Asia Pacific Infrastructure October November 2015

AsiaPacific

INFRASTRUCTURE THE THIRTY YEA

October/November 2015 Volume 5 No 5

INFRASTRU

R

2015

NEW ZEALA

ND

CTURE PLAN

FULL GE A COVER SUE S I S I H T

Go online for the latest Health & Safety at Work Act 2015 www.infrastructurenews.co.nz

FIRST WORD >> Property

Major reforms needed to maximise potential Connal Townsend Chief Executive, Property Council NZ Auckland may be known as the City of Sails but it should probably be called the City of Cranes

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ities like Hamilton, Tauranga and Queenstown are also undergoing their own growth, while in Christchurch renewal and rejuvenation is the key.

Property is a key driver in growing our economy - it can react to the needed residential growth as in Tauranga or be a proactive enabler as it is for commercial property in Auckland.

However, our planning systems are failing us, we are not meeting our potential.

We are certainly not flexible or responsive enough. Instead we are overburdened with central and local government red tape that is adding unnecessary costs onto property developers and investors, which in turn are meaning developments are either not achieving their potential or not being progressed.

Property Council wholeheartedly supports calls by the New Zealand Council of Infrastructure Development (NZCID) to look at our existing planning framework and see how we can improve its integration, governance and delivery for all types of development.

NZCID’s Integrated Governance Planning and Delivery is a proposal that offers a fresh perspective and challenges the status quo.

We need to have a frank and objective discussion that is free from political interference - is our current local government system working and is it meeting the myriad of challenges facing regional and urban New Zealand? Another discussion must occur around the Resource Management Act, Local Government Act and the Land Transport Management Act. Each Act has experienced countless amendments, with promises of further reform. They do not work together to create seamless regulations that are well integrated and complement each other. They have different and conflicting requirements and are overly fragmented. They operate within differing timeframes and are divorced from

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investment decisions, commercial realities, and market trends. We have tinkered on the edges for too long. In light of the forecasted growth in Auckland, Tauranga and Hamilton alone being reactive is not good enough anymore, we need to be proactive.

Commission call NZCID is calling for a Royal Commission inquiry into local government planning law reform. That’s a no-brainer from our perspective. We will support NZCID in advocating for this inquiry. We need a cir-

“We are overburdened with central and local government red tape that are adding unnecessary costs onto property developers and investors, which in turn are meaning developments are either not achieving their potential or not being progressed” cuit-breaker and a return to first principles in the terms of reference.

So what is the government doing in identifying the future infrastructure needs of New Zealand? At the NZCID Building Nations Symposium Finance Minister Bill English released the government’s Thirty Year Infrastructure Plan 2015. The plan is driven by two outcomes: to better utilise existing infrastructure and where to allocate new investment.

The plan outlines demographic changes across the country; with 1.2 million additional people expected to live here by 2045. Some 92 percent of this growth spans just five regions with a whopping 60 percent projected for Auckland. Ageing and

declining populations are projected for several regions.

These projections have implications on the types of services people will require, and the nature of infrastructure needed to enable service delivery. In growing areas such as Auckland, we are faced with an infrastructure network that has suffered from decades of underinvestment.

In other regions we have infrastructure networks that are more than 100 years old, and the cost of upgrade and maintenance is particularly difficult if they are in smaller ratings and economic bases.

We support the government’s acknowledgment that simply building infrastructure to meet demand isn’t sustainable anymore.

The plan features an Action Plan with several interest areas. Property Council supports: • efforts to establish national data standards for infrastructure • establish regional centres of excellence to support decision-making • consider different options to long-term integrated regional infrastructure plans • different ways of enhancing procurement governance for larger procurements • a longer term review of planning legislation and alignment • updating the Resource Management Act to improve the national planning framework • developing a trans-Tasman procurement market with Australia.

The government is on the right track with this Action Plan. But it doesn’t go far enough. We have called for a discussion about the big issues like funding. Funding is critical to delivering adequate and suitable infrastructure across New Zealand.

Local government needs a suite of funding tools for efficient and timely infrastructure which is currently shouldered by the development community and ratepayers.

We need closer scrutiny of funding options that are bold and bi-partisan in a deeply ideologically driven political climate. The Thirty Year Infrastructure Plan 2015 identifies a need for a $110 billion investment over the next 10 years. This is another compelling reason to not only look at how the RMA, LTMA and LGA interact with each other, but the restrictions they impose on alternative infrastructure funding options.

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 October/November 2015

SECURITY >> Disaster Planning

Smart software deals with disaster

A new cloud-based software has been launched to help small New Zealand businesses that generally don’t have plans to help them recover from earthquakes, cyclones, floods, fires or the loss of key staff

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mePoint is the world’s first emergency planning tool designed for small and medium businesses and is designed to help them prepare better for disasters, keep going afterwards and recover faster.

Developed by New Zealand software company Healthpoint, EmePoint disaster recovery software allows businesses in any sector to develop their own customised plans for dealing with the disruptions their business may face – for less than $1 a day.

Ninety seven percent of enterprises in New Zealand are small businesses, says Healthpoint Managing Director Kate Rhind.

“Most are under-prepared and so they’re more susceptible to disruptions when disaster strikes,” she believes. “They know that ‘she’ll be right’ won’t cut it in 2015, but until now they’ve had few realistic options.”

EmePoint has been developed by experts in risk identification, emergency planning management and business continuity planning, working closely with many small businesses, from law offices and automotive mechanics to pharmacies, schools and design companies.

The system helps them: • plan using a clever rulesbased platform • guides them through an intuitive process • streams in relevant local emergency data • identify and assess risks specific to their business, to prepare for these and to produce their own individual plan.

Whether their business is disrupted by a large-scale disaster like an earthquake or a localised event like a power outage or flood, EmePoint is designed to ensure small enterprises will October/November 2015

be ready to respond and able to recover more rapidly.

EmePoint also notes their priorities and capabilities and, as these change, it allows them to easily update the plan – for example, when they move key systems to the cloud, adopt mobile technologies for their workforce or restructure their business they make changes to one part of their plan and these take effect across all scenarios so that their plan will always be relevant and current.

EmePoint meets the requirements of New Zealand privacy legislation and uses the same security approach as internet banking, enabling small businesses to access the software through a secure login.

Proven platform The emergency planning platform used in EmePoint was first developed to meet the needs of GPs in the northern region

ness Development Manager - Emergency Planning Andy Wisheart. “We developed EmePoint to provide custom planning for a much wider audience but now any small business can use EmePoint to design an emergency plan that works for their business.”

EmePoint covers a wide range of disasters, from large-scale

“Now any small business can use EmePoint to design an emergency plan that works for their business” of New Zealand, but on seeing it in use The Royal Australian College of General Practitioners (RACGP) asked Healthpoint to design a tool for GPs in Australia.

The Emergency Response Planning Tool (ERPT) Healthpoint subsequently developed has been available for 18 months and is now used to provide sector-wide resilience to over 2,000 general practices throughout Australia – around 30 percent of the total.

“Word quickly spread to other sectors, and businesses from around the world contacted us because they needed a similar solution for their organisations,” says Healthpoint Busi-

emergencies to smaller crises that disrupt small businesses.

“Everyone understands floods, fires and pandemics,” says Mr Andy Wisheart. “But small businesses are even more likely to be taken out of commission by things like absence or loss of key personnel, an accident or a power outage - these are all things you can plan to deal with.”

Specific emergency planning activities addressed by EmePoint include: • risk identification • loss of power supply • disruption of water or gas supply • disruption to telecommunication systems

• loss of IT systems or data • loss of supplies, equipment and furniture • complete or partial loss of premises • communication during an emergency response • loss of or non-availability of key staff • business continuity planning.

EmePoint enables small businesses to comply with contractual requirements, quality standards and government regulations that often require suppliers to be pre-vetted for emergency preparedness – especially for services provided to the health sector, defence and police.

Transnational organisations and large New Zealand companies, too, often have requirements around emergency planning; recent changes to health and safety legislation place much greater responsibility for emergency planning on employers and any organisation seeking a quality accreditation will usually need to show comprehensive and robust planning to qualify. “EmePoint provides SMEs with the expert advice they do not have in-house, and helps them meet these requirements,” Mr Wisheart assures. www.infrastructurenews.co.nz –3

proven

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irrigation and vineyards 12-23 Cover Story - The 30-Year New Zealand Infrastructure Plan orOffice, Palmerston Northinfrastructure Pipelines Head Truck • Flat packs to site for CallIplextyres for anLtd,independent commission (8) installation in only 3 to 6 days We provide electrical engineering, project management and Freephone 0800 800 262 Phone: 06 358 2004 Fax: 06 356 Car 2906change The necessary step in the NZ approach to infrastructure tyres maintenance services for asset owners and major infrastructure • Minimal site preparation www.iplex.co.nz projects in Power, Water, Gas & Transport. planning and the nine key challenges (12-13) • Designed and Engineered for The blueprint for development (14) and some tough targets for large volume liquid storage We apply proven approaches in both traditional and new smart Kliptank P6-7, 11 technologies to support our clients. the public and private sectors (15-23) Budget P40 Min radius Bill English’s (16) alongw: with NZCID recommendations (18) www.kliptank.com Freephone 0800notes 255 222 To each and every engagement, we bring our experience and technical expertise along with our commitment to safety, Charts quality of current state of NZ infrastructure and looking ahead to and the environment. the future (19) If you have used tyres for collection or drop-off,NZCID or you’dP15 like Investment since 2009 (21) and regional profiles (22) tell their own to know more about end-use products like Eco-Retainer, story Chapman Tripp P35 talk to us today.

LOCAL GOVERNMENT new zealand council for infrastructure People Centric P27 development 10-11 Government attempts to bully local government to comply Advancing best practice in the development with its own ideas meet strong resistance of world class infrastructure for the benefit of all New Zealanders.

33-34 The country’s local government system is seriously impedEcoRetainer Systems P6-7 www.nzcid.org.nz ed by fragmented and complex governance structures Call us today +64 21 572 603 Red Cross P17 34 Good credit rating for many local councils or alternatively +64 9 973 4709 COMMENT Investing in a sustainable future www.ecoretainer.com 2 Regulatory and legislative environment is not robust enough to meet the growth in property or necessary infrastructure says PropElectrix P21 erty Council chief Connal Townsend 8 NZCID CEO Stephen Selwood makes a call for an independent national statutory authority to identify long term infrastructure issues and monitor Government response Subsurface P25 10-11 Government remains a toothless tiger when it comes to electrix.co.nz Pride Performance Value bullying local councils into its way of thinking with tough sounding PO Box 72 095, Papakura 2244 Auckland Tel: 0800consultant 500 330, 021 532 rhetoric says planning Dr599Joel Cayford Email: justinbell@leakdetection.net.nz Hopper- Infrasol P5 Websites www.waterleakdetection.co.nz 24 Water New Zealand to play a pivotal role in 3 waters infrastrucwww.subsurfacedetection.co.nz ture planning says CEO John Pfahlert 26-27 Senior policy advisor with NZCID Hamish Glenn reports on the 2015 Building nations Symposium Page 36 – ENVIRONMENT 28 Progress in the “productive water sector” in the past six years and timeframes for change can be agonisingly slow says Chapman Tripp senior associate Ben Williams 35 LGNZ president Lawrence Yule says its 2013 initiative has had a significant impact on getting a clear picture of the state of play with the 3 waters 36 Smart Alliance’s sustainability consultant Nick Meeten says we are largely ignoring an economical and readily available source of energy that we could be using in city air conditioning 38 A survey of procurement processes in some of the country’s leading public organisations produced some startling findings says Plan A managing partner Caroline Boot 39 Be it one of the 3 Waters, transportation, social housing or electricity supply the need is universal. Years of neglect, under investment and lack of forward planning has finally come home to roost says Hopper director Evans Young THE BEST TANK STORAGE SOLUTION

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Editor Geoff Picken 0212 507 559 geoff@ mediasolutions.net.nz Managing partner Phil Pilbrow 027 564 7778, 09 489 8663 phil@mediasolutions.net.nz Design & pre-press Jamie Laurie jamie@mediasolutions.net.nz 021 161 0602

Web development Neo Chen neosync@icloud.com

www.infrastructurenews.co.nz

Publisher Mike Bishara 027 564 7779 mike@mediasolutions.net.nz

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ISSN 2324-3163 (Print) ISSN 2324-3171 (Online)

October/November 2015

SECTIONS Environment 6 Energy self-supporting, multi-use units in a 40 foot container 7 EcoRetainer gets the industry thumbs up for its economical concrete block using old tyres and used aggregate 25 Investing a little in finding underground electrical and water lines can save a lot of money and time for both major and minor projects 36 The challenge in the future may not be keeping cities warm but keeping them cool Infrastructure 26-27 Bill English unveils the 30 year plan at 2015 Building nations Symposium which also examined aspects and prospects for the Resource Management Act and compared procurement and delivery practices in Australia and New Zealand 38 Procurement polices other than those of the NZTA are largely well below par Property 2 Support for the NZCID’s proposed Integrated Governance and Planning and Delivery programme for a property sector “overburdened with costly red tape” Security 3 Cloud-based solution for SME disaster planning Transport 30-32 What is Kiwi Rail buying with its $400 million dollar capital injection from the 2015 budget Water 6-7 Case Study - Central Hawkes Bay District Council comes up with a template for small township water supply 9 Case Study - Laser guided boring expertise for heavy traffic site in Christchurch 24 Key long-term focus by Water NZ is on optimising existing 3 Waters services by adopting national standards with IPWEA, LGNZ and local authorities.

28-29 The days of easy water are over as uncertainties in the National Policy Statement and the RMA plague irrigation plans 35 LGNZ 3 Waters project proposes five broad expectations of what a fit-for-purpose sector should look like

Page 12-23 – FOCUS Page 30-32 – KiwiRail

October/November 2015

www.infrastructurenews.co.nz – 5

INFRASTRUCTURE >> Innovations

Model solution for township water supply

The site for the Porangahau township water supply contained five concrete tanks that were starting to show their age and the site itself was showing signs of ground movement

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entral Hawke’s Bay District Council’s Water Network Engineer Harry Robinson set out to find a way to stabilise the site and increase the holding capacity to be able to supply Porangahau township for longer in the event of the supply main failing.

He also wanted to increase the volume of water available for fire-fighting purposes.

“I needed a more robust site with increased tank storage, and greater capacity to monitor the site as well as increased security of the compound in both ground stability and public access,” says Mr Robinson.

There were limitations on increasing the site due to the topography of the surrounding hill side and council road infrastructure.

“The reservoir supply system

had to remain in operation throughout the redevelopment of the site and it was decided very early that a staged upgrade of the site would be required,” he says.

Porangahau has a permanent population of less than 200, which can double during the summer months.

A bore site located at Te Paerahi Beach to the east supplies the tanks and the beach settlement itself. Porangahau water is pumped 4.5km to the reservoir site before gravity feeding into the township network Water is first treated via membrane ultra filtration with disinfection carried out by chlorination prior to distribution.

Council carried out a cost estimate on three different types of tank storage systems including site preparation, provision of

Water Network Engineer Harry Robinson (left) and Civil Engineer Shane Kingston found an economical and flexible solution to small town water supply new inlet/outlet pipe networks and valves to enable a shutdown of individual tanks while still having an operational reservoir site.

The telemetery system needed an upgrade including a more robust solar power supply and installation of a security fence around the compound.

Three tank options were considered – six 30,000 litre Rota Moulded PE Tanks, three 55,000 litre steel tanks on a concrete ring foundation and Kliptank’s three 60,000 litre tanks.

All three options came within 1.5 percent lowest to highest overall cost.

The council needed a system which would provide a reasonable construction time

frame, provide the most compact internal pipe network with easy operation in maintenance periods, a compact compound to house the reservoir and easy repositioning of the tanks should it be required.

The Kliptank option ticked all of Council’s requirements.

The Council consulted all six contractors involved with the project to produce a construction timeline to ensure critical points in the sequence of the works was maintained throughout the project. They required flexibility should it be needed to ensure the redevelopment was completed within the 14week schedule.

One factor was to be sure that if a tank was to be moved on its

Information feature

Taiwan’s ecopower station

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he Eco-Power Station (EPS) is an off-the-grid system entirely self-powered by solar energy. It features a 5 kW thin-film photovoltaic module as well as a 5kW lithium-ion battery.

Designed by Taiwan’s Green Trade Project Office, the EPS has brought together 10 innovative green-technology producers in order “to demonstrate the viability of a green solution to climate change”.

The EPS has been created out of a 40-foot shipping container that will ultimately serve as an electric-bicycle station in New Jersey USA.

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The entire rooftop area of the station is covered with thin-film solar panels which feed the station’s smart grid with electricity - excess is stored in the station’s batteries. The station has installed hydrogen fuel cells to provide reliable backup power in case of blackouts. Under normal conditions, this hydrogen fuel cell self-refuels when a supply is maintained through the solar-power source. In total, this fuel cell can provide more than eight hours of backup power while operating at its maximum output. www.greentrade.org.tw

Sustainable future looks assured for block maker The September launch of EcoRetainer drew an enthusiastic response from infrastructure developers and civil engineers

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coRetainer is a patented, modular, and interlocking civil engineering unit made from recycled tyres and recycled concrete.

It looks like a very large plain concrete block but has at its core a compressed bale of 110 car tyres bound by galvanised, high tensile steel wire.

About 3.5 tonnes of recycled concrete is used in each retainer, totally replacing aggregate.

The product launch was held at Wilco Precast in Papakura and attracted leading civil engineers, contractors and council personnel from Auckland and the Waikato.

They inspected a display wall

made from EcoRetainer blocks and were able to discuss possible uses with the man who created the product, engineer Stuart Monteith, and his team.

“If only we knew about this product six months ago,” said a senior engineer with engineering and design consultants Harrison Grierson. “It would have saved substantial time and money on a retaining wall project where the speed and ease of construction was critical due to geotechnical factors.”

This 24-square-metre mass block retaining wall display was assembled in just one hour, demonstrating the speed with which solutions can be put in October/November 2015

The reservoir supply system had to remain in operation throughout the redevelopment of the site

Kliptank’s three 60,000 litre tanks increased the reservoir capacity substantially and modular construction did away with the need to have heavy machinery on site

base for any reason, it could be dismantled and shifted without the need for heavy lifting equipment.

Kliptank provided this assurance through its modular construction system which requires only on-site personnel. The sand base system for sitting the tank, in combination with its construction, provided an Importance Level One (IL1) constructed water tank.

If the tank was to be constructed outside to Council’s Network Utility Operators classification Importance Level Three would have been required as part of the Water Network framework within the Building Code.

Council engineers decided this would add unnecessary

“Like many small towns Porangahau is situated some distance from major centres where there are resources to carry out this sort of redevelopment,” he says.

“Kliptank’s modular system does away with the need to have heavy machinery on site which reduces costs further,” he says.

Mr Robinson and Mr Kingston took a look with Kliptank’s Sales Engineer, Ian Jamieson at a dairy effluent holding tank outside of Dannevirke to assess the construction method and how the tank had performed to date.

“After the construction of the first tank on-site a few minor issues showed up around

place, its ease of handling, flexibility and the minimal training required to build a permanent structure.

“Visitors soon identified that Eco Retainer could be used to build quickly a large structure economically and at the same time minimize disruption on highway projects for example,” said Business Development Manager Dave Youngson.

“It’s a simple idea with potentially a great future,” commented a senior project engineer with McConnell Dowell Constructors.

“I will certainly forward the idea around to project and senior managers and our estimating and engineering team members to see if the idea can be used in a tender and or on a project,” he says.

Council engineers particularly appreciated the product’s sustainability profile as it productively disposes of large volumes of waste tyres and recycled conOctober/November 2015

costs and time to the project and that an IL1 would provide the required level of service to maintain an operational reservoir site for the township.

This was put to the test recently when the township experienced a 5.8 magnitude earthquake centred some 50km south without any issues on the reservoir site.

The old site held about 110 cubic metres of water, while the new site now has the potential to hold 180 cubic metres.

“The increase in capacity has also meant a longer time between stop and start of the supply pump which will lessen wear on the pump itself, increasing its lifespan,” says council Civil Engineer Shane Kingston

the access hatch, platform and mounting of the monitoring equipment – a teleconference call with KlipTank quickly provided solutions that enabled the time frame to be unaltered.

Council are now considering the use of Kliptank on another water bore site - a single holding tank of greater capacity used as a secondary supply site for the town of Waipawa.

Kliptank, Ian Jamieson: 07 579 5200 www.kliptank.com Harry Robinson, Shane Kingston: 06 857 8060 www.chbdc.govt.nz

Above left: Visitors inspected the display wall and discussed uses with Developer Engineer Stuart Monteith and his team. Above right: Each retaining block contains a compressed bale of 110 car tyres and 3.5 tonnes of recycled concrete crete said Mr Monteith.

“Many councils face increasing problems with end-of-life tyres and waste building materials and have been burdened with costly solutions,” says Mr Monteith.

“Each EcoRetainer block uses one tonne of end-of-life tyres and 1.4-1.8 cubic metres of recycled concrete, substantially reducing environmental impact while serving a useful and necessary purpose.”

Consultant engineers suggested a wide range of applications including bridge abutments, sea walls, inclusion in foundations where the substrate is poor and even a water tank with an internal liner.

“These blocks will be excellent for a straight face retaining structure,” commented a quantity surveyor with McKenzie & Parma.

Sustainability is becoming an important part of our work and

reusing tyres like this ticks the boxes said another estimator.

“Together with short installation times, EcoRetainer blocks make a compelling case for use in our tenders.”

Call Stuart Monteith 021 572 603 09 973 4709 Dave Youngson 021 859 910 dave@ecoretainer.com www.ecoretainer.com www.infrastructurenews.co.nz – 7

COMMENT >> infrastructure

NZCID calls for infrastructure commission to monitor progress Stephen Selwood Chief Executive, NZCID An independent commission should oversee infrastructure says NZCID chief Stephen Selwood

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ignificant advances in infrastructure planning and investment have been made in recent years to lift the performance of the New Zealand economy and the quality of public assets that underpin it.

Achieving the ultimate objectives of major infrastructure investment is about stimulating long-term economic growth, delivering improved liveability and better environmental outcomes. Strong long-term partnerships between central and local government and the private sector are essential.

If local government planning fails to promote effective land use, then a government transport investment will not deliver national aspirations. If the market does not like the area served by a big local government project, then it will not provide the investment to justify council expenditure.

In no place is the imperative to link the theory and practice of good infrastructure planning, delivery and associated development more pressing than in the most heavily and expertly resourced of our regions – Auckland.

With regional governance reformed and now consolidated, Auckland Council has developed a single plan for a quality compact city supported by public transport. In theory, this should mean urban development is now being directed towards brownfield areas serviced by rail and other rapid transit.

But an assessment of the Special Housing Areas earmarked by the council and government for immediate residential de-

velopment shows this is not the case.

Four out of every five of the 26,000 dwellings identified to date are poorly served by public transport, and only around 5,000 or 20 percent are located close enough to public transport to provide a realistic alternative to the car.

The majority of these new, priority homes are dislocated from the enormous investment the city is making in rail and other public transport and reinforce private motor vehicle dependency.

Meanwhile, the notified unitary plan allows significant urban intensification in areas not well supported by public transport while imposing height restrictions in town centres and locations adjacent to train stations and bus corridors.

A review of the unitary plan shows that almost half of bus and rail stations have weak transport and land use integration. What signals do these policies send to private investors and government agencies?

Incredibly, in the absence of a National Policy Statement the government maintains no formalised capacity to influence the Auckland plan or the unitary plan beyond submitting through consultation, despite government investment being central to delivering the plan.

Similarly in Christchurch, in the absence of a compelling investment proposition and a unique point of difference, market response to the CBD rebuild has been much slower than anticipated.

Across the regions, there re-

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mains no cross-party agreement on major inter-generational investment in roads in Wellington, Waikato and Northland and there is opposition from consenting authorities in Wellington to national and local strategic investment.

Something must be done.

Emerging as a key platform of the British Labour Opposition’s policy agenda is an interesting initiative that may help address the problem: an independent national statutory authority to identify long-term infrastructure issues and monitor Government response.

A New Zealand National Infrastructure Commission would be responsible for assessing and publishing national infrastructure needs over 30 years and monitoring regional and national progress on issues and opportunities.

The needs assessment, delivered every five years, would be tabled in Parliament, as would other ongoing monitoring reports, and be subject to rigorous committee review processes. All future trends and pressures would be analysed -population and demographic change, finances, technology and environmental challenges.

The commission itself would comprise recognised public and private sector experts across planning, project funding and delivery, regulation and procurement and be fully funded by the Crown. Each member would be appointed by the government for a fixed term and approved by Parliament.

As a statutory body, the commission would possess powers

to require information from government departments and agencies and would maintain capacity to investigate infrastructure issues of national significance.

But it would not formulate solutions, nor propose investments – this role can only sit with the government. The commission would be restricted to analysis, monitoring and reporting.

Government departments would be required to develop sector plans within 12 months of the commission having undertaken the needs assessment, demonstrating how they are addressing issues raised. Where councils plan, manage, or regulate for nationally significant infrastructure, they would have to meet the same requirement.

Much of the work that a National Infrastructure Commission would undertake has already been initiated by the existing National Infrastructure Unit, but accountability for effective execution of policies and plans remains problematic.

An independent National Infrastructure Commission would enable a shift away from shortterm politicised debate to long-term planning horizons, promote cross-parliamentary alignment on infrastructure policy and provide independent scrutiny and commentary on the execution of public investment in infrastructure of national significance.

Independent oversight and direct advice to Parliament by a National Infrastructure Commission on the execution of infrastructure planning, funding and delivery is the logical next step to ensuring that planning, funding and delivery of nation-building infrastructure measures up and meets the expectations of all New Zealanders, including current and future generations.

Stephen Selwood is Chief Executive of the New Zealand Council for Infrastructure Development October/November 2015

INFRASTRUCTURE >> Information feature

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COMMENT >> Local government

Minister: Lay off councils and communities The purpose of local government in New Zealand is changing so fast these days it’s hard to keep up

T

he September/October issue of AsiaPacific Infrastructure featured articles by the Minister of Local Government Paula Bennett, the head of Local Government New Zealand Lawrence Yule and others.

The common theme was the pursuit of ‘sustainable growth’ – a concept that anyone with any feeling for the meaning of ‘finite resources’ knows is impossible.

Nevertheless, the minister’s speech to the LGNZ Annual Conference this year blithely states, ‘Size doesn’t always matter, but long-term sustainable growth in the best interests of all New Zealanders should’.

She argues, ‘we simply have to look at growth across a region, and your current structure does not strategically or cohesively support that….’, and, ‘I have zero interest in imposing unwanted change on you’, but, ‘where necessary I will legislate to either set a new CCO up across a region – or even to take something away….’

Tough talk indeed. Central government has been building up to this for a while. A cabinet paper ‘proactively released’ in 2009 by then Minister for Local Government Rodney Hide states: “....In the speech from the Throne, the Government outlined three priority areas for its work: • growing the economy; • a reduction in government bureaucracy and a focus on investing in frontline services; • reducing regulatory and compliance demands that get in the way of productivity growth.

These priorities are underpinned by a belief in individual freedom and a belief in the capacity and right of individuals to shape and improve their own lives. Work in the local government portfolio needs to align with these priorities...”

Local government reforms since then include changes to the Act, Auckland amalgamation, changes to the powers of the Local Government Commission (particularly an ability to respond to requests for amalgamation) and now concerted pressure from the minister (with Local Government New Zealand in tow, it appears) for councils across New Zealand to get with central government’s growth programme. Or else.

According to central government’s web-

10 – www.infrastructurenews.co.nz

site, ‘The Minister of Local Government’: Is responsible for core policy issues relating to the constitution, structure, accountability and funding of local government; Leads the relationship between central and local government.

So I guess you could say that the minister is ‘leading the relationship’. That’s what she’s doing when she makes a speech like that. But it’s important to keep in mind the fact the law of the land states, at present, ‘The purpose of local government is to enable democratic local decision-making and action by, and on behalf of, communities’.

Those of you in the know will know that this purpose has been added to by central government. To the democratic decision-making purpose another one has been added, ‘and, to meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses.’ So both of those purposes now need to be met.

The important point to make is that central government does not, yet, have draconian enough powers to impose its growth agenda on local communities but it would very much like councils to do its bidding.

Dr Joel Cayford, Planning Consultant

What can councils do to promote growth?

parks, beaches and swimming pools, libraries and sports facilities.

Councils can give effect to central government’s growth agenda – through infrastructure construction, planning and regulation and sometimes through economic development spending.

But it is crucially important to understand how these roles developed in local government, why, and whose interests they were designed to protect.

In her speech Paula Bennett states, ‘Too many of our small but significant communities aren’t experiencing the levels of growth they need. And suburbs in our big cities are in the same boat.’ The question that arises here is whose ‘need’ is she talking about?

Planning regulations have traditionally had one fundamental purpose and that is to restrict the uses of private property that

This central government figure shows where council spending goes. Traditionally council activities have concentrated on the 3 ‘R’s – roads, rates and rats.

Infrastructure development and maintenance is a major area of spending. From a ratepayer’s point of view so is public health,

will adversely affect the interests of neighbouring property owners specifically, and the community generally.

Removing or reducing these regulations (‘cutting red tape’) has the effect of undermining the ability existing residents and ratepayers have to defend their interests, October/November 2015

lose a golf course, who might suddenly find a piece of park or stopped road has been sold by council to a developer, who find they can’t get their kids into a school with reasonable teacher ratios because places have been taken up by new families in a new subdivision, by workers who find they can no longer reliably get to work in a half hour because new residents have filled up the roading networks. The list is lengthening. In Auckland the ratepayer’s ability to resist the impacts of this growth strategy on their quality of life has been steadily reduced to the point they can almost be ignored.

Central government regularly measures the ‘Quality of Life’ in New Zealand by survey. This shows a dramatic decline in the confidence and attitude of Auckland ratepayers to local government since amalgamation.

More than half of Aucklanders now believe they have zero or little influence over council decision-making – compared with about 40 percent before amalgamation.

And prior to amalgamation less than a quarter of those surveyed disagreed that decisions made by their council were in the best interests of the city – that has now jumped to a third.

There is no good news for advocates of amalgamation in this central government survey data. It is simply dishonest to suggest otherwise.

New Zealand needs economic development which is measured by an increase in the quality of life and income/capita. The present national GDP increase measure reflects increased migration levels and largely ignores what is happening to existing residents and communities, concentrating on business growth and tax revenues. This is not sustainable or acceptable.

“The important point to make is that central government does not, yet, have draconian enough powers to impose its growth agenda on local communities but it would very much like councils to do its bidding” while making it easy for the developer to make a buck and contribute to central government’s growth agenda.

I accept that planning regulations need to be changed when greenfield land is rezoned for urban development, but again, those investing need to be certain their investment won’t be undermined by careless planning of the rest of the development.

Infrastructure is costly and takes time to get right. It’s there to service the communities that paid for it. What central government wants to do is reduce the ability of councils to charge development levies on new greenfield development.

Councils use this revenue to fund any new infrastructure needed. Without that ability councils will be forced to rate existing ratepayers because someone has to pay.

Imposing this change to reduce ‘barriers to investment’ would in effect force existing ratepayers to subsidise central government’s suburban and urban growth agenda.

And if central government wants coun-

cils to take a risk and build some sort of economic development anchor project – a new stadium, a convention centre, a new greenfield site – then it needs to respect its own legislation which requires councils to make democratic decisions and remain accountable to their communities – not to the minister.

Who benefits from growth?

Various stakeholders will gain from central government growth policies. The building industry is booming and already stretched to meet demand because of a shortage of skilled tradesmen. The finance industry has an area of the economy it can direct investment with little risk – it seems.

Central government coffers gain from the GST and taxes from increased economic activity, and there’s foreign capital from foreign investment in building and brought into the country by new immigrants. These are all gains.

But there are losers in this strategy. These include those existing residents who might

Dr Joel Cayford is a Planning Consultant, blogger and Planning Researcher/Teacher at the University of Auckland, and a former City and Regional Councillor

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FOCUS >> 30 Year Infrastructure Plan

Setting the scene

for tomorrow The Thirty Year New Zealand Infrastructure Plan provides a roadmap to tackle the infrastructure challenges faced by New Zealand over the next 30 years

T

he plan sets out a “necessary step-change” in New Zealand’s approach to infrastructure planning and management says Lindsay Crossen, Chair of the National Infrastructure Advisory Board.

“While we generally have a good infrastructure base today, we face growing future pressures,” Mr Crossen says. “Our assets are getting older and will soon need replacing, our popu-

lation is aging, we face a shift in economic gravity towards Asia, and we face regional growth in some areas and decline in others.”

He says that the plan provides a broad consensus across the public and private sector on what the new approach is and how to get there. “This plan is a major step forward in collaboration across central government, local government and the pri-

Nine key challenges

N

ew Zealand is facing several major challenges that have to be overcome if the country is to achieve its full potential.

percent change to that ratio.

The median age is projected to increase from 32.8 years in 1996 to 42.7 years in 2043. This has implications for the types of services New Zealanders Aging infrastructure networks will want, the infrastructure reneed renewing quired to deliver those services, This is a simple consequence and available funding. of when they were built; they are nearing the end of their life. Some regions will grow and For example, the schooling es- others will shrink tate has an average age of 42 By 2045 there are expected to years and parts of the water be another 1.2 million people network are now over 100 years living in New Zealand. However, old. Meeting the cost of infra- this increase will not be evenly structure renewal and mainte- spread across the country: 92 nance is even more challenging percent of this growth will be in areas with smaller rating and across just five regions, and economic bases. over 60 percent is likely to be in just one region: Auckland.

Affordability constraints Several regions are expected to Local authorities are respond- shrink over this period. ing to community calls to manage debt and reduce rate rises, Infrastructure needs to supand central government is fo- port higher levels of produccused on returning to surplus tivity for economic growth and reducing net debt to 20 There is a persistent propercent of GDP by 2020. ductivity gap that needs to be addressed to make sure local An aging population businesses remain competitive In 1996 no Territorial Local Au- on the world stage. Infrastructhority had more elderly people ture will play a key role in lifting than children, but by 2031, it is productivity and ensuring New projected that there will be a 91 Zealand can take advantage

12 – www.infrastructurenews.co.nz

vate sector to the three main elements of the new approach: we need a better understanding of the levels of service we want to deliver; more mature asset management practices and use of data; and more effective decision-making that considers non-asset solutions.”

But the plan is more than just an agreement on a new approach, Mr Crossan insists.

“For the first time, it includes a specific Action Plan to help us make the necessary shift,” he explains.

“It includes the development of national shared data standards for our roads, building and water assets to give us a consistent base to build evidence and deepen our capability to

manage these networks.”

It also directly addresses the need for long-term integrated regional infrastructure planning, stronger practices for larger procurements including increasing the transparency of future intentions, greater alignment of planning legislation and the development of a trans-Tasman procurement market.

“Central and local government own approximately $220 billion worth of assets and plan to spend another $100 billion over the next 10 years,” Mr Crossen notes. “This plan will ensure that we spend our money wisely, and find more innovative ways of better managing our existing infrastructure.”

of opportunities in the global economy, including the ongoing growth in developing countries and Asia in particular.

New Zealand to export goods and services to these markets.

This requires decision-makers to fully consider the needs of, and opportunities for, regional economies when forecasting infrastructure demand, and underpins the need for good international connections and effective roads, rail and broadband to link regions to cities and the global marketplace.

Technological change It is behind many of the changes to Kiwi lifestyles, and is also transforming the way infrastructure providers deliver services.

This provides exciting opportunities, but also brings challenges in the form of cyber security risks and the need to make sure Climate change is putting New Zealand’s networks are New Zealand’s natural flexible enough to adapt to new resources under pressure technological developments.

Rainfall patterns are changing, and sea levels are expected to Infrastructural pinch-points rise by 30 centimetres by 2050.

The continued growth of New Flooding is the most frequent Zealand’s economy will be more natural disaster with an average concentrated in certain regions, annual cost of approximately creating infrastructure pres- $51 million. As a country New sures in housing, urban infra- Zealand has a wealth of natural structure, the three waters and resources, but it is beginning to roads. Between now and 2045 deplete some of its important the pinch-points of growth will natural resources and is reachbe felt most predominantly in ing limits on some of the crucial Auckland, which is forecast to inputs such as land and fresh grow by another 716,000 peo- water. These issues raise quesple over this time. tions around how infrastructure is developed and managed – it Economic centre of gravity needs to be resilient to changOngoing growth in develop- es over time, and use resources ing countries, particularly Asia, efficiently. will create opportunities for October/November 2015

“Central and local government own approximately $220 billion worth of assets and plan to spend another $100 billion over the next 10 years,” says National Infrastructure Advisory Board Chair Lindsay Crossen

For the latest in Infrastructure innovation, case studies and news plus the same for Local and National government activities, visit our website www.infrastructurenews.co.nz October/November 2015

www.infrastructurenews.co.nz – 13

FOCUS >> 30 Year Infrastructure Plan

A blueprint for

development The Thirty Year New Zealand Infrastructure Plan 2015 provides a new approach to infrastructure management and planning

T

he 2015 plan is the latest of several long-term planning initiatives designed to provide national direction to infrastructure development and confidence to the private sector.

As such, it follows in the footsteps of: • the first 2010 Plan in 2010 that provided short-term priorities for infrastructure investment and regulatory reform • and the 2011 edition that set

out a vision, principles and goals to provide an ‘operating framework’ for infrastructure decision-makers.

However, this is the first infrastructure plan that details a comprehensive suite of actions that will be undertaken to deliver on the new approach.

In some cases the work is underway, whereas other actions are the start of a work programme that may take a number of years to deliver results.

The actions are focused on what central government, local government and infrastructure peak bodies will do, reflecting the collaborative effort required to change how infrastructure is planned, developed and managed in New Zealand.

The Action Plan is intended to help make this shift, with a particular focus on: • developing national, shared data standards for infrastructure • establishing regional centres of excellence or similar arrangements to support decision-making • investigating options to support long-term, integrated regional infrastructure plans • more transparent infrastructure pipeline data • investigating options for enhanced procurement govern-

ance for larger procurements • a longer-term review of planning legislation and alignment • updating the Resource Management Act (RMA) to improve the national planning framework • and developing a trans-Tasman procurement market with Australia.

This shift will drive the two outcomes sought – better use of existing infrastructure and better allocation of new investment.

A number of larger actions represent a major shift, and anchor the new approach to infrastructure.

However they are just the start: significant policy work and consultation will be required to develop the detail.

New approach

Action

Next steps and timeframe

Strengthening Asset Management Practices

A. Develop national metadata standards for roads, water and buildings to ensure a consistent base to build evidence, undertake forecasting and deepen capability.

Central and local government to finalise metadata standards for three asset types (roads, water infrastructure, and built assets) by mid 2016 including an implementation plan.

Strengthening Asset Management Practices

B. Establish regional centres of excellence or similar arrangements for collating and making available the data obtained through shared metadata standards. This initiative will also explore the costs and benefits of any new entity providing the necessary analytics to interrogate the data and support local decision-making.

Central and local government will work through the arrangements established the arrangements established under the action on shared data standards above to build this capability and the necessary governance structures.

Increasing Understanding of Levels of Service and Future Drivers of Demand

C. Investigate options to support long-term integrated regional infrastructure plans, potentially with legislative recognition incorporating central and local government objectives.

The NIU will work over the next 12 months with local and regional government to determine the best way to implement this action considering the large amount of work underway in the RMA and housing policy areas.

Optimising Decision-Making

D. Changes to the Resource Management Act to improve the national planning framework and enable more responsive and efficient infrastructure and housing supply.

These changes will be captured in the Resource Management Bill planned to be introduced in 2015.

E. Commitment to the longer-term review and alignment of planning legislation This will be sequenced to follow the implementation of the Resource Management Bill to be introduced in 2015, with work expected to start on this action in 2017.

F. Strengthen the transparency and quality of infrastructure pipeline data through the annual production of the Ten-Year Capital Intentions Plan and increasing the level of detail available in years one to three, including timing and planned procurement methodology.

G. Investigate options for enhanced procurement governance of large/significant procurements – developing scale and building capability – including market engagement, coordination, risk pricing and the use of more sophisticated procurement tools with a focus on innovation and outcomes.

14 – www.infrastructurenews.co.nz

October/November 2015

FOCUS >> 30 Year Infrastructure Plan

Painting a bold picture The Thirty Year New Zealand Infrastructure Plan 2015 sets some tough targets for both the public and private sectors

T

he plan foresees the adoption of a “holistic” investment management approach to asset portfolios and capital investments across central government.

Agencies will make effective use of long-term investment plans to shape future investment choices and will have a sound understanding of how their assets contribute to service delivery.

A significant step towards achieving this will be made through the recent introduction of Cabinet Circular CO(15)5 by the Treasury, which will ensure that: • agencies must produce 10year Long-Term Investment Plans to be reviewed every three years • agencies must report on relevant asset performance indicators in annual reports • and an Investor Confidence Rating will take account of a range of lead and lag organisational performance indicators such as asset performance, asset maturity and several other factors that will ensure that agencies make more effective use of long-term investment plans to shape future investment choices.

Local government will have a “long-term view” of their investment requirements to make more informed decisions, with the Local Government Amendment Act 2014 marking a move towards this end by requiring councils to prepare an infrastructure strategy for at least a

30-year period. (the first reports were completed this year.)

Infrastructure providers across New Zealand’s three main asset classes – water, roads, and buildings – will develop a more sophisticated approach to understanding the condition of those assets, the timing of renewals, and how they are performing in comparison to similar networks.

This be will progressed through the establishment of shared metadata standards across roading, the three waters, and government-built assets (NZTA, LINZ, MBIE, NIU, local councils).

Decision-making will no longer be fragmented; infrastructure providers will be able to understand how their networks interact with other infrastructure networks as well as the implications for land use planning and the end use.

Individual sectors will progress specific programmes to improve their asset management maturity including: • the establishment of a programme to enhance the capability, productivity and leadership in asset management throughout the public sector in New Zealand by the Institute of Public Works Engineering Australasia (IPWEA) New Zealand and the NIU • the establishment of the Education Infrastructure Service within the Ministry of Education, who have recently produced an Eight-Point Plan to tackle challenges facing the

schooling estate • the Investing in Justice (IIJ) expenditure review, which includes consideration of the Ministry of Justice’s capital asset management and longterm infrastructure plan • the establishment of a cross-District Health Board Health Asset Management Improvement group (HAMI) to coordinate and drive asset management improvement across the sector • and development of a Transport Domain Plan by the Ministry of Transport and Statistics New Zealand, which will identify the gaps in knowledge regarding key enduring questions about transport.

• Housing challenges and land use integration Looking ahead to 2045, the focus will be on future understanding of demand and optimising decision-making through various actions: • the Resource Management Reform Programme, which will seek to ensure that local authorities are enabling sufficient and responsive supply of land for urban development – core components such as improved planning processes, clearer and more balanced national direction, the introduction of a national planning template, new consenting rules and processes to improve timeframes, and changes to ensure local authorities are enabling sufficient and responsive supply of land for urban development will be included in a Re-

source Management Reform Bill to be introduced in 2015.

• the Future Urban Land Supply Strategy being developed by Auckland Council to maintain a pipeline of development capacity will sequence structure planning and live zoning of the future urban areas to achieve the best outcomes for the provision of housing, employment, community facilities, open space and infrastructure, including transport.

The Future Urban Land Supply and the proposed Auckland Unitary Plan, along with the Resource Management Act reforms, the Auckland Transport Alignment Project and the wider work on the 2018 Government Policy Statement on Land Transport provide the opportunity to coordinate and deliver the long-term integrated planning required across land use and infrastructure provision.

Social housing The Social Housing Reform Programme reflects the plan’s approach, both through collaboration between central government, local government and the private or community sector and in considering different ownership options and the attraction of private capital.

One of the components of the programme includes the transfer of Housing New Zealand houses and tenancies to Community Housing Providers, initially involving 1,000–2,000

Continued on page 16

new zealand council for infrastructure development Advancing best practice in the development of world class infrastructure for the benefit of all New Zealanders. www.nzcid.org.nz

October/November 2015

www.infrastructurenews.co.nz – 15

FOCUS >> 30 Year Infrastructure Plan Continued from page 15 houses and tenancies in Invercargill and Tauranga during the coming year.

The partnership programme with the private sector aimed at building positive communities such as Tamaki and Hobsonville will continue - in all, there are 24 redevelopments projects underway across Auckland.

Changes to density controls and zoning in the Auckland Unitary Plan could unlock development capacity for a further 39,000 additional dwellings on current Housing New Zealand land over the next 30 to 50 years.

Procurement Central government procurement governance arrangements will be strengthened and a portfolio approach to procurement will be adopted.

Implementation of the new Government Rules of Sourcing introduced on 1 July will be staged, with key actions including: • tightening planning requirements with 10 year long-term agency investment plans (Treasury) • and introducing a new Investor Confidence Rating that includes an assessment of long-term investment plans,

project delivery and delivery of benefits and asset performance (Treasury).

The government’s future investment intentions will be more transparent, and a trans-Tasman procurement market will be developed through: • the annual publication of NIU’s Ten-Year Capital Intentions Plan, which has a particular focus on years one to three (NIU) • MBIE’s National and Canterbury Construction Pipeline reporting which provides a consolidated picture of current and future construction activity (MBIE) • the NIU and MBIE’s work with Infrastructure Partnerships Australia and the Global Infrastructure Hub to expand and develop the Trans-Tasman procurement market (NIU/MBIE).

Government will be more capable procurers, which will be achieved by: • developing a pool of construction project expertise and developing guidance for construction projects covering complexity and capability, contracting modes, use of Building Infrastructure Modelling (BIM), and balancing risk and benefits (MBIE) • implementing the Procurement Capability Index for

Planning for the future

N

ew Zealand has a good national infrastructure base, bolstered by investment in recent years, Finance Minister Bill English says.

The Thirty Year New Zealand Infrastructure Plan 2015 that has been developed collaboratively with local government and industry sets out 145 initiatives that will strengthen asset management, improve understanding of demand, and improve decision-making around infrastructure provision.

Key initiatives include: • developing national data standards for roads, water and buildings to allow a con-

sistent assessment of infrastructure across the country • establishing centres of excellence to use this data to improve infrastructure decision-making • investigating how best to undertake long-term integrated regional planning • an increased focus on non-asset solutions such as demand management to make better use of existing networks • further development of a trans-Tasman infrastructure market.

“These actions will drive better use of existing infrastructure and better allocation of new in-

16 – www.infrastructurenews.co.nz

government agencies, with links to the new Investor Confidence Rating and State Services Commission Leadership Success Profile processes (MBIE) • an investigation into the options for enhanced procurement governance of large/ significant procurements – developing scale and building capability – including market engagement, coordination, risk pricing and the use of more sophisticated procurement tools (MBIE/ NIU).

Regulation The effective regulation that is critical to ensuring the right type of infrastructure is available at the right time and in the right place will be ensured through: • government responding to the issues raised by the Productivity Commission, which highlighted several shortcomings in the way that regulation is developed and managed in New Zealand - in essence moving to a stewardship approach to regulation that is proactive and focuses on the life cycle of regulation (Treasury) The following regulatory reviews are underway, or are planned, to ensure the strucvestment,” Mr English believes.

A pipeline of government department capital intentions for the next five years has also been published. “The pipeline shows the government is committed to ongoing investment in infrastructure and other public services,” Mr English maintains.

“This includes, for example, a $13.9 billion land transport programme between 2015 and 2018, as well as continuation of the more than $2 billion roll-out of Ultra-Fast Broadband and the Rural Broadband Initiative.”

Both the Infrastructure Plan and Capital Intentions Pipeline demonstrate the government’s commitment to transparency and engagement.

ture and rules of the regulatory regimes are fit for purpose: • competition law provisions relating to the abuse of market power (MBIE) • the Resource Management Act to generally improve decision-making, increase national consistency, reduce the cost of regulatory compliance for development, and streamline planning processes taking account of the need for resiliency and management of natural hazards (MfE) • the Telecommunications Act focused on what settings will be needed post-2020 to ensure competition is promoted while incentives for investment and innovation can be protected (MBIE) • an investigation of the impact that current pricing methodologies and other regulatory requirements have on incentives for efficient investment in new generation, storage and demand management technologies (Electricity Authority) • the regulatory arrangements for private land access by telecommunications network operators and revision of the National Environmental Standard for telecommunications to bring national consistency to a greater range of planning requirements (MBIE).

“Strengthening the integration between sectors and across central and local government is pivotal to achieving the best results from infrastructure” – Finance Minister Bill English

October/November 2015

Transport Roads will become more efficient and remain affordable as non-asset solutions such as demand management become more commonplace.

This will be achieved through: • an assessment of the potential of demand management tools, including road pricing, to improve the estimation of demand for infrastructure and optimise the use of infrastructure (MoT) • the Transport Analytics Governance Group’s work to develop shared metadata standards across roads to support decision-making and collaboration between authorities (consortium of NZTA and local councils) • the recently established One Network Road Classification (ONRC) which will allow road-controlling authorities to make more strategic decisions on how roads are used (NZTA/LGNZ).

Auckland will be less congested and there will be more public transport options as a result of greater collaboration between central government,

October/November 2015

Auckland Council and Auckland Transport.

This will be achieved through: • development of the engagement process between central government, Auckland Council, and Auckland Transport to agree a 30-year transport strategy for Auckland (central government, Auckland Council, and Auckland Transport) • the government’s Auckland Transport Package (NZTA) • managing and developing the road network to serve multiple modes, users and activities to encourage more compact, accessible land use development (Auckland Transport) • Auckland Council’s Future Urban Land Supply Strategy, which will ensure transport projects are planned in a way that is integrated with land use planning (Auckland Council).

New Zealand’s roads will become less congested and our air cleaner as Intelligent

Continued on page 18

www.infrastructurenews.co.nz – 17

FOCUS >> 30 Year Infrastructure Plan Continued from page 17 Transport Systems (ITS) are deployed: the government will assist this through the Intelligent Transport Systems Action Plan which includes identifying and tackling regulatory barriers (MoT).

Greater regional integration and collaboration will connect the regions to the global marketplace and to local cities courtesy of the government’s Accelerated Regional Roads Package (NZTA).

The transport network will support international connectedness and a strong export economy through: • the continued negotiation of new air services agreements, both bilaterally and multilaterally, to provide more access to key and future trade

markets (MoT) • reviewing the Telecommuemergency calling system • the maintenance of the nications Act, a key focus of (MBIE).

National Freight Demand which will be the price-setBarriers to the uptake of UlStudy to provide up-to-date ting arrangements for whole- tra-Fast Broadband will be idenforecasts to guide freight insale services (MBIE) tified to ensure the adoption of frastructure investment and • reviewing land access ar- UFB is maximised for realising land-use planning decisions rangements for telecommu- productivity benefits (MBIE). across the public and private nications lines to support effisectors (MoT) cient UFB connections (MBIE) Energy • the review of the Civil Avia- • reviewing the National EnA smart electricity network will tion Act, which will improve vironmental Standard for empower consumers and dethe framework for regulating Telecommunications Facili- cision-makers courtesy of the competition in international ties to bring greater national Smart Grid Forum (MBIE with air services and allow the inconsistency across environ- the support of the Electricity dustry and government to be mental planning rules for de- Networks Association). more responsive to technoployment of broadband infraAuckland will be greener, logical changes (MoT). structure (MBIE). more prosperous, livable, low New Zealand’s communica- carbon and powered by more Telecommunications tions networks will be more re- efficient, affordable, clean enerRegulatory settings will cater silient through: gy thanks to Auckland Council’s for the growing convergence • the development of an ICT Low Carbon Auckland, which of telephony, internet, broadresiliency framework for sets out a 30-year pathway and casting, information media and emergency services (MBIE) computing.

• the development of a stratContinued on page 20 This will be achieved through: egy for the future role of the

A perfect policy prescription?

T

he New Zealand Council for Infrastructure Development (NZCID) has made four recommendations for best practice infrastructure planning based on overseas experience.

1. Framework The Resource Management Act’s (RMA) “effects-based” regime lacks strategy and fails to ensure alignment between land use planning and funding, and delivery of development and infrastructure.

The balance of the RMA is primarily concerned with the adverse impacts of development, evaluated almost entirely through an environmental lens.

The length of time projects take to go through the planning and consenting processes, the complexity of the process, the range of legislative criteria involved, and the costs of consequent delays is a major concern for New Zealand.

Recommendation: Implement less rigid, overlapping and time-consuming statutory processes, says NZCID Chief Executive Stephen Selwood.

2. National leadership A distinct lack of leadership and a high-level infrastructure strategy was a major hindrance in New Zealand compared with what NZCID has seen overseas.

“The New Zealand government does not formally identify growth priorities or provide funding or other resources to accommodate long-term growth,” says Mr Selwood.

“Successive governments have chosen instead to define and redefine the purpose and responsibility of local government. It is not clear what the government’s planning priorities are or what the expectation is of local government to promote national direction.”

Recommendation: Instead of constantly moving the goalposts for local government, an aligned strategy between local and central government would co-ordinate infrastructure planning and development.

Mr Selwood says requiring ministerial sign-off on all regional plans would commit the government to co-founding agreed plans and stymie investment creep in growth areas with

18 – www.infrastructurenews.co.nz

behaviour.”

Recommendation: Move away from immediate benefit prohigh demand for new services. jects to the development of new funding and project criteria 3. Transport funding to avoid creating artificial barriThis is one area where New ers to major projects.

Zealand was identified as having a world-class system and one of 4. Value capture the most “evolved and efficient New Zealand presently lacks in the world”. Fuel taxes, road an established approach to capuser charges and vehicle licens- turing the value created from ing fees are fully hypothecated new investment in infrastructure to transport spending and man- or the rights to develop. aged by a semi-independent Mr Selwood believes urban national authority -- the New investment, particularly in transZealand Transport Agency. port, results in property value Mr Selwood says, however, change proportionate to the that the strength of the fund- level of amenity conferred upon ing system is also its weakness. an affected parcel of land. “The “The integrity of user pays de- potential for land value increase pends on a robust relationship is significant, as much as double between those who pay and the value of land proximate to those who benefit from invest- quality public services. There ment,” he maintains. is a compelling moral case for “The benefits of transport capturing value created by as an economic and social public capital investment and development tool have been rezoning.” under-represented in project Recommendation: Allow govevaluation, with priority given ernment to re-capture some of to value-based benefits when the value created. Present New making transport decisions. Zealand law allows for targeted This methodology made it rates to be applied in the same more difficult to push through manner as an area levy, and optransport mega-projects be- tions around a capital gains tax cause of high-cost, slow-burn could also be implemented. effects and requisite changes in October/November 2015

The current state of New Zealand’s infrastructure 10,886km State High83,703km of local roads way network

721,700 hectares of total irrigated land

42,312 GWh electricity produced

12,000km of national transmission grid

75-80 percent of elec724,253 end users able 239,150 rural households 35,500 barrels of oil protricity from renewable to connect to Ulwith access to wireless duced per day in 2013 sources tra-Fast Broadband broadband

4,000km of rail corridor

$45.2 billion total replacement value of the three waters assets

19 prisons

2,532 schools

38 public hospitals

16 sea ports that export 37.7 million tonnes a year

308 public libraries

52 municipal landfills

371 community based police stations

471 public museums

Looking ahead

The NIU publishes an annual Ten-Year Capital Intentions Plan with details of all identified projects. This report is available at www. infrastructure.govt.nz Type of infrastructure

Infrastructure project/programme

Budgeted cost (million)

Period

Transport

Auckland Waitematā harbour crossing

$4,500

From 2025

Auckland City Rail Link (CRL)

$2,500

To 2025

Auckland Western Ring Route - Waterview road connection

$2,250

To 2020

Wellington Transmission Gully road

$1,500

To 2020

Panmure corridor road

$1,097

To 2035

Hamilton Eastern Bypass road

$982

To 2019

Puhoi-Wellford State Highway

$755

To 2026

Christchurch northern arterial road

$215

To 2019

Wellington integrated public transport ticketing system

$32

To 2022

Ultrafast Broadband Programme

$1,500 + $210

To 2020

Rural Broadband Programme

$300 + $100

To 2020

Mobile Black Spots Fund

$50

To 2020

Christchurch Hospitals redevelopment

$600+

To 2019

Dunedin Hospital campus redevelopment

$300

To 2025

New Schools and Kura Programme

$1,000

To 2022

Greater Christchurch Education Renewal Programme

$1,140

To 2022

Upgrade Programme for social houses

$2,004

To 2022

Expansion Programme for social houses

$2,312

To 2022

Christchurch City Council Social Housing Rebuilds

$34

To 2017

Auckland Central interceptor waste water system

$965

To 2025

Waikato Water Treatment Plant No.2 and Watermain

$400

To 2025

Huia Water Treatment Plant Upgrade, Auckland

$241

To 2023

Waiari Water Supply Project (stage 1), Tauranga

$65

2017-2021

Lyttelton Waste Water Treatment Plan

$52

To 2022

New Wanganui Waste Water Treatment Plant

$32

2017-2020

Dunedin Stormwater trunk mains

$36

To 2024

Christchurch Northern Trunk Sewer

$35

To 2020

Waikiwi Reservoir, Invercargill

$34

2040-2045

Hamilton replacement of water mains

$33

To 2022

Coastal Tasman Water Supply Pipeline

$32

2032

Waihou Piako pump renewal programme, Waikato

$31

To 2045

Palmerston North water pipe replacement

$28

To 2025

Hastings stormwater works

$22

To 2022

Waimea Community Dam, Tasman District

$25

To 2020

Whau Valley Water Treatment Plant, Whangarei

$19

To 2018

Earthquake strengthening of Wellington City Council buildings

$49

To 2022

TSB Stadium redevelopment, New Plymouth

$27

To 2025

Flatbush pools and leisure space, Auckland

$27

From 2020

Aquatic centre building, New Plymouth

$21

To 2022

Development of Porirua landfill

$17

To 2025

Telecommunications

Health Education Housing

Water

Other Facilities

October/November 2015

www.infrastructurenews.co.nz – 19

FOCUS >> 30 Year Infrastructure Plan Continued from page 18 a 10-year plan of action (Auckland Council).

Data quality and asset management practices across gas and electricity lines businesses will continuously improve through review of asset management plans and analysis of related information (Commerce Commission).

Electricity networks will be more resilient thanks to: • the Electricity Networks Association’s improved understanding of their future investment environment including adding to levels of

resilience through the use of models such as “Transform” (ENA) • the continued security of domestic liquid fuels through MBIE’s publication of the Oil Emergency Response Handbook and work on greater transparency of regional storage capacity (MBIE) • protection of New Zealand’s energy infrastructure in order to avoid vulnerabilities and disruptions to service, including cyber risks where advice has been developed in conjunction with the electricity sector for the protection of industry control

systems (MBIE).

Demand management will grow in importance leading to greater energy efficiency and the avoidance of unnecessary expenditure on grid upgrades through: • development of Transpower’s demand response programme, which pays participating consumers to reduce demand during critical peak periods (Transpower) • the gas industry’s development of a demand-response solution to congestion management on parts of the gas transmission system (Gas Industry Company)

Infrastructure investment since 2009 Infrastructure investment since 2009 Since 2009, the Government has added over property, plant and Since$46 billion 2009, the of Government has added equipment to theofCrown’s sheet. over $46 billion property,balance plant and equipment to the Crown’s balance sheet.

Since 2009, the total value of infrastructure assets2009, acrossthe social (Education, Since totalsectors value of infrastructure Health, Housing New Zealand, Justice, and assets across social sectors (Education, the Defence estate) has increased by almost Health, Housing New Zealand, Justice, and $7 billion. the Defence estate) has increased by almost $7 billion.

The Government has instigated a $13.9 billion land transport programme The Government has instigated a between 2015 andtransport 2018. programme $13.9 billion land between 2015 and 2018.

Between 2009 and 2014, the Government spent $3.3 billion on2014, Roadsthe of Government National Between 2009 and Significance and both government and spent $3.3 billion on Roads of National local councilsand spent $8.8 billion on and new Significance both government and improved local roads.

This includes local councils spent $8.8 billion on new $5 billion outside ofroads.

Auckland, and improved local This Wellington includes and Canterbury. $5 billion outside of Auckland, Wellington and Canterbury.

$3.2 billion invested in railways since 2009, included $1.4 billion for the KiwiRail $3.2 billion invested in railways since Turnaround Plan,$1.4 billion over $80 million on 2009, included for the KiwiRail the Wellington Rail Metro Upgrade, Turnaround Plan, over $80 million on andWellington $690 million onMetro the Auckland the Rail Upgrade,rail development. and $690 million on the Auckland rail development.

The Government’s total contribution to the since September TheChristchurch Government’srebuild total contribution to 2010 is around $16.5 billion, which includes the Christchurch rebuild since September $1.8 billion on local infrastructure 2010 is around $16.5 billion, whichand includes $2.2 billion on on local Crown assets. $1.8 billion infrastructure and $2.2 billion on Crown assets.

Over $1.7 billion has been provided for the roll out of Ultra-Fast Broadband andfor $400m Over $1.7 billion has been provided the for the Broadband Initiative.

A further roll out Rural of Ultra-Fast Broadband and $400m $50 million been provided for tackling for the Ruralhas Broadband Initiative.

A further New Zealand’s $50 million hasblackspots. been provided for tackling New Zealand’s blackspots.

$5 billion invested through Transpower to updateinvested the National GridTranspower and increase $5 billion through capacity, to updateperformance the National and Gridreliability. and increase capacity, performance and reliability.

Since 2011 the Government has allocated over $150 million for investment in irrigation Since 2011 the Government has allocated development. over $150 million for investment in irrigation development.

85 Special Housing Areas (SHAs) have been created in Auckland, 21 in Wellington, 85 Special Housing Areas (SHAs) havenine been in Tauranga, and one 21 each for the Western created in Auckland, in Wellington, nine Bay of Plentyand andone Queenstown.

Three in Tauranga, each for the Western developments totalling over 420Three dwellings Bay of Plenty and Queenstown. are also being progressed on420 publicallydevelopments totalling over dwellings owned in progressed Christchurch. are alsoland being on publicallyowned land in Christchurch.

In 2012, the Government established the Future Investment Fund which has provided almost $5 billion of new capital spending including: In 2012, the Government established the Future Investment Fund which has provided almost $5 billion of new capital spending including:

Almost $1 billion in transport.

Almost $1 billion in transport.

$636 million in education. $636 million in education.

$684 million in health. $684 million in health.

$210 million for extending Ultra-Fast Broadband. $210 million for extending Ultra-Fast Broadband.

20 – www.infrastructurenews.co.nz

• the development of a framework for electricity demand-side management (Electricity Authority) • the development of minimum energy performance standards for electricity appliances (Energy Efficiency & Conservation Authority).

There will be greater competition within electricity markets and more fit-for-purpose regulation able to deal with changing market conditions via: • review of the principles governing the pricing of electricity transmission and distribution services, including the connection of distributed generation (Electricity Authority) • promoting competition in electricity markets by providing consumers with better access to information and tools (Electricity Authority) • review of input methodologies for the economic regulation of gas and electricity lines businesses to ensure regulatory instruments remain fit for purpose and respond to changing market conditions (Commerce Commission) • analysis of Electricity Distribution Businesses’ information disclosure (Commerce Commission).

Three waters A key focus is optimising the existing three waters network, which will be achieved through: • developing national metadata standards for water infrastructure to ensure a consistent base to build evidence, undertake forecasting and deepen capability (LINZ, NIU, local authorities, and sector bodies) • establishing centres of excellence responsible for collating the data obtained through the shared metadata standards, providing the necessary analytics and supporting local decision-making (NIU, sector bodies, and local authorities).

Continued on page 22 October/November 2015

proven

track-record

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We apply proven approaches in both traditional and new smart technologies to support our clients.

To each and every engagement, we bring our experience and technical expertise along with our commitment to safety, quality and the environment.

electrix.co.nz

Pride Performance Value

FOCUS >> 30 Year Infrastructure Plan Continued from page 20 ter services and infrastructure collaborate more effectively EquiP LP, Local Government New Zealand’s centre of excellence, is developing a Governance Development programme and an Organisational Performance programme to assist councils in raising the standard of governance, performance and asset management (LGNZ).

The LGNZ 3 Waters project to lift the performance of potable water, wastewater and stormwa-

established a National Information Framework survey in 2014 and the issues paper released in October 2014 explores the issues facing New Zealand’s three waters sector.

LGNZ will release a position paper in 2015 to outline what a well-performing three waters sector should look like and propose options for a sector-led approach to improving performance in the future.

Infrastructure providers will

across Auckland, a collaborawithin and across regions, taktive project to be completed ing a long-term view and enby October 2015 that recogsuring adequate investment in nises the importance of alignhigh-growth communities. ing infrastructure delivery with This will be achieved by: planning (Auckland Council) • investigating options to sup- • a cross-boundary, three-opport long-term integrated tion study between Hamilton regional infrastructure plans, City Council, Waipa District potentially with legislative Council and Waikato District recognition incorporating Council to determine how central, regional and local each council should manage government objectives (NIU) water, wastewater and storm• the Future Urban Land Supwater services across the subply Strategy being developed region.

Regional profiles Region

2013 Population

2013 Population as % of national total

Projected 2043 Population

Projected % change from 2013 to 2043

GDP per capita ($ per GDP ($m) capita)

Central Government expenditure ($ per capita)

Vehicle kilometres travelled (m)

Fast IrrigaBroadband ble Deployland ment*

Schools Public hospital beds

Northland

164,700

4%

182,900

10%

5,760

34,825

19,014

1,672

100%

7,800

151

334

Auckland

1,493,200 34%

2,229,300

33%

81,186

53,759

16,839

12,717

30%

5,700

541

3,592

Waikato

424,600

10%

517,400

18%

20,576

48,098

17,450

5,364

80%

21,000

306

907

Bay of Plenty 279,700

6%

328,700

15%

11,862

42,213

18,952

2,713

80%

11,600

159

672

Gisborne

47,000

1%

47,600

1%

1,626

34,602

21,364

390

17%

4,500

51

125

Hawkes Bay

158,000

4%

164,000

4%

6,354

40,091

18,493

1,474

41%

26,000

125

374

Taranaki

113,600

3%

130,200

13%

9,170

80,297

17,136

1,036

76%

6,500

94

207

ManawatuWanganui Wellington

231,200

5%

234,700

1%

9,147

39,442

18,924

2,404

61%

21,700

204

497

486,700

11%

548,400

11%

30,335

62,021

17,699

3,507

34%

16,600

248

1,003

Vehicle kilometres travelled (m)

Fast Broadband Deployment*

Irrigable land

Schools Public hospital beds

506

12%

2,300

36

191

* UFB connectable premises as % of UFB eligible premises Region

2013 Population

2013 Population as % of national total

Projected 2043 Population

Projected GDP % change ($m)** from 2013 to 2043

GDP per capita ($ per capita)

West Coast

33,000

1%

33,200

1%

1,721

52,306

Central Government expenditure ($ per capita) 19,825

Canterbury

562,900

13%

729,200

23%

30,204

53,054

19,092

5,470

46%

444,800

293

1,515

Otago

208,800

5%

239,800

13%

9,813

46,684

18,647

2,196

49%

93,900

145

710

Southland

96,000

2%

96,800

1%

5,502

57,135

17,334

1,133

51%

17,200

86

0

Tasman

48,800

1%

54,000

10%

4,180

42,695

16,555

***

NA

12,000

35

***

Nelson

48,700

1%

55,900

13%

**

**

16,942

1,316

49%

****

23

343

Marlborough 44,700

1%

46,700

4%

2,282

51,051

16,937

***

100%

29,800

30

***

* UFB connectable premises as % of UFB eligible premises ** Nelson is combined with Tasman *** Combined figure for Marlborough/Nelson/Tasman **** confidential 22 – www.infrastructurenews.co.nz

October/November 2015

Productive water New Zealand will have led the way in advancing the management system underpinning water use and nutrient limit-setting.

Key elements will include: • the development of guidance material by the Ministry for Primary Industries (MPI), Ministry for the Environment (MfE), regional councils and industry on the use of OVERSEER (a strategic management tool to manage nutrients on farm) by regional councils (MPI, MfE, regional councils) • the Land and Water Forum’s advice to government on the development of the National Objectives Framework and on implementation of the National Policy Statement for Freshwater Management (Land and Water Forum) • Catchment limits will have been established through collaborative processes that encourage the support of all regional stakeholders and take account of the economic and social effects of cost mitigation.

Mechanisms for doing this will include: • the National Collaboration Group for Farm Plans project to identify opportunities and leverage existing work to support the successful development and implementation of farm plans (MPI with support from MfE) • collaborative regional approaches to water nutrient limit-setting including the economic implications, such as Environment Southland’s Economic Project

(various regional bodies) • the development of guidance and professional development in collaborative processes and economic analysis of options for water quality and quantity limits and how they can be achieved (MfE).

The regulations governing water use and nutrient limit-setting will provide clearer and more balanced national direction, greater national alignment, and simple consenting rules and processes to improve timeframes through: • the Resource Management Reform Bill to be introduced this year (MfE) • an independent review of the National Policy Statement for Freshwater Management, scheduled to begin in 2016, to assess the reforms and their results (MfE/MPI) Effective regulation will protect New Zealand’s natural environment and make the country’s primary industries amongst the most efficient water users in the world by driving demand management amongst water users through the uptake of new technologies.

Social infrastructure Asset management across the social sector will have evolved to a mature level, including advanced asset management planning processes, consistent collection of data, and the use

of performance measures in decision-making.

This will be achieved through: • the new Cabinet Office Circular which came into effect on 1 July 2015 and features an Investor Confidence Rating that takes account of factors such as asset performance and asset maturity (Treasury) • the development of shared national metadata standards for built assets (MBIE with stakeholders from across the public sector) • sector-specific actions, including the Ministry of Education’s 8-Point Plan and the establishment of a cross-District Health Board Asset Management Improvement Group in health (various departments).

Central and local government will collaborate more effectively across regions thanks to: • the establishment of regional centres of excellence or similar arrangements to support local government and central government decision-making (NIU, sector bodies, local authorities) • sector-specific initiatives that will also progress collaboration. In defence, for example, the Estate Regeneration Strategy will maximise efficiency and utilisation across the Defence Force and consider benefits on a whole-ofgovernment basis, including exploring different ownership

models, increasing the number of multi-use facilities and greater use of commercial providers. Estate planning will also be coordinated with major equipment replacement projects to ensure Capability and Estate initiatives are aligned (various departments).

Government will use a broad range of funding, financing and procurement mechanisms and procurement across central government will be joined up. This will be achieved through: • the new Government Rules of Sourcing and investment rules for government agencies that came into effect on 1 July (MBIE/Treasury) • improved pipeline reporting such as the 10-Year Capital Intentions Plan (NIU) • investigating options to develop scale and capability for large/significant procurements (NIU/MBIE).

Many of the institutional arrangements that prevent more effective investment decision-making will have been addressed – for instance, the tension to both collaborate and to compete across the schooling network will be improved as new initiatives in the Ministry of Education to encourage school collaboration – such as those within the Ministry’s 8-Point Plan – are rolled out (various departments).

Strong foundations The best start to any infrastructure project is expert legal advice. Our team of specialist construction and major projects lawyers can work with you to deliver successful outcomes throughout the full life cycle of your project.

Visit www.chapmantripp.com/construction October/November 2015

www.infrastructurenews.co.nz – 23

WATER

Turning on

the taps

John Pfahlert, Chief Executive Water New Zealand Water New Zealand is to play a pivotal part in the government’s Thirty Year New Zealand Infrastructure Plan 2015

T

he plan recognises the importance of having mature asset management practices across all providers, underpinned by reliable and accurate data on the state and performance of all networks to support better decision-making.

Water NZ will play its part, along with other infrastructure sectors, in ensuring it delivers the most suitable and technologically advanced water services.

A key focus will be on optimising existing water, wastewater and stormwater services, collectively known as the 3 Waters. The Local Government New Zealand 3 Waters Project identified shortfalls in the systems used by councils to record asset condition.

As a result, Water New Zealand, local authorities, the IPWEA, LGNZ and local authorities will be developing national metadata standards for water infrastructure, ensuring a consistent database on which to build evidence, undertake forecasting and deepen capabilities.

Shared standards will enable improved analytical work to be done and provide greater and better support for local or regional decision-making. Existing 3 Waters infrastructure providers should be able to collaborate more effectively, within and across regions, taking a long-term view and ensuring adequate investment in highgrowth communities.

Another project identified in the infrastructure plan relates to earthquake resilience. Water New Zealand and the University of Canterbury’s Quake Centre have jointly developed Levels of Service Performance Measures for Seismic Resilience standards for 3 Waters infrastructure networks. Some existing assets are nearing the end of their economic lives and simply wouldn’t stand up to any significant earthquake activities.

In another earthquake-related project, the Treasury, Ministry of Civil Defence & Emergency Management and Department of Internal Affairs will also review disaster recovery funding arrangements for the

24 – www.infrastructurenews.co.nz

2015-2016 period.

Water New Zealand and central, regional and local authorities all know that rainfall, runoff, river channel flows, flood protection and related infrastructure are strongly correlated and contribute to a wide range of outcomes, including productive water requirements, urban water requirements and natural hazard risk management.

Hydraulic models used for stormwater management are quite variable across New Zealand and often lead to sub-optimal outcomes – from governance, technical assumptions and community preparedness.

Work is underway with Treasury to examine whether a national approach to managing rainfall and runoff calculations would be a better solution rather than the existing local approach.

At the governance level organisations such as Auckland’s Water Care and Wellington Water have impacted positively on the water administration in these regions.

Further work is occurring in other areas to consider whether council-controlled organisations could add value.

Council cooperation One example is the “cross-boundary study” being done by the Hamilton City Council, Waipa District Council and Waikato District Council to determine how each council should manage water and wastewater services across the greater Waikato region.

The current recommendation is for a council-controlled organisation (CCO) to be created and for water and wastewater services to be outsourced on a cost recovery basis but with councils retaining ownership of stormwater assets.

If the three councils agree with the recommendation to form a CCO there will be a public consultation process followed by the creation of the proposed CCO, including a “Waters Centre of Excellence” that will be able to share expertise with other water authorities on a cost recovery basis.

All of the 3 Waters infrastructure networks around the country need reviewing and some will need renewing, many simply because they are over 100 years old. Meeting the cost of maintaining and renewing these assets will be even more challenging in areas with small rating bases and declining populations.

New Zealand’s population is predicted to grow by about 1.2 million over the next 30 years, though this increase will not be evenly spread across the country. Some regions will shrink while others will grow, with the vast majority of this forecast growth expected to be across just five regions, predominantly greater Auckland.

This will mean increased pressure on existing and new infrastructure to ensure New Zealand lifts its productivity and takes advantage of opportunities in the global economy.

Technology is transforming the way infrastructure providers deliver their services.

This presents both some opportunities but also some challenges.

So we need to make sure our networks are flexible enough to adapt to these new technological developments.

New Zealand’s climate is changing and our natural resources are under pressure, with rainfall patterns changing.

Flooding is now our most frequent natural disaster with an average annual cost of approximately $51 million.

These issues raise questions about how we develop and manage our infrastructure so that it is resilient to change over time and uses resources efficiently.

Some say that infrastructure is the platform on which modern society is built.

And the infrastructure being planned for and invested in now will be around for a very long time. It will be very expensive but also essential.

John Pfahlert is Chief Executive of Water New Zealand, a not-forprofit organisation that promotes and represents organisations within the water industry in New Zealand October/November 2015

UNDERGROUND DETECTION >> Information feature

A few hours of underground diagnostics can save a lot of headaches Sub Surface Detection and Leak Detection are the “go to” companies for facilitating underground asset management, protection and health and safety requirements in New Zealand

B

oth Sub Surface and Leak Detection are in a growth phase and focused on setting new standards to maintain market leadership.

Sub Surface Detection Ltd is already contracting to an impressive client list within the Auckland Region, supplying valued clients with the service they require to complete their projects safely and with minimal disruptions to their schedules.

Our aim is to continue growing this client list.

Leak Detection Ltd also has been experiencing record water leak-detection survey call outs, which indicates both companies are providing the quality of service that existing and new clients expect.

“We have an ongoing investment programme in new and cutting-edge technologies; we recently acquired a new Internal Cut & Cap system that provides another advanced tool at our disposal for leak detection,” says chief executive Justin Bell.

“To meet demand and main-

“Still the fact remains that accident prevention or mitigation should take place long before excavation begins.

“There have been a number of major advances in the past 10 years to reduce excavation injury and accidental damage to underground utilities.

“A few hours diagnostic and preventative work ahead of a tain our high standards, we are dig can save thousands later selectively employing more key and provide increased safety for copper communications cables. personnel. workers.”

Combined with the under“We believe that our compaground images produced by a nies’ teams are our most valua- Accurate location the GPR survey, both metallic and ble asset and have instituted a starting point non metallic (plastic, concrete, programme of investing in our Many underground sites are a asbestos, cement) objects lying staff’s personal growth. We have criss-cross of power cables, gas in the path of a potential excavafocused on creating the team lines, water and drainage pipes tion can be seen and identified,” environment and excellence and fibre optic communications says Mr Bell. needed to provide this level of cables, with danger lurking milliservices,” he says. metres away from a probing me- The companies’ client base includes Leighton Contractors, chanical digging shovel.

Pre-dig investigation enhancThe key to preventing pipeline Downers, Transfield Services, es worker safety and cable hits begins by accu- Higgins, Watercare, Fletcher If there is significant damage rately locating and marking ex- Construction, Hawkins, or injury to workers from exca- isting underground facilities.

Fulton Hogan, John Holland, vation accidents, expensive le“Sub-Surface uses electro Fonterra, Arrow International, gal action is inevitable and the magnetic induction (EMI) and Contact Energy, Lend Lease, question becomes who is at ground penetrating radar (GPR) Hick Bros, McKenzie & Parma, fault. to locate metallic utilities such as Fuel Installation Companies, WorkSafe investigations may steel pipes, power cables, and Vector and many more. add to contractors’ woes and result in large fines if it is proved Sub Surface Detection has formed alliances to that safety procedures were not offer a broad range of services to be provided followed.

• GPR - Ground Penetrating • Hydro excavation “It is easy to have sympathy Radar • Laser Scanning both above with contractors when margins • EMI - Electro Magnetic Inducground, and of drainage are so tight and there is no protion (pipe and cable locating) systems below ground vision for pre-dig testing,” says • CCTV drain camera • GPS survey positioning/ Mr Bell. inspections drawings.

PO Box 72 095, Papakura 2244 Auckland Tel: 0800 500 330, 021 532 599 Email: justinbell@leakdetection.net.nz Websites www.waterleakdetection.co.nz www.subsurfacedetection.co.nz

October/November 2015

www.infrastructurenews.co.nz – 25

COMMENT >> NZCID Building Nations Symposium 2015

Successful symposium sets a fresh course Hamish Glenn Senior Policy Advisor, NZCID The record breaking 2015 Building Nations Symposium held on August 20-21 in Christchurch forged a new direction for infrastructure in New Zealand

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our ministers, 400 attendees and a string of international and national experts gathered to hear central government’s plan for the next 30 years, find out the issues and build a way forward.

In front of the largest ever grouping of New Zealand infrastructure leaders, Minister of Finance Bill English released the 2015 National Infrastructure Plan.

The plan sets the vision for New Zealand’s infrastructure, highlights nine challenges and sets the pathway forward.

Some attendees were disappointed that the plan retained a heavily strategic flavour and did not include a project pipeline.

It does, however, portend over $110 billion of public investment in infrastructure and continues the shift in recent years towards greatly improved infrastructure information, analysis and understanding.

Local Government New Zealand Presi-

dent Lawrence Yule commended the plan for its much improved coverage of local government infrastructure issues and reiterated his commitment to working with central government to improve New Zealand’s infrastructure.

His panel discussion with New Zealand Council for Infrastructure Development (NZCID) Chair and National Infrastructure Advisory Board member John Rae and Business New Zealand Chair David Prentice celebrated the steps taken to advance infrastructure in recent years, but highlighted the challenge regulation in particular was placing on infrastructure development.

Leader of the Opposition Andrew Little was less enthusiastic about government direction. Labour’s primary concern is that the plan is less a plan than a “plan for a plan.” He signalled a strong commitment from Labour to national infrastructure de-

livery and identified infrastructure as one of the major levers available to government to generate economic activity and fairly distribute growth. Labour will establish a $200 million regional development fund to help councils deliver on agreed plans.

A second big topic for the conference this year was the Resource Management Act. Environment Minister Nick Smith outlined why the government has to intervene in the RMA, including the impact it is having on small business, our internationally poor regulatory ranking and stifling rules which have already required fix ups in Canterbury water, Auckland housing and other areas.

The government intends now to provide greater national direction, streamline plan making and remove the need for resource consents for minor activities. He also foreshadowed a longer term conversation New Zealanders need to have about the role of

“The National Infrastructure Plan portends over $110 billion of public investment in infrastructure and continues the shift in recent years towards greatly improved infrastructure information, analysis and understanding”

26 – www.infrastructurenews.co.nz

October/November 2015

the RMA and whether it makes sense to have planning and environmental protection under a single Act. NZCID head Stephen Selwood took the opportunity to initiate that conversation and proposed a shake-up of not only the RMA, but the Local Government Act and Land Transport Management Act. He highlighted the lack of alignment between the key planning Acts and, in particular, the statutory separation of funding from planning which is undermining implementation.

He proposed that environmental protection provisions of the RMA be separated to form a strengthened environmental protection Act and the planning components of the RMA, LGA and LTMA brought together under a single planning Act. Noting the political context of RMA reform in particular, he recommended a Royal Commission to investigate reform.

Procurement priority A third big theme related to procurement and delivery. CEO of Fulton Hogan Nick Miller compared project procurement on both sides of the Tasman. Australian infrastructure contracting competition is stronger and is enabled by greater confidence in the project pipeline. New Zealand’s advantage is one less level of governance and according requirements. Both countries need to work harder to reduce bid costs.

Minister for Canterbury Earthquake Recovery Gerry Brownlee gave an update on the rebuild, including progress to establish a special purpose agency to oversee major projects. Regenerate Christchurch will operate commercially and be led by an independent board reporting to the Crown and Christchurch City Council, before eventually being absorbed by the council.

Christchurch Mayor Lianne Dalziel endorsed the minister’s focus on improved governance. She underlined the importance of cooperation, noting partnerships between different levels of government and with the private sector were critical to a

successful rebuild.

A presentation from NZCID’s Sarah Lang underlined why a new agency was so critical to Christchurch’s recovery. A recent survey of infrastructure service suppliers highlighted some significant challenges with major project procurement across New Zealand, including in Canterbury. Industry considers there is considerable scope to improve value for money across the public sector through more efficient procurement.

The bright spot emerging from the procurement survey was unequivocally the New Zealand Transport Agency. The government’s transport delivery arm outperformed the national average across every one of the 19 best practice criteria.

NZTA’s Tommy Parker put the strong performance down to the agency’s focus over many years on improving procurement practice. He also reiterated comments from Bill English on the importance of data in managing assets.

The role of data in transport was part of a wider sector theme relating to technology.

Minister Simon Bridges outlined the impact technology was expected to have on transport in coming years, not only from an asset monitoring and performance perspective, but also the expansion of the electric fleet, increasingly intelligent networks and autonomous vehicles.

International keynote Phil Dreaver from Plenary Group North America highlighted some transport technology innovations from overseas, including dynamic tolling of express lanes in Colorado.

Data underpinned presentations from Christchurch City Council’s Raf Manji and another of the keynotes, Guy Perry from AECOM. Raf commended the democratisation of data via the London Datastore and Guy provided global evidence on the impacts of urban design on various public outcomes. Well-designed communities can lead to both an improved environment and better health of citizens.

David Pitchford from Urban Growth New

South Wales continued Guy’s focus on good urban design, showcasing a number of projects underway in Sydney. The largest city in Australasia is aggressively targeting growth in opportunity areas with a coordinated focus on maximising land potential, leveraging heritage values and regenerating urban communities.

The final major issue discussed at this year’s conference was irrigation. Irrigation New Zealand’s Andrew Curtis provided a complete overview of the sector, with regulation remaining the single biggest impediment to enhancing water access in rural areas across New Zealand.

Derek Crombie, CEO of one of the comparatively few major irrigation projects to receive go-ahead in recent years, Central Plains in Canterbury, noted a 20-year timeframe was required to deliver the scheme, which could have been completed in less than seven.

The expert panel discussion which followed underlined the contentious nature of irrigation. Alex Adams of the Hurunui Water Project acknowledged the value of the Irrigation Acceleration Fund in getting projects off the ground and the Crown Irrigation Investment arm in finalising initiatives, but noted a gap in the middle where projects are stalling. David Caygill from Environment Canterbury pushed back against calls for public agencies to do more in the space and emphasised that good projects will still find a way through.

All in all, the conference suggested infrastructure is heading in the right direction.

Some focus areas over the next year include irrigation, regulation, asset management and governance – all issues identified in the National Infrastructure Plan. Strong follow-through on the plan will ensure that New Zealand’s infrastructure continues its improvement over coming years.

Hamish Glenn is Senior Policy Advisor at the New Zealand Council for Infrastructure Development

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October/November 2015

www.peoplecentric.co.nz www.infrastructurenews.co.nz – 27

COMMENT >> Water

To be dammed

requires patience

Ben Williams, Chapman Tripp Senior Associate The latest Thirty Year New Zealand Infrastructure Plan notes that while progress has been made in the “productive water sector” over the last six years the timeframes for change can be agonisingly slow

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ight irrigation upgrades have been commissioned since 2010 and three new projects and one upgrade have entered the construction phase. But most schemes have taken at least seven years to develop, and some have taken more than 10 years.

So; yes, in New Zealand, to be dammed – or even wet – requires patience.

The reasons the National Infrastructure Unit offers for this slowness are: • uncertainty in the application of the National Policy Statement for Freshwater Management 2014 (NPS) and its implications for nutrient limit-setting (so that water quality can be protected) • and delays associated with the Resource Management Act 1991 (RMA).

Context is however important. New Zealand already has around 750,000 hectares under irrigation with the potential to go to 1.1 million hectares. But, as Irrigation New Zealand advises, the days of “easy water” are over.

With many water bodies nearing ‘full allocation’ or already over allocated, giving effect to any wider aspiration of further irrigation has to not only tackle environmental considerations in terms of water quantity and water quality but also, in many cases, has to address or ‘revisit’ the practices in existing irrigation areas.

A significant portion of the growth in future irrigation will occur only if existing consent holders are either made, or volunteer, to become more efficient so that ‘head room’ is created for others.

The prospect of ‘robbing Peter to pay Paul’ is an abhorrent one for most RMA regulators, while further restrictions on nutrient management have reduced or removed any individual incentive that might have previously existed to reduce individual water use.

In simple terms, even for existing irrigators to irrigate more land the complexities

28 – www.infrastructurenews.co.nz

and challenges are not straightforward.

The task for new irrigators (especially where they have to deal with what are now highly educated and concerned existing irrigators) is even harder.

Although high levels of water use efficiency and sustainable land use practices will ultimately be forced on all existing irrigators, major change is likely to take time (and in some instances will need to await renewal of the relevant individual 35-year resource consents).

Good things take time The National government has signalled that it plans to invest up to $400 million to accelerate the development of irrigation in New Zealand. Accordingly, in July 2013 Crown Irrigation Investments was established to oversee the government’s new

“The challenge for the government is to balance a clear economic driver for more irrigation with an environmental concern over water quality and quantity” role in co-investing in new off-farm irrigation schemes.

To date only one scheme has secured funding – a second-ranking investment of $6.5 million in stage 1 of the Central Plains Water Enhancement Scheme (Central Plains). Stage 1 has cost $140 million and the total cost of the scheme is estimated at around $385 million. So, Crown Irrigation’s contribution thus far has been small although useful in underscoring the government’s wider commitment to irrigation.

The Central Plains scheme is a good example of the cost associated with further irrigation development and the delays in consenting and construction. The initial ap-

plication for resource consent was lodged in December 2000 but construction of stage 1 did not commence until April 2014 and it was September this year before the first water was taken.

Central Plains was well over 10 years in the consenting phase (including multiple challenges as to priority and a decision to withdraw certain resource consent applications relating to a central storage facility).

Not only had scheme costs increased in that time but the regulatory regime had also become a lot more challenging.

To date the various changes to the RMA have done little to assist the likes of Central Plains. We are also still waiting to see whether the wider RMA reform programme will amend Part II to place greater weight on economic considerations.

Being realistic – especially given the government’s more recent move to gazette a National Policy Statement (NPS) that is focused on protecting water quality - it appears unlikely that reforms will fundamentally change the status quo.

Ultimately, New Zealanders place significant value on their ‘clean green’ image.

The NPS is strongly focused on ensuring that remains the case and it appears all future irrigation will need to comply with that wider framework.

The significant challenge of meeting wider aspirations as to water quality is best illustrated with reference to the Hawke’s Bay Ruataniwha Water Storage Scheme.

The $275 million dam and irrigation project required a Plan Change, a notice of requirement and 17 resource consents. The proposed Ruataniwha project is occurring in a catchment where by virtue of existing irrigation and land use there are already concerns about water quality.

It was called in for a Board of Inquiry (BOI) process in June 2013. The BOI reported in June 2014. Aspects of its decision relating to water quality were appealed by conservation groups to the High Court.

The court delivered its judgment in December 2014, ordering the BOI to reconsider its approach in relation to the management of nitrogen in the surface waters of the Tukituki Catchment.

The BOI produced its final report in June 2015 and as a result the scheme will be subject to very specific – and it appears potentially onerous – restrictions relating to nutriOctober/November 2015

ent management within the scheme.

Such restrictions have wider implications for funding and investment certainty (and scheme cost) – something that still needs to be worked through by the Ruataniwha scheme.

So where to from here?

On the one hand there is a clear government mandate to support the development of further irrigation. However, in the absence of ‘low hanging fruit’, the opportunities for giving effect to that mandate, without offending the NPS requirements and wider community expectations, appear limited.

Despite the above, there is an extensive work programme underway around both of the issues identified by the National Infrastructure Unit – albeit largely at the edges.

This includes: • guidance being prepared by the Ministry for Primary Industries, the Ministry for the Environment, regional councils and industry on the use of OVERSEER (a strategic tool for on-farm nutrient management) • the independent review of the National Policy Statement for Freshwater Management, scheduled to begin next year • and the Land and Water Forum’s advice to the government, due by 1 July 2017, on how to mandate dairy stock exclusion from waterways.

In addition, the next tranche of amendments to the RMA is expected to pick up the forum’s recommendation to establish special multi-stakeholder collaborative processes for abstractive river uses to reduce the adversarial content of the engagement and to speed the subsequent RMA consenting.

So, on their face, well-intentioned interventions which will assist with facilitating further irrigation. But, at least as this article went to print, we were still awaiting the introduction of the amendment Bill, although the word from Environment Minister Nick Smith’s office is that he is still confident of getting it into the House before Christmas.

Ultimately, we are in a time of change.

However, by its very nature we expect irrigation consenting will always be ‘hard’ and often controversial. The challenge for the government is to balance a clear economic driver for more irrigation with an environmental concern over water quality and quantity. In many instances it will be difficult to reconcile to the two.

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Ben Williams is a Senior Associate at Chapman Tripp, specialising in natural resource and urban infrastructure October/November 2015

www.infrastructurenews.co.nz – 29

TRANSPORT

Keeping the

T

he $400 million investment is essential to maintain a network which is a large and integral component of New Zealand’s transport supply chain says a KiwiRail spokesperson.

“KiwiRail provides essential services to exporters, ports, manufacturers, freight forwarders, and commuters amongst many other customers,” Senior Communications Adviser, David Miller observes.

The network is high capacity, with many lines carrying multiple trains per day loaded to over 2,000 tonnes – typically with just a single driver in charge.

A single wagon can be loaded to 72 tonnes, and a new wagon fleet is poised to operate at 80 tonnes gross, Mr Miller advises.

“Through this capability, KiwiRail is well placed to deliver growth to exporters, and provide relief where other transport assets are at or near capacity.”

However, it’s often forgotten that KiwiRail is a nationwide operator in partnership with freight forwarders, operating a high-capacity freight network that consists of 3,500km of operational main line.

Moreover, New Zealand’s topography requires significant assets to link industrial centres with ports and cities. “On KiwiRail’s lines there are over 67km of tunnels, 56km of bridges (including 26 viaducts), and nearly 11,000 culverts,” Mr Miller notes.

As New Zealand’s transport requirements have grown, so has its rail network changed and evolved into a trunk network with a heavy focus on the Auckland to Christchurch spine and inter-island link; with important feeder lines connecting to major industrial sites, provincial cities and towns.

Maintaining such a network has a high fixed cost, but rail’s advantage is its low variable cost; additional trains can be run, or wagons added to trains at relatively low marginal cost.

A problem arises if traffic drops for a sustained period with low reserves for infrastruc-

30

country on

the rails

How does the country’s largest rail transport operator plan to spend the multi-million capital injection it received in the 2015 Budget?

KiwiRail’s high-capacity network sees many lines carrying multiple trains per day loaded to over 2,000 tonnes, with typically just a single driver in charge ture renewal. “This was the case during the 1980s and 90s, and KiwiRail is faced with rectifying this period of underinvestment,” Mr Miller says.

“Fortunately, through growth and winning customers, coupled with strong operational performance, KiwiRail is cash-positive for its above-rail operations.”

Consequently, he maintains, KiwiRail’s vision of being a trusted Kiwi-owned logistics partner growing New Zealand is already being achieved, but would be “much more sustainable” if its infrastructure assets were in a steady-state condition.

“KiwiRail acknowledges that the company cannot fully fund the renewal of its legacy below-rail assets from retained earnings so support from the government, as the shareholder, is required and a funding package of $400m was allocated in the 2015 Budget,” Mr Miller explains.

“We also recognise that this

funding is not a free handout, and therefore we must prioritise our projects and balance them with commercial demand, how we allocate resources across the network, and rigorous cost control as well.”

Plentiful projects KiwiRail’s overall planned infrastructure capex spend for FY16 is $165m, which includes a range of projects including (but not limited to) upgrading signalling, replacing track, bridge repair and renewal, upgrading and installing telecommunications, drainage, tunnel works and improvements to level crossings.

The projects include refurbishing the 79 metre-high Makatote Viaduct and renewing bridges at various sites, including timber bridges between Taumarunui and Te Kuiti, at Te Awamutu and Otaki in the North Island, and at Belfast north of Christchurch.

“Various works in major tunnels include upgrading the commu-

nications and tunnel floor in the 8.9km Kaimai Tunnel on the East Coast Main Trunk. “ One excellent example of a track renewal project is the replacement of over 2,200 specialist bridge sleepers on the 700m-long Waiau River bridge in North Canterbury. “This work began in late June, and includes an upgrade of the access walkway,” Mr Miller says.

“These types of renewals are essential for reliability and for avoiding speed restrictions, which impact on transit times.”

The line between Christchurch and Picton can be one of the busiest on the network depending on the time of the year – on a typical busy day on this line KiwiRail operates five freight trains each way, along with the Coastal Pacific Scenic Journeys service that runs during its extended summer season.

Given the volume of rail traffic, it is important that KiwiRail’s teams are able to undertake renewals while keeping the line October/November 2015

The 79 metre-high Makatote Viaduct is being refurbished as part of KiwiRail’s $165m infrastructure capital expenditure for the coming year

open – the Waiau River bridge project for example sees KiwiRail using an innovative modular and low-cost approach which involves replacing every second sleeper in a section of 30 with a new sleeper and then repeating the process on the next set of sleepers as traffic permits.

This method allows the line to remain open to allow a train to pass when required. “However track protection is always in place to control the movement of the train through the work site to ensure worker safety,” Mr Miller stresses, adding that the upgrade will cost around $1.2 million and is due to be completed in November this year.

Rail is a key driver in New Zealand’s trade and export growth, which means embedding the rail corridor in national and multi-regional transport planning documents and funding models as being of National Significance.

It also means adding capacity to very busy parts of the network and developing plans so that rail can secure the building of inland container and freight ports. “A number of our customers are affected by international commodity prices, including forestry, and our October/November 2015

business plan makes provision to support the sector while it is going into a low part of the cycle and being ready to step up to support an upswing,” Mr Miller explains.

“Our freight operations are also now integral to the dairy industry, and we must have the capacity to reliably deliver bulk milk to Fonterra’s biggest factories and the flexibility to move finished product by rail to its choice of northern and eastern export ports.”

It is too early for KiwiRail determine the long-term future of its West Coast rail operations due to the uncertainty around Solid Energy, which has been affected by the drop in coal prices on the world markets.

Any changes to the number of rail services depend largely on what decisions are taken regarding Solid Energy, whether the company cuts coal production, and to what levels, although Mr Miller notes that the future for Solid Energy is a matter for that company and the government.

“Such uncertainty has caused KiwiRail to carefully consider each investment decision, but overall we are not in a position to determine what the implications for rail could be until any

decisions are made.”

Essential initiatives However KiwiRail is continuing with its immediate renewal and maintenance programme for the West Coast and central South Island. Replacing old timber structures, building new culverts, installing a fit-for-purpose signalling system and cleaning the coal dust from the Otira Tunnel are essential to mitigating any safety risks.

KiwiRail has also undertaken sleeper and bridge renewal work on the Hokitika line, which, along with maintaining the ballast profile, means that axles loads have been raised by 25 percent and the line remains fit for its current level of traffic.

“KiwiRail was impacted by the Canterbury earthquakes, but we are well placed to help continue Canterbury’s economic recovery and growth,” Mr Miller says.

KiwiRail’s Greater Christchurch Plan is a strategy that brings 14 current or planned infrastructure and operational projects for Christchurch and surrounding districts together into one document.

All of the 14 projects are now linked as part of a broader co-ordinated approach rather

than occurring in their own silo.

“This approach enables KiwiRail to prioritise projects based on the revenue that they can generate, be better placed to address the current and future needs of customers, and identify future opportunities for rail in Canterbury.”

KiwiRail worked with Mainfreight on the extension of the rail siding at their logistics facility at Sockburn. The current siding at Mainfreight’s site opened last year and the extended line will connect the entire logistics warehouse to the main rail line and allow for 20-21 wagons to access the site, as opposed to the current four to five.

There is also a system whereby all electronic gates across the site close when a train is loading or unloading freight at the facility. “This Zero Harm initiative means that there will be no foot or vehicle traffic entering the siding, which will reduce the risk of injury or accident,” Mr Miller adds.

Peter Baker Transport (PBT) is building a new logistics facility at Sockburn, which will include a new purpose-built rail siding costing around $12 million that will enable PBT to transport more freight by train.

Work is underway on the site 31

TRANSPORT and is scheduled to be finished towards the end of this year, when the siding will be able to handle up to 10 wagons. “Both these projects are evidence of the strong relationship that has built between KiwiRail and its logistics partners,” Mr Miller believes.

KiwiRail is also upgrading the rail yard at Sockburn given the increase - and future increase - in freight volumes. “This involves re-spacing the areas between the tracks to allow more trucks to access the yard, improved lighting for safety and upgraded signalling as well.”

Elsewhere, work has finished on installing a two-track siding running from the Midland line into the Port of Tauranga (POT) container facility, which opened at the end of July.

Further south, projects at Rolleston are industry-led and companies such as Westland Dairy, POT and Lyttelton Port Company are working with KiwiRail as they recognise that rail is a key component for their business when it comes to moving high freight volumes cost-effectively.

Rolleston is planned to be one of the country’s major catchment hubs for milk freight, especially in the South Island, with freight moving through the I-Zone from Fonterra’s Darfield plant and Westland Milk to port.

South Canterbury and Otago, meanwhile, are faced with significant coastal erosion issues following this winter’s storms and flooding but KiwiRail doesn’t plan to move the rail lines further inland. “However we are actively inspecting the area and undertaking strengthening work, replacing the rock armouring and repairing any areas where flooding or washouts have occurred.”

KiwiRail is carrying out further assessments and will also undertake any necessary repairs to the infrastructure if further erosion or damage occurs, Mr Miller says. “Coastal erosion can happen in areas where the rail corridor is in close proximity to the sea and KiwiRail has a 32

Maintaining vital infrastructure such as a rail line is a 24/7 commitment that requires staff such as this signals team to work in all conditions

programme to identify areas of risk throughout the country and undertake any remedial work required.”

Given the size and scope of these initiatives, KiwiRail is clearly committed to investing in its infrastructure and assets to provide a rail network that is high-capacity, reliable and safe – both now and in the future.

Building bridges 007 Bridges plus Taupiri Project

Two of the existing bridge spans were removed during a 24-hour block of line (trains restricted from using line) in May. Construction of the new southern embankment was completed under another 24-hour block of line in September this year.

Downer has also completed the strengthening works for the bridge’s existing pier. The pier was encased in 300mm of reinforced concrete.

of strengthened ground. These works will form the foundations of the new embankments which will be constructed on the southern and northern side of the bridge. Two short bridge spans on each side of the river will be replaced during the September block of line.

Ongaruhe Bridge 207 Site establishment works will soon be underway.

Uepango Bridge 206

NIMT BR 273 (adjacent to The ground improvements the Waikato Tainui Urupa at KiwiRail and Downer have in the stream bed of Uepango Taupiri) been working on a project to Stream continue under bridge Northern side upgrade eight timber bridges 206. These works involve the inThe new 150m-long timber along the North Island Main stallation of sheet piles parallel retaining wall is now complete.

Construction of the second and “Through growth and winning customers, much shorter concrete panel retaining wall is now underway. coupled with strong operational retaining wall will be only performance, KiwiRail is cash-positive for This about 24m long and is locatits above-rail operations” ed at the southern end of the Trunk (NIMT) line in the Tau- to the existing bridge and con- northern bank, where the rail maranui and Taupiri areas since struction of a concrete capping bridge meets the embankment February 2014. KiwiRail is in- beam over the sheet piles. Cur- between the existing rail track vesting approximately $30 mil- rently Downer is in the process and the new alignment. Four lion into the project, which will of removing the existing materi- of the five new bridge piers are help improve New Zealand’s rail al between the capping beams now complete. network and allow more freight and replacing it with hard fill. Southern side to be carried by rail in the fu- Once complete, the stream The temporary staging platture. The work is being carried bed will be ready to receive the form is now complete and out in consultation with the precast concrete culvert units. eight, 24m-long girders have local stakeholders and authori- These will be stressed together now arrived onsite. These ties. The bridges are at various to form the new culvert through 17-tonne beams will become stages of completion and all which the stream will flow. the new sides of the new bridge construction activities on-site 273. Installation of these girders occur during the day to mini- Whiritoa Bridge 201 has commenced, with span one Site establishment is now now complete and span two unmise disruption to neighbourcomplete and ground improve- derway. ing residential areas. ment works have begun. These Blessings of the other bridges Taringamotu Bridge 203 improvement works involve a Local iwi held a hui, followed Downer has completed con- process referred to as jet grout- by a karakia, on Saturday 1 Austruction of the new northern ing, whereby grout is injected gust to bless the workers and embankment for Taringamotu into the ground under high the work on bridges 207, 208 pressure and forms a column and 209.

Bridge 203.

October/November 2015

LOCAL GOVERNMENT

Royal Commission necessary to overhaul local government New Zealand’s local government system is seriously impeded by fragmented and unnecessarily complex governance structures, the New Zealand Council for Infrastructure Development argues

T

he NZCID’s Integrated Governance Planning and Delivery proposal maintains that the planning and statutory framework in which local government operates is “disintegrated, difficult to navigate and inhibits integrated planning, funding and delivery.”

Councils face intense political pressure to keep rate increases to a minimum. The principal local government laws – the Resource Management Act, the Local Government Act and the Land Transport Management Act – require them to conform to a maze of statutory processes.

Consequently local government attention is much less focused on delivering strong local economies and building vibrant communities but more on administration, managing negative effects, balancing the budget, and dealing with the costs rather than the opportunities of growth.

From a local democracy perspective, formal consultation processes have become a barrier rather than an enabler of meaningful community engagement. Councils and councillors are bogged down with complex legal processes instead of meaningful participation.

From a commercial viewpoint, inconsistent rules, the sheer number of councils involved and complex planning and decision-making processes make it unnecessarily difficult to do business. Similarly, fragmentation and complexity hinders collaboration between central and local government and the business community.

Despite decades of continued amendment, land use planning and resource management decisions under the Resource Management Act remain disOctober/November 2015

connected from investment decisions made under the Local Government and Land Transport Acts. Consequently there is weak integration between planning, investment, urban growth and infrastructure.

While the RMA is New Zealand’s pre-eminent environmental law, and has contributed significantly to reducing point source pollution since its enactment, overall environmental outcomes have been disappointing.

frastructure that will underpin spatial planning framework social and economic develop- • enactment of a dedicated ment. Lifting regional prosperEnvironment Act including ity requires focused leadership provision of national environand aligning organisational mental policies and standstructures and laws around that ards and development of common goal. the Environmental Protection In proposing change, NZCID Authority into a national regis seeking to develop an inteulator with regional offices to grated planning, governance, assume environmental regufunding, regulation, delivery lation from Regional Councils and resource management • enactment of an integrated system that will drive regional Planning, Infrastructure and social and economic developLocal Government Act which ment, improve environmental would combine the planning functions of the RMA with the “Taken together, the combination of investment functions of the LGA and LTMA fragmented local government structures, • establishment of council-concomplex planning laws and weak trolled, not-for-profit regional environmental legislation is contributing utilities for delivery of water and transport services to poor outcomes for New Zealand” • establishment of a National The cumulative effects of land outcomes and strengthen local Infrastructure Commission use activities permitted under democracy and community ento provide strengthened the RMA have over the course gagement. oversight, review and audit of the Act led to a slow but NZCID considers that this will of infrastructure needs and significant deterioration in the require: monitor effectiveness of dequality of monitored streams, • strengthening local govlivery across local and central rivers and lakes. ernment capacity through government agencies And, despite the imperative consolidation of the number • development of a specialist to protect biodiversity under of authorities from 78 to a procurement agency to prothe Act, leading environmennumber between 10 and 20 vide support to central and talists describe New Zealand councils; each tasked to work local government agencies. as being at the point of a bioin partnership with communidiversity crisis. Although the ties, iwi, business and central The way forward RMA was amended in 2004 to government to promote susHaving consulted extensiveaddress climate change issues, tainable regional growth and ly, NZCID says there are many reforms have failed to have any development and support vi- New Zealanders who agree significant impact to date. brant communities that there is need for change While many suggest that de- • strengthening local partic- and are supportive of proposals velopment of National Policy ipation and engagement for first-principles local governStatements (NPS) and National through the establishment ment and planning law reform Environment Standards (NES) of empowered Local Boards; such as this. are the answer, this is an exeach with their own ability to On the other hand, some contremely difficult task and in the set targeted rates to support sider that existing structures end, does not address the overlocal initiatives, where man- are broadly satisfactory. Their arching systemic issues at play. dated by community support view is that with improvements • development of local govern- to the statutory framework, and Change challenging ment funding mechanisms given the introduction of the NZCID takes the view that if that incentivise growth LGNZ performance improveNew Zealand wants to realise its • reform of the national plan- ment programme, many, if not full potential it must bring focus ning framework from “effects all, of the issues raised can be to the sustainable development based” to a fully integrated addressed. of its regions, including the innational, regional and local Others recognise the need for 33

LOCAL GOVERNMENT change but are unsure of the best way forward, especially in the light of strong opposition and the emotive political debates that surround proposals for local government amalgamation.

Understandably, they are reluctant to support significant change without thorough review of alternative options. They seek objective evidence-based analysis of potential benefits and dis-benefits of substantive change.

For all of these reasons, and

because change of this nature is almost impossible in today’s political environment, NZCID recommends that a Royal Commission inquiry into local government and planning reform in New Zealand is needed.

The commission would be required to undertake a firstprinciples consultative review of the planning framework and the purpose, structure and funding of local government in New Zealand.

It would report back to Par-

liament in 2018, following the 2017 general election, and provide recommendations to the incoming government on a preferred option to either enhance existing arrangements or advance proposals for reform.

A Royal Commission into local government and planning law reform provides the opportunity to undertake a comprehensive and evidence-based inquiry into options to strengthen local democracy, participation and interaction, improve envi-

Many councils getting good credit ratings

Invercargill City Council received a credit rating last year

Increasing numbers of councils in New Zealand are receiving credit ratings from global rating agencies

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ome 22 councils now have ratings and the sector’s ratings rank alongside South Australia, most US states and many large global cities.

New Zealand council ratings currently range from ‘AA’ to ‘A+’, which suggests a “very strong to strong” capacity to meet financial commitments.

Porirua and Invercargill City Councils both received credit ratings last year, followed recently by Horowhenua and Waimakariri District Councils.

Taupo District Council has recently received an upgrade to its existing rating and Whangarei District Council’s rating was placed on positive outlook.

Local Government Funding Agency (LGFA) Chair Craig Stobo says the number of councils with credit ratings had increased from 10 councils at the end of 2011.

“This is a strong result for the New Zealand Local Govern-

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ment sector given the global trend is for credit ratings to be generally lowered,” he says.

“LGFA has encouraged councils to obtain a credit rating from one of the global rating agencies such as Standard and Poor’s, Fitch or Moody’s and we expect more councils to seek a rating in the coming year.”

Mr Stobo says the sector’s credit ratings rank alongside those of South Australia, Provinces of Ontario and Manitoba, most US states and large global cities such as Vancouver, Toronto, New York, Tokyo, Geneva and Prague.

A credit rating is an independent external evaluation of a borrower’s ability to meet interest and debt repayment and the likelihood of the borrower defaulting.

Mr Stobo says the benefits for a council with a credit rating are that it provides: • a n external assessment of

their current and future financial position • a framework for assessing future financing and expenditure decisions • a comparison to other rated entities • a historical perspective on a council’s financial position • a pricing benefit in borrowing from LGFA, as the borrowing margin is reduced if a council borrower has a credit rating Only 13 countries in the world have an ‘AAA’ credit rating, the highest available credit rating available. The New Zealand Government and LGFA have ‘AA+’ ratings, the second highest, while New Zealand banks are rated ‘AA-’. Fonterra is rated ‘A’ and the energy companies are rated in the ‘BBB’ category.

New Zealand councils tend to rate highly in credit ratings compared to their global peers because of the close relation-

ronmental outcomes, streamline decision-making, align planning and delivery between central and local government and the private sector and enhance the provision of local government services.

ship between the two-tiered central and local government and the institutional framework the sector operates under.

“The focus on a balanced budget, long-term financial planning, the certainty of revenue and risk management are seen as positive factors,” Mr Stobo says.

He believes investors and rating agencies value the transparency around Annual and Long Term Plans, the financial prudence benchmarking, pre-election reports and the high degree of public consultation.

“They acknowledge the sector’s level of debt is linked to its large infrastructure requirements but this reflects the infrastructure responsibilities facing councils and the funding of this investment by debt to ensure an intergenerational equity balance.”

Investor support for the sector is also evident with offshore institutional investors over the past year doubling their holdings of LGFA bonds from $700 million to $1.5 billion. Offshore investors now hold approximately 28 per cent of the LGFA bonds on issue.

Mr Stobo says investors are attracted to the bonds because of the underlying financial strength of the sector. “ They have an abundance of global investment opportunities available to them so it is a sign of confidence in the sector’s financial management that they are willing to invest in it.”

October/November 2015

COMMENT >> Local Government

New position paper outlines best practice water infrastructure Lawrence Yule President, LGNZ LGNZ initiated the 3 Waters project in 2013 to gain a better understanding of sector challenges and to ensure that decision-making processes are well-suited to addressing these challenges

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he first step was to fill the information gap by developing the National Information Framework survey, where councils disclosed information on their performance using an agreed framework and set of measures. A total of 70 out of 78 councils in New Zealand provided data on their potable, waste and stormwater assets and services.

The findings of the survey show that the potable and wastewater system is currently functioning as expected, but that opportunities exist to lift performance in the future.

In addition to substantially improving the level of sector data, the 3 Waters project released an issues paper in August 2014 which extensively analysed three core issues facing the sector: • investing to replace and renew existing assets • investing to meet rising standards and increasing expectations • and providing end-users with the right incentives to use water infrastructure and services efficiently.

These issues, and others, were tested through a series of workshops attended by 61 councils. The issues paper received around 30 written submissions from councils, central government, consultants and interested individuals and organisations. This engagement and feedback shows both a strong level of commitment and ownership of the issues and a October/November 2015

commitment to improving outcomes over time.

As a result of this work, LGNZ has just released its 3 Waters project position paper, Improving New Zealand’s water, waste-

responsibility for delivering the outcomes needed through a “strong, sector-led approach.”

LGNZ’s 3 Waters project position paper proposes five broad expectations of what a fit-forpurpose sector should look like as well as key expected outcomes. These five expectations are interdependent, reinforcing each other to achieve best results.

The five expectations are: • understanding customer needs and expectations

“The best way to deliver sustainable, cost-effective improvements in sector performance is for the local government sector to accept responsibility for delivering the outcomes needed through a “strong, sector-led approach”” water and stormwater sector, to the local government sector for feedback as part of its consultation process.

The paper is the culmination of previous work under the 3 Waters project and outlines what a world-class water infrastructure network could look like. It builds on the momentum of the 3 Waters project and describes how a ‘strong, sector-led approach’ is needed to put an improved regulatory framework in place to assist the potable and wastewater service providers in addressing key issues over time. The paper also draws attention to the unique challenges facing the third water, stormwater, when considering possible pathways to improve sector performance.

What does strong performance look like?

LGNZ believes the best way to deliver sustainable, cost-effective improvements in sector performance is for the local government sector to accept

• effectively managing and investing in physical assets • effectively recovering costs • promoting efficient usage • continuing to learn and grow.

Meeting these five overlapping expectations, LGNZ anticipates any changes to the three waters sector must deliver three outcomes: • transparency on performance, with improved performance over time • asset management practices that are based on consistently high quality information on the state of assets • and decision-making processes that recognise and resolve trade-offs.

A strong, sector-led approach Given future expectations will exceed current service levels, improvements can and should be made to the way the sector operates.

One of the key themes that emerged from the LGNZ 3 Waters project data analysis is that there appear to be few, if

any, issues that are truly “sector wide” (although stormwater is an area that may require special consideration because of its intimate association with road infrastructure).

LGNZ’s Improving New Zealand’s water, wastewater and stormwater sector paper outlines three possible approaches to delivering a strong, sector-led approach: • a multilateral contract or deed with a commitment to enforceable provisions • a co-regulatory approach modelled on the successful co-regulatory approach used in the gas industry • and utilisation of the possible Local Government Risk Agency.

The business case to establish whether such an agency should be created presently is being developed in partnership with the Crown. If the business case stacks up, it may be a logical entity to set data standards and benchmarks, hold asset information and incentivise and share better practise across the sector since to carry out its functions it is likely to have to hold this information in any event.

The right approach to improving performance must reflect this sentiment, particularly avoiding “one size fits all” initiatives. Continuing to further develop and apply database technology to help build our understanding of the state of the three waters assets and services in the future will be a key focus for the strong sector-led approach.

A copy of the paper is available at www.lgnz.co.nz.

Lawrence Yule is President of Local Government New Zealand, which represents the interests of 78 local authorities in New Zealand 35

ENVIRONMENT >> Wastewater

An air conditioning solution to keep Are we ignoring an economical and readily available source of energy that could be used in urban air-conditioning systems? Nick Meeten certainly thinks so

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ontrolling the temperatures inside buildings to keep people comfortable through the ups and downs outside is an expectation in these modern times. But it comes with a price, both financially and environmentally.

Many cities are tackling the challenge of climate change by setting themselves emission reduction targets, and since buildings already use approximately 40 percent of the world’s energy making buildings more efficient is one area that offers huge opportunities to reach these emission targets.

Much focus in the last decade has been given to making buildings better insulated to prevent heat leaking out and so reduce their winter heating needs.

But the world is changing. It’s warming and heatwaves are becoming more frequent.

In the US, for example, extreme heat events are responsible for more deaths annually than hurricanes, lightning, tornadoes, floods, and earthquakes combined.

So in the opposing corner to energy and emission reductions, more and more buildings and homes are moving to air conditioning systems to keep their occupants cool.

This results in energy consumption increasing, and it’s pulling cities away from their reduction targets.

And it’s not a problem that’s confined to the US. In the UK, 10 percent of commercial building floor space was air conditioned in 1994 but by 2020 this figure is expected to be 40 percent.

Elsewhere, The Netherlands Environmental Agency estimates that between 2015 and 2100 there will be a 10-fold increase in energy used for air conditioning.

So there is a growing realisation that the challenge facing

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Wastewater not only cools buildings such as the IWS Sail Apartments in Canada, it also reduces the urban heat island effect

cities in the future may not be keeping cities warm, but keeping them cool.

Many heating and air conditioning systems today use the atmosphere as an energy sink.

In winter heat is pulled out of the atmosphere, in summer heat is dumped into the atmosphere.

One of the disadvantages with this idea is that as the ambient temperatures outside move towards the upper or lower extremes and heating or cooling is needed to keep people inside comfortable, the concept is increasingly working against the natural flow and it becomes ever harder to extract or dump heat from the atmosphere.

So the system has to work harder to overcome this and consequently operates least efficiently when it’s needed most.

What alternatives are there?

Looking elsewhere for an energy sink? One possibility is the Earth. Ground source heat pumps are well-established technology, and proven to be very efficient. The problem in cities is that it is difficult to find areas of land in which to bury the ground heat exchange

pipes needed.

Water is another possibility.

Water is an excellent conductor of thermal energy and easy to handle.

Forty years ago the Christchurch Town Hall used that city’s drinking water supply as a thermal energy source and it worked well. In today’s world there is less tolerance towards people messing about with drinking water supplies.

Ground water can be an option if there are supplies available below the site, or maybe a river or lake if it happens to be beside one.

There is also one other source that most people choose to ignore.

Enter wastewater: normally the black sheep of the water family, it could be the knight in shining armour in cities of the future.

It has a lot going for it as a source of thermal energy. It is wonderfully neutral in temperature all year round, cool in summer and warm in winter.

It flows every day and is well distributed throughout cities within infrastructure which is already there.

It is also a water source which

doesn’t raise any possible contamination issues because it’s already contaminated.

What is it exactly? Wastewater is water. The Food and Agriculture Organization of the United Nations says typical municipal wastewater is 99.9 percent water, so while it might be dirty water it is still water and its thermal characteristics are unchanged.

It’s a great energy sink for heat, either dumping heat into it or pulling heat out of it.

Ample advantages There are several reasons why using wastewater in this way is a good idea: • the infrastructure and the water is already there – this makes better use of both by using wastewater for two jobs instead of just one • efficiency – with a neutral temperature heat sink, AC systems can operate very efficiently.

• Recent research in the US compared a ground source AC system in Atlanta with an air source AC system. Atlanta has a climate about 95 percent the same as Sydney and the test compared the same type of building and October/November 2015

cities comfortable two identical floors with same types of usage.

• After two years of operation, through heating and cooling seasons, with extensive monitoring and data collection the ground source system used about 45 percent less energy annually than the air-based system. Almost twice as efficient! Wastewater flows at pretty similar temperatures to the ground so it is not unreasonable to assume similar gains in efficiency should be possible • urban heat islands - many cities suffer from an Urban Heat Island (UHI) effect where the centre of the city is warmer than the surroundings, typically by about 3-5 degrees C, and in extreme cases up to 12 degrees C. There are multiple factors that create a UHI, and air conditioning systems dumping heat into the air are one contribution. This leads to a vicious cycle of cities getting warmer due to UHI, more air conditioning being used, more heat dumped into the atmosphere, cities getting even warmer due to UHI, even more air con being used and so on. Dumping some of the heat into wastewater helps break this cycle • energy recycling - when energy is dumped into the atmosphere, it is lost. When it is dumped into wastewater it is contained within a pipe.

Maybe there is someone else downstream who might need some heat, and so recycling of energy in a sort of hybrid district energy system starts to become possible.

There is even the possibility of a new revenue stream - how much would building owners be willing to pay to cut their air conditioning power bills by a conservative 30 percent?

October/November 2015

A wastewater energy project I was involved with last year in Québec City was held up for about three months when the city realised they were freely giving away something quite valuable – a source of thermal energy.

After stopping the project to ‘review the connection agreement’ they now get paid an annual fee for allowing the building owner to tap the wastewater energy in their pipes.

How much potential is there down in the wastewater pipes?

It depends. There are a few factors that need to be considered to assess the feasibility of any particular site. However in 2014 I did a high-level analysis of five cities – Munich, Los Angeles, Melbourne, Philadelphia and New York. It averaged out that the wastewater flows of the city

“Wastewater is a great energy sink for heat, either dumping heat into it or pulling heat out of it” – Smart Alliances Buildings/ Water/Sustainability Consultant Nick Meeten

buildings. Most of the air conditioning hardware stays the same as with conventional solutions.

So the chillers/heat pumps and distribution systems are all unchanged. The only thing which changes is the heat exchanger and the heat sink. Out goes the cooling tower or air cooled condenser, and in comes a heat ex-

“The Food and Agriculture Organization of the United Nations says typical municipal wastewater is 99.9 percent water, so while it might be dirty water it is still water and its thermal characteristics are unchanged” could absorb about 30-35 percent of the energy consumed by the commercial buildings of the city, and the wastewater temperature would not be changed by more than 5 degrees C. So theoretically roughly every third commercial building could hook in.

That is a lot of potential which is not being used, and if cities want to hit their emissions targets they need to take advantage of every opportunity possible.

changer designed to work with wastewater.

These are going to be more expensive than a standard heat exchanger but should still pay back within the region of 5-10 years compared to a wet cooling tower, purely on avoided maintenance costs and reduced energy consumption.

Add the energy savings from system efficiency gains and maybe in time there may be carbon credits available too. It stacks up.

It’s estimated that there are alWhat is needed on the hardready about 400-500 wastewaware side? ter energy installations worldFirstly, we’re not talking about wide, with the first ones done pumping wastewater through over 20 years ago so the guinea

pig phase is over. Technically it is pretty simple stuff too, the risk is low.

There can be bureaucratic hurdles to jump at times, because many wastewater regulations are written so wastewater can be put into the pipes but cannot be taken out again.

Generally these hurdles can be overcome with effective communication though.

So wastewater networks can be used for more than just moving dirty water out of a city – they can also be used for moving thermal energy.

They can be used to increase the energy efficiency of buildings, and reduce urban heat islands.

In doing so they can save a lot of money for the building operators, and it is not unreasonable to assume that some of this can be secured by the wastewater utilities for allowing access to the opportunity.

A win/win result for both parties. The time has come for wastewater utilities to shine and become climate change heroes.

Nick Meeten is a Buildings/ Water/Sustainability Consultant with engineering, resource management and architecture company Smart Alliances Ltd 37

COMMENT >> Management

The good, the bad and the downright indifferent Caroline Boot, Managing Partner Plan A A survey of procurement processes in some of New Zealand’s leading public organisations produced some startling findings when it was unveiled at the recent Building Nations symposium

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he New Zealand Council for Infrastructure Development (NZCID) survey identified the NZ Transport Agency as the outright star performer in the New Zealand public sector – scoring them particularly highly with regard to communication, innovation and the use of a fair and contestable procurement process.

However, the practices of some of the other bigger names were generally perceived as well below par as were those of major councils – in contrast to the smaller city and metro councils, the Ministry of Education, Transpower and Department of Corrections, whose procurement activities are all widely agreed to be above average.

In-depth interviews conducted with a small selection of the survey’s respondents offered greater insight. Good communication, project organisation and a sense of an ‘equal playing field’ were key factors behind a positive perception of the procurement process.

On the other hand, poor communication, uncertainty around funding and future work programmes, and unnecessarily complicated and disorganised processes inevitably led to poor reviews.

The NZ Transport Agency, as the currently identified benchmark within the industry, was perceived as professional, well organised and consultative. Feedback rated their consistency, transparency and willingness to merge innovation with previously proven models.

The best scoring agencies scored exceptionally highly on the following criteria: • early advice of forward work programmes • innovation in procurement techniques • timely, clear and effective communication • a high level, outcomes-focused approach to the project.

The worst scoring agencies were attributed very low scores across the board, but in particular regarding: • providing useful feedback to tenderers • evaluation of project performance after

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tender award • prioritising whole-of-life value over capital cost • costs of tendering.

Education essential The obvious solution to address poor or patchy procurement capabilities is to educate procurement professionals in the practices and techniques that drive fair, cost-effective, fit-for-purpose decisions on the best value-for-money suppliers. To do that,

“For those who are keen to achieve a general procurement and purchasing qualification that is also recognised overseas, the international CIPS programme is suitable” first there needs to be agreement on what constitutes best practice in procurement.

An overwhelming 53 percent of respondents felt that a collaborative working group – made up of representatives from MBIE, Treasury, government departments and local councils or business and/or community leaders – should be established to oversee best practice procurement development in New Zealand.

There is a clearly identified need for changes and improvements within the existing procurement models of the various public sector organisations. Practical training for tender evaluators, together with greater emphasis on effective procurement planning, is the key to effecting changes across this sector. Many government organisations provide little or no training to their procurement staff.

There are two major training and qualification options available to organisations keen to raise the bar for their procurement professionals.

CIPS Training and Qualification For those who are keen to achieve a general procurement and purchasing qualification that is also recognised overseas, the international CIPS programme is suitable.

It is aimed at senior buyers, contract and supply chain managers with the expertise to improve organisational procurement and to fulfil organisational objectives.

The Diploma in Procurement and Supply gives them the knowledge base to reduce costs, improve quality and timescales, manage the supply chain and deal with legal issues.

Costs start at around $3750 for registration and study materials (mainly online study with text books and study guides) but subsidies are available for some government procurement employees. Ongoing membership to the Chartered Institute of Purchasing and Supply is required to maintain qualification (annual subscription $370/ year).

NZQA National Certificate in Infrastructure Procurement Procedures For NZ-based practitioners working in preparing RFx Tender documents and evaluating tenders, the National Certificate in Infrastructure Procurement is a useful alternative.

This qualification is based on evidence of practical skills in procurement planning (including choosing the most appropriate supplier selection method, scoring system, attributes and weights); preparing RFx documents and conducting procurement processes; evaluating tenders and applying legal requirements and ethical standards to tendering processes.

A two-day training course [Clever Buying™] is available to train the practical skills required for the qualification. This is strongly activity-based, involving participants in a wide range of procurement exercises from using laptops to explore weight allocations to undertaking actual evaluation exercises and developing scoring tools and role-playing tender debriefs.

However government organisations choose to approach building better procurement practice, there is no denying that a concentrated effort will be needed.

Caroline Boot is the Managing Partner of Plan A Tender Specialists and Clever Buying™ www.plana.co.nz, www.cleverbuying.com www.procurement@mbie.govt.nz Tel: 0800 752 622 October/November 2015

LAST WORD >> Local Government

The calm before the yawn Evans Young Business Development Director Hopper Developments It’s gone quiet on the local government front lately

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o brain explosions, tantrums or worthy malapropisms from politicians to remind us that they are indeed there, fearlessly defending the public’s right to cringe at the thought of who or what we voted for.

Over the past couple of months we’ve had the release of the National Infrastructure Unit’s (NIU) Thirty-year Infrastructure Plan, the results from the Greater Wellington and Hawkes Bay referenda on regional amalgamations and the NZ Council for Infrastructure Development’s annual Building Nations conference in Christchurch.

Together, these events are possibly the most significant catalyst for local government as it focuses on the looming challenges facing the sector moving forward.

Individually, each was predictable and possibly as exciting as watching paint dry.

The NIU’s Thirty-year plan highlights the perilous state of much of our utilities infrastructure and the need to adopt disciplined, single-minded planning to seamlessly maintain continuity of service while undertaking the renewal, replacement or upgrading of the means of delivery.

Be it one of the 3 Waters, transportation, social housing or electricity supply the need is universal – years of neglect, underinvestment and lack of forward planning has finally come home to roost and ignoring the problem will not cause it to disappear.

How individual communities will respond to the challenge is going to be interesting to observe. Some, mainly small, conservative rural authorities are in a strong financial position with little or no debt; but conversely have low urban population pressures driving a need to upgrade services.

Other, again mainly rural authorities but with a more definable urban constituency are finding they have an existing infrastructure designed and built to service a population that is in decline as the migration of October/November 2015

youth and talent seeking opportunity and employment gravitates to the larger urban centres.

And finally there are the urban-dominated authorities that are experiencing population growth unable to keep up with the demand for new infrastructure to provide housing and employment for this influx, let alone undertake a managed replacement /renewal program for existing aged and failing services.

The electoral “great unwashed’s” rejection of proposed amalgamations in Hawkes Bay and Wellington was as predictable as it is embarrassing for the Local Government Commission. While the intent and logic behind the respective proposals

“A new approach is required – leaders willing to make decisions need to step forward and articulate their vision and plan” was robust, the Auckland factor cannot be underestimated.

No-one, other than Mayor Len, can claim the Auckland experiment has been a resounding success. Outside observers have alternatively been amused and/ or shocked at the dysfunctional antics on public display – if that’s the visible dividend of amalgamation, sorry we don’t want to subscribe.

The unfortunate consequence of such an attitude is that the positive benefits of greater efficiencies of resources such amalgamations can provide are lost, and there is widespread reluctance (apathy?) to review or re-visit the subject at any future date.

Finally the NZCID Building Nations conference. These conferences have been a regular feature on the industry calendar for some time. The speakers are learned, ear-

nest and inspiring.

Unfortunately the message appears to fall on barren ground as there doesn’t appear to be any successful local ‘case studies’ able to be showcased to inspire attendees to race off and devote time, effort or resources and be part of the success story.

Too often we are presented to by bureaucrats, consultants or academics who are full of theory but lack the practical ‘handson’ or ‘skin in the game’ experience to appreciate the risk or cost their lofty solutions carry.

So now we finally have to face the inevitable truth – the family silver is tarnished and a quick once-over with the polishing cloth is not going to restore the lustre.

A new approach is required – leaders willing to make decisions need to step forward and articulate their vision and plan. The public has to accept that we elect our local politicians because we believe they are knowledgeable, capable and honest. And we trust them to make the right decisions for the good of the “greater community”.

There needs to be greater realisation that having excised our democratic right to vote (or, more significantly, not vote) we cannot tolerate our politicians continuing to delay making pressing decisions by constantly consulting with all and sundry in an effort to reach some utopian ‘consensus’ on the appropriate means to deliver what are essential outcomes. The alternative is to continue to do as Nero did in AD64, “fiddle while Rome burns”. Remember, we vote them in – we will always get what we deserve.

Evans Young is Business Development Director for Hopper Developments and INFRA-SOL. Tel: 09 477 0015 Email: evans@hoppers.co.nz www.hoppers.co.nz

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