-outs, identifying efficiencies and improving project coordination and delivery would all be major benefits.

4. Identify and commit to a long-term investment pipeline and invest in industry training and capacity building While immigration will need to fill yawning capacity gaps in the short term, industry and government must prioritise investment in training, technology and capability across the construction sector. A long-term project pipeline and smart procurement

and partnering with existing land owners, or buying them out if needed, would create an opportunity to create value and fund supporting infrastructure.

6. Accelerate legislation to enable Urban Development Authorities to aggregate land and capture value to pay for the infrastructure UDA’s provide the opportunity to aggregate land through partnership or purchase, where needed. NZ Super, ACC, iwi and other domestic and international funds are all looking to invest but the opportunities are extremely limited. Well-functioning UDA’s could unlock this potential and facilitate master-planning and urban development at scale.

7. Provide opportunities for private investment in infrastructure and release capital through asset recycling

10. Reform New Zealand’s antiquated planning laws and local government structures and funding The Resource Management Act, the Local Government Act, and the Land Transport Management Act provide the legal framework for infrastructure planning, funding and delivery but between them represent 1,358 pages of conflicting processes and complexity. Administering this system is 78 regions and councils, all of them with inadequate resources and funding needed do their job properly. A first-principles, evidence-based review of our planning laws and the purpose, structure and funding of local government in New Zealand is required.

Tax payers should not have to fund the bulk of the investment. Taxes are best used to address market failure, seed fund development and incentivise the market to deliver. Public private partnerships and partial or full sale of existing assets can enable private sector capability to be brought to bear and release public capital to be recycled into desperately needed water and transport infrastructure.

8. Introduce road pricing and roll out water pricing nationwide

Hamish Glenn is Senior Policy Advisor at Infrastructure New Zealand

Road pricing could dramatically

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get less and larger, faster growth areas, more. The development fund is expected to turn this dynamic around, so that investment is used not just to support expected growth but generate new growth in those areas many perceive to have been left behind. The other big decision will be what the government decides to do about water. The Havelock North Inquiry recommended major restructure and consolidation of the industry and if the government sits too long on the advice and another health crisis erupts there will serious political consequences. A good decision for water will enable public water companies to raise debt off council balance sheets and operate independently. Such a policy would have major benefits for the Urban Growth Agenda. What has not been announced so far by the new government, but which does promise to create a step change for the infrastructure system is specialised procurement capability. Choosing the right project for the job, prioritising and sequencing it appropriately and making sure it is delivered on time, on budget and to specification is critical for major projects. With local and central government spending over $10 billion per annum on new infrastructure, a specialised and modern approach to capital procurement would result in the equivalent of one Transmission Gully being delivered for free to New Zealanders every year or two. This is extremely important in light of how much investment must be brought forward to respond to growth needs in the immediate term.


An eventful year leading to significant reform in the water sector 2018 is likely to see the start of major reform in the drinking water sector, says Water New Zealand Chief Executive John Pfahlert

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he release in December of the second stage of the government inquiry into the Havelock North Drinking Water contamination report has set the scene for change. Many of Water New Zealand’s submissions to the inquiry were reflected in the 51 recommendations the Inquiry made to government. In particular, we supported the recommendation that the government create an establishment unit to oversee the creation of a new drinking water regulator and that all public water supplies have mandatory treatment of drinking water, including the use of a residual disinfectant, except in exceptional circumstances. We now strongly urge the government not to delay the recommendations, because unless there

are significant changes to the way drinking water is regulated there is a serious risk of another contamination outbreak on the scale of Havelock North. At Water New Zealand, we support the view that all public drinking water ought to be treated. It was pleasing to see that in January, the Christchurch City Council finally agreed to chlorinate its water supply. However, it is concerning that councillors remained adamant that this is a temporary measure and that the treatment would be removed once the supply is able to have its “secure bore status” reinstated. This decision may be overtaken by events if the government moves to implement the inquiry findings.

It has recommended the removal of “secure bore status” from the Drinking Water Standards.

Systemic problems

While we know that many councils do a good job providing safe drinking water, the inquiry clearly identified systemic problems in the regulation and supply of safe drinking water. The report accurately identified the lack of competence and training in the sector and called for a mandatory training and qualification regime to be established for all operators, supervisors and managers working in the sector. The sector has been well aware of the lack of competency for some time and this is an initiative Water New Zealand is already acting on. The inquiry included recom-

John Pfahlert is Chief Executive of Water New Zealand, a national not-forprofit sector organisation comprising approximately 1500 corporate and individual members in New Zealand and overseas that focuses on the sustainable management and promotion of the water environment encompassing the 3 waters – fresh, waste and storm waters

mendations in relation to the aggregation of water suppliers. Given that it has observed this would lead to improved compliance, competence and accountability, Water New Zealand is urging the government to further investigate this recommendation. Reflecting the need to ensure industry is well informed about what the likely outcomes are following the report, Water New Zealand ran a series of seminars around the country so the sector could better understand the implications for them. The response to the seminars was so overwhelming that extra venues had to be found in order to try to meet the demand. In all, more than 600 water sector managers, council officials and local body politicians attended the seminars. As part of the bigger picture, Water New Zealand has recruited additional expertise in water quality, and will continue to provide more coherent industry advice around water treatment and water safety plan development.

Training focus

There was a big emphasis on industry training in 2017. Our board has asked staff to take a greater leadership role in the organisation around training for the water sector. New qualifications will start to be delivered in 2018, and there is a strong industry desire to modernise the traditional block courses offered to the sector towards a world of blended learning. This involves the ability to do distance/e-learning and more onjob training. It will require Water New Zea-

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land to be more directly involved with Connexis going forward, and in the arrangement of training delivery. The other big piece of work started in 2017 has been establishing a system of industry certification for operators, supervisors and managers involved in water and wastewater treatment. It has become very apparent through the Havelock North Inquiry that the sector needs much better systems to train staff and demonstrate their competence to do the job being asked of them. This is a significant change for the sector that will probably take two to three years to implement. It involves defining a body of knowledge that staff need to be able to demonstrate, arranging a system of competency assessment, and ultimately a system of continuing professional development to maintain that competence.

Zealand undertook a major public opinion survey of attitudes towards water. The report, Water New Zealand Consumer Survey Report 2017 is the start of a work plan seeking to understand what customers really want from the industry. Last year the government began a three waters review. The focus of the review on financial incentives, asset management practices, and compliance and monitoring appears to miss an opportunity to address more fundamental issues facing the water sector. This review was started by the

question whether the existing industry structure in terms of the number of entities is actually capable of delivering safe drinking water to all communities. We know the financial and technical capability issues faced by many small councils. At some stage the government needs to address that issue.

Projects aplenty

Water New Zealand has a wide variety of projects underway. Of significance is the rollout of the metadata standards developed over the past two years. An industry working group has

There are considerable challenges in managing and improving our water quality. We’d like to see issues around contamination addressed on a national basis rather than placing the responsibility solely at the door of councils. For instance, better management of wastewater overflows will be critical to achieving swimmable waterways and the development of some national standards for wastewater overflows would be a huge help. Good technical and other support from central government would allow local government to implement freshwater policies more effectively and consistently. This is particularly the case for small communities where the environmental challenges associated tourism, for instance, places considerable strain on some communities. It is clear that the new government is likely to place greater emphasis on protection of our freshwater resources. We will be urging the government to work closely with and support local government in any policy development in this area.

“We now strongly urge the government not to delay the recommendations, because unless there are significant changes to the way drinking water is regulated there is a serious risk of another contamination outbreak on the scale of Havelock North�

Survey start

The focus on treating ratepayers as customers was also a key focus in 2017. After all, many water customers are not ratepayers. As part of that, Water New

last administration, so perhaps there will be an appetite by the new government for a more ambitious work programme. For example, issues that might be examined in more detail include whether the time is right to establish an economic regulator for the sector, or perhaps ask the

been established to oversee this task and I anticipate good progress in 2018. This speaks to our strategy of getting councils to operate in a more consistent manner. The dry summer has again put the spotlight on our fresh water resources.

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Talking Rubbish While possibly invoking the thought that I regularly talk rubbish, there’s a pressing need to discuss the serious issue of managing physical refuse in our communities, says Leigh Auton

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ike many of the debates around the physical infrastructure that underpins our wealth and wellbeing, refuse management involves philosophical and ideological battles about its use and disposal. In Auckland, at least in the southern area where I have lived and worked for over four decades, the negative impact is currently very evident and raw. Without careful policy resetting, the effects are building to be major. In my career I have visited and investigated many waste disposal systems and sites. In countries as diverse as Italy, Japan and the US, all wealthy and highly populated, I have seen highly expensive systems of converting household and commercial refuse into energy to power large cities and communities. Such systems incorporate com52

ponents of reuse and recycle, but primarily focus on the burning of refuse at very high temperatures to feed power into the electricity grid. Cost structures are exponentially higher than our systems in New Zealand, but their need to manage large volumes of waste effectively is far greater. Burning refuse in this manner is unaffordable for our country.

Dangerous disposal

The opposite of the developed countries are the developing nations where refuse disposal is typically fragmented, inefficient and often non-existent. A visit to massive rubbish dumps in cities such as Manila in the Philippines is an enormous eye-opener. There people actively live in mountainous landfills, taking reuse and recycling into a new

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realm! The environmental and human costs are huge. In my career as a local government practitioner, I saw the terms used in the industry change; rubbish became refuse, tips became sanitary landfills, and the terms reduce, reuse and recycle became part of the lexicon as large-scale consumerism began to impact on the supply chain. I have been involved in challenging debates with the giants of the waste management industry, and yes, they are powerful and influential. I learned that you have to work with them to make change, and indeed my former employer Manukau City Council created a joint venture with one such giant to manage and develop the Whitford Sanitary Landfill. Likewise, the council combined with Auckland City Council in a public-private partnership with Visy to create the large state of

the art recycling plant at Onehunga, forming the basis of very successful recycling for a substantial part of Auckland’s population. From experience, the successful management of the refuse cycle involves working with, and recognising, the needs of your community. New Zealand has many communities, and local government generally recognises such diversity.

Conflicting councils

Prior to amalgamation in Auckland, the seven territorial councils applied different methodologies and philosophies to the waste stream. North Shore City Council’s model of household refuse collection was based on competing private collections at the gate, with a user-pays philosophy. Manukau City Council, with a community comprising significantly larger households, lower


rationalising the different philosophies inherited from the legacy councils. An early initiative was to progressively remove the inorganic collections operated by a number of councils. In Manukau’s case the collection was annual, while Auckland City Council ran its service every 18 months. These collections, based on a rolling programme across the city, over a typically three-month period (spring time in Manukau) were efficient, cost-effective and popular, even if a bit chaotic for a few weeks for each neighbourhood. These collections have gone, replaced with an appointment process for specified and limited numbers of inorganic items. This new system has not been received well, and the results of the policy in southern Auckland and elsewhere is overwhelmingly evident in mass illegal dumping. Industrial zones have been a major target area, with the council being required to uplift significant tonnages on a daily basis. A check of the Manukau Courier website will evidence this policy failure, as will recent comments on Facebook and other media by Mayor Goff.

240-litre option available for an additional $55 charge. Housing NZ chose not to pay the additional amount for its tenants. In Manukau these rubbish bins replace the unlimited bag collection system. Drive around

inorganic and household rubbish for a discounted price onto public places. Let this develop to any significant degree and you can ultimately arrive at the state of rubbish removal chaos of a Rome or Naples. Too strong, maybe. But let us not test the possibility. My suggestion is that the Auckland Council needs to urgently review its policies on refuse disposal, including having a detailed conversation with its Local Boards. Local Boards are bearing the brunt of community angst, and they can be part of the solution. Ultimately the policies must enable residents to dispose of their refuse by using systems easy to understand, are readily accessible and which provide the basis on which to maximise the use of the waste stream once in the public ownership. I agree that there must be a move by residents to reduce, reuse and recycle, but let us agree that people led busy lives of which waste disposal is but one part. I have previously written articles that commend the Auckland Council on its progress on infrastructure such as water and waste water treatment, and in transport. On rubbish management, it needs a major rethink and reset.

incomes and significant public housing, opted for a ratepayer bag collection, recycling bins and an annual inorganic collection. The Waitakere City Council used an ‘Eco City’ model including the running of their own transfer and reuse plant, their system generally more expensive to the consumer than other councils in the region. The Central government’s role in New Zealand has generally been by way of legislation, introducing a waste levy to support waste reuse and recycling efforts, with exhortations to communities to manage their waste more effectively. The concept of zero waste has been part of the government messaging, being picked up to lesser or greater degrees of focus by local government. Central government’s role in developing legislation or programmes around issues such as packaging has been generally muted. This may change with the Green Party involvement in government, exampled by the German model which was driven by the green movement in that country.

Rationalising refuse

So to the current state in Auckland, where the council is

Major issue

A major issue with the new system is that it requires the resident to make an appointment with the council. On the surface this looks simple, but it is not for many residents and tenants. An example of the lack of uptake of the new system was evidenced in one suburb of over 10,000 residents with only two appointments. The policy is especially not working in poorer communities with large families and significant numbers of public and private rentals. A side-effect, I suspect, is that the level of recycling and reuse in the new system is much less than the previous system, where a flotilla of cars, vans and people picked through the inorganics in the days immediately prior to the formal collection. More recently the Auckland Council introduced 120-litre wheelie bins for the weekly household collection, possibly moving to two weekly, with a

southern Auckland today, including the roads and reserves on the urban rural fringe and you will see massive piles of these dumped bags, often yellow stickered for 30 days before the council will clear them away. I am not arguing against looking at new and innovative ways of managing our waste stream. I am entirely supportive of reducing, recycling and reusing. My argument is that policies need to be more than ideological; they need to be relevant to the communities they serve, and not be at odds with, or too far ahead of what residents can sustain.

Policy misalignment

In Auckland, waste policy is out of step with the general public. Poignantly, the policy is more expensive for both the council and consumers. The cost of the new inorganic collection with a ‘$28 voucher’ for those that make an appointment, combined with negative impact of dumping will be far greater than the $14 cost per rateable residential property for the old inorganic collection in Manukau. I am sure this applies to other legacy council areas. In the governance of society, basic services such as water supply and its treatment, the regulation of hygiene and health standards, and the management of physical waste are fundamental to good environmental health. They are historically the basis of the modern city. Where policy decisions on such matters are too far out of sync with the populace, a state of disobedience will develop. Alternative outlets appear, such as illegal operators now in operation who will ‘dispose’ of

Leigh Auton is a former Local Government Commissioner and a Director of Auton & Associates with 35 years’ local government experience, a chairman/director/trustee on several boards and provides consulting advice to public and private sector companies

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“…policies need to be more than ideological; they need to be relevant to the communities they serve, and not be at odds with, or too far ahead of what residents can sustain…”


No silver bullet to solve the scourge of drugs in the workplace Employers simply can’t afford the effects that drug and alcohol abuse can have in the workplace. They can’t afford the lost productivity. They can’t afford to risk other workers’ safety and livelihoods either, says TDDA Chief Executive Kirk Hardy

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robust drug testing programme plays a pivotal role in creating a successful drug-free working environment where people are safe, valued and abundantly productive. Allowing employees to work in a high-risk, safety-sensitive industrial environment while they are under the influence of drugs or alcohol is no different than letting the driver of a school bus transport your kids home after a couple of drinks Under the Health and Safety at Work Act 2015, employers have a level of responsibility to ensure that workplace risks are well managed, and this includes not allowing employees to work while under the influence of drugs or alcohol. If employers are aware that an

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employee is impaired and fail to do anything to mitigate the risk, they may be liable if an accident occurs where someone is harmed or employees harm themselves.

Identifying employees under the influence is not easy Tell-tale signs include attendance problems, poor concentration, poor performance, behavioural issues, forgetfulness and frequent, minor accidents. Even when clues are present, many employers and managers lack the skills and confidence to deal with the delicate and potentially volatile situations that might arise from confronting an employee. If you don’t know what you are doing, a delicate and volatile situation can move rapidly from

asking simple questions to laying the groundwork for a personal grievance claim. The skill is to confidently move from suspicion to verification, proving the employee is under the influence. You need to know what to do when a drug test is returned positive. Add to this is the worry about reactions and repercussions, and uncertainty about the next steps needed to deal with the current problem without creating new ones. Even if you are confident you can spot an employee who is under the influence, could you detect if they were on methamphetamine or cocaine or marijuana? Dealing with someone under the influence of these different drugs calls for very different tactics.

Planning, vigilance education and training

To manage a modern workforce that operates in New Zealand’s evolving drugs and alcohol culture requires ongoing planning, vigilance, education and training. First you should firmly establish that your workplace culture does not tolerate people attending work under the influence. You can do this by making and displaying a set of workplace rules, introducing a wellness programme and training sessions about how to detect people under the influence. If your company is committed to creating a drug-free working environment, introduce your philosophy to employees from the very beginning. New employees need to understand the company’s policy before the first work day begins. Improving communications with employees about workplace policies – as early as the interview stage. During interviews, you need to clearly outline your standards and expectations on drug use and testing. It’s critical at this stage to reiterate the importance of a drug-free workplace for health and safety. These first conversations with employees need to be consistent with your company’s written drug and alcohol policy, which needs to be unambiguous and regularly reviewed.


SAFETY NEWS

Rules and guidelines should outline reasons for drug testing, processes involved and methods of assistance given to those employees who test positive or voluntarily admit they have issues. Get professional advice on how to go about drug screening employees. Put a regular testing programme in place and discuss what form of testing – whether it be hair testing, on site or lab-based urine testing or saliva testing can be set up to best meet a company’s needs and avoid legal grievances. Many safety-sensitive workplaces now lean on pre-employment testing as a prerequisite. It’s a good idea to state that pre-employment testing will be conducted when advertising the role. This makes it clear that an employer is committed to managing drugs and alcohol in the workplace and helps to make sure that potential employees are aware of your approach and policy from the start. It goes without saying that where pre-employment testing is used, wait until the test results are returned before making an offer of employment. This means there is no argument that an employment relationship is in place. Importantly, don't take chances, or rely on DIY kits. Drug testing is a professional service that should be conducted by accredited companies and professionals because

when done wrong it not only compromises employees’ safety but damages a company’s bottom line, or worse, its reputation. Companies trying to save money by doing their own staff drug testing put the business at risk. DIY testing is fraught with legal and HR pitfalls and can lead to innocent staff losing jobs or employees under the influence going undetected – and potentially cause serious injuries or fatalities. The Australian FairWork Commission recently ruled against a diagnostic services company, citing disciplinary process flaws, in a case with DIY drug testing. The company conducted a drug test on a female employee after being informed by her neighbour that she was under the influence of drugs. When asked to give a urine test the employee became agitated, claiming she had spent the morning trying to gain an Apprehended Violence Order against her neighbour. The employee left the building saying she would come back after lunch and never did. She was later called into a disciplinary meeting for failing to return for the test and her employment was terminated for serious misconduct. The FairWork Commission determined that while the company did have reasonable grounds for requesting a drug test, it was not best practice to take a drug

sample from a person with whom they work and manage. Nor was the process to take the sample in line with Australian and New Zealand Standards. This reinforces the importance of using an independent and accredited tester when conducting drug and alcohol testing, best practice and knowledge of international standards is critical. It protects the interests of the employer and employee and guarantees accurate outcomes in a professional manner that will hold up in a court of law. Professional testing services also ensure that employees are treated with dignity, respect and that their privacy is protected. The fairer and more professional a company’s approach is, the less likely that employees will perceive a drug testing regime as a negative programme or invasion of privacy. Companies need to remember that while testing can be used to identify those who come to work under the influence, it’s just as important to take a proactive approach by educating employees on the perils of drugs and alcohol in the workplace and reminding them to think of the consequences. There are many companies that offer employee training initiatives to help combat drug and alcohol abuse in the workplace. There are also organisations

that train supervisors and managers to assist with identifying behaviours that indicate recent drug and alcohol use, and to keep pace with emerging trends in the drug market. These also offer advice on how to go about approaching an employee about suspicions they are under the influence. However, when selecting a provider be sure they have right accreditations, scale and track record for testing and education services to meet your business needs.

Kirk Hardy is the Chief Executive of The Drug Detection Agency (TDDA) which has 57 operations throughout Australasia. TDDA has ISO 15189:2012 accreditation for workplace drug testing.

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“the secret to architecture – hei tangata, hei tangata, hei tangata (it is the people, it is the people, it is the people)”

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Dynamic designer garners gold One of New Zealand’s most creative architects recently became the youngest winner of the NZIA Gold Medal, the highest honour an architect can receive and rarely given mid-career

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ounder and creative director of Patterson Associates, Andrew Patterson is responsible for some of the country’s most distinctive and exciting buildings, ranging from a prestigious golf club to New Zealand’s only single artist gallery. Along the way he has also found time to venture abroad, designing the New Zealand Pavilion at the 2012 Frankfurt Book Fair and the New Zealand China Concept Store in Shanghai two years later. Impressive achievements one and all but perhaps only to be expected from a determined individual who always wanted to be an architect – even though his father had other ideas, Patterson told the New Zealand Institute of Architects (NZIA) awards ceremony in November. “My father was a doctor and he was equally determined that I would go to medical school, so I ended up in Dunedin, which is about as far away as you can get

from an architecture school in New Zealand. “I remember the grade to get into medicine was an A+ and the grade to get into architecture was a B-, so it was only with very considered under-achievement that I became an architect.” “I arrived home to my very disappointed doctor dad to say sorry, and in the middle of the living room was this drawing board that he had bought for me.” However, it wasn’t just any drawing board: “it was the Rolls Royce of drawing boards and it’s still in the office, much to the curiosity of anybody under 30 and the complete disgust of my partner Andrew Mitchell.” On the drawing board his father had placed his secret to life, which was a copy of Jacob Bronowski’s The Ascent of Man and his dictum “Know only facts”. “My granddad fought at Passchendaele, so he was 92 when I went to medical school and his

hobby was translating Latin,” Patterson recalled. “Most of you know firmitas, utilitas, venustas, the Latin test for architecture, and I asked him about it. “He said venustas is not the work for beauty or delight per se, it’s the word you use for the delight of the natural world – and in an instant my whole architectural philosophy was formed.”

Local inspiration

Buildings had to be as beautiful as the New Zealand natural environment – they had to match the local environment. “I was excited and I went back to architect school with this renewed vigour.” At the time, New Zealand’s buildings, and they still are, were copies of overseas buildings and graduates would go on their big OE. However, armed with his newfound philosophy, Patterson was

“absolutely determined” not to travel. “I wanted my education to be in New Zealand in the landscape – I wasn’t going to have a bar of going overseas.” Joining a firm, he remembers being told “don’t worry about the back of the building, nobody sees the back of the building; don’t worry about that flashing line, it’s high.” Clearly the eager young architect and the staid, conservative firm had different ideas. “Thankfully the architect waited till the day I was registered, the very morning, before sacking me.” All was not lost, though, as Patterson’s burgeoning talent had been recognised before he even graduated with a commission to design a house – although it had been completely overlooked by the awards system. Coincidentally, architects Pip Continues on Page 59

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A cavalcade of creativity

Andrew Patterson has been responsible for some of New Zealand’s most creative and striking buildings during his career to date, many of which have won major awards. Perhaps he is most synonymous with New Plymouth’s Len Lye Centre, the only such building in the country solely dedicated to a single artist. Designed to fulfil multiple requirements, the $11.5 million project had to integrate with a proposed new art and cultural precinct while seamlessly merging with an existing art gallery. The finished building with its striking curved 14-metre-high stainless steel and concrete façade introduced new gallery spaces, education studios, a cinema, the Len Lye Archive and a dedicated motor room for his kinetic works.

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The 3000-metre building engages with the urban square via a light reflecting and transmitting façade, which transfers light in a holographic effect from one place to another to successfully enliven and activate both. The Len Lye Centre uses a sustainable energy source to include ESD principles in the high-performance environment required by International touring exhibition standards, aptly reflecting Lye’s passion for kinetic sculptural art powered by electricity. Completed and opened in 2015, the Len Lye Centre was a fitting winner of the Gold Commercial Projects Award 2017, the WAN Civic Building Award 2016, the LGNZ: Excellence Awards 2016, the Creative New Zealand EXCELLENCE Award for Best Creative Place 2016 and Stainless NZ Innovation for Stainless Award 2016.


Cheshire and Pete Bossley the Year award, which Patterson duly won. “With that I got the Carter Holt Harvey Home of the Year Award, which at that time was a $20,000 travel grant, which completely threw my travel ban out the window.” Patterson ended up travelling around the globe forcefully immersed in world architecture; leading him to wryly conclude that “the secret to architecture is betraying your personal values.”

Clients key

On a more serious note, he believes “the open secret to architecture we all know is you can’t have a great building without great clients. “I’ve been terribly, terribly lucky,” Patterson admits. “I’ve had the best clients, and many of them have come back time and time again.” One of his major influences was Sir Michael Friedlander, who taught him about longevity of the buildings. “Our buildings have got to attract future generations, otherwise they’re not sustainable,” Patterson insists. The award winner also took the opportunity to thank his team at Patterson Associates, who he believes taught him another secret to architecture - collaboration. “It’s a wonderful, talented group of people – thank you very much, I couldn’t have asked for more.” He also thanked his “third sister”, Maori politician and community leader Naida Glavish, for the “actual” secret to architecture – hei tangata, hei tangata, hei tangata (it is the people, it is the people, it is the people). Patterson said this can be easily proved by taking out a phone and flicking through Instagram or old photos. “You’ll flick over all of the landscapes, and the sunsets and the buildings and it’s only the people that’ll make you smile,” he argued. “Us architects have known that throughout the generations – in classicism with its human proportion, in wharenui with its arms outstretched and a sense of belonging, brutalism’s honesty.” Patterson’s then revealed the “secret secret” to architecture. “Tangata is a two-way street – people are hard wired to recognise other people. “We’re all human – that’s the crack that lets the light come

through – and it’s the clarity of consciousness in a work that makes it beautiful. “I challenge you to think of any building you consider beautiful that doesn’t have a recognisable authorship, even if you don’t know who those authors are or that author is. “So, when that authorship is diluted the beauty of that building and its attraction to people is diluted as well.” Patterson summed up by paying tribute to his father, proclaiming “My Hippocratic Oath is to make New Zealand a more beautiful place.”

Luxurious lodge

A more recent development was The Kinloch Club, a golf course near Taupo designed by Jack Nicklaus in 2005 that is considered his finest southern hemisphere course. The course’s development led to the design for an extended clubhouse, lodge facility and central spa surrounded by 52 duplex rooms. Situated on an exposed south-facing rocky escarpment high above the golf course, the lodge is constructed of bagged stone on blockwork and punctuated by turret-like chimneys. The building wraps around itself to form a sheltered internal courtyard with a series of strategically placed terraces to catch northern and western sunshine as well as views of the striking landscape. Inside, a sequence of rectangular rooms, deep window bays and intimate transitional spaces seem hewed from the stone, volume is flattered by the panorama viewed through a series of openings that cut right through the body of the building and large pocket sliders open in bright weather to usher in the cool breeze. The duplex units are housed in black stained cedar boxed arranged along the western slope of the escarpment, all enjoying sunshine and views via double-sided outdoor living spaces. Patterson’s artistic vision inherent in Kinloch Lodge was recognised with the NZIA: Residential and Commercial Award 2017, the Silver Commercial Award: Tourism 2017 and the Sir Miles Warren Award for Architecture 2017.

Botanic beauty

Patterson’s creative flexibility is also evident in the design of the Christchurch Botanic Gardens Centre, which was conceived in the spirit of classic garden

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architecture strategically sited to complement existing pathways within the garden. A base for botanic science and research, the building is designed to communicate and educate and incorporates shade houses, tractor and fertiliser sheds. It’s unusual in that it isn’t a walled garden but rather permeable all the way round pierced by bridges and offering access ways to complete the pathway system and open a large section of the adjacent riverbank for public access. The Visitors’ Centre is experienced as a series of airy, leafy thresholds which includes public spaces such as the shop and café that look into a variety of semi-public spaces including the library, function room, meeting room, exhibition area and a large greenhouse and shade house. The public spaces are enhanced by sculptural panels on the walls and ceiling that filter light and further reinforce the look of a contemporary greenhouse, especially with the sawtooth roof that is a traditional greenhouse design. The Christchurch Botanic Gardens Visitors Centre project saw Pattersons take out the inaugural John Scott Award for Public Architecture at the NZIA Awards 2015. The jury noted “an exhilarating contemporary take on the traditional garden greenhouse and an adroit and sympathetic piece of place-making” and “the elegant form is an inspiring contribution to the public realm in Christchurch”. The same project also won Pattersons the intensely contested Civic Award at the 2015 Interior Awards. The judges said, “beautifully crafted geometries create moody, ethereal spaces of dappled light and wondrous detail, allowing the building’s skin and interior to become one.” The Christchurch Botanic Gardens Visitors Centre was also shortlisted in the 2015 World Architecture Festival Awards in Display – Completed Buildings category, along with fellow Patterson designs Scrubby Bay in House – Completed Buildings and Olive Grove – Hotel and Leisure – Completed Buildings.

International assignments

Not content with scooping up awards in his own backyard, Patterson has accepted similar assignments further afield, designing the New Zealand pavilion

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at the 2012 Frankfurt Book Fair and winning the 2015 NZIA Award for International Architecture for a concept store in Shanghai for New Zealand food brand Oravida. The New Zealand China Concept Store in Shanghai was the only building to be recognised in the international architecture category of the awards, which is dedicated to overseas buildings designed by New Zealand architects. The concept store is “intentionally a show-off building,” the jury said. “It exhibits its intentions and its contents with clarity and to a thoroughly international standard.” Patterson has also turned his hand to various other architectural fields, including the Paoneone private residential project that took home the NZIA Regional Housing Award. The judges said: “Space is the luxury here; the wooden sides of the house slide back so the big indoors flows to the great outdoors. “Time is another commodity in plentiful supply: the level of detailing evident in the house is not achieved quickly. “On an idyllic site, the considerable resource has supported a single-minded pursuit of quality.” He is equally at home with store design and even war memorials, taking out the Retail Award at the 2017 Interior Awards for international skincare brand Aesop’s Newmarket outlet, which the judges described as: “Intimate and elegant, meticulous and sophisticated with a simple, bright idea as its basis, this space proves that a singular clear concept can often be stronger than large operatic solutions”. Two years ago, the French Embassy selected Patterson Associate’s Le Calligramme as the winning entry for a war memorial at Wellington’s Pukeahu National War Memorial Park. Chosen from 43 submissions, the $870,000 design that is scheduled to be opened this year includes stone shipped from Caen in the north of France. Rounding out Patterson’s eclectic offerings, the AJ Hackett Bungy Centre that scooped the NZIA Resene New Zealand Award for Architecture 2008 echoes ancient Maori eel-catching devices and features a bungy cord-like ramp that winds down to a viewing deck perched over the Kawerau Gorge A man of tremendous vision and many talents, Andrew Patterson

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looks certain to become an even more important influence on local architecture and fulfill his vision of making New Zealand a more beautiful place.

Tough and solid

“He likes the tough and solid stuff, especially concrete and steel. “This predilection is highly compatible with his declarative impulse. “There is nothing tentative about Andrew’s architecture. “Not for him, for much of his career, the tread lightly approach. Andrew’s architecture is an architecture of occupation; buildings such as Site 3 (2001), Geyser (2012) and The Lodge at Kinloch Club (2016) take possession of their sites. “Often, the buildings burrow in, as is the case with two Queenstown projects, AJ Hackett Bungy (2002) and The Michael Hill Golf Clubhouse (2008). “Digging in, as Andrew points out, is not a foreign concept in this country; Māori were sculpting the earth in Aotearoa for centuries before the Europeans turned up. ‘Andrew is at least as com-

fortable talking about myths as modernism. “His attraction to mythologies, and the earth-moving and monument-making civilisations that have produced them, is expressed in strong formal statements such as Anvil and Local Rock House (both 2010) and the Len Lye Centre (2015). “It also seems to feed his appetite for pattern-making, a hallmark of his architecture that is there for all to see on buildings as disparate as Cumulus (2003), Stratis (2005) and the Mai House (2007). “Pattern is not lightly applied to the façades of these buildings, but seemingly carved out of them. “In Andrew’s architecture clarity of concept is never betrayed by timidity of execution. “Unusually for a New Zealand architect, Andrew is not reticent about proclaiming his ambition and ability or sharing his metaphorical excursions. “The evocative nomenclature, an amalgam of Platonic essentialism and capitalist branding, applied to many of his buildings is a promise of excitement.” www.pattersons.com


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Focus on core space a key office trend for 2018 PROPERTY INFRASTRUCTURE & BUILD

Mobile tech will continue to disrupt workspaces, say office experts

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ffice occupiers will increasingly draw a distinction between their ‘core’ and ‘flexible’ space needs as mobile disruption continues to reshape workplaces in 2018, office experts say. Colliers International National Director of Office Leasing Rob Bird says flexibility has been a key trend in recent years, with more staff working offsite and from home. “It’s now becoming harder to justify allocating a desk to every employee when staff occupancy rates are trending down,” he says. “Occupiers are seeking new ways to consolidate space and save on real estate costs, and a good starting point is to analyse how staff utilise the workspaces available to them. “A clear understanding of the office areas that are vital to the business can help companies become more efficient by eliminating unnecessary floorspace and the associated costs.” Bird says ‘core space’ is defined as the minimum space a business needs to function efficiently, with no excess for expansion, short term projects, seasonal work surges, or large meetings and presentations that take place only occasionally. These excess needs can be fulfilled by using ‘flexible space’ – shared facilities that companies can use as and when required. Shared facilities could include project spaces, meeting rooms, collaborative spaces, event spaces, and administrative areas for printing and copying. “Some modern office buildings provide shared facilities that enable the building’s various

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occupiers to access flexible space when they need it,” Bird says. “Alternatively, occupiers without shared facilities in their buildings can use one of the many co-working providers that have been established in New Zealand’s main centres in recent years.”

Creative co-working

The latest innovator to enter the New Zealand market is Spaces – a global co-working provider founded in Amsterdam that has since expanded to more than 50 locations worldwide. Located in the former Fairfax building on Auckland’s iconic K’Road, the 2,700sq m business and creativity hub is due to open next year. Spaces will share the heritage building with tech disruptor Tesla, which opened its first New Zealand electric car showroom earlier this year. “The premises will be newly fitted out with state-of-the-art meeting rooms, private offices, expertly designed co-working spaces, and a cafe with barista-served coffee,” Bird says. “With room available for up to 400 occupants, Spaces will offer casual and monthly membership plans as well as permanent office solutions.” As co-working continues to grow in popularity, Bird says providers like Spaces will increasingly target major corporates like Twitter and Rabobank – which already use Spaces’ facilities – rather than focusing solely on start-ups and smaller businesses. “This has already started happening in the United States, where large co-working providers have begun competing with

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traditional landlords for major tenant leases.” Bird also expects occupiers will embrace co-working by subleasing space to co-working providers. “This strategy allows occupiers to bank additional space for growth if required. It also gives occupiers the ability to collaborate with the businesses the co-working provider brings in, resulting in better productivity and the opportunity for innovation.”

More workspaces

Colliers International Commercial Leasing Director Matt Lamb says flexible work practices and mobile technology are also making workplaces denser. “With fewer staff in the office, we’ve seen some occupiers consolidate their space by increasing density from a staff-to-squaremetre ratio of 1:10 to 1:8,” he says. “We expect this trend to increase, particularly within major CBD areas where space is becoming more expensive.” At the same time, Lamb says building owners and occupiers are investing heavily to make their workspaces more appealing and useful to workers. “This trend towards ‘placemaking’ will become a key part of owner and occupier strategy in 2018 and beyond,” Lamb says. “With the rise in mobile technology, people now have a choice of working in a traditional workspace, a co-working space, at home or elsewhere, such as a cafe or park. “Workers now expect compelling reasons to come into the office, and owners are responding by providing the likes of wellness

amenities, improved shared spaces, and partnerships with occupiers, retailers and service providers. “All of these offerings can help create spaces that attract and connect with the new hyper-mobile workforce.”

Security essential

Office security and safety is expected to be among the priorities for occupiers and owners in 2018 and beyond, says Auckland Commercial Leasing Director Sam Gallaugher. “As security concerns becomes more prevalent, landlords and tenants will start to consider more advanced methods than traditional pass cards,” he says. “Technologies such as facial recognition, finger print scanning and phone ID scanning aim to provide a level of non-intrusive security that doesn’t detract from the experiences of visitors and staff within the building. “These new security methods will become even more important, given the trend towards flexible working hours and more people coming and going from office buildings.” Gallaugher says some high-end Auckland office buildings have already introduced next-generation security technologies. “Kiwi Property’s Vero Centre on Shortland Street, for example, uses number plate recognition technology to control access to the car park,” he says. “We expect more and more office buildings will adopt similar technologies to offer workers a more seamless home-to-work transition.”


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Delivery Drones

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Life Saving Drones

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Vertical Inspection Robots

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Komatsu Surveyors

Drones areGO lifesavers in disasterPLACES zones Pioneering research from the University of South Australia Where are you going? has shown for the first time that drones can be used to detect human vital signs in war and natural disasters Youzones might want to answer, ‘to

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niversity of South Australia researchers have successfully trialled unmanned aerial vehicles to measure heart and respiratory rates using remote-sensing imaging systems, while hovering three metres from humans. The research was carried out under a collaborative agreement with the Defence Science and Technology (DST) Group and published in Biomedical Engineering Online. Video footage from the drones can detect changes in human skin tone and minute head movements to read vital signs, providing a low cost, accurate and convenient way to monitor heart rates without physical restrictions, researchers say. The breakthrough could have many applications, including triaging disaster victims in earthquakes, detecting security and terrorism threats at airports, and remotely monitoring heart rates of premature babies in incubators. Under the supervision of Professor Javaan Chahl, UniSA PhD students Ali Al-Naji and Asanka Perera carried out a number of experiments with 15 healthy individuals, ranging in age from 2-40 years, in both indoor and outdoor settings, and within close range of the drones. The results were as accurate as traditional contact methods – ECGs, pulse oximeters and respiratory belts – that are currently used to monitor vital signs. “This is the first time that video from a hovering UAV has been used to measure cardiorespiratory signals,” Chahl says. The experiments were performed within three metres of humans but researchers expect the drones to capture information at much greater distances once the technology is further developed.

work’, or ‘to the shops’. But we’re all going somewhere bigger than Heart monitors that. We’re heading there with The drones could help detect potential every action, every decision, terrorists in public spaces, merely by every measuring anomalies in their rates, seemingly insignificantheart step. according to Chahl, a Professor of Sensor

Systems in UniSA’s of Engineering. Well, we’re hereSchool so you can keep “A person who is about to engage in moving. Wherever you need to violence will probably have anomalous be, you’lland find us. behaviour physiological signs. “They might be highly agitated or unnat-

urally calm and in many cases they might Wherever you’re going, be under the influence of drugs. stay with Quest.

“There is a good chance that our system can detect these anomalies.” In the developing world, expensive disposable electrodes could also be replaced with this technology to monitor vital signs remotely and eliminate the temptation to reuse the electrodes which can spread horrific skin infections between neonatal infants. Aged care facilities may also benefit from the imaging systems which could be placed in strategic locations to monitor older people’s heart and breathing rates, Chahl adds. “Obviously there are privacy and ethical issues around this technology that need to be resolved before it becomes common practice, but there is enormous potential to use machine vision systems to benefit society, particularly in the biomedical sphere. “I expect we will be using this software in everyday life in the next decade.”

0800 9444 00 questapartments.co.nz

To see footage of the drone experiments, click here


PROPERTY INFRASTRUCTURE & BUILD

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he project achieved a 6 Star Green Star Interiors rating from the Green Building Council of Australia (GBCA). Notable design features of the fit-out include an extensive metering system that monitors major energy and water usage, using materials with lower environmental impact such as 95% reused, recycled, certified or best practice timber and PVC amongst other features. The GBCA’s Chief Executive Officer, Romilly Madew, applauds Westpac for demonstrating leadership and setting an example for other institutions on a global scale. “The rating reflects Westpac’s ongoing commitment to reducing its environmental impact. This commitment is increasingly expected by investors and consumers alike—the latter increasingly looking for evidence that companies are walking the talk,” Madew says. “We are proud that we’ve been able to support the Barangaroo precinct’s goal of becoming Australia’s first carbon neutral community,” says Westpac Group General Manager, Operations, Property and Commercial Services John Harries. “ In addition to receiving the highest score, we are also in a 6 Star Green Star Building, with the first 6 Star Green Star bank branch – St.George.”

Nine categories

Following an assessment across nine categories, the fit-out was awarded maximum points for reduced water consumption, reduced dependency on private transport, minimising harm and

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Westpac Barangaroo banking on highest Green Star credentials Westpac Group’s fit-out in Tower Two of Barangaroo’s International Towers Sydney has received the highest number of Green Star points achieved by any office fit-out in Australia

enhancing the quality of local ecologies and encouraging sustainability practices throughout the fit-out’s design, construction and operation. “As well as reducing our environmental footprint, our emphasis has been on designing a workplace that provides flexibility and choice to help build an adaptable, health-conscious workforce,”

YEARBOOK 2018 PROPERTYANDBUILD.COM

Harries adds. Recognised as the world’s most sustainable bank for the 10th time in the 2017 Dow Jones Sustainability Index, a number of the group’s properties have been awarded the 6 Star Green Star rating. This includes Bank of Melbourne’s flagship branch at 525 Collins Street, the St.George

branch at Barangaroo, and the Westpac branch at 150 Collins Street Melbourne. Green Star is an internationally recognised sustainability rating system for the design, construction and operation of buildings, fit-outs and communities. 6 Star is the highest rating achievable and represents a world-leading sustainable fit-out.


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Delivery Drones

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Artificial Intelligence

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Drone Security

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Life Saving Drones

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Vertical Inspection Robots

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Komatsu Surveyors

Drones are lifesavers in disaster zones Pioneering research from the University of South Australia has shown for the first time that drones can be used to detect human vital signs in war zones and natural disasters

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niversity of South Australia researchers have successfully trialled unmanned aerial vehicles to measure heart and respiratory rates using remote-sensing imaging systems, while hovering three metres from humans. The research was carried out under a collaborative agreement with the Defence Science and Technology (DST) Group and published in Biomedical Engineering Online. Video footage from the drones can detect changes in human skin tone and minute head movements to read vital signs, providing a low cost, accurate and convenient way to monitor heart rates without physical restrictions, researchers say. The breakthrough could have many applications, including triaging disaster victims in earthquakes, detecting security and terrorism threats at airports, and remotely monitoring heart rates of premature babies in incubators. Under the supervision of Professor Javaan Chahl, UniSA PhD students Ali Al-Naji and Asanka Perera carried out a number of experiments with 15 healthy individuals, ranging in age from 2-40 years, in both indoor and outdoor settings, and within close range of the drones. The results were as accurate as traditional contact methods – ECGs, pulse oximeters and respiratory belts – that are currently used to monitor vital signs. “This is the first time that video from a hovering UAV has been used to measure cardiorespiratory signals,” Chahl says. The experiments were performed within three metres of humans but researchers expect the drones to capture information at much greater distances once the technology is further developed.

Heart monitors

The drones could help detect potential terrorists in public spaces, merely by measuring anomalies in their heart rates, according to Chahl, a Professor of Sensor Systems in UniSA’s School of Engineering. “A person who is about to engage in violence will probably have anomalous behaviour and physiological signs. “They might be highly agitated or unnaturally calm and in many cases they might be under the influence of drugs. “There is a good chance that our system can detect these anomalies.” In the developing world, expensive disposable electrodes could also be replaced with this technology to monitor vital signs remotely and eliminate the temptation to reuse the electrodes which can spread horrific skin infections between neonatal infants. Aged care facilities may also benefit from the imaging systems which could be placed in strategic locations to monitor older people’s heart and breathing rates, Chahl adds. “Obviously there are privacy and ethical issues around this technology that need to be resolved before it becomes common practice, but there is enormous potential to use machine vision systems to benefit society, particularly in the biomedical sphere. “I expect we will be using this software in everyday life in the next decade.”

To see footage of the drone experiments, click here


New Zealand’s Independent Infrastructure Think Tank Infrastructure New Zealand is the nation’s highly respected, peak infrastructure body. Our core purpose is to advance best practice in the development of world class transport, energy, water, telecommunications and social infrastructure for all New Zealanders. We do this through research, advocacy and public and private sector collaboration. Our members are infrastructure industry leaders from diverse sectors across New Zealand.

Membership Benefits Market intelligence, influence, connections, profile

Building Nations New Zealand’s yearly premier infrastructure event

Our Groups Women in Infrastructure & Emerging Talent Networks

Networking and Engagement Access high calibre member-only events

Take advantage of membership 09 377 5570 infrastructure.org.nz


Ten trends for Asia, Australia & New Zealand property markets

PROPERTY & BUILD

Colliers International 2018 Asia Pacific Property Outlook unveils insights and predictions across Asia, Australia and New Zealand

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olliers 10 key predictions for Asia, Australia and New Zealand highlight five themes common to the region.

1. Strong economic growth set to persist

Global real GDP growth in 2017 reached its highest level since 2010, and 2018 should be better still. China, Japan, South Korea, Hong Kong and Singapore all saw growth accelerate in 2017, with only mild slowdowns likely in 2018; momentum in India is now also rebounding sharply. Australia is seeing not only firm growth, but favourable demographic trends, notably in New South Wales and Victoria. However, employment growth is positive in all Australian states; and the IMF expects Australia’s five-year population growth rate to be double the average of the world’s top 30 economies.

2. Interest rates set to stay low

US interest rates are set to continue rising, putting upward pres-

sure on benchmark interest rates in Asia. Nonetheless, we expect Hong Kong to enjoy negative real (i.e. inflation-adjusted) interest rates until early 2020, with real interest rates also set to stay low or even fall in Japan, Singapore, India and China. In Australia, interest rates are at record lows, and we do not expect the RBA to raise rates until 2019. In New Zealand, likewise, we think that the official cash rate will not go up until late 2018 at the earliest.

3. Room for further yield compression

Investment property transaction volumes have been strong in key Asian centres, above all Hong Kong and Singapore, with newer markets like India picking up. With demand very firm, deal volumes may well rise again in 2018, despite limited supply of quality buildings for sale and low yield spreads versus bonds in Tier 1 Chinese cities. If so, capital values should rise and yields fall still further. In Australia, demand for commercial property

5. Industrial property likely to shine across APAC

should remain strong from global property, pension and sovereign wealth funds, including Chinese, Japanese and German investors. In New Zealand too, shortage of stock for sale coupled with firm demand should outweigh slightly higher debt costs, driving yields lower.

4. Office rents in big cities likely to rise or be stable

Driven by firm demand from existing and new occupier sectors including finance, technology and flexible workspace operators, we expect prime grade office rents to rise further in 2018 in Hong Kong, Singapore and tech-driven cities in India. In large Chinese cities, rents should be stable or drop slightly due to high new supply; however, prospects for rent growth, net absorption and vacancy are brighter than we had assumed until recently. In Sydney and Melbourne, vacancy is low and demand is firm. Rents are rising despite the prospect of new supply in Melbourne from 2019 and in Sydney from 2020.

Higher trade flows and e-commerce should continue driving industrial and logistics property in China, Hong Kong, Singapore and India, with industrial property emerging as a key organised asset class across Asia. In Australia, new entrants to the e-commerce sector should increase demand for well-located industrial space. In New Zealand, we expect increasing online retail activity to boost demand for warehousing from retail logistics providers.

David Hand is Chief Executive Officer of Colliers International Asia Pacific

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Asia 1. Firm economic growth and persistent low real interest rates will continue to drive occupier and investment property markets in Asia

Economic conditions have strengthened around the world: 2017 will see the highest global real GDP growth since 2010, and 2018 should be better still. In Asia, China, Japan, South Korea, Hong Kong and Singapore should all achieve higher or sharply higher growth in 2017 than in 2016, although modest slowdowns look probable for 2018. Momentum in India slowed in H1 2017, and so growth will be below China’s for that year; however, growth should rebound sharply in 2018. Improved economic conditions have boosted demand for leased office space, especially in Hong Kong but also in Singapore, the leading Chinese cities and in India. Demand for industrial and logistics property has strengthened for similar reasons. With overall demand for leased office and warehouse property set to stay strong, office and warehouse rents should rise further or at least stay reasonably stable, boosting cash rental streams to landlords and thereby supporting investment property demand. US interest rates are clearly set to rise gradually from now on, putting upward pressure on benchmark interest rates in Asia. Nevertheless, monetary conditions in many Asian countries are currently so loose that that we expect the pace of monetary tightening over 2018-2019 to have only a very moderate impact on property markets. We think that Hong Kong will continue to enjoy

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negative real (i.e. inflation-adjusted) interest rates until late 2019 or early 2020, and with inflation likely to move gradually upwards in Singapore, Japan, India and China real interest rates ought to stay low and perhaps even fall in those markets too. Persistent low real interest rates should ensure funding costs remain low for property developers and investors.

2. Property investment volumes in Asia will remain strong, and yields may well shrink even further

With robust economic growth and low real interest rates set to persist in Asia, investment property transaction volumes should remain high. Based on RCA data for Asia Pacific as a whole, after a strong 2016 transactions in completed properties rose by 4% YOY to USD102 billion over the first nine months of 2017[1]. Particularly strong were Hong Kong (+38% YOY) and Singapore (+83% YOY); and these two cities rose, respectively, to be the first and third ranked urban investment centres in Asia Pacific over the period. Looking forward, we expect the investment market in India (+85% YOY over the first nine months) to continue maturing, while Japan may well recover from recent weakness as its economy accelerates. It therefore seems reasonable to expect transaction volumes to rise again in 2018. The chief risk to this view is not weak demand or availability of capital, but a shortage of high-quality properties available for sale, whether in the core or value-add segments of the investment property market.

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Assuming investment volumes increase again in 2018, property yields may well fall still further, even after several years of compression. Stretched valuations are a real issue, with prime grade office property in Tier 1 Chinese cities now offering only very narrow or even negative spreads over ten-year bonds. In contrast, prime office properties in Singapore offer a 1-2 percentage point yield spread over bonds, and this remains one of our preferred markets in valuation terms. Yields on retail and industrial property in Asia remain higher than for office property, but are stable or falling.

3. Office rents in major centres will continue to rise or be fairly stable in 2018

We expect prime grade office rents to rise further in 2018 in Hong Kong (+4-7% on Hong Kong Island; flat in Kowloon) and Singapore (+5-7%), driven by firm GDP growth and strong or recovering occupier markets, with increasing demand from new tenant segments such as coworking operators and technology and media companies. In China, we expect office rents in Shanghai and Beijing to fall by 1-3% in 2018, since heavy new supply is likely to offset firm demand in the near term; beyond that, however, rents should be stable or rise. In Shenzhen and Guangzhou, firm demand should continue to push up rents in 2018, but the impact of heavy new supply should push rents down from 2019. However, in the case of all these Chinese cities firm demand from occupiers in finance, technology and other sectors means that prospects for

rent growth, office net absorption and vacancy levels are more positive than we had assumed until a few months ago, when we expected rents to fall sharply in response to a wave of new supply. We project an average 5% annual increase in office rents over the next three years in the technology-driven markets of Bangalore, Hyderabad and Chennai.

4. Flexible workspace will strengthen as a source of new leasing demand

The flexible workspace market has seen huge growth in many Asian cities, and this trend should continue. Flexible workspace operators are now a major source of demand for leased office space in Hong Kong, Singapore and the Tier 1 and Tier 2 Chinese cities, and are growing in importance in India with Jakarta and Bangkok set to be the next markets to witness significant growth. The global player WeWork is leading the trend; WeWork has just signed its largest ever leasing deal in Shanghai (for an entire Grade A building covering 27,000 sq metres or 290,500 sq feet in Huangpu[1]). However, there is plenty of competition to the international operators from expanding regional players, including naked Hub and JustCo. We expect to see deeper partnerships formed between landlords and operators over 2018, with many landlords understanding the need to add flexibility to their portfolios to retain large space users. End-user demand comes from both large and small companies across a range of sectors from finance to technology and manufacturing.


5. Technology companies will strengthen their presence in the CBD and CBD fringe Acquisition of talent is the greatest challenge that technology companies face, ranking far ahead of other constraints; this was cited as the key problem in 40% of responses to our question on the subject in interviews with Asian technology occupiers[1]. We think technology groups need to move towards the CBD or CBD fringe to find and retain talent in R&D, software and IT, and sales & marketing, all groups which should increase in proportion to integration of artificial intelligence; and we expect the attractions of the CBD and CBD fringe to strengthen further over time. Business parks on city edges are an option for smaller or startup groups. Different economic criteria apply to manufacturing units, for which location outside cities makes sense. However, technology occupiers attempting to concentrate all their operations in out-of-town campus sites look unlikely to attract all the highskilled staff needed for the key roles of the future.

6. Higher trade flows and e-commerce will continue driving industrial and logistics property in China, Hong Kong, Singapore and India, with industrial property emerging as a key organised asset class across Asia

The industrial and logistics property market in China continues to be driven by firm real GDP growth (about 6.8% in 2017), steady growth in retail sales (up by 14% p.a. on average over 20072016), and above all by strong growth in e-commerce retail sales (up by 67% p.a. on average over the past ten years, and still growing by 34% YOY over the first nine months of 2017). Retailers and third-party logistics businesses related to e-commerce growth are key demand drivers for leased logistics space across China. Given firm demand for logistics space and very limited land supply, we think that vacancy rates will fall and rents will rise in 2018 and over the next few

years in prime logistics properties in Shanghai in particular, with demand increasingly spilling over to cities further out such as Nantong, Changzhou, Wuxi and Changshu. In the same way, in North China, we expect strong demand for logistics property in the established markets of Beijing and Tianjin to overflow to adjacent areas, for example emerging markets lying between the Beijing New Airport and Xiong’an New Area in Hebei Province. Meanwhile, the logistics property market in China’s mid-West looks set for substantial growth, reflecting growth in e-commerce demand, the benefits of the Chinese government’s ambitious Belt & Road initiative, and the operation of the Sino-Europe Railways. The inland cities of Chengdu, Xi’an, Chongqing, Wuhan, Changsha and Zhengzhou are attracting attention from investors. In Hong Kong, recovering global trade volumes should continue to drive exports, while the pick-up in tourist arrivals is helping fuel a recovery in retail sales. Both factors suggest a positive outlook for the warehouse market in 2018 amid a total lack of new supply. In Singapore, we expect new supply to ease after 2018, allowing rents to stabilise and post modest growth. In the meantime, however, new high-specification industrial space ought to lead demand. Finally, we expect industrial space to emerge as next organised property asset class in India, giving a decentralisation push which should unlock land values in areas outside major cities and stimulate business activity.

7. The business and industrial park market will strengthen in Shanghai and Singapore

Shanghai is seeing strong interest in business parks due to a strategic geared move to become a global science and innovation centre. Colliers' analysis of business parks in Shanghai has found that domestic enterprises are the main new tenants and investors. Internet and IT enterprises account for the majority of the leases, and Zhangjiang and Jinqiao are the most active submarkets for leasing and investment. In the coming five years, new supply should slow in core areas. We expect the vacancy rate will remain low and fall steadily. Meanwhile, rent for business parks in Shanghai should rise by just under 5% per annum on average over 20172021. We expect domestic buyers to continue to dominate invest-

ment in business parks, although foreign investors should also find the sector attractive. In Singapore, national strategic directives and support from the government are helping prepare the economy for the so-called Fourth Industrial Revolution featuring the adoption of new technologies such as big data and analytics, artificial intelligence and the Internet of Things. Pilot schemes for flexible land use for industrial purposes are being tested now in major planned projects, and integrated "livework-play-learn" spaces are being rolled out to access, attract and train talent. We envisage that supply of space in business parks and high-specification industrial parks will increase steadily from now on, and double by 2030.

8. Retail property will recover in Hong Kong, though Singapore is less certain Retail rents on prime streets in Hong Kong have fallen nearly 45% over the past four years. However, recovery now appears to be very close. Driven by robust local consumption, rebounding tourist arrivals and the increasing popularity of mid-tier health and lifestyle brands and new dining concepts, retail sales have been picking up and the decline in prime rents has moderated in all major retail districts. For 2018, we predict a 3-4% rise in retail sales and a 1-3% increase in retail rents. By contrast, recovery prospects do not yet look so clear in Singapore. Retail rent corrections appear to be tapering off in the prime Orchard Road belt, but overall retail market recovery is more gradual. We expect Orchard Road prime floor rents to rise 1-3% per annum on average over the next four years; conversely, we expect prime rents in regional centres to fall 1.0-1.5% in 2018, and only to stabilise over 20192021.

rates are effectively tied to US interest rates by the territory’s currency peg. Unless US interest rates rise materially faster than we currently expect, pulling Hong Kong rates up with them, increasing interest rates look unlikely to affect home prices until H2 2019 or early 2020, when we expect real interest rates to turn positive for the first time since the Global Financial Crisis of 2008-2009. In Singapore, data from the Urban Redevelopment Authority showed the first uptick in private home prices after 15 consecutive quarters of decline. We believe that the current wave of collective sales in Singapore will continue rising through 2018 and into 2019, and that prime luxury residential sites will gain favour soon. The current wave may well accelerate price recovery in the near term due to immediate incremental demand from displaced sellers and the large capital gains. We expect average home prices to rise 17% over 2018-2021, driven by higher GDP growth, falling physical completions and ongoing collective sales deals.

10. What could go wrong?

9. Residential property prices will rise further in Hong Kong and Singapore

Given firm demand, limited supply, persistent negative real interest rates and promotional efforts by developers in the primary market, we expect mass-market residential property prices to rise 8-10% in Hong Kong in 2018. Luxury residential sales are more dependent on secondary market demand, and so price increases in this segment are likely to be more moderate; we project growth of 3-5% in 2018. Hong Kong interest

Precisely because prospects look bright, it is important to ask what might go wrong. In our view, the greatest risk to property markets in Asia is a global or regional financial downturn, prompted by high equity valuations (notably for US and Chinese technology stocks, though also for Chinese property developers). Besides reducing the yield attraction of property assets, a major downturn in equity and/or bond markets would upset the benign conditions that large financial occupiers currently enjoy in major Asian centres. We assign a 35% probability to this scenario. In addition, we highlight the chance that investment property markets may suffer from signs of reduced demand for leased CBD office space from large financial tenants due to faster than expected adoption of artificial intelligence and consequent workforce reduction programmes; we note that the financial sector still accounts for 40-50% of CBD office space in Hong Kong, Singapore, Shanghai and Beijing. We assign a 20% probability to this scenario. In our view, both scenarios are significantly more likely than a major Asian conflict (10% probability), although this last outcome has the potential to cause the greatest damage to financial markets and general economic confidence.

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Looking forward, we expect the size of flexible workspace centres to increase and also expect greater differentiation, with all levels of the market to be covered and some operators even looking to cater for specific vertical sectors. The trend for corporate take up will undoubtedly grow in 2018.


PROPERTY & BUILD

Australia 1. Demographics is Destiny

Migration trends in Australia have had a profound impact on Australian property markets. While offshore migration is still well below the record levels experienced in 2008/09 (circa 300,000 migrants, versus 230,000 year to March 2017), the movement of people has changed dramatically. In 2008/09, 58 per cent of all offshore migrants settled in NSW and VIC. That figure is now up to 78 per cent. We believe this trend will continue, as infrastructure spending and jobs growth is heavily concentrated in these states. Residential markets continue to respond to the wave of people movements. The Sydney market in particular has been undersupplied for many years and supply is only just starting to catch up. Census data revealed that 19,000 more households were formed in Sydney than dwellings over the five years to 2016 - the only city to experience such huge undersupply. Concerns about oversupply in our markets ignore the long term impacts of population growth.

2. Economic indicators push the investment case for commercial property

Record low interest rates, below target inflation and anaemic income growth are a set of economic circumstances rarely seen in Australia. The RBA has not increased interest rates since November 2010, and we don’t expect an increase until sometime in 2019. While these indicators aren’t unique to Australia (most major economies are experiencing similar) our demographic

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buffer against these economic trends is what continues to set us apart. The case for property continues to grow despite the unusual economic circumstances, and property will continue to outperform other asset classes in terms of returns and growth potential.

3. Infrastructure spending continues to grow

Close to $100 billion of transport infrastructure projects are currently under construction across Australia. Almost half of these projects are in NSW – the true infrastructure powerhouse of Australia currently. And it doesn’t stop there. NSW will invest a staggering $70 billion over the next 4 years in transport infrastructure, while Victoria will invest $40 billion over the same time. A number of these projects, like the Sydney and Melbourne metro rail projects, will be true game changers for their cities, and open up more land for property development in the future.

4. Australia stands tall amongst the major global property markets

It can’t be underestimated just how unique Australia’s investment potential is when placed in a global context. Global property funds, as well as pension and sovereign wealth funds, have taken notice, and continue to allocate money to invest in Australian commercial property. While much has been made of China and the flow of funds to Australia, FIRB approvals have increased 223 per cent from Japanese real estate investors, and 79 per cent from

YEARBOOK 2018 PROPERTYANDBUILD.COM

German. Over 2018, we expect the cap rate compression cycle will continue, as demand for limited stock remains high.

5. Office supply dwindling in the major markets, turning points close in others

Sydney and Melbourne CBD and metro markets have below average vacancy rates, with these rates forecast to fall even further in 2018. While supply is on the horizon – circa 2019 for Melbourne CBD and North Sydney and 2020 for Sydney CBD – strong demand conditions being experienced now mean that rents are moving upwards. In the other states, demand conditions are improving – faster in Brisbane, more slowly in Perth and Adelaide – and low supply conditions in these markets will be a positive for landlords.

6. New entrants to eCommerce industry will increase demand for well-located industrial space

The transport and logistics sector has been dominating the demand for industrial property with strong growth projected as the demand for goods rises (on the back of consistent economic growth and robust projected population growth). Fuelling this trend is Australia’s growing eCommerce industry - currently making up around 40 per cent of the online retail market. Therefore, industrial properties that are located close to urban centres and end consumers are becoming an important option to consider when seeking to optimise the supply chain and distribution

process. As new entrants are expected to enter the Australian market, the need to speedily deliver products to the end-consumer will become a major point of difference for business’ competitive advantage. There will become a greater need for facilities to be positioned close to highly populated areas to effectively achieve the last mile delivery.

7. Retail markets facing headwinds, population growth softening the blow The arrival of Amazon in Australia has put the retail market on notice, and its impact will be closely watched throughout 2018. Despite the negative watch on some landlords and major retailers, the Australian retail sector does not mirror any other international market, and has a number of defences against the onslaught of online retailing. By and large, Australian centres are well run and maintained on a global benchmark, and the better landlords have positioned their assets to capture the long trend of growing food and services consumer sectors. Population growth in the major centres also continues to push retail turnover growth into positive territory.

8. Disruptors in Hotel industry will challenge the market

2017 was underscored by a pause in hotel transaction activity after the bull run experienced over the past five years, with transaction sales falling back toward the long-term average. Locational discrepancies across the country are widening as trading fundamentals fluctuate, though a


lack of stock is still driving pricing. Growth has also shifted, bringing new stars to the fore. In particular, Cairns and Canberra were some of the strongest trading markets. Appetite for hotel development in Melbourne and Sydney is growing, against a backdrop of improving tourism demand and as consumers demand a greater focus on in-room design and technology. Disruptors are clearly evident, but the hotel sector has a proven track-record of resilience that should absorb this inventory over time.

9. Australia is leading the world in healthcare innovation

10. Wagyu and Angus set to be a focus for rural investors

With nearly all commodity values in AUD remaining bullish to strong, the stand out sector in Australia is high value beef such as Wagyu and Angus. In particular, high value beef exports have been exceptionally strong. Numbers of cattle on feed in Australian feedlots has lifted strongly, with record levels reached in 2017 of just under 1.1 million head on feed at the end of the Q2 2017. Carcass weights continue to rise due to the record numbers of cattle fed and time spent on feed*. In April 2015, there were 7,720 registered Wagyu animals in Australia with estimated breeding values (EBVs). In April 2017, it was more than

80,000**. This dynamic demand base for high value livestock has created a strong run on properties displaying safe production systems, and first-rate genetic records, with herds close to feedlots and processors. The buyers are mainly domestic HNWI and North Asian Corporates seeking to increase market share. * MLA. (2017). Australian Cattle, Industry Projections 2017 October update ** Goodwin, S. (2017). Wagyu’s explosive growth set to continue. Retrieved 21st November 2011 from http://www.wagyu.org.au/wagyus-explosive-growth-set-to-continue/

PROPERTY & BUILD

The ageing population globally

is presenting economies with both significant challenges and opportunities. With circa $100bn in estimated investment required in Australian healthcare over the next 30 years alone, advances in medical technology, models of care and the physical buildings in which they are housed have positioned Australia as a global leader in healthcare provision - surpassing even Japan in eldercare models. As a result, investment in the Australian healthcare sector (local and global) has grown exponentially in the last few years and is on an accelerated trajectory in recognition of a relatively stable economic environment and political landscape coupled with the increasing demand.

New Zealand 1. New Zealand investment groups will dominate rural property purchases

Overseas buyers will chase urban assets instead, mostly due to the attractive returns, but also partly due to Overseas Investment Act restrictions on rural land purchases of 5ha or more.

2. Extra office supply in Auckland and Wellington won’t dent strong capital value and rental increases

Syndicators and overseas funds will continue to be the dominant buyers of substantial city centre properties, as domestic institutions find it hard to justify buying at current price levels.

3. The high level of confidence shown by industrial property investors in 2017 will prove to be justified Investors can expect more

rental rises and steady (already very low) yields, particularly in the main centres.

4. Increasing online retail activity will boost demand for warehousing from retail logistics providers

This will be aided by continuing low fuel prices. In Auckland, a regional fuel tax will concentrate demand close to arterial roads.

5. A more stringent application of GST to offshore online purchases will boost domestic online sales Domestic online sales will grow more quickly in 2018 than for any of the last few years.

6. Extra office supply in Auckland and Wellington won’t dent strong capital value and rental increases

This will particularly affect those

in the food and beverage sector. However, the lag effect of these measures and continued positive consumer confidence will defer any negative effects beyond 2018, while robust tourism growth will counteract these effects in tourist hotspots.

7. In a year, the national median house price will be higher than it is now

Downside protection will be provided by base demand, which remains robust, low interest rates and, at the margins, easing of loan to value restrictions.

8. Off the plan residential sales will get a boost

Concentrating overseas buyers on new homes, plus a bit of Government buying, will begin to boost ‘off the plan’ sales, allowing supply in the following years to increase.

9. Government efforts to increase skilled labour for the construction industry will be constrained

Other Government policies, such as free tertiary education for a year, and reduced immigration will impact plans to train or import more labour. Construction cost inflation isn’t going to go away in the short term.

10. The official cash rate won’t go up until late 2018 at the earliest A shortage of quality stock for sale in a high demand environment will be a more powerful influence than marginally higher debt costs, driving further yield compression in the commercial sector.

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New Zealand Report

2018 property market bounce expected

PROPERTY & BUILD

Office, industrial and tourism growth to continue in 2018, Colliers International CEO Mark Synnott predicts

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bounce in New Zealand's commercial property market looks likely in 2018 after a significant slowdown around last year’s election, with the industrial, office and tourism sectors all continuing to show promising signs of growth. However, uncertainty around

the implementation of foreign ownership restrictions may put off some overseas investors, resulting in a shallower pool of buyers at the top end of the market. We expect on- and off-market sales volumes will trend upwards as vendors look to offload the significant amount of stock that

remained unsold during the latter months of 2017. Corporate owner-occupiers will continue to divest via sale and leaseback to free up capital to invest in their businesses, while significant institutional and private investors will offload non-strategic assets to improve the quality

of their portfolios. The room for further yield compression is small, but still possible in prime assets. However, the major contributor to capital growth will continue to be rental growth, driven by record low vacancies and new supply not meeting demand.

Offshore attraction

New Zealand will continue to be attractive to offshore investors, thanks to ongoing net immigration and GDP growth, coupled with little likelihood of material interest rate rises. However, the government’s proposed foreign ownership restrictions are likely to create uncertainty until there is greater clarity about what types of assets will be caught in the Overseas Investment Office’s net. We expect this will have the biggest impact at the top end of the market, where the pool of local buyers is shallow. Of the 12 Auckland commercial property transactions worth $50 million or more last year, only one was sold to a local buyer. The property at 2-4 Fred Thomas Drive, Takapuna, was sold by Colliers International to syndicator Maat Group for $60.85 million, representing a yield of 7%. New Zealand’s ongoing tourism boom will continue to buoy the commercial property market, particularly the hotel and retail sectors. Visitor arrivals are likely to top 4 million this year, after a record 3.7 million arrivals in the year to October 2017.

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Undersupply continues to be the hotel sector’s biggest constraint. In response, investors have been buying up residential units and renting them out through Airbnb. We expect a number of councils will follow Queenstown’s lead in introducing bylaws to limit Airbnb’s negative impacts – notably residential rent increases driven in part by Airbnb’s pressure on rental housing supply and affordability.

Industrial tight

In the industrial sector, the tightening market will continue to be the single biggest issue. Rental and land value appreciation will continue, while yields will hold firm as undersupply worsens. Demand for industrial space will increasingly be driven by the growth of online retail. In the office sector, yields will remain low as new supply fails

to meet pent-up demand. Rents will continue to rise from an already strong base – we are aware of rents in excess of $500 per square metre being regularly achieved in 151 Queen Street in Auckland’s CBD, for example. In the retail sector, online competition will continue to be a challenge, but this will be offset somewhat by the growth of food and beverage retail, driven partly by sustained tourism growth.

Shopping centres will continue to capitalise on this trend by curating new dining, entertainment and leisure precincts that emphasise indoor-outdoor flow, such as Sylvia Park’s newly opened The Grove. In Auckland, the year will be bookended by the closure of the Two Double Seven shopping centre in Newmarket, which Scentre Group is refurbishing and expanding over two years, and the

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opening of the first retail stage of Commercial Bay in mid-2018, with the balance of the centre opening in the first quarter of 2019.

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Apartments active

In the residential apartment sector, supply pressures will continue despite the completion of many of the apartment projects launched two to three years ago, such as Skhy in Grafton and Botanica in Mount Eden. Investors who bought apartments off the plans could benefit from substantial capital gains. We are aware of apartments in Botanica selling for between $200,000 to $350,000 more than their purchase price – an increase of 25-30% over a two-and-a-halfyear period. Auckland’s undersupply across the office, industrial and residential sectors will continue to have positive flow-on effects for the other centres in the ‘Golden Trian-

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gle’, which is the fastest-growing area in New Zealand. Hamilton will continue to attract large industrial users, as evidenced by Visy’s $100 million design build deal to establish a new plant at Hamilton Airport. This growth is being enabled by substantial infrastructure investment including Ports of Auckland’s Waikato Freight Hub, Tainui Group Holdings’ Ruakura Inland Port, and continuing improvements to the Waikato Expressway. The Tauranga market will be fuelled by growth in both the residential and industrial sectors. A number of high-density residential projects are in the pipeline, while the Tauriko Business Estate continues to attract substantial industrial users like freight and logistics company NZL Group, which plans to move from Mount Maunganui to a $20 million purpose-built facility.

YEARBOOK 2018 PROPERTYANDBUILD.COM

Wellington facing central office demand woes The capital’s CBD office vacancy has dropped to record new lows, highlighting an acute shortage of office space that is especially apparent in the prime sector

D

emand pressures have continued to grow following the loss of nearly 100,000 sqm of office space since November 2016 - will new office supply in Wellington this year alleviate some of those pressures? Office vacancy in Wellington reached a record low of 7.4% in our December 2017 survey, down from a pre-earthquake level of 10.5% in November 2016. There is little relief in the prime sector, with less than 300 sqm (or 0.1%) of vacant space available. Vacancy in secondary space has also dropped, declining 3.3% to 9.1% (103,147 sqm) compared to a

year ago. The completion of new office developments in Wellington added 38,800 sqm in 2017, but has done very little to alleviate demand. One of the largest additions is the new Transpower building at 22 Boulcott Street (8,440 sqm), which allowed the tenant to consolidate two office locations. Vacancy is unlikely to lift anytime soon. Both 20 Customhouse Quay and The PwC Centre are expected to be completed by the end of the first half of 2018, adding 26,400 sqm to the total office stock, but


Retail resilient

In the past year, Wellington CBD retail has experienced a decline in vacancy across all main precincts. Wellington overall retail CBD vacancy reduced from 8.8% in December 2016 to 6.9% in De-

cember 2017. The drop in vacancy in the CBD core is due to BNZ bank taking up space on Ballance Street. However, Lambton Quay has increased by 3.3% to 4.6% thanks to the departure of Topshop and Topman. Vacancy in the Manners Street precinct decreased slightly due to Augustine, Huffer and Andrea Moore leased space on Manners & Victoria Streets. Courtenay Place had the largest percentage reduction in retail vacancy (from 21.3% to 8.9%), due mainly to vacant space being removed for earthquake strengthening.

Solid Sales 2017 provisional office sales for New Zealand reached just over $1.85 billion across 397 properties, with the Auckland region recorded the largest share with sales totalling over $1.32 billion across 170 properties. The top five office sales in 2017 were:

Industrial mixed

Colliers International’s latest Commercial Investor Confidence Survey shows that industrial investors have mixed levels of confidence across the main centres. Of the three main centres, Wellington was the only centre to record an increase. Record low vacancy, and competition amongst purchasers pushed average prime yields to a record low 7.48% in December 2017. Even though Auckland has seen a slight decline in industrial confidence, it’s still well above the 10-year average of net positive 33%. This level of positivity reflects the sector’s solid performance over the past years. The Auckland industrial market will likely remain positive as shortage of prime stock will put upward pressure on rents, fueling demand for further development.

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both are virtually fully pre-committed. It’s certainly a great time to be a landlord in the prime office market in Wellington – the low vacancy has lifted average prime gross face rents 3.9% in the year to December 2017. The latest quarterly investor confidence survey gives the city a clear vote of confidence – Wellington being the only main centre recording an improvement in office investor confidence. Conversely, vacancy in Auckland’s CBD office market has increased 0.7% to 5.9% overall in December 2017, still well below long-term averages. It has not exceeded 6% since the middle of 2015. The latest increase stems mostly from prime vacancy edging up in Viaduct Harbour and Victoria Quarter. The next two years will see close to 60,000 sqm completed over three projects. While Vocus House on Sale Street will be completed by Q1 2018, the majority of new office supply is set to arrive in Q3 2019. PwC Tower in Commercial Bay makes up over half (33,000 sqm), while One 55 Fanshawe to be constructed on the ex-Caltex site by Mansons TCLM, is expected to contribute 15,000 sqm. Vacancy will remain tight over this period.

1. Goodman's Central Park Corporate Centre in Greenlane, Auckland which sold for $209 million (subject to OIO) to Oyster Group and another investor

2. 205 Queen Street in Auckland CBD sold for $174 million to Singapore listed property group Roxy-Pacific and Chip Eng Seng

3. Kiwi Property's Majestic Centre in Wellington CBD sold for $123 million to South Africa's Investec

4. Mansons TCLM’s 46 Sale Street in Auckland CBD sold to an Hong Kong based fund for $118 million

5. NZI Centre, 1 Fanshawe Street sold for $63 million to Singapore listed property group Roxy-Pacific

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Asia Pacific Infrastructure | Property & Build | Industrial Safety News - Yearbook 2018  

PPE, Access, Hazmat, Health, Injury, Management, Environment, Focus, Local & National Government, Construction, Cities, Energy, Transport, W...

Asia Pacific Infrastructure | Property & Build | Industrial Safety News - Yearbook 2018  

PPE, Access, Hazmat, Health, Injury, Management, Environment, Focus, Local & National Government, Construction, Cities, Energy, Transport, W...