AsiaPacific Infrastructure - Aug&Sep 2014

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AsiaPacific

INFRASTRUCTURE LOCAL GOVERNMENT • CONSTRUCTION • CITIES • ENERGY • ENVIRONMENT • TRANSPORT • WATER • COMMUNICATION

E L B M A

New Zealand Edition

R C S N LECTIO

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August/September 2014 VOL 4 NO. 4

s a m t s i r h C y l

Ear

I just want to be friends with the winner.

I wanted a train set last year too, and it never came.

I want a laptop and access to the internet.

I want to keep the family jewels at home. I want a drink and a place to swim.

• Promises to local government • Selwyn winner • Transmission Gully • Water Conference


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20 N O I T LEC

COMMENT>> A case for Auckland by Len Brown

E

New Zealand’s largest city critical to the country’s future

Nearly one in three voters in next month’s election will be residents of Auckland – a powerful group that no party can afford to ignore

Auckland is placing the highest priority on three key transport projects: the East West Connections programme and closely linked Auckland-Manukau Eastern Transport Initiative an additional Waitemata Harbour crossing; and the City Rail Link

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y focus will be on ensuring that all political parties understand what matters most to Aucklanders, and why an even greater investment in Auckland’s infrastructure is critical to New Zealand’s future. Auckland is rapidly emerging as a city that has the potential to compete on an equal footing with other world cities like Sydney, Melbourne and Singapore. This is still an aspiration, but it is a goal. Achieving it would transform New Zealand’s economy and greatly improve our rankings across a range of international measures, as well as attracting more highly skilled migrants and foreign investment to the country. Auckland currently accounts for around 40 percent of New Zealand’s GDP, we are home to nearly a third of the population, and we are growing at about 50 percent faster than the country as a whole. In another three decades, Auckland’s population is expected to grow by 1 million. But it is no secret that Auckland is being held back by its transport woes and without a doubt this is the issue that matters most to Aucklanders. I know, I hear this every day. Getting Auckland moving through a highly functioning integrated transport system is my single most important

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August/September • 2014

priority as Mayor of Auckland. Investment in a decent transport network – including roads for private and commercial transport, trains, ferries, buses, cycleways and walkways – is not only critical to improving economic opportunities and quality of life in Auckland, it is critical to New Zealand’s economic performance. In advancing Auckland’s agreed transport programme we have broken the mould. We are no longer identifying the problem and heading to Wellington for a solution. Instead, we are working hard to develop an Auckland solution.

For three years we have been looking at finding alternative, Auckland-based funding options for transport infrastructure, which will be presented to Aucklanders later this year. Investing in a highly functioning public transport system, for example, will help get private vehicles off the road and keep them open for commercial carriage – vital to the economies of neighbouring towns and centres. Freight first Very clear in Auckland’s 30-year Plan is that particular emphasis

Len Brown . We are no longer identifying the problem and heading to Wellington for a solution. Instead, we are working hard to develop an Auckland solution must be given to freight movement and other related business travel on international, national and regional transport corridors. The upper North Island is responsible for over half of New Zealand’s entire freight movements, with a large majority coming into, out of, or through Auckland. Inter-regional freight in the upper North Island is forecast to grow by over 100 per cent in the next 25 years, with roads expected to account for 86 per cent of transport movements. Unfortunately however, Auckland is playing catch up. It is gradually working its way back from decades of under-investment in transport.

Getting Auckland moving through a highly functioning integrated transport system is my single most important priority as Mayor of Auckland


Victoria St entrance

But simply keeping our heads above water won’t be nearly enough to enable Auckland to achieve its potential. It will still be well short of making the step change required to provide a modern, efficient, world-class transport system which allows people to travel easily and goods to be transported efficiently. This is why Auckland is placing the highest priority on three key transport projects: the East West Connections programme and closely linked Auckland-Manukau Eastern Transport Initiative (AMETI); an additional Waitemata Harbour crossing; and the City Rail Link (CRL). To achieve Aucklanders aspirations for a world-class transport system, we cannot work in a vacuum. We have been working closely with both the private sector and the government. We are making good progress with the associated partnerships, but momentum must continue. Programme priority First, the East West Connections programme is focused on the heart of Auckland’s freight movements – the area between Onehunga, East Tamaki and Auckland Airport. This area is the engine room of New Zealand’s industrial and manufacturing economy employing more than 130,000 people and generating more than $10 billion a year in GDP. There are around 6,000 heavy vehicle movements a day along Church St in Onehunga, alone. The increasing freight volumes and anticipated economic and population growth in the area will place increasing pressure on both the nation’s supply chains and the local transport network. The East West Connections programme proposes a strategic transport corridor that will connect SH20 at Onehunga and SH1 – the Southern Motorway, which will provide improved access to the rail freight hub at Metroport and major employment areas such as East Tamaki. This link will address the high traffic and freight movements on congested local roads, provide

Aotea Station

efficient freight movements between SH20 and SH1, and between industrial areas and the port and airport. Innovative initiative The Auckland-Manukau Eastern Transport Initiative (AMETI) is a closely related project that proposes a transport link between the Eastern Suburbs to unlock the economic potential of the area. AMETI, is the multi-modal response to the large increases in population and economic activity expected in the area bounded by Glen Innes, Pakuranga and Sylvia Park through to Botany. Under this scheme the Waipuna Bridge and the South-Eastern Highway become the primary freight and business traffic route through to central Auckland. The total cost of both projects is around the $2.6 billion mark with construction phased from 2011-2033. Second, by 2030 Auckland will need an additional Waitemata Harbour crossing to move increasing volumes of freight and a growing population. An additional harbour crossing would improve the resilience of Auckland’s transport infrastructure and will provide better connectivity into and through the city centre. The crossing must make provision for road and public rail transport, and will require significant investment beyond that. Trimming travel Third, the City Rail Link - the foremost transformational project for Auckland in the next decade and beyond. The CRL, estimated to cost $2.8 billion, will improve transport choices for Aucklanders with dramatically reduced travel times to and within the city centre. A train ride from New Lynn to the future Aotea Centre station will reduce by 55 percent from 51 to 23 minutes. It is no giant leap of faith that a well-oiled public transport system means less private vehicles on arterial routes, which means less congestion.

Front and centre of the Auckland Plan is the target to reduce congestion levels for vehicles on the strategic freight network to at or below the average of 2006 – 2009 levels by 2021. In real terms that means an average delay of not more than 32 seconds per kilometre. These plans and targets must be turned into a reality. Capital canny We have to be smart about our capital programming and very resourceful and innovative in how we source and structure the associated financing decisions. Auckland has suffered, and still does, from the effect of decades of under-investment in essential infrastructure. There has been a ‘closeenough is good-enough’ mentality, which has now resulted in a significant planning and budgeting challenge. We need to backfill the inherited infrastructure deficit, but at the same time work towards stepping up to best practice management of our capital expenditure. This means anticipating future demand; and building infrastructure before it is needed so it is operational when we need it. The opposite is commencing the build when we need it and being endlessly behind the 8-ball. A case in point is the recent PWC report, which argued the government’s conditions for agreeing to fund half the construction of the CRL earlier than 2020 were unrealistic. We simply won’t meet the patronage and central city employment targets the government set without a CRL – the trend for rail patronage is up, the private sector is on board, the people of Auckland want us to get started, so why wait till 2020? We need to get CRL construction started in 2016 to prevent Auckland coming to a grinding halt within a decade. For the next 10 months the Auckland Council will be concluding one of the most important funding debates it has ever had. As it works its way through the current process of adopting its 2015-2025 Long-term Plan, Auckland’s 10-year budget,

decisions need to be made on whether to stick to the transport package based on current funding sources, or whether new sources of funding need to be sought to deliver the transport programme Aucklanders have asked for. Funding focus Current funding sources would deliver us a transport system no-one wants. It is for this reason that three years ago I set in place a process to explore and capture alternative funding sources for transport infrastructure to find the $300-$400 million a year to fill the $12 billion funding gap. As a result a Consensus Building Group was formed, which last year advised council that there were two broad options to choose between. One, a significant increase in rates and fuel taxes or two a new form of road pricing. This year we have reformed this group, renamed it the Independent Advisory Board and tasked it with delivering fully-costed policy and business cases on the two options by November. We will be making final decisions on the transport programme Auckland wants and how it is funded in May and June of 2015. So Auckland’s proposition to the in-coming government is quite simple: • continue to work with Aucklanders, and the private sector that is increasingly taking an interest in us, to make the Auckland Plan a reality • allow us the space to conclude a tough discussion on funding and then get behind us to help implement an Auckland solution • listen to the more than 70 per cent of Aucklanders that want us to get on with the CRL rather than waiting until 2020 Auckland is growing at more than twice the rate of any other city in New Zealand. We all need to think smart and act smarter to capitalise on Auckland’s growth for all New Zealand. Len Brown is mayor of Auckland i

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THIS ISSUE AsiaPacific

INFRASTRUCTURE

40-41 NZ infrastructure has come a long way in the last decade - it’s critical that the next government doesn’t lose momentum 42-43 Is the baby of good local government being thrown out in the reform bathwater drawn since the global financial crisis? 44 Local government plays a key role in reflecting and representing the democratic rights of NZ communities 45 Infrastructure and property sectors are keen to see completion of infrastructure programme 46 Decision-making on the best-value infrastructure projects will need to be carefully managed

Transport

6-8 New Zealand’s first state highway Public Private Partnership is gathering speed following the signing of a contract for the construction of the Transmission Gully motorway P26-27 President Yule looks for local democracy powering community and national success

Construction

38-39 Legislation on construction contract retentions has been caught in the pre-election squeeze but may still be passed this year

30-37 Local Government NZ conference

30-31 Powering local economies and building vibrant communities 31-32 The social landscape is changing as the population ages and becomes urbanised 32 Survey identifies what Mayors and Chairs think are the major issues facing their communities 33 Lifting governance and financial performance 34 PM launches a central and local government review group 35 Labour to identify the opportunities and barriers to growth and offer solutions 36 Economic wealth is unevenly shared in New Zealand says NZIER economist 36 Technology transforming the way countries and communities do business says Xero boss Rod Drury 36-37 Winners of the inaugural LGNZ EXCELLENCE Awards

ION

ELECT

2014

Elections 2014

2-3 Nearly one in three voters in next month’s election will be residents of Auckland – a powerful group with special infrastructure needs that no party can afford to ignore 26-27 Local Government New Zealand has a vision: local democracy powering community and national success

mediaSOLUTIONS Editor Geoff Picken 0212 507 559 geoff@ mediasolutions.net.nz

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Sponsored Articles

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9 School kids name micro tunneller for McConnell Dowell 10-11 New Zealand is a virtual water-trading nation while the tradable sector is heavily weighted towards biological production 12-14 New Zealand’s first solar air drying hall for biosolids that has helped provide about $17 million of cost savings for Selwyn District Council 15-18 The government has announced clear, robust national standards for freshwater that will take a significant improvement to the way freshwater is managed

Energy

19-21 The photovoltaic industry crisis is drawing to a close with increasing demand for new technology in many regions but it will have little effect on the small New Zealand market 22 Award-winning strategy to cut Nelson Cold Storage energy bill and shows the way forward for other Kiwi companies 23 Infrastructure industry training organisation launches as Connexis

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August/September • 2014

P17 Iplex - Restrain was developed for installation using trenchless technology methods P23 The ITO created following the merger between InfraTrain and the ESITO officially launched as Connexis P28 Southeys hydro evacuation , spill service and bulk liquid waste cartage and disposal P29 Leak Detection Ltd saves clients time and money with latest technology for underground water leak detection P47 Oliver introduces safety boots specially designed for women and gets overwhelming support for the move

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Subscriptions mail@mediasolutions.net.nz Rates: $30 incl GST and postage for 6 issues, plus digital editions to five email addresses. Overseas rates available on request. www.infrastructurenews.co.nz Free access online to an interactive digital edition. Free access to the industry’s most comprehensive, key word searchable archives in key infrastructure categories: Local Government, Construction, Cities, Energy, Environment, Transport, Water, Communication. Free access to daily updated news with the AsiaPacific Infrastructure online carousel


CONTENT PARTNERS

Len Brown on Auckland’s needs pages 2-3

Stephen Selwood on Transmission Gully – page 8

Murray Gibb on water managementpages 10-11

Brendan Winitana on solar power growth in NZ – page 19

Lawrence Yule on post election hopes - pages 26-27

John McKay on pending legislation covering retentions– pages 38-39

Hamish Glenn on maintaining the momentum – pages 40-41

Joel Cayford on the dangers of sacrifice – pages 42-43

Leigh Auton on protecting democracy – page 44

Connal Townsend on infrastructure completion – page 45

Caroline Boot on best-value and good decisions – page 46

Geoff Picken is the editor of AsiaPacific Infrastructure

Any cancer. Any question. For cancer information and support phone the

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AsiaPacific

INFRASTRUCTURE Printed by Crucial Colour 24 Fairfax Avenue, Penrose, Auckland +64 9 589 1550 Published by Media Solutions Ltd Level 2, 9 Anzac St, Takapuna PO Box 31397, Milford 0741 09 489 8663 Original material published online and in this magazine is copyright, but may be reproduced providing permission is obtained from the editor and acknowledgment given to Infrastructure. Opinions expressed are those of the authors and may not necessarily be those of Media Solutions Ltd. ISSN 2324-3163 (Print) ISSN 2324-3171 (Online)

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T R A N S P O R T > > Transmission Gully

Groundbreaking highway project to transform travel in Wellington region New Zealand’s first state highway Public Private Partnership is gathering speed following the signing of a contract for the construction of the Transmission Gully motorway

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Z Transport Agency Chief Executive Geoff Dangerfield says the signing of a Public Private Partnership (PPP) contract between the NZ Transport Agency and the Wellington Gateway Partnership for the 27 kilometre Transmission Gully project marks

a major step forward for the Wellington region. The announcement means that Wellington can have certainty that Transmission Gully will be a reality, Mr Dangerfield maintains. “By progressing the project as a PPP we have achieved a good-value

result and work will get underway on the project in the coming months”. The contract signing marks the completion of a contract negotiation process which began in December last year when the Transport Agency announced the Wellington

Gateway Partnership as the preferred bidder for the project after a competitive tender process. Mr Dangerfield says under the terms of the PPP contract the Wellington Gateway Partnership (WGP) will design, construct, finance, operate and maintain the new Transmission Gully highway for the 25 years that will follow the expected five-year construction period. It is aimed to have Transmission Gully open for traffic by 2020. “People in Wellington have waited for decades to see real action on the building of a safer, efficient and more resilient highway route north of the city, and today we can say with certainty that construction will soon begin on a vital link in that route,” Mr Dangerfield adds. “Not only do we have certainty that the project will be built to a strict deadline that will see it opening in 2020, but the PPP contract also requires that the project is designed, constructed, operated and maintained to achieve a high standard of performance in the areas of safety, journey times, reliability and customer satisfaction.”

Public Private Partnership Points T

his is the first Public Private Partnership for a state highway project in New Zealand. The Wellington Gateway Partnership will finance, design, construct, operate and maintain the Transmission Gully motorway for the 25 years that will follow the expected five-year period to build the highway. It aims to have the Transmission Gully highway open for traffic by 2020. The Wellington Gateway Partnership is made up of firms with considerable experience in the design, construction, financing, maintenance and operation of key Public Private infrastructure projects overseas. The ‘availability’ PPP model adopted for the Transmission Gully project means that the Wellington Gateway Partnership will be paid for making a safe road open and

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available to traffic, and after achieving specified performance levels such as safety, customer satisfaction, reliability and travel times. Mr Dangerfield says for the project to proceed as a PPP, the Partnership’s bid needed to guarantee a high-quality highway for less than it would cost the public sector to build using any other procurement approach. “PPPs allow large and complex projects to benefit from private sector innovation and additional scrutiny of risk from the financiers,” he explains. This increases certainty of delivery and drives better value for money, as well as effectively identifying and reducing risks and where appropriate transferring these to the private sector. “This innovation can also be applied across the wider New Zealand transport network

because we don’t just get the road, we also retain the intellectual property,” Mr Dangerfield adds. “The contract guarantees unprecedented certainty for a highway project, as Transmission Gully must be delivered for a set price, and must perform to measurable performance standards for the full 25 years.” Mr Dangerfield says that the lower cost of the PPP is determined from a straight comparison between the contract price and the cost of doing it through traditional methods. The total payments over 25 years are equivalent to today’s contract price, as expressed in future dollars. “In economic terms, the total cost spread over 25 years is lower than the alternative of paying it all up-front now,” he believes. “This will also free up the Transport Agency’s funds so that it can deliver

additional transport investments throughout the nation.” Payments are not linked to the volume of traffic using the road, however contractual incentives are provided to ensure long-term performance. Many of the high-profile failures of PPP highway projects in other parts of the world have resulted from traffic demand risk being passed to the private sector. This PPP uses a different model based on the road being open and performing strongly. Mr Dangerfield says the NZ Transport Agency will consider PPPs for other projects that have the scale and complexity that will permit superior value for money to be achieved by using a PPP approach. “Projects will be evaluated on a case-by-case basis to determine if they meet the criteria for a PPP,” he says.


Transmission Gully will…

Procuring Transmission Gully as a PPP incentivises improved road safety, travel time reliability and resilience – outcomes that will have a meaningful impact for New Zealanders for years to come - Treasury Deputy Chief Executive Vicky Robertson

“This project will save lives, shorten journeys, make Wellington’s economy more competitive, and help keep us connected in a natural disaster,” reckons NZ Transport Agency Chief Executive Geoff Dangerfield

Key component Transmission Gully will be a key component of the 110km Wellington Northern Corridor Road of National Significance, which when fully completed will provide a safer, more reliable and more efficient highway connection from Levin to Wellington, connecting the city to the growing economic centres of Kapiti and the Manawatu and subsequently the wider North Island. Importantly for the Wellington region, in the event of a major earthquake, it will be quicker to reinstate the Transmission Gully motorway than the existing SH1. The Transmission Gully motorway will also reduce traffic on SH1, which will provide a safer environment for communities along this route. Mr Dangerfield says Transmission Gully has consistently enjoyed strong support from residents and businesses in the Wellington region, which recognise the project’s significant benefits to journey times, economic productivity, resilience to major disruption, and safety. “This project will save lives, shorten journeys, make Wellington’s economy more competitive, and

help keep us connected in a natural disaster,” he says. “It will also remove heavy quantities of highway traffic from communities like Mana, Plimmerton and Pukerua Bay.” Two major public consultations were undertaken in 2005 and

“The current two-lane SH1 is totally unacceptable in terms of capacity, exposure to high tides in storms and seismic risk,” says Regional Council and Regional Transport Committee Chair Fran Wilde. “Transmission Gully will provide a huge degree of resilience for Wellington and for New Zealand on this important route”

2008 to ascertain the views of residents of the greater Wellington region on whether a route through Transmission Gully should be progressed, and both showed more than 80 percent support for a highway through the Gully.

• save lives and prevent serious injuries • shorten peak journeys by 7-15 minutes and provide two lanes in each direction • bring the Wellington region closer together as a key part of the Wellington Northern Corridor • remove heavy highway traffic from local communities such as Mana and Plimmerton • provide a more resilient route that will reopen more quickly in the event of a natural disaster • make Wellington more economically competitive by improving efficiency of moving people and freight.

Providing best value for money for the public has always been an important consideration, says Mr Dangerfield, who maintains that a PPP will deliver value in several ways. “It will deliver the project at a lower ‘whole of life’ cost than

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The Wellington Gateway Partnership consists of: • Leighton Contractors • HEB Construction • Accident Compensation Corporation • InfraRed Infrastructure General Partner • Bank of Tokyo-Mitsubishi UFJ

the public sector could expect to through conventional procurement. “The incentives built into the PPP contract will ensure the completed highway will be flatter, wider, and straighter with enhanced safety features making it safer and more resilient to natural disasters and closures,” he believes. “The PPP model also encourages the most advanced technology and innovative approaches from overseas to be brought to the project.” These innovations can then be applied on other roads right across New Zealand to make travel safer for everyone. “That means that as well as delivering safer journeys along the Transmission Gully route itself, the PPP will also release flow-on benefits onto the whole New Zealand transport network by introducing new, innovative road safety approaches which can be applied to save more lives in other parts of the country.”

Welcome news Regional Council and Regional Transport Committee Chair Fran Wilde welcomed the announcement as great news for Wellington. “The current two-lane SH1 is totally unacceptable in terms of capacity, exposure to high tides in storms and seismic risk,” she notes. Ms Wilde adds that as well as servicing the capital and being a critical commuter road for the region, SH1 carries national freight destined for the South Island - yet it still functions as it did a century ago. “Transmission Gully will provide a huge degree of resilience for Wellington and for New Zealand on this important route”. The Treasury Deputy Chief Executive Vicky Robertson said The Treasury was pleased to have partnered with the Transport Agency in the delivery of Transmission Gully as a Public Private Partnership, which represents another significant

milestone in the development of the PPP programme. “Procuring Transmission Gully as a PPP incentivises improved road safety, travel time reliability and resilience – outcomes that will have a meaningful impact for New Zealanders for years to come,” Ms Robertson says. How are we paying for it? The Transmission Gully project’s net present cost is $850 million. This is the “whole of life” cost, for the Wellington Gateway Partnership to build and then operate the road

A PPP will: • provide better value for money • provide strong incentives for the project to be designed, built, operated and maintained to achieve high and sustained performance including advanced safety features to be built into the highway, saving lives and preventing serious injuries • cover the management and upkeep of the road for quarter of a century, not just its construction • guarantee project completion in 2020 at a set price • incentivise innovative approaches that can be rolled out across the whole state highway network • keep the road in public ownership.

for 25 years. Because the costs are spread over time, they are expressed in today’s terms. This is $25m less than what the contract would be expected to cost through conventional procurement, and hence meets The Treasury’s value for money test for PPPs. The cash payments will be around $125 million per year, starting only when the project is finished and open for use, and lasting for 25 years. This stream of cash payments brought back to today’s dollars is $850 million and is the “net present cost”.

Innovative approach to transport infrastructure investment The Transmission Gully PPP is a “significant innovation” in transport infrastructure investment in New Zealand, says New Zealand Council for Infrastructure Development Chief Executive Stephen Selwood “After many decades of frustration, Wellingtonians can now look forward to a resilient and efficient roading connection to the rest of the North Island, due in large part to alternate financing arrangements which overcome institutional barriers to major transport investment,” he notes. Despite the “clear strategic merit of this project”, Transmission Gully has been deferred for decades because of its comparative high cost, he says. “Conventional costbenefit analysis does not adequately recognise regional growth potential, land use and other transformational benefits which lie at the very heart of Transmission Gully and the payas-you-go National Land Transport Fund is not geared for billion-dollar

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projects which consume such a disproportionate share of annual resources.” Mr Selwood says the government’s elevation of inter-regional investment through the RoNS initiative and NZTA’s expansion of transport evaluation to recognise the importance of strategic corridors like Transmission Gully both deserve commendation for overcoming the barrier posed by narrow economic analyses. “The funding challenge was overcome by the first ever use of private finance in a New Zealand transport project,” he observes. “By employing a public-private partnership or PPP model, NZTA are able to leverage private capital to advance Transmission Gully as a

single project.” Not only does this enable the economic, safety and strategic benefits of the project to be brought forward, but the successful Leighton-led consortium have been able to demonstrate over the past year that efficiencies in project delivery and risk transfer away from tax payers has been sufficient to offset the cost of private debt. The billion-dollar Transmission Gully mega-project is a vital link in the Wellington Northern Corridor Road of National Significance, providing a much more effective strategic connection between Wellington city and the territories north of Paekakariki. “Employment centres, activities and, potentially, entire industries

Stephen Selwood will be made possible by improved connectivity between the lower North Island’s population centres and Wellington’s central business district, port and airport,” Mr Selwood believes. “The new corridor will replace the fragile coastal segment of State Highway 1 north of Tawa which is vulnerable to both flooding and earthquakes, and will save many lives on what is currently one of the most hazardous stretches of road in the country.” i


NEWS Sponsored Article

Latest member of the underground McConnell Dowell’s new micro tunnel boring machine has arrived in Silverdale, 30km north of Auckland city, to begin work installing a gravity wastewater system. But it could not start work without a name – Silverdale kids solved the problem

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cConnell Dowell is laying 3.15 kms of wastewater pipeline for Watercare using microtunnelling trenchless technology. The waste water will flow through the pipeline through gravity offering significant advantages during construction and operation in terms of safety, environmental and community impact. The system runs from the existing Watercare Pump Station off Millwater Parkway Orewa to a new series of surrounding subdivisions. Major residential developments are already underway in the area bringing tens of thousands of residents to Rodney and the Hibiscus Coast. The largest development, Millwater, will house more than 10,000 residents with around 3500 homes planned. Tunnelling tradition dictates that a tunnel boring machine cannot start work until it is given a name. Just like Alice at Waterview, this new machine needed to be named as a sign of good luck for the project. Local primary school children from three schools were given the opportunity to enter a competition to name the machine, researching famous New Zealand women in history for inspiration. The winner was nine year old Amber Bigwood from Silverdale School who named the machine Nancy after the WW II underground spy Nancy Wake. Ms Wake, who was born in Wellington, served as a British agent. She was a leading figure in the French Resistance and was one of the Allies’ most decorated servicewomen of the war. By 1943, she was the Gestapo’s most wanted person, with a 5 million-franc price on her head.

Nine year old Amber Bigwood (inset) named the micro tunnel boring machine Nancy, after New Zealand underground spy Nancy Wake, who served as a secret agent in World War II. Pictured here with McConnell Dowell Engineer and Environmental Manager Alasdair Mawdsley, Communications Manager Clare Farrant and Watercare’s John Redwood and required the longest micro tunnel drive of its type in the southern hemisphere at that time at 870m.

Other waste water micro tunnelling work carried out by McConnell Dowell included the $83.5 million Christchurch Ocean Outfall, the largest civil engineering project

undertaken by the Christchurch City Council prior to the Canterbury earthquakes. At three kilometres long, this is one of the longest outfalls in New Zealand

McConnell Dowell is part of the WellConnected Alliance, managing the design, construction and operation of the Waterview Connection project, a $1.4 bilion dollar Road of National Significance - one of the most important infrastructure developments ever to take place in New Zealand. Completing a motorway ring route around the city, the connection will deliver five km of six-lane motorway through and beneath Auckland’s western suburbs, linking State Highways 16 and 20 to complete the city’s Western Ring Route by 2017 . i

Driving Progress www.mcconnelldowell.com Lower Hatea Bridge, Whangarei

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COMMENT

>> Water by Murray Gibb

Developing and safeguarding our water environment is essential New Zealand is a virtual water-trading nation – the tradable sector is heavily weighted towards biological production that depends on the precious liquid

We have been able to take the resource for granted for much longer than other countries because we’re water rich – extraordinarily so by international benchmarks. Until recently we haven’t put the resource under much pressure

D

airying now makes up 30 percent of the country’s exports. Thirty years ago meat was the major export earner and 60 years ago it was wool - all depend heavily on water. Given its critical importance to the economy, an uninformed observer might suppose that New Zealand has got its water policies right. They would be wrong: declining water quality is consistently rated as the country’s number-one environmental concern. There are four reasons for this state of affairs. First, there has been no leadership. Unlike other countries we have had no designated lead agency for water policy. At least eight central agencies provide policy advice, 11 regional councils provide devolved environmental regulation, six unitary councils provide both local environmental regulation and water services, and 61 more councils provide water services. Eighty six agencies provide governance for water for a population of just 4.4 million people. We do not have a Minister for Water. It is a fragmented system and not one is in overall charge. Critically our water science and technical capacity is dispersed through all of these agencies plus our research institutions.

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The regulatory system, particularly the Resource Management Act which is aimed at protecting the environment, is not tailor-made for water. It combines environmental protection with planning law. Since being enacted in 1991 water quality has declined and in parts of the country it is over-allocated. To date, in the context of water management, the statute has failed to achieve its purpose. Other utility services have fitfor-purpose regulation – the Telecommunications, Electricity and Gas Acts. Unlike other jurisdictions we have no Water Act. Instead our water utilities operate under a complex mix of Acts of national and local application which are at times poorly understood by officials and customers alike. Water rich Second, we have been able to take the resource for granted for much longer than other countries because we’re water rich – extraordinarily so by international benchmarks. Until recently we haven’t put the resource under much pressure. Unlike our Australian cousins we haven’t had decade-long droughts or faced the prospect of our major cities running out of water. Our water is also more readily accessible, with 30 percent of

stocks being above ground in our lakes and rivers and 60 percent being groundwater. Respectively, that is 100 times and twice world averages. Annual rainfall here averages almost two metres compared with the 0.8 metre global average. That is over 500 cubic kilometres of rainfall, or two and a half times as much as falls on the supposedly soggy British Isles each year. Also by international standards we abstract minimal quantities of it – somewhere between two and five percent of annual runoff (we’re not sure exactly because we have only recently started measuring and reporting rates of abstraction.) The comparable international figure was estimated to be 54 percent of the runoff that was temporally and geographically available, in a paper published in Science way back in 1996. Internationally, the resource is under severe and increasing pressure. By comparison if we need a new source of water for abstraction, it is usually readily available. Often it is simply a case of digging a hole in the ground where we want to use it. Third, it has only been over the past couple of decades that the governance of water in New Zealand has been found wanting by

the body politic. Previously our main concerns with water were with the consequences of its excess, namely erosion control and flood protection. Intensification of land use, particularly pastoral dairy farming, has now tested our first-come, first-served approach to allocating the resource. Concurrently, diffuse sources of nutrient and microbial contamination of our lowland water bodies have increased. Some council suppliers of water services have also struggled to meet externally imposed standards for drinking water quality and wastewater discharges. Fourth, competing and conflicting demands for water use put water governance into the wicked problem basket. Environmentalists and recreational users put different values on the resource than hydro generators and irrigators. That makes it difficult to fix because of contradictory and changing requirements that are often difficult to reconcile. Additionally, urban water services are poorly understood both by customers and the elected officials in charge of them. This is not helped by water charges being bundled into local property taxes. Few utilities here meter and volumetric charge domestic consumers. The relationship between consumers and their local council supplier is therefore an administrative one, rather than being based in civil contract between supplier and customer. The latter arrangements arguably raise the expectations of both parties. Solutions sought Current attempts to improve water management stem back to 2002, when the government of the day started its “sustainable water programme of action”, partially in response to a recreational lobby groups’ “dirty dairying” campaign. The aim was to use the instruments available under the Resource Management Act (policy statements and environmental standards) to give direction to 16 regionally based environmental regulators. Famously labelled a “sustainable water programme of inaction”, it lasted six years and delivered


only one environmental standard (for sources of water for human consumption). This work was never intended to examine the wider deficiencies in our water governance. A draft National Policy Statement for Freshwater Management was developed but it never attracted sufficient buy-in to be acceptable. Three initiatives in 2008 led to a revised approach to what had become a gridlocked debate on water. The incoming government signalled a willingness to take a collaborative approach with representative bodies to addressing water quality and quantity issues. The genesis of this came from the Nordic co-governance model, where through a formal framework government and industry work together on policy. Arising from its 2008 annual conference, the Environmental Defence Society proposed a Sustainable Land Use Forum, aimed, as the name implied, at sustainable land use. Land and water are part of one holistic system. Neither can be properly managed without the other. Water New Zealand convened a forum called the Turnbull Group to propose better ways to govern water. The Turnbull Group’s blueprint for reform was published in 2009 in a document entitled Governance of Water. Policy programme The government pulled these strands together in its “new start for freshwater policy” programme, launched in June 2009. Aimed at improving freshwater management, the programme had three elements. It established a Land and Water Forum with a mandate to propose new policies aimed at better managing the resource. The forum comprised non-government groups with interests in water. The government also opened discussion between Ministers and the Iwi Leaders Group aimed at resolving high level freshwater issues for Maori and set up a concurrent officials work programme. Between 2004 and 2009 governments provided significant

funding for the clean-up of some of New Zealand’s iconic lakes and rivers. A cap and trade nutrient trading scheme was established for one of the larger lakes - Lake Taupo. The Land and Water Forum delivered the first of its three reports A Fresh Start for Freshwater in April 2011 providing a blueprint for a way forward. The government responded quickly with a national policy statement on freshwater management, and some funding to accelerate irrigation. The second and third reports from the Land and Water Forum in 2012 proposed tools and processes for setting and managing limits on water quality and quantity. The government’s response announced late year was to propose amendments to the national policy statement on freshwater management to be implemented this month. For the first time New Zealand will have a national objectives framework for freshwater and some bottom lines. Regional environmental regulators and their customers will have to agree on the attribute states they want for all the water bodies in their jurisdictions. These will be given effect through regional rules. Additionally councils will be required to measure and report all takes and discharges (diffuse and point source) in their jurisdictions. This will give an objective measure of the abstractive and assimilative ‘freeboard’ there is in our water bodies. Innovative initiatives Several other initiatives have been aimed in part at improving existing organisational deficiencies in water governance. Regulations were passed in 2010 requiring measurement and reporting of water takes. A water directorate has been established in the Ministry for the Environment to coordinate water policy development across government departments. Assigning one central agency with the responsibility to coordinate policy is a common feature of successful

Intensification of land use, particularly pastoral dairy farming, has now tested our first-come, first-served approach to allocating the resource. Concurrently, diffuse sources of nutrient and microbial contamination of our lowland water bodies have increased. water governance arrangements in other jurisdictions. Installing irrigation infrastructure in the drier eastern parts of the country has been prioritised. The government has set aside money to help kick-start irrigation infrastructure projects and assist with bringing irrigation projects to the consenting stage. Establishment of an infrastructure unit in the Treasury has focused attention on improving our infrastructure systems. Auckland governance reforms have given an opportunity for scale economies to be demonstrated in the delivery of water services. The stunning economic benefits that rationalisation of water services have brought to customers in the region remain largely unsung. Recent reforms to the Local Government Act now require council suppliers of water services to report on a range of financial and non-financial reporting measures. Amongst other things this is aimed at bringing greater transparency to the performance of water utilities. Further water service reforms are contained in an Act recently passed by the Parliament. These will

require councils to prepare 30-year strategies for water services and consider the most cost effective ways of delivering them, including rationalisation and placement at arms-length from local political control. An Environmental Reporting Bill is currently before Parliament. It will require regular reporting on the state of the water environment independent from the government of the day. What is on Water New Zealand’s wish list for the new Government? We support all the reforms currently in train. There is much unfinished business. A Minister with overall responsibility for water would help. We like to see someone in charge. Good leadership makes a difference. Murray Gibb is Chief Executive of Water New Zealand, an independent not-for-profit association of water professionals and organisations that is the country’s largest water industry body and provides leadership and support in the water sector through advocacy, collaboration and professional development i

www.infrastructurenews.co.nz

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WATER >> Eastern Selwyn Sewerage Scheme

Smart sludge solution helps win award for infrastructure excellence A New Zealand-first solar air drying hall for biosolids that has contributed towards an estimated $17 million of cost savings helped MWH New Zealand win a prestigious engineering award proofed, cost-effective solution able to meet the community’s current and on-going needs.

The completed upgrade allows for future staged expansion of the Selwyn project. An allowance has been made for extra channels and structures to be constructed in the future as the population grows. For example, the bioreactor has been built with allowance to add another later, providing an up-front capital saving of $4 million

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he innovative solution that massively reduced the sludge needing to be carted off site for disposal was a defining feature of MWH’s Eastern Selwyn Sewerage Scheme (ESSS) at Rolleston, Canterbury, which scooped the Physical Works over $10 million award at the New Zealand Institute of Public Works Engineering Australasia, New Zealand Division’s (IPWEA NZ) annual ceremony. MWH and project partners Selwyn District Council (SDC) and HEB Construction were worthy winners of an IPWEA Award that recognises engineering excellence in infrastructure projects completed in New Zealand in the last two years, having seen the ESSS increase in complexity and cost over several years. The original MWH commission in 2007 was the planning of a managed and staged expansion of the sewerage infrastructure for the eastern communities in the Selwyn District, including Rolleston, Lincoln and Prebbleton. The Eastern Selwyn Sewerage

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Scheme was driven by the need to convey and treat wastewater flows for the projected population increases of the three communities, which had already seen two decades of significant growth and were expected to expand further according to the Greater Christchurch Urban Development Strategy’s population projections. The design work for an expanded wastewater treatment plant and pipeline infrastructure was well underway when the September 2010 and February 2011 major Canterbury earthquakes hit, forcing quick adaptation of MWH’s existing programme and designs to cope with the unexpected population surge projected to shift from the damaged city into the Selwyn area. The existing system had to keep operating during expansion to ensure continuity of services to the local community, while an innovative design and project management solution had to be found to meet the need for an expanded wastewater treatment

plant without high infrastructure costs burdening rate payers. Unique elements of the scheme the MWH team lead by Rainer Hoffmann, Shane Bishop and Mark Ridge designed, developed and delivered included: • significant infrastructure reuse – ensuring past investment was used to benefit the wider scheme • balancing of wastewater flows to minimise the size of the infrastructure installed • staging to minimise cost, while future proofing the infrastructure to allow for expansion and projected needs • a step-change innovative sludge solar-drying design solution, the first of its kind in New Zealand to use the natural climate to minimise the sludge to be removed from site substantially decreased operational costs. MWH also expanded the project plans after the earthquakes in a way which could relieve the Christchurch City Council’s (CCC) damaged infrastructure should the need arise, thus providing a future-

Creating capacity The fundamental requirement of the original scheme was the ability to dispose of wastewater: there was no spare capacity under the existing discharge agreements with the Christchurch City Council to meet the growth predictions for either Prebbleton or Lincoln while an upgrade of the existing wastewater treatment plant (WWTP) at Rolleston was imminent. Discharge of treated water into waterways, ocean outfall disposal or land disposal were all investigated by the MWH team, with the latter proving to be the most acceptable and appropriate option. The MWH design team concluded a centralised option at the existing Rolleston site (the Pines WWTP) was the most viable option for land disposal due to the: • availability and suitability of adjacent land for irrigation disposal • existing consent on the adjacent land • reuse of existing infrastructure • capability for future integrated treatment solutions However, there were significant technical complexities and difficulties to overcome, including: • developing a scheme that was capable of adapting to the existing and future needs of the communities • ensuring equitable cost to all communities and minimising the front-end cost of the project for rate payers • ensuring sewerage services continued to be provided during the redevelopment ensuring resilience • fast track planning portions of the scheme to help relieve the Christchurch City infrastructure system following the earthquakes • scarce structural engineering resources available following the earthquakes • maintaining programme schedule following the challenges presented by the earthquakes • as wastewater flows increase due to population growth, allowing for the provision of additional modules and thereby minimising the initial project investment cost.


Infrastructure upgrades The challenge was to make the design as future-proof as possible, the resulting plant and associated pipelines that can manage a flow for a 60,000 population equivalent (PE) far exceeding the initial phase design criteria to provide for 30,000PE. Above ground, an allowance has been made for extra channels and structures to be constructed in the future as the population grows. For example, the bioreactor has been built with allowance to add another later, providing an up-front capital saving of $4 million. Two clarifiers were designed with allowance for another to be added, each with a design capacity of 20,000PE. The capacity of these first two clarifiers was larger than the initially installed capacity of the bioreactor, ensuring that the bioreactor upgrade would not need to occur at the same time as the clarifier upgrade and allowing for future investment costs to be spread over time. Other MWH design considerations included tilt slab construction, which allowed for some key end walls to be deconstructed and extensions added as needed in the operations building and solids handling facility. Extra space to allow for future expansion was

The superstructure of the innovative solar air drying halls incorporated into the design to defer future capital costs for as long as possible. Essentially, the MWH approach taken for bulk conveyance and the expansion of the Pines WWTP was to stage the capital investment as much as feasible to defer capital costs without compromising the performance of the system, whilst having the ability to alter the timing of improvements if population growth rates accelerated.

Design challenges The devastating earthquakes meant MWH needed to both amend and fast track the pipeline design to help Christchurch relieve the load on its stressed wastewater system should the need arise. The existing pipeline between Lincoln and Christchurch city that would otherwise have become redundant under the ESSS was used to convey flows from Prebbleton to Lincoln and then

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onto Rolleston to the Pines WWTP, allowing the projected date for construction of the Prebbleton to Rolleston pipeline to be pushed out for 5-10 years. The plan also allowed for the ESSS to partly relieve the load on the Christchurch city wastewater infrastructure should it be needed, diverting the Prebbleton and Lincoln wastewater flows away from their existing connections to temporarily discharge to land while the Pines

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Construction of the two clarifiers for the Selwyn project continued throughout the winter. The capacity of these first two clarifiers was larger than the initially installed capacity of the bioreactor, ensuring that the bioreactor upgrade would not need to occur at the same time as the clarifier upgrade

WWTP was being constructed. This would have involved adapting the existing pond based system at Lincoln to partly treat flow and using the installed pumping arrangement to discharge directly to land at Rolleston. MWH also needed to carefully consider the pipeline diameter between Lincoln, Rolleston and the Pines WWTP: too large and there would be significant retention time in the pipeline combined with low flushing velocities, too small and there would be no capacity to cater for future growth. The MWH design utilised the existing infrastructure at Lincoln to buffer peak future flows to minimise the size of the pipelines, ensuring peak flows from both Prebbleton and Lincoln are currently within the design capacity of the pump station and pipeline. Future flows will be pumped directly to Rolleston from Prebbleton and a portion of the peak wet weather flows at Lincoln will be temporarily stored in existing tanks on site, adjacent to the pump station. MWH ensured resilience by utilising existing infrastructural elements including the oxidation pond that partially treated wastewater from Lincoln discharging it into the Christchurch city wastewater system. The pond

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was incorporated as an emergency provision in the scheme to manage any significant issues within the pumping system such as a burst pressure main. The configuration was maintained to divert flows from the Lincoln wastewater system but was also incorporated in the design of the pressure mains to allow gravity drain down from the pump station in Rolleston, reducing the risk of significant discharges of wastewater directly to the environment while allowing valuable time for repairs to be undertaken. The pressure mains connecting Lincoln and Prebbleton to Christchurch city have been retained as these too form part of contingency measures. Close consultation MWH’s close consultation with the Selwyn District Council (SDC) produced a sound collaborative relationship, supporting the Council’s development of a flexible, rapid response to the significant challenges presented to the project following the Canterbury earthquakes by changing plans to effectively deal with the new circumstances and deliver the best solution. MWH provided professional consultation services to the SDC

covering project management, project definition and design, resource consent applications, detailed design and procurement plus construction MSQA. This close collaboration with the SDC allowed planning to be flexible and monitored along with the identification and mitigation of risk and helped ensured services were effectively maintained for all communities during the construction process. In addition, many of the documents such as the assessment of environmental effects and consent applications produced by MWH were available for public viewing on the SDC website and thus helped ensure community support. Not surprisingly, Selwyn District Council is very pleased with the final outcome, says SDC Asset Manager Murray Washington. “I would note that planning and coordination of this project was critical for Selwyn to be able to respond not only to the Canterbury earthquakes but also to the stellar growth that Selwyn has experienced pre and postearthquake,” he adds. “The MWH design of the Pines II plant to incorporate the bulk of the existing facility infrastructure, and the modular and scalable design to allow for future growth is very innovative.”

Environmental elements MWH worked equally collaboratively with the SDC to ensure the best environmental outcome was achieved for both Lincoln and Prebbleton. Lincoln’s growth was previously limited as the town’s partially treated wastewater was discharged into the CCC wastewater system and the amount of wastewater servicing provided under the CCC agreement. The discharge of the oxidation pond effluent into a local stream or on saturated local land was deemed unacceptable, with land disposal subsequently identified as the preferred option despite the fact that the nearest suitable land was some distance away. Prebbleton too was in a similar situation: without the ESSS no further growth of these communities could occur as there was no spare capacity under the existing discharge agreements with the Christchurch City Council. MWH developed the ESSS by adhering to SDC’s environmental principles of sustainability: • make decisions based on environmental, social, cultural and economic aspects of well-being • internalise environmental and social costs • act to halt the decline of indigenous biodiversity and maintain and restore remaining ecosystems • consider and promote the sustainability of neighbouring communities and work with governing bodies for sustainable outcomes. MWH was also keenly aware of the social and cultural aspects of the project and was uniquely placed to provide a rapid, high quality response to the suddenly changed needs of the Christchurch and Selwyn communities following the Canterbury earthquakes. Christchurch residents who had lost their homes needed to have certainty that the option of shifting to Selwyn was available to them following the earthquakes, which wouldn’t have been possible without the rapid up-scaling of the Selwyn project. MWH also future-proofed the upscale project so the up-front and future infrastructure investment would be socially acceptable for existing and future residents – for example, the Pines WWTP infrastructure can be reconfigured should membrane treatment technology become a more viable and cost effective future option. Ultimately, it is estimated that a total of more than $17 million in savings was achieved as a result of the innovative approach taken by MWH in the conveyance system and treatment for the ESSS, making the firm a worthy winner of one of New Zealand’s most coveted infrastructural engineering accolades. i


WATER

Clear, robust national standards for freshwater quality released The government has announced clear, robust national standards for freshwater that will make a significant improvement to the way freshwater is managed

Source: Delivering Freshwater Reform

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nvironment Minister Amy Adams and Primary Industries Minister Nathan Guy say the changes are a critical milestone in the government’s drive to improve water quality. “Ensuring an on-going and reliable supply of healthy water is one of the most important environmental and economic issues facing New Zealand today,” Ms Adams says. “It is critical that we protect and improve the water quality that we all care so much about.” Mr Guy says the changes balance economic growth with environmental sustainability. “It’s not an either-or situation – we need both. Primary industries

contribute more than 76 per cent of our merchandise exports and largely depend on freshwater, while tourism also relies on the beauty of New Zealand’s water bodies.” He adds that everyone wants sustainable and profitable primary industries. “That will mean changes to some of our farming practices, but I know farmers are up for the challenge.” The changes include the introduction of national standards for freshwater in New Zealand – for the first time, New Zealand rivers and lakes will have minimum requirements that must be achieved so the water quality is

suitable for ecosystem and human health. More than 60 freshwater scientists from public, private

and academic sectors across New Zealand have come up with numeric values proposed for the national standards, which follow a government requirement three years ago for councils to maintain or improve the water quality in their lakes, rivers, wetlands and aquifers across their region. “If their water quality is already above the national standard it cannot be allowed to deteriorate,” Ms Adams says. “However, where a water body currently falls below the national standard, councils and communities will need to ensure that the standard is met over sensible and realistic timeframes.” Ms Adams is currently

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in the more detailed consultation phases.”

Source: Delivering Freshwater Reform

outlines why they need to take place and what the desired outcomes are, in an accessible and understandable way. “Recent freshwater reform documents have had to include sufficient detail for the stakeholders who have a strong level of engagement and acceptance of the reforms,” Ms Adams says. “This document focuses on providing information to a wide range of New Zealanders who care deeply about water quality and are unlikely to be participating

Bottom line Councils are required to maintain or improve water quality within their regions and cannot set an objective below a national bottom line. There are only two circumstances where an objective may be set below a national bottom line. First, where the water quality is naturally below the bottom line, for example a native bird colony nesting in a river bed causing high E. coli levels downstream and, second, where significant existing infrastructure such as the hydroelectric power stations on the Waitaki, Clutha or Waikato Rivers, means water quality is below the bottom line. The government has begun a process to determine the range of infrastructure that could be listed in the NPS-FM starting with seeking the views of iwi, councils and infrastructure owners about existing infrastructure in rivers and lakes. This will be followed by public consultation later in the year. If a community is of the view that the process to manage a water body to a level above the bottom line would place an unmanageable burden on their community they can apply to the government for that area to be specified. This would effectively allow a longer time period, and staggered approach, for developing the process to move above the bottom lines. Councils are also required to take a more integrated approach between fresh water and coastal water, to monitor progress towards achieving the objectives, and to fully implement the National Policy Statement by 2025 rather than the Continued page 18

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considering applications from regional councils for $1.1m of funding for activities that support regional planning and community participation in freshwater management in order to councils with the implementation of the National Policy Statement for Freshwater Management. The government has also released a high level snapshot of the freshwater reform programme entitled Delivering Freshwater Reform, which provides the history and context for the reforms,

Freshwater policy change Several major changes to the National Policy Statement for Freshwater Management (NPS-FM) have come into force. The National Policy Statement for Freshwater Management 2014 (NPS-FM) directs regional councils to consider specific matters about fresh water when they are developing regional plans for fresh water. The NPS now provides a National Framework that directs how councils are to go about setting objectives, policies and rules about fresh water in their regional plans. They must establish freshwater areas (freshwater management units) across their regions and identify the values (for example irrigation, mahinga kai, swimming etc) that communities hold for the water in those areas. Next, councils are required to gather water quality and quantity information on the water bodies to assess their current state and decide the water quality objective or goal (grouped into A, B or C bands) for each value the community has chosen based on the economic, social, cultural and environmental impact to that community. The final step is for the community to assess how, and over what timeframes, those goals are to be met. The NPS-FM now requires councils to account for all water taken out of rivers, lakes and groundwater, and the sources and amounts of contaminants going into them. This will provide councils and their communities with the necessary information to understand the impacts of freshwater objectives before they are set in the regional plan. “Ecosystem health” and “human health for recreation” are compulsory national values and must be provided for everywhere. The NPS now includes nationallyset minimum acceptable states for these two values which are called national bottom lines.

The human health value previously proposed has been merged with the recreation value into one compulsory value. Councils are now required to consider whether to manage water in rivers and lakes for swimming or any other level above the national bottom line, which is set at a level suitable for wading and boating.

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SPECIAL FEATURE >> Iplex Sponsored Article

From open cut to trenchless methods - save time and money RestrainTM was developed for installation using trenchless technology methods including guided auger boring, micro-tunneling, horizontal directional drilling, slip lining and hydraulic, static pipe bursting

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ction Civil Ltd (ACL) were awarded Hutt City Council’s Westminster St sewer renewal in 2012. The project consisted of installing about 800 metres of DN225/150 SN16 sewer main with additional sewer laterals to each of the surrounding properties. The DN225 sewer main was installed using traditional open cut methods, they began installing the sewer laterals after the main was completed using open cut methods as well. Production was very slow, some days only two sewer laterals would be completed. With many laterals to be renewed ACL explored using faster methods. ACL Director David Murtagh called Iplex Pipelines to ask how productivity could be increased. Iplex had introduced David to “static pipe bursting” a year before, providing case studies and technical support to prove that 6-8 sewer laterals could be renewed every day using a technique called “Cartridge Method-Static Pipe Bursting”. This method is completed by installing short lengths of RestrainTM PVC-U gravity sewer pipe incorporating a threaded pipe socket, spigot and a rubber ring joint. This Cartridge method has been proven successful during installations in Auckland, Bay of Plenty, New Plymouth, Hastings, Whakatane, Masterton, Wanganui, Oamaru and Invercargill. Recently contractors in Christchurch City have began installing RestrainTM where more than 2000 kilometres of sewer laterals were destroyed during the Christchurch earthquakes - ACL contacted contractors to confirm that 6-8 laterals installed per day was possible. They then engaged Iplex Pipelines to complete a trial installation at the Westminster Street project. A trial date was set. Iplex and AB Equipment staff arrived on site at 9.50am with the RestrainTM pipe and bursting equipment in hand - ACL had already excavated the exit pit and a 1.2m x 1.2m entry pit at the trial property boundary. The Hammer Head PB30 hydraulic portable burster was set up using an excavator as the hydraulic power source.

By 10am the burster was in place and the first lead pipe of Restrain was connected to the pull head. By this time also, Iplex had trained ACL’s installers and pull back began immediately installing pipe cartridge style, one pipe after another, in the entry pit. ACL were amazed how simple and fast this method was, by 10.22am just 22 minutes after beginning - the first sewer lateral had been installed. “Bugger - how easy was that … I wish we had got onto this technology earlier, ACL’s Ben Jones said. “We could have installed each sewer lateral within the trench while the open cut main was being constructed”. ACL immediately ordered more RestrainTM pipe and purchased the burster on the spot, they continued to install the remaining laterals using this technique. “I was anti towards pipe bursting first up, but time restraints pushed me to review faster methods. I am pleased I chose to use this technique as it delivered a nice tidy solution using a very small low impact, footprint. It’s a brilliant method, by switching to this technique mid stream it saved us time and money”. David Murtagh commented.

Restrain being installed within small entry pit in a narrow grass berm - tunnelled beneath existing front fence - and (right) the connection using traditional rubber ring joint PVC fittings The pipe entry pits were small in comparison to the open cut excavations, most lateral connections were made within the entry pit excavated between the footpath and each properties front fence. In some cases this space was less than one metre and installers were able to tunnel beneath fences and other abandoned services, then install pipe in extremely tight spaces. All connections to the main and

existing house sewer lateral were made using common rubber ring jointed PVC fittings. By using this technique it not only allowed the contractor to increase his installation rate but it had other benefits to, these include: Westminster St remained open while the RestrainTM pipe was being pulled into position, less truck movements due to less excavation and overall lower installed cost. i

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Continued from page 16 original date of 2030. The NPS-FM now also includes a specific statement at the outset of the document about the national significance of fresh water and Te Mana o te Wai (the mana of the water). This recognises that there is a range of community and tangata whenua values associated with fresh water. The government has made these changes to ensure communities are involved from the outset in developing water plans that carefully consider and weigh all community interests in respect of each area to create plans that are enduring and ensure water quality and use is properly provided for over the long term. Contaminant control One of the main benefits of the amendments is to settle the science required to support freshwater objectives for ecosystem health and human health. Specifying the contaminants or factors that must be managed to achieve national bottom lines, and the amount of each of them that corresponds to each of the A, B or C grading bands, reduces the scope of matters that can be challenged through the plan development process. This is more efficient than every council having to work through, and be challenged on, the science when they develop and review their regional plans. Councils and communities are required to consider the costs involved when they make choices about how and over what timeframe they act to get the water quality they want. Where rivers and lakes are below a national bottom line, the council will need to put plans in place to improve the water quality. The methods and timeframes chosen to get water quality above a bottom line will affect the costs on the people using the water resource. These will be decisions for communities to make but it is important they have clear information informing these decisions. Councils may also face costs

to set up council systems to account for the water taken out and the contaminants getting into fresh water. The Ministry for the Environment and the Ministry for Primary Industries will be providing guidance for councils to help with this and all new requirements in the NPS-FM. Further funding In addition, the government will provide $12 million in extra funding over the next four years to help councils and communities improve the way they plan and make decisions about managing their local freshwater resources. While there will be costs to councils in building expertise, these will be balanced by lower costs in producing their regional plans, and by the benefit in having better freshwater management over the longer term. The latest changes to the National Policy Statement for Freshwater Management were informed by specialist reference groups, the Freshwater Iwi Leaders Group, freshwater science panels, and over 7,000 public submissions.

Government urged to consider planning principles The New Zealand Planning Institute (NZPI) is urging the government to consider a suite of NZPI-developed guiding principles on freshwater quality issues when it implements its upcoming freshwater reforms. NZPI Board Member Robert Schofield says the NZPI has an important role working with the

government to help ensure that any legislative amendments and other changes align with, and do not undermine, high quality planning practice. “As the position paper points out there is no ‘one size fits all’ solution for freshwater issues,” Mr Schofield says. The NZPI’s ‘Freshwater Quality’ position paper acknowledges that national standards, policy statements, or guidance are appropriate to ensure consistency on some matters and to address matters of national importance, but it also argues that local and regional matters are more appropriately managed within a local context where a unique approach may achieve the best outcome. Mr Schofield says the NZPI considers the biggest problem in promoting freshwater quality is the lack of integration between the need for land use and development and the need to manage discharges into our freshwater systems. “It’s about a balanced approach to freshwater management,” he believes. “It is important to manage land use and development that affect water quality so that economic opportunities can be pursued, while also ensuring that activities are managed to meet agreed water quality outcomes.” Other critical issues the paper identifies are the lack of long-term political commitment and the need to reach across the board understanding of the causes of freshwater quality issues and focus on these. “It’s no secret that freshwater quality continues to decline most rapidly in urban areas subject to intensive land use as well as in pastoral farming areas,” Mr Schofield believes. “However, gaining broad acceptance for water quality objectives to improve water quality in specific catchments is a major challenge.” The position paper emphasises that clean water is integral to New Zealand’s economy, human health, ecosystem health, culture and identity. It also highlights

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that in 2012 the Ministry for the Environment graded 45 percent of monitored freshwater recreational beaches as either poor or very poor. Other threats to the country’s water quality include ammonia from animal urine and high bacteria levels in some supplied drinking water. The NZPI advocates the use of appropriate tools and a community based approach, underpinned by guiding principles for freshwater management: * integration - manage freshwater quality in an integrated way that considers the interaction between land use, development, water flows and allocations, groundwater, surface water, sediment and estuarine and coastal environment * agreed understanding - focus on getting the community and affected parties to agree on an understanding of the uses, values and issues for water resource management * governance at appropriate levels - recognising the need for national standards but acknowledging that local situations may require unique local solutions * setting water quality objectives Includes setting values, objectives and limits for water quality that should, as a minimum, safeguard human health and the life-supporting capacity and ecosystem health of water bodies * freshwater quality management options and planning framework includes focusing on the causes of freshwater quality issues and the effectiveness of potential actions when determining management options. Mr Schofield says NZPI members are involved at every step of planning processes in New Zealand. This includes collaboration with many other professions, organisations and groups in the preparation and administration of water quality planning. “With their comprehensive understanding of New Zealand’s unique character, professional planners are well placed to make a valuable contribution to addressing this country’s broad range of water quality issues,” he says. i

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ENERGY

Sun starting to shine again on global photovoltaics market The photovoltaic industry crisis is drawing to a close with increasing demand for solar modules in many regions heralding a bright new future for the sector

Photo: BELECTRIC Solarkraftwerke GmbH

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he solar industry has changed as many countries with feed-in tariffs for solar power have drastically curtailed subsidy tariffs due to rapidly rising costs, forcing nearly half the European cell and module manufactures out of the market. However, those keeping their heads above water can now finally hope for better days. This holds particularly true for companies that are already multi-national players. In Japan and China demand for modules tripled last year and even in the US it was up by 40 percent. China has announced it once again plans to considerably increase its targets for solar power build-up – by 2017 the total solar power output installed in the country is to more than triple. On a global scale demand for modules is expected to rise by at least 20 percent in 2014. Simultaneously, China is expanding its market leadership in module production. According to a study by consulting firm Global Data, modules with a total of 40 Gigawatt (GW) will be manufactured in the Asia-Pacific region this year and of these 30GW will be produced in China alone. As Global Data Analyst Ankit Methur explains, this means Asia now accounts for 90 percent of global production. Many glass industry companies will demonstrate their continued focus on photovoltaics at glasstec 2014 in Düsseldorf, the world’s largest and most international glass sector trade fair that runs from 21 to 24 October 2014.

Thin-layer in rows: solar project developer Belectric has built Europe‘s biggest photovoltaics power plant in Eastern Europe using cadmium-telluride modules by First Solar They want to make their contribution to a further reduction in solar power prices, especially by means of thinner solar glass as well as more efficient production and coating techniques. Innovations in solar glass and solar modules will also be centre stage at the glasstec Congress “solar meets glass”, where experts from the solar and glass industries will exchange ideas on the progress made in manufacturing, materials and costs.

Currently, solar power can only compete with conventionally generated power in a few regions with abundant sunshine. To change this, PV producers must urgently make further progress in cost cutting – and this is best achieved with help from their suppliers. Thin-film producers, in particular, have ambitious targets. As the prices of customary silicon modules dropped over the past few years they lost sight of their original aim to oust the comparatively “clumsy”

crystalline competitors from the market by means of thin and low-cost coated modules. But the technology, which had almost been discarded, could now be heralding a comeback – and, hence, boost demand for high-tech glass. For instance, thin-film manufacturer and former Q-Cellssubsidiary Calyxo has just put a new €54 million 60-megawatt (MW) line for cadmium-telluride (CdTe) into operation in the east German city of Bitterfeld-Wolfen, expanding

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Photo: SolarWorld AG Photo: F-Solar

Quality control: crystalline silicon cells are becoming ever cheaper. One reason for this is the improved properties of cell blanks, the so-called wafers

Thin but rugged: solar glass is only two millimetres thick these days, cutting material costs and making it possible to build robust double-glass modules production capacity at the site to 85MW. Calyxo had every reason for this capital expenditure. “We will bring

down production costs in the medium term to less than US$0.50 per watt,” says chief executive Florian Holzapfel. “We will then

be producing at the lowest costs worldwide.” To compare: according to US market research company GTM Research, manufacturing costs for crystalline “China modules” currently stand at US$0.60 per watt. Calyxo’s optimism is based first and foremost on the ambitious announcements made by CdTe pioneer First Solar, which recently announced new expansion and innovation plans triggering an immediate surge in their share price. By 2018 First Solar is planning to nearly double its capacity from its current 1.9 to 3.5GW. Economies of scale thanks to higher capacities produced as well as the efficiency increase from 13.2 percent to 17.2 percent by 2017 are to “markedly bring down” manufacturing costs for CdTe modules, say First Solar. The company sees its biggest sales market practically right on the doorstep: agreed targets specified by the US federal states for renewable energies, the so-called Renewable Portfolio Standards, are forcing some American energy supply utilities to raise their green power levels drastically. The best option, particularly in the sunny south west of the US, is large solar power plants. These can already produce a kilowatt hour for less than eight cents – cheaper than conventional coal and

gas-fired power plants. Also anticipating a significant rise in sales figures are the producers of CIGS-based, thin-film modules (copper, indium, gallium and selenium). Japanese Showa Shell group Solar Frontier’s CIGS factory with 900 MW in the Japanese city of Kunitomi had been running at full capacity all last year thanks to strong domestic demand. Now Solar Frontier is planning another 150-MW factory in northern Japan. In Taiwan the Taiwan Semiconductor Company (TSMC) wants to implement 1 GW of CIGS production capacity. Korean firm Samsung has announced a new 200 MW factory for 2014, which is also to be ramped up to one GW in 2015. The Chinese energy group Hanergy even plans to build 5.25 GW of new CIGS capacities. These companies are pursuing these expansion plans to capitalise on the potential of CIGSfab, a turnkey production line that Swabian machine manufacturer Manz has offered since 2010. This 150-MW standard factory now makes it possible to produce modules with an average efficiency of 14 percent and production costs of EUR 0.41, i.e. $ 0.57 per Watt. By 2017 Manz intends to optimise its CIGSfab to such a level that modules with up to 17 percent efficiency can be produced and production costs can be cut again

Renewable energy initiatives would help solar power shine even brighter The New Zealand sustainable electricity sector is booming but more progressive thinking is needed to reap maximum benefits according to an industry expert

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ew Zealand’s sustainable electricity industry is currently growing at a forecast rate of well over 200 per year on year but this could be just the beginning of a clean, green future. With more than 80 solar photovoltaic (PV) installations occurring monthly and with most installations being grid connected, it’s clear that New Zealand consumers are striving for energy independence – for a variety of reasons including economics, return on investment and going green amongst a heap of others. There’s also major uptake in commercial installations in New Zealand: 50 to 60 kWp installations were considered huge three years ago but with price reductions and improved economics a 100kWp installation is common in commercial installations. Uptake in this space is equally as large as the consumer sector, with the economics and solar PV generation profile meeting the

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requirements of organisations keen to significantly reduce their energy costs. Similarly, the awarding of a $32 million Pacific Islands solar PV implementation contract in the Pacific Islands to a New Zealand solar system integrator sends a clear signal that solar power is here to stay and indeed is growing more and more prevalent both at home and abroad. This latest success builds on the already strong solar PV uptake in New Zealand dependent countries, and translating this success to the New Zealand environment would definitely be a step in the right direction. There are several ways this could happen including: • lifting the 90 per cent Renewable Energy target to 100 per cent with a clear game plan on how that will be achieved by government • inclusion of solar PV in the energy mix based on a non-biased and clear understanding by

government, advisers and policy makers – this would require political will and desire followed through with policy implementation • including solar PV in the energy mix and thus encouraging local storage to assist in shaving peak demand would make New Zealand a global leader in this space, but embracing a disruptive technology portrays foresight and political courage • an understanding by government that solar PV is about energy independence for those who wish to develop such systems and philosophies • policy that includes a fair payment regime for excess solar PV generation – net metering to enable greater uptake and industry development to create more jobs • educating consumers and the next generation on the benefits of renewable energy generation • a moratorium on all oil and coal generation.

Implementing these several steps would help immeasurably in achieving SEANZ’s long term aim, namely driving the growth of onsite renewable electricity generation in New Zealand by developing the industry’s capacity and capability. Brendan Winitana is Chairman of the Sustainable Electricity Association New Zealand, an independent body representing organisations who research, manufacture, distribute, design, sell, finance, build and use solar, wind turbine and mini hydro technology and projects in New Zealand, the Pacific Islands and other countries


investment will be “minimal” and appreciable benefits won’t be seen for several years, says Sustainable Electricity Association New Zealand Chairman Brendan Winitana. “New Zealand is small and its PV demand currently is low as it is measured in MW and not GW like other countries, even though the New Zealand growth rate annually is over 200 percent,” he explains. Mr Winitana says New Zealand photovoltaic demand is strong in relation to the population and Installation Control Point (ICP) numbers, but there is no scale that allows for huge major improvements in pricing reductions for new technologies and technology gains. “Currently New Zealand has most of the major photovoltaic manufacturers and suppliers either being represented here or banging on the door looking for a piece of the pie – which is great for competition and the consumer but a short-term gain for the manufacturer as there is not enough substance to maintain a consistent level of penetration.” One appreciable benefit of new technology coming on stream in other countries is the possibility of New Zealand photovoltaic PV suppliers purchasing older technology modules at better rates. “New Zealand has already experienced this spike which continues now – and it is not a lot

Photo: F-Solar

by at least 10 percent. “This would give us more than a level playing field with crystalline producers,” says Manz thin-film expert Bernhard Dimmler. However, market observers believe the catch-up race for thin-layer modules might prove more difficult than its protagonists assume. “You have to take their optimism with a pinch of salt,” Bernreuter Research analyst Johannes Bernreuter believes. “The race with competitors from the crystalline silicon segment is far from over.” Producers of silicon modules are also keen on making rapid progress. February saw Kyocera from Japan and Ja Solar from China announce the production of multicrystalline record cells with 18.6 and 19 percent efficiency. On the module level these new cells allow for over 16 percent efficiency. Both corporate groups already wanted to start commercial production as early as this European summer. Crystalline cell and module producers’ approaches for further efficiency will utilise higher crystal qualities and optimised electrode processes as well as improved charge carrier/conductive emitter and barrier layers to ensure that incident light is used even more efficiently. The local impact of these photovoltaic production levels and

View into the furnace: flat glass production requires plenty of power, therefore manufacturers aim to use less of this expensive energy

different to other industries where the same rules apply.” This additional increase in take-up of the older technologies in New Zealand at a better price could of course change dramatically given it is election year. “Some political parties do not support PV given it is disruptive technology and their position of generating power from old outdated central plants and spending a heap of money to move it around the country to generate a return to the shareholders,” Mr Winitana observes. “Then there are those that are right behind solar photovoltaic PV, with plans

to help consumers invest in solar to generate returns for that consumer.” The realisable difference in New Zealand of the latest photovoltaic PV developments, he believes, will be more consumers understanding more about the technologies and the myths around solar being dispelled. “This is a common theme in the industry given the misinformation out there – from a heap of sources,” Mr Winitana adds. “I was at a conference earlier this year and information presented by an energy analyst on solar PV was over two years old – old pricing and i old thinking.”

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ENERGY

Keeping the heat out of cold storage costs pays dividends One of New Zealand’s largest cold storage logistics providers has implemented an award-winning strategy to cut its energy bill and shown the way forward for other Kiwi companies

Cold Storage Nelson is the first non-Transpower connected customer to purchase electricity directly on the wholesale market

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lectricity has long been a major cost for Cold Storage Nelson (CSN), which has been servicing the horticulture, seafood, meat and dairy industries for some 30 years. The company’s world-class Controlled Atmosphere (CA) storage facilities in three sites in the Nelson region that provide 47,000 tons of storage capacity require large and constant amounts of energy to ensure and maintain product integrity. CSN’s CEO Alister Morison therefore appointed Simply Energy in 2009 to jointly implement a three-pronged strategy to cut the company’s electricity costs over a four-year period. The plan involved: • a detailed programme of capital investment in energy-efficient plant • implementing automated controls to align cold store loadings with real-time energy prices • initiating direct wholesale electricity market purchasing, with Simply Energy providing ongoing wholesale reconciliation, billing and code compliance services, and also managing a hedge book. Working closely with Simply Energy, CSN has achieved energy savings of more than 2GWh a year while increasing its Tauranga cold storage facility capacity by 70 per cent – equating to 30 per cent energy savings on a product throughput basis. One of the keys to these achievements was Simply Energy’s estab-

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lishing CSN as a direct purchaser of electricity on the wholesale market – the first non-Transpower connected consumer to do so. CSN lowered overall electricity to approximately 12 GWh per annum in 2013, adding more than $250,000 per annum to the bottom line and positioning itself for more savings over time thanks to process improvements and a resulting focus on innovation. The new operating model and commercial structure is also replicable and is now being rolled out to a newly acquired cold store in Christchurch, vindicating Mr Morison’s belief that engineeringbased projects drive energy efficiencies to a degree but typically don’t go far enough. “We’ve established an innovative commercial structure that interacts with the wholesale spot market and automatically controls demand in response to pricing signals,” he says. “We benefit financially, have a greater insight into energy use and can align real energy demand and cost with inventory levels.” New systems measure energy demand against wholesale spot prices and network charges, automatically load shedding when costs are higher, improving CSN’s competitiveness and enabling the company to more accurately control the energy levels required to effectively store products – without compromising quality or wasting energy. “Simply Energy’s value as a partner

Lowering overall electricity consumption to approximately 12 GWh per annum in 2013 added more than $250,000 per annum to Cold Storage Nelson’s bottom line comes from its expertise and authority to act in the market,” says Alister Morison. “To make the model work we needed an independent Retail Market Participant with the licenses, systems and processes to reconcile and settle back into the wholesale electricity market.” Successfully introducing the new commercial structure required a close and trusted working relationship. “Simply Energy created additional opportunities for CSN’s benefit, unconstrained by the parameters of original contract,” he adds. Established in 2005, Simply Energy is a registered electricity retailer and generator that can participate in the markets as an Electricity Authority Registered Electricity Retailer and Electricity Authority Registered Electricity Generator. It also has Electricity Authority Certified Reconciliation Participant Status, Nationwide Use-of-System Network Agreements and an Authorised Futures Dealers Licence, enabling it to work on behalf of large industrial users such as clients Carter Holt Harvey Full Circle, CB Richard Ellis and L&M Energy and independent generators alike. The Simply Energy team has both New Zealand and international expertise in: • wholesale electricity markets • electricity retail • development and operation of electricity assets • commercial optimisation of

electricity related assets • tariffs, hedging and structured contracts • project financing and deal structuring. “The experience in creating a structure allowing direct wholesale market participation together with real time controls has created a new solution for Simply Energy that will be used with other industrial energy clients,” says Director Murray Dyer. The solution won suitable recognition at the 2014 EECA Awards, with judges in the energy management category at the 2014 EECA Awards describing the results as: “An innovative approach to a blend of supply and demand side initiatives. It’s both cost-effective and easily replicated, opening up new technical solutions in the market.” CSN was duly rewarded with a Commended award in the Philips Lighting NZ Energy Management category of the prestigious competition, which is run by the Energy Efficiency and Conservation Authority (EECA). A New Zealand government entity, EECA seeks to “encourage, support and promote energy efficiency, energy conservation and the use of renewable sources of energy in order to maximise the costeffective benefits from energy savings for all New Zealanders and stimulate the uptake of both large and small-scale renewable energy i where economic.”


SPECIAL FEATURE >> Connexis Sponsored Article

Infrastructure industry training organisation launches as Connexis The Infrastructure Industry Training Organisation created following the merger between InfraTrain and the Electricity Supply ITO officially launched as Connexis on 30 June

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erving the wider infrastructure industry, the new organisation is a “one stop shop” providing training, qualifications and support initially for the civil construction, electricity supply and telecommunications sectors. Following the legal merger of InfraTrain and ESITO late last year, Connexis has been combining systems and processes to operate effectively as one organisation for the past few months. The latest step has involved the development of a new brand. Part of the establishment of Connexis has been the appointment of a new board of directors (including representation from both civil construction and electricity supply), chaired by Frances Hague and a new chief executive Helmut Modlik. Connexis operates principally from Wellington, Hamilton, Christchurch and Auckland, with other field staff working from satellite offices throughout New Zealand.

Board Chair Frances Hague says that the merger has allowed a combining of training, skills and resources in the infrastructure sector with the aim of providing even better service to people seeking training and the companies they work for. “We now think we have chosen a new name that is both modern and dynamic and which is reflective of our organisation,” she says. “It is an exciting time in New Zealand across all the infrastructure industries which need to support a growing national economy. “As we continue to build Connexis our aim is to work with the industry to help provide skill capacity and capability development to add value across the sector.” Ms Hague continues Chief Executive Helmut Modlik is excited about the industry grouping that Connexis serves. “All of New Zealand’s industries are important, but those concerned with infrastructure underpin and

All of New Zealand’s industries are important, but those concerned with infrastructure underpin and enable everything and everyone else say Chief Executive Helmut Modlik enable everything and everyone else,” he explains. “By targeting a clear and related group of employers building New Zealand’s infrastructure, Connexis is able to be very focused, and to offer synergies to its current and

It is an exciting time in New Zealand across all the infrastructure industries which need to support a growing national economy, says Board Chair Frances Hague. future customers. “We will be a valued partner to our industry only if we add value. To do that we must always remember that it’s not about us; it’s about our trainees, it’s about our employers,” i he says.

www.infrastructurenews.co.nz

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PRODUCTS

Sea change in approach to safety Cloud Ms latest innovation Blerter is driven by two primary human concerns - to protect each other and to save each other’s time

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he revised National Action Agenda focuses on five sectors with consistently high rates of injuries and fatalities – construction, agriculture, forestry, manufacturing and fishing. New Zealand based mobile platform and applications company Cloud M aims to minimise harm in these and other high risk industries by empowering the supply chain to monitor health and safety in real time. “Blerter changes a company’s approach to safety and health by putting people at the centre - where they should be when health and safety is concerned. It provides tools for real time situational awareness, hazard management, communications and incident reports. It embraces the wider workforce including sub-contractors,” says Cloud M chief executive Richard Gill. Individual workers create their own profile on a mobile device and that links their particular skill set with those of their team, their company

and the wider industry. Everyone from the top down and the bottom up understands their role and how to stay safe in the toughest of environments. Blerter collects safety data on site in real time and communicates across projects to ensure everyone is on the same page when it comes to safety matters. Health and safety is people centric and every worker should feel empowered to go home safely,” says Site Safe chief executive Alison Molloy. “Enabling tools like Blerter is an important step in improving attitudes and behaviours about health and safety.” Downer is part of the Zero Harm Community and Leadership Safety Forum and a leading provider of engineering and infrastructure management services with a 21,000 strong workforce. The company has been running a pilot programme with Blerter within its ultra-fast broadband team in New Zealand with positive results.

“Blerter has the capability to change the landscape of health and safety for everyone everywhere,” says Mike Maunsell, General Manager of Fibre Operations at Downer. Blerter is available as a free download for individual profiles from Apple’s App Store and coming soon to Android from the Google Play Store. Business owners can

subscribe to provide access to their projects. www.blerter.com According to the MBIE, there are 102 work-related deaths, 378 work-related serious non-fatal injuries on average in New Zealand each year, contributing to social costs of $3.5 billion a year.

Visual workflow tool for greenfield and brownfield operations

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entley Systems has released an enhanced version of its asset performance software that enables users to take advantage of immersive Applications Performance Management (APM), a visual environment in which hypermodelling is used to spatially enable operations and maintenance for the interactive inspection of critical infrastructural assets. “Bentley users can walk an inspection prior to going to the asset and make better decisions faster.” says Bentley senior vice president Alan Kiraly. AssetWise APM V7.2’s immersive approach to visual operations helps converge an engineer’s mental model of the plant, network, or other asset with its performance and representation in IT systems. The hypermodels in this visual environment can directly link to asset condition indicators, enabling

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inspection indicator readings to be associated with the visual model. In addition, the ability to view assets via i-models (conveyors of architectural, engineering, construction, and operations deliverables) provides expanded engineering context in a variety of formats – from design files to specification sheets to corrosion loops, and more. Inspection photographs can also be included with assets, indicators, indicator readings, and checksheets. The visual workflow supports both greenfield and brownfield operations, bridging the gap between CAPEX and OPEX and enabling a sustainable business strategy for operational excellence and safety. AssetWise APM V7.2 also includes new analysis techniques used in Risk-based Inspections (RBI) and Reliability-centred Maintenance (RCM).

Capabilities include demand scenario risk analysis based on the consequences of economic, health and safety, environmental, and company reputation effects; risk matrices support for failure mode criticality evaluation; and degradation rates updated from failure modes, analysis based on economic feasibility of maintenance strategies, and probability based on time between failures. Bentley delivers a single platform to support both RCM and RBI asset strategy development methods, as well as a comprehensive inspection data management system. This drives an enterprise-wide approach to managing risk, increasing uptime, and ensuring process safety and predictable production at the lowest lifecycle cost. Bentley users are able to push reliability-based processes and practices earlier into the design phase of the asset lifecycle,

delivering an information management platform to ensure operational readiness and sustainable asset performance. AssetWise APM has tested and certified integrations to leading EAM systems, including SAP, IBM Maximo and Oracle eAM. New in Bentley’s Reliability Business Improvement Assessment is the alignment of its APM Process Maturity Model directly to ISO 55000. This standard enables users to identify the qualitative and quantitative evidence of their existing capabilities, to assess the stage at which their organisations currently operate, and to know what is possible with a given business case and plan. “Bentley’s approach to asset performance management was the first to combine process, practices, technology, and methodologies that are tightly coupled and automated to provide sustainable results,” Mr Kiraly claims. i


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20 N O I T LEC

E

Local democracy powering community and national success Local Government New Zealand has a vision: local democracy powering community and national success

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e want to see vibrant communities and economic growth across all of New Zealand. To achieve this goal the local government sector needs a constructive relationship with central government and a legislative, regulatory and policy environment that supports and enables councils to make a difference in their communities and local economies. LGNZ has seven strategic policy priorities we hope to work with the incoming government on, designed to highlight the strategic, legislative and regulatory issues where we believe improvements can be made to enhance local leadership, create stronger economies and enable local government to deliver more effective and efficient services. Governance and performance excellence In no particular order, our first policy priority is governance and performance excellence. LGNZ is committed to raising the standard of governance and performance among our members, all local authorities in New Zealand. We

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welcome government support for our programme of initiatives designed to lift the performance of the local government sector. For our success we also ask the incoming government to provide LGNZ with the opportunity to assist councils experiencing problems, before considering the use of the intervention powers provided in the Local Government Act 2002, so as to respect the democratic integrity of local government. We hope central government will amend the criteria and processes governing the use of the Minister of Local Government’s intervention powers to incorporate a role for LGNZ and establish a contestable fund to enable councils with limited means to investigate alternative service delivery options to enhance service efficiency and effectiveness. Shared national approach to regional development Our second priority is a shared national approach to addressing regional development and growth across all of New Zealand. The country’s economic growth strategy

We want to see a share of the royalties from mineral, oil and gas extraction to the communities where the extraction takes place to ensure those communities that bear the cost also reap some of the benefits


LGNZ welcomes new Vice President

needs to consider the nation as a whole and the needs of its regions. We need to find ways to make our regional centres attractive for investment and skilled migrants to settle in. For this to occur LGNZ believes there needs to be a shared national strategy to address regional development and growth across all of New Zealand. We ask the incoming government to work with LGNZ on the development of a joint strategy to strengthen New Zealand’s regional economies. We want to see a share of the royalties from mineral, oil and gas extraction to the communities where the extraction takes place to ensure those communities that bear the cost also reap some of the benefits. We hope central government will consult with LGNZ and affected local authorities before making decisions which may have a significant negative impact on the economic well-being and performance of a region or regions, and ensure councils have the authority to use efficient and effective infrastructure funding mechanisms (as recommended in the LGNZ Local Government Funding Review) in order to attract and retain investment in their towns, cities and regions. Developing a sustainable model Our third priority is developing a sustainable funding model for local government. This means acknowledging the pace of demographic change and future infrastructure challenges, and their potential impact on the economic and social well-being of communities. LGNZ seeks that the incoming government consider carefully the findings of the LGNZ Local Government Funding Review currently being undertaken and establish an “equalisation fund” to assist councils representing low socio-economic communities to invest in and upgrade essential infrastructure and services. We want central government to pay rates, or payments in lieu of rates, on Crown-owned land and provide councils with the necessary funding tools, or fund directly, the cost of any new responsibilities or administrative duties imposed on local authorities. Leading effective infrastructure development Our fourth priority is leading effective infrastructure development and funding policies. Recognising that good quality infrastructure requires a long-term commitment built on effective asset management

planning and ongoing investment, LGNZ asks that the incoming government ensure that the value of local and regional roads to the economic well-being of New Zealand, and the sustainability of road funding for regions, is recognised in the Government Policy Statement and through the overall allocation of road and transport funding. With water, we want central government to acknowledge local government’s leadership of strategy concerning potable water, wastewater and stormwater assets and services, and agree that decisions about ownership and management should continue to belong to communities. We hope the incoming government will fund the additional costs faced by those local authorities that are required to upgrade water, wastewater and stormwater assets due to national regulations or increased standards. In terms of building resilience, we want to ensure that the Building (Earthquake-prone Buildings) Amendment Bill reflects the different risk profiles of buildings and regions, and takes into account social and economic impacts alongside life safety. LGNZ hopes central government will consider carefully the relevant findings of LGNZ’s Insurance Market Review. Both central and local government are fully committed to providing regulatory regimes that are effective and do not impose unnecessary costs on communities and citizens. In order to achieve this we need a stronger relationship with central government policy setters. Regulatory reform and development Setting an agenda of regulatory reform and development of more effective policy-setting in areas impacting local government is important to LGNZ. We seek that the incoming government implement the recommendations of the Productivity Commission’s report Towards Better Local Regulations, particularly the development of a “partners in regulation” protocol and a forum to ensure both spheres of government agree and understand intended regulatory outcomes, identify resource and capability gaps and agree ways of resolving them. We want the incoming government to establish a joint central local government task force to review the framework of statutes and regulations impacting on local authorities to remove unintended

Horowhenua District Council Mayor Brendan Duffy was voted the new Local Government New Zealand Vice President at the LGNZ 2014 Annual General Meeting. Mr Duffy is a member of LGNZ’s National Council representing Zone 3 and Chair of the Provincial Sector of LGNZ. LGNZ President Lawrence Yule, who was re-elected unopposed as President for another term, welcomed Mr Duffy as the new Vice President for the triennium. “I look forward to working with Mr Duffy and I’m sure he will bring significant leadership to this position,” he says.

consequences and unnecessary regulatory costs. We want to see an alternative provided to the “joint and several” framework for determining liability, and we hope to see section 259 of the Local Government Act 2002 amended to enable regulations to be made for infringement notices for local authority bylaws thus reducing the need for councils to resort to the courts to ensure regulatory compliance. LGNZ also hopes central government will review the Local Authority Elected Members Act 1968 to remove dated provisions that inhibit the willingness of people to stand for local elections. Sector-led policy on environmental issues Our sixth priority is sector-led policy on important environmental issues for effective management of natural capital. Local government, like central government, is committed to finding the balance between protecting environmental values and amenities for future generations while also developing local economies. LGNZ seeks that the incoming government, consistent with the recommendations of the Productivity Commission, involve councils in the development of policy and regulations as they affect resource management planning and the setting of priorities for national direction. We want the incoming government to agree that locally elected representatives, in consultation with citizens, should remain the primary decision-makers on plans and policies under the Resource Management Act (RMA). We wish to extend the “streamlining” introduced to allow for Special Housing Areas to other parts of the RMA and ensure that future reforms of the RMA are practical, workable, have clear aims and minimise costs to councils and citizens through speeding up planning and consenting without shifting liabilities to decision-makers. We hope to establish a partnership with central government and elevate natural hazards in the RMA in order to recognise the likely impacts of climate change and better manage

the risk of future events. We hope to see electronic waste made a priority product under the Waste Minimisation Act and require all importers of electronic equipment to sign up to a product stewardship scheme for e-Waste at the point of manufacture, assembly or entry to New Zealand. Strengthening local democracy Our seventh priority is strengthening local democracy and the value of local government. Local government is an important part of New Zealand’s constitutional arrangements, providing both local services on behalf of its communities and effective local democracy. Both central and local government must play their roles if we are to ensure New Zealand continues to have a robust local democratic framework. LGNZ seeks that the incoming government strengthen intergovernmental relationships, in particular agreeing to meet with the National Council of LGNZ following each parliamentary election to discuss and agree priorities, strategic direction and engagement, and meet regularly as a core group to strengthen alignment between central and local government during the parliamentary term. For stronger local democracy we hope the incoming government will implement the recommendations of the Online Voting Working Party established by the Minister of Local Government and provide funding to assist with the development of online voting and the promotion of the triennial local authority elections. We hope to strengthen the role and status of local government by amending the NZ Constitution Act 1986 to incorporate a reference to local government in order to reflect its role as part of the governance arrangements of New Zealand and amending the purpose of the Local Government Act 2002 to recognise the role of local government in the promotion of social, economic, environmental and cultural well-being. Lawrence Yule is President of Local Government New Zealand, which represents the interests of 78 local authorities in New Zealand i

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SPECIAL FEATURE >> Sub-surface utilities

Green, precise - low labour cost Hydro evacuation uses low pressure water to convert solid ground to loose soil which is quickly picked up by a powerful truck mounted vacuum system. It is a perfect fit for bulk liquid removal and cartage specialists Southeys whose range of services includes the removal and recycling of bentonite from construction sites and spill response services

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outhey’s varied fleet of vacuum loading trucks, large volume tankers and specialist equipment including hydro excavation trucks provides a wide range of specialist services in conjunction with knowledgeable operators. The company offers significant cost benefits to clients by utilising its own clean fill disposal site 20 minutes northwest of Auckland City. The site is able to accept both drilling and hydro excavation waste. “One of our most recent innovations was the introduction into New Zealand of cutting-edge green technology that uses pressurised water to safely and surgically convert solid ground into loose soil that is quickly removed by a powerful truck mounted vacuum system,” says managing director Bob Southey. “This process, known as hydroexcavation or HX allows for quick, clean and precise excavations which require less backfill, less labour, less restoration and has less environmental impact than conventional drilling methods.” Hydro-excavation uses a low pressure stream, which a properly trained technician can use to wash the soil away with no threat to sensitive utilities. It is not the same as hydro-blasting or hydro-demolition which uses a very high pressure stream of water (up to 40,000 psi) for a range of applications from removing paint, scale and hard calcium deposits, to cutting steel. Pressures in that range can cause severe damage to human flesh, even death. Southeys partnered with US based Amerivac to introduce this breakthrough expertise to New Zealand and

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Root exposure without damage to the tree to locate gas line 600mm below and precision excavation (right). has sole rights to Amerivac machines in the Asia/Pacific region. “We have further refined our equipment and now build hydroexcavators fully customised to New Zealand conditions,” says Mr Southey. Southeys point of difference lies in its in-depth knowledge of the various facets and applications of hydro excavation technology operated by US trained staff. “Dedicated hydro excavation equipment eliminates all possibility of cross contamination with prior “suspect” waste loads,” says Mr Southey. Southey’s use separate water blaster tanks (using only potable water) to prevent contamination from soil pathogens. Using truck water supply runs the risk of any contagion within the truck water supply being vaporised by the high pressure water into airborne particulates risking respiratory infection and site contamination. “Water pressures are limited to between 1500 psi and 2200 psi as, in our experience, pressures higher than 2500 psi are unsafe and can cause

unintentional damage to utility covers or casings, as well as operator injury. Water usage is maximised by the latest green technology and our New Zealand designed units also have the ability to further lower water pressure to ensure full protection to tree roots,” says Mr Southey. Due to the non-mechanical and non-destructive nature of hydroexcavation, it is used in a wide range of applications such as: • Location and mapping of underground utilities

• Working within close proximity to vegetation and trees • Trenching through utilities or landscaping • Cleaning over or under utility services • The ability to work in the proximity of energised services • The ability to work in confined areas or where access for conventional excavation equipment is not possible • Precision excavation for the placement of structures, foundations, or equipment • Collapsed trench rescue i

Recent hydro excavation • Brian Perry Civil – Watermain Tuakau , trenching, locating cables & horizontal digging • Northern Gateway Alliance – Newmarket Bridge, high voltage cable locating • VPA – Victory Park Tunnel, digging out for pump placement • Manukau Harbour Crossing – Higgins, locating water line & digging post holes for Armco barrier • Mangakura – Hallet Enterprises (Auckland Council) digging out mud for pontoon placement. • J&R Contracting – Locating gas line • Fletchers – South Western Interceptor, pot holing for services • Fletchers - Auckland University, services location • Natural Habitats - Auckland Domain, digging holes for tree planting in road berm • Contract Landscapes - digging piles in confined area • Leighton Construction - Ultra Fast Broadband, services location and trenching • Transfield - Ultra Fast Broadband, services location and trenching • Downer Construction - Ultra Fast Broadband, services location and trenching • Higgins Construction - Ultra Fast Broadband, services location and trenching

ES Hydro Excavation l Vacuum Loading l Bulk Liquid Waste Disposal l Drilling Mud & Bentonite Disposal

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Email: rob@southeysgroup.com Tel: New Zealand 0800 493 7639 International +64 27 275 4306

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HYDRO EXCAVATORS UNITS INTERNATIONAL SALES


SPECIAL FEATURE >> Sub-surface utilities

Leak Detection Ltd PO Box 72 095, Papakura 2244, Auckland • Phone 0800 500 330 • admin@leakdetection.net.nz Underground detectives solve costly water leak mysteries Over the last few years Leak Detection Ltd and Sub-Surface Detection Ltd have successfully attended thousands of residential and commercial property water leak detection call outs

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he majority of the companies’ clients only become aware of a water loss problem after receiving a water bill. “This only goes to prove the importance of having a water meter to aid awareness and control of water loss. About 75 percent of the call outs we attend show no sign of surface water,” says managing director Justin Bell. Access to leak detection equipment also aids the process of locating and determining the nature of an underground asset, whether a water pipe is still in use or not and potentially the positions of service to main connections. “One contract in the Wairarapa, successfully combined these techniques with the assistance of ground penetrating radar (GPR) and electro magnetic induction (EMI) pipe locating equipment, to determine positions of unknown residential water service lines and connection points to the water main. This enabled the local council to place water meters at the property boundary lines,” he says. Leak Detection only locates hidden underground water leaks. “We don’t perform the repair. We leave the repairs to the plumbing professionals, and this is what enables us to focus on what we do best - locate the underground water leak,” says Mr Bell.

“We have the capability and the right equipment to identify and pin point the location of your underground leak quickly.”

“In fact, many of our clients are plumbers who rely on our services to save them, and their client’s time and money. “If you have a residential or commercial property with a leaking underground water pipe, this will be costing you money. “We have the capability and the right equipment to potentially identify and pin point the location of your underground leak quickly -before it costs you more, and before you have to start paying someone else to do unnecessary messy guesswork, digging or concrete cutting trying to find your water leak. “Our technicians use the latest acoustic leak detection equipment,

listening for the noise created by the water leaving the pipe. Combined with the use of our specialist underground pipe locating equipment, we are able to trace the trench line in which the water pipe has been laid, listen directly above this line for the noise that is being created, and usually successfully mark the exact location of your water leak. “If your water pipe line needs to be replaced or added to, we can help you through this process by identifying the line entry points to your property. We work alongside many of Auckland’s directional drilling and underground civil engineering companies who are involved with water line maintenance i and installations,” says Mr Bell.

Leak Detection Ltd

Impressive client list • Leighton Contractors - mark out all underground services along council berms prior to drilling or trenching for the Ultrafast Broadband project and motorway projects • Downer Roading - prior to road milling and channel trenching • Fletcher Construction - at the beginning of build excavations • Hawkins ,Abernethy Civil ( (now Fulton Hogan/John Holland) - prior to civils for electrifying new train network for Kiwi Rail • Plus Transfield Services, Higgins, Hick Bros, Mckenzie & Parma, Ross Reid, Contact Energy, Watercare Services and fuel installation companies prior to excavations

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

PO Box 72 095, Papakura 2244, Auckland • Phone 0800 500 330 • admin@leakdetection.net.nz

www.infrastructurenews.co.nz

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LOCAL GOVERNMENT>>NZ CONFERENCE 2014

Future of provincial New Zealand a top priority, conference told Powering Local Economies, Building Vibrant Communities was a timely theme for the recent Local Government New Zealand conference in Nelson

LGNZ is a proactive advocate on policy, covering issues as diverse as psychoactive substances, infrastructure and growth, local body voting, developing a sustainable funding model for local government and reforming ways to regulate this sector, says President Lawrence Yule

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ne of local government’s major aims is to foster economic growth across all New Zealand, Local Government New Zealand (LGNZ) President Lawrence Yule told the organisation’s 78 members and Local Government Minister Paula Bennett. “Representing all communities in New Zealand, we recognise that economic growth should occur across all of New Zealand – our cities, regions and provincial New Zealand,” he says. However, he concedes that it’s clear that in the medium term there are some clouds over the future of provincial New Zealand. “Jobs

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August/September • 2014

and essential services will be stretched. And population changes will add financial pressures on local government.” This is at odds with what the provinces contribute to the national economy, he believes. “And so it’s absolutely vital we find a solution to this conundrum, which I know is concerning the Government and Opposition politicians as much as us here in Local Government New Zealand.” A shared approach to solving this and ensuring the maintenance of the infrastructure that supports the economic engine of New Zealand will be essential, Mr Yule maintains.

“There must be sufficient investment in natural and human capital to sustain our provinces so they can continue to prosper.” Looking ahead, regional New Zealand contains economic opportunity, natural resources, and local innovation. “They are places our tourists like to visit and where some of our greatest minds and talent choose to live.” LGNZ wants regional New Zealand to be as confident about its future as our cities are about theirs. “We are seeking a commitment from central government to work on a joint national strategy to strengthen the future of provincial New Zealand, and ensure growth across all of the country.” LGNZ will get the ball rolling by launching a roadshow for provincial New Zealand over coming months. “We will listen, gain further insights and work with provincial stakeholders and councils to focus the prime issues and possible solutions to discuss with central government,” Mr Yule promises. “We see the future of provincial New Zealand as a top priority for local government over the next three years.” Striking a more immediate note, he says the past year has been a “strong one” for LGNZ. “First, we are serving our members with new initiatives in governance and other training, for example for newly elected Councillors,” he observes. “We welcome government support for these initiatives.” LGNZ is assisting with expertise in enabling shared services for its members. “We have EquiP, local government’s Centre of Excellence, up and running,” Mr Yule adds. “To support our Regional sector, we’re putting in place a Project Office that will manage at a national level the environmental monitoring and reporting work that takes place in all the regional and unitary councils across New Zealand.” Mr Yule says LGNZ is a proactive advocate on policy, covering issues as diverse as psychoactive substances, infrastructure and growth, local body voting, developing a sustainable funding model for local government and reforming ways to regulate this sector.

“We believe we have constructive engagement with central government,” he says. “LGNZ has positive relations with stakeholders and we welcome increased media coverage of sector issues.” LGNZ and its members “generally perform well” but Mr Yule concedes that the organisation can do better with all those that local government represents. “Part of improving what we do involves understanding what others think of us, and responding positively to that.” LGNZ has recently researched New Zealanders’ views of local government. “While we presently only have top line results, it is clear that New Zealanders value local decisions by local people.” On the other hand, local government needs to better explain what it does, the value it adds to local communities, and to account more for its performance: not enough New Zealanders understand the size and importance of local government in economic development and growth. “We are being open about these results because we want to transform the sector to its rightful place in our communities and at a national level,” Mr Yule says. “Clearly, we need to match the faith New Zealanders have in local government with what we do and what we contribute.” To this end, Mr Yule announced two important new initiatives that would sit in LGNZ’s Centre of Excellence, EquiP, including a partnership with FairWay Resolution Limited, a Crownowned company providing conflict management and dispute resolution services. “LGNZ and FairWay have identified that our effectiveness as a sector can be further improved if we increase engagement and allow quick resolution on issues,” Mr Yule says. “FairWay has appointed former Kapiti Mayor Jenny Rowan to lead this important relationship and over coming months we will roll out specific offers for members.” LGNZ has also formed a significant new partnership with the Transport Agency to establish a new Road Transportation Unit. “LGNZ and the Transport Agency recognise we have a responsibility to provide long-term


NZ CONFERENCE 2014

guardianship of our roading assets, which means making smart, valuefor-money investments to provide the right level of service.” Located within the Centre of Excellence, this unit will embed best practice in road asset management at both the governance and maintenance level. “It will assist with the introduction of vital tools such as the One Network Road Classification, and it will add in gains from clustering and collaboration of local authorities,” Mr Yule explains. “Finally, it will support people with practical advice on how to maximise the value from these tools over the longer term. Mr Yule also took the opportunity to announce the launch of the Institute of Directors’ BetterBoards assessment tools, which are designed to recognise specific governance improvements that can be made within each council, as well as a special Institute of Directors membership offer for councils to improve governance training. “These are just but a few of the services that show the significant focus that our sector is placing on improved governance and performance,” Mr Yule insists.

Delegates took time to relax and enjoy entertainment such as a display of highly imaginative World of Wearable Art creations. The WOW models are posing here with Christchurch Councillor Pauline Cotter He believes LGNZ can lift local government’s perceptual value further with those the sector represents.

“We have something to offer, particularly on major issues such as a national strategy to ensure economic growth in all areas of New Zealand,” Mr Yule maintains. “With all our challenges and opportunities, local government is assuming its rightful place.”

Future development and local implications New Zealand’s social landscape is changing as the population ages, becomes more diverse and increasingly urbanised, leading experts observe BERL Chief Economist Dr Ganesh Nana and Lincoln University Professor Caroline Saunders told the annual Local Government New Zealand Conference in Nelson that understanding the uncertainties governing future development and the local implications of these trends is essential for councils as they begin planning for the 2015-25 long-term plans and infrastructure strategies. As the local economic landscape reorients in the face of major demand for commodities from

The world is changing fast and New Zealand needs to think about its vision for the next 20, 30 and 40 years ahead says BERL Chief Economist Dr Ganesh Nana

the growing economies of Asia, the presenters asked what will this mean for future development patterns. How will it impact on transport links, investment and governance at the local and regional levels? The session considered ways in which councils can deal with uncertainty so that planning helps prepare communities to face the future. Lincoln University Professor Caroline Saunders says that the strengths of regions are important to regional development. “We need to think about value-added activities and what regions are good at, what they’re passionate about, and how to assess how that fits with the global environment and economy,” she believes. “We need to bring

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NZ CONFERENCE 2014

“We need to think about value-added activities and what regions are good at, what they’re passionate about, and how to assess how that fits with the global environment and economy,” says Lincoln University Professor Caroline Saunders these different parts together to facilitate the necessary growth of skills in our communities.” Dr Ganesh Nana notes that the world is changing fast and New Zealand needs to think about its vision for the next 20, 30 and 40 years ahead. “We’ve got to broaden

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the conversation about return on investment,” he maintains. “I don’t think New Zealand is poor, our bucket of resources is much better off than it was for my parents’ generation.” However, he believes New Zealand needs to think today about how much resources it uses and how much is put away or invested in resources for the future, to make sure they continue to be productive for the next generation. “We need to move past this idea of ‘Auckland versus the regions’, Dr Nana insists. “We need to think about where market services, business services, manufacturing services and primary services are located and work together, because regions cannot exist in isolation.” Local Government New Zealand President Lawrence Yule says it is vital the sector respond to changing community demographics and prepare for the future. “We need to find ways to develop our regional centres into environments which offer opportunities in education, employment and business, as places where skilled locals want to stay and set up business, and where skilled migrants want to settle,” Mr Yule says.

Economic growth and jobs A report based on the findings of a recent survey identifies what Mayors and Chairs of local authorities think are the major issues facing their communities and organisations Commissioned by Simpson Grierson and LGNZ, the report was launched at the opening of the annual LGNZ Conference in Nelson. The research reveals seven key findings that include: • 84 percent said economic growth and job creation are by far the most important concerns for Mayors and Chairs • 46 percent were concerned with environmental impact and sustainability • 40 percent were concerned with rates affordability • more than 66 percent said that funding limitations and the consistency of central government

Mayors and Chairs of local authorities in New Zealand face a wide range of challenges in relation to both their communities and their organisations says Simpson Grierson partner Joanathan Salter

policy making are seen as major impediments in community outcomes • 84 percent were clear that


NZ CONFERENCE 2014

This report adds further weight to the policy positions which are released in our Election Manifesto reckons LGNZ Chief Executive Malcolm Alexander

housing affordability is not an issue best solved by local government alone.

Simpson Grierson partner Jonathan Salter says Mayors and Chairs of local authorities in New Zealand face a wide range of challenges in relation to both their communities and their organisations. “It is enlightening to see such clear messages emerging from the research,” Mr Salter adds. “With the survey results we now have further data to help inform local government’s future agenda.” LGNZ Chief Executive Malcolm Alexander believes the report’s themes are entirely consistent with local government’s focus on vibrant communities and economic growth across all of New Zealand. “Our local and national economies and particularly the prospects of the people in our regions remain uppermost in our mayors and chairs’ minds,” he says. “This report adds further weight to the policy positions which are released in our Election Manifesto” The survey was carried out in June 2014 and received responses from Mayors and Chairs of 62 rural, provincial, metropolitan and regional councils throughout New Zealand, a response rate of nearly 80 percent.

Governance and financial performance Governance not only sets the direction for an organisation but also ensures that institutional structures and the allocation of resources are aligned to the achievement of those goals and objectives That was the message of the “Lifting governance and financial performance” presentation at the recent Local Government New Zealand conference in Nelson, which had a Powering Local Economies, Building Vibrant Communities theme. Te Runanga o Ngai Tahu had a governance change in 2011 when it introduced two new senior committees, one for external communications and one for internal, Te Runanga o Ngai Tahu CEO Arihia Bennett says. “This allowed our directors to be more deeply engaged with tribal matters and refocus efforts,” she adds.

Te Runanga o Ngai Tahu introduced two new senior committees, one for external communications and one for internal to allow directors to be more deeply engaged with tribal matters and refocus efforts, according to Chief Executive Arihia Bennett

The organisation also developed governance capability because “we want people to be the best they can”, be engaged at the flax root with communities and know what to

Regional New Zealand contains economic opportunity, natural resources, and local innovation. LGNZ is seeking a commitment from central government to work on a joint national strategy to strengthen the future of provincial New Zealand, and ensure growth across all of the country

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NZ CONFERENCE 2014

Central and local government review group A central government and local government review group was launched at the Local Government New Zealand conference by the Prime Minister John Key

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Government Funding Agency Chair Craig Stobo says that directors need to understand their roles for good governance, to know when to pull back and to entrust their management, seeking results while ensuring regular reporting

“We set up a concept of executive governance so that if you worked as a leader in Auckland Council at any tier, you had to take responsibility for performance across the whole of Council,” says CFO Andrew McKenzie

do in terms of governing. “Governance requires specific generic competencies such as those the Institute of Directors promotes, and for us it is important we include tribal nuances and significant cultural leader practices.” The Local Government Funding Agency has lent more than $3.7 billion to councils since its establishment in December 2011, and with 18 per cent of its funders based overseas the agency sees “strong demand” for investment in New Zealand local government. “For good governance, it is important that we have a majority of independent directors with diversity of location and skills, and that all conflicts of interest are declared,” Local Government Funding Agency Chair Craig Stobo says. The agency has a shareholder council that provides guidance and encourages accountability for the board members. “Directors need to understand their roles for good governance, to know when to pull back and to entrust their management, seeking results while ensuring regular reporting,” Mr Stobo believes. “It is also important to adapt to change.” Auckland City Council Chief Financial Officer Andrew Mr McKenzie says that the Auckland Council introduced reporting

frameworks when it was established so that every month councillors would get a performance-focused report on what was happening across the Council. “We established some basic financial parameters to report to that helped us with planning and delegations,” he explains. The auditor relationship is “really important” and has become a strong partnership, he adds. “We set up a concept of executive governance so that if you worked as leader in Auckland Council at any tier, you had to take responsibility for performance across the whole of Council.” Local Government New Zealand (LGNZ) President Lawrence Yule says the sector knows that in order to deliver strong local government across New Zealand, it needs to continue to raise its standards of governance and performance. “While there are many strong performers we need to lift the bar higher,” Mr Yule insists. March 2014 saw LGNZ launch EquiP, its Centre of Excellence, to deliver tailored services, best practice guidance, business solutions, governance and management support to strengthen the sector. “We are leading and supporting our members to improve governance and performance,” Mr Yule says.

August/September • 2014

The Rules Reduction Taskforce that Local Government Minister Paula Bennett will establish is an attempt to improve regulations and control costs in both central and local government. “The government agrees wholeheartedly with the point made in LGNZ’s Election Manifesto that central and local government need regulations that are effective and that do not place onerous costs on communities,” Mr Keys says. “Too often regulations are confusing, change from region to region unnecessarily, and suck up councils’ precious resources in administration. The Rules Reduction Taskforce will listen to local concerns and find opportunities to reduce and improve local regulation. “It’s part of our response to the Productivity Commission’s report on Better Local Regulation. “ The Prime Minister says the taskforce, which will comprise people from both central and local government, along with members of the community, will address local regulation that could be improved. “We already know there are property owners up and down the country who are frustrated with the regulatory requirements they must meet, and the time and money it takes to complete transactions,” he observes. Mr Key says the decisions that councils make on regulation affect the whole country. “When local government sets requirements for building standards, for example, they can increase the cost of building, which affects house price inflation and potentially the track for interest rates and the exchange rate.” Central government grapples with regulatory issues as well, he admits. “So let’s work together to make life easier for ratepayers and pool our resources to tackle this issue together.”

Mr Key believes it is important for local government and central government to work together on a range of issues that impact communities, regions and New Zealand’s economy. “Things work best when we’re pulling in the same direction, which is why we put so much effort into our relationship with local government, especially by Paula Bennett and Peseta Sam Lotu-Iiga,” Mr Key says. Central and local government have recently been working on roading, with the draft Government Policy Statement currently out for consultation, and work on improving housing affordability with Housing Accords and Special Housing Areas Act. “This is in effect a joint initiative between central and local government to fast-track Special Housing Areas for new developments,” Mr Key says. He notes that the government introduced the Earthquake-prone Buildings Amendment Bill to strike the right balance between protecting people from harm in an earthquake, and the costs of strengthening or removing buildings. “I know this is an issue which has vexed local councils – no one wants to see councils or communities shoulder unnecessarily heavy financial burdens,” Mr Key says. “So I’m also pleased that Building and Construction Minister Nick Smith has been working with mayors and LGNZ to work through the impacts of new legislation, particularly in regions where the risk of an earthquake is low.” The Prime Minister says that while central and local government have different core functions, both face the same challenges. “We have to be prudent as we operate within tight financial constraints,” Mr Key says. We have to be smarter with the resources we have got. And the needs of New Zealanders should be at the heart of what we do.” LGNZ President Lawrence Yule says the local government sector enjoys a “strong working relationship” with the Prime Minister. “Local government and central government need to work together to create shared national strategies on a number of policy areas to create vibrant communities and strong economies across all of New Zealand,” Mr Yule says. Local government welcomes the Government’s commitment to refine the Earthquake-prone Buildings Amendment Bill to strike the right balance between managing life risk and cost so that communities and


NZ CONFERENCE 2014

“Things work best when we’re pulling in the same direction, which is why we put so much effort into our relationship with local government, especially by Paula Bennett and Peseta Sam Lotu-Iiga,” says John Key.

Prime Minister John Key - While central and local government have different core functions, both face the same challenges. We have to be prudent as we operate within tight financial constraints. We have to be smarter with the resources we have got. And the needs of New Zealanders should be at the heart of what we do

Opposition’s regional development policy welcomed Labour’s new regional development policy that seeks to identify the opportunities and barriers to growth and will introduce practical measures to create change was welcomed by delegates

The Building and Construction Minister Nick Smith has been working with mayors and LGNZ to strike the right balance between protecting people from harm in an earthquake, and the costs of strengthening or removing buildings says the prime minister

councils are not overburdened with costs they cannot afford. “We seek to ensure that the Bill reflects the different risk profiles of buildings and regions, and takes into account social and economic impacts alongside life safety,” Mr Yule says.

The policy was launched by Leader of the Opposition David Cunliffe, who says Labour’s $200 million regional development fund will be released over four years for projects that will have community-wide benefits and generate jobs in regions across New Zealand. “Increasingly the New Zealand economy is split between Canterbury, which is now growing quickly buoyed by the efforts for the rebuild, the main centres where there is moderate growth and the regions where economies are stagnant or going backwards,” Mr Cunliffe says. Making sure the economic potential of New Zealand’s regions is unlocked is critical to making sure New Zealand’s economy prospers, he maintains. “We understand every region is different and has its own strengths; we don’t believe in one size fits all.” Mr Cunliffe says some good

business ideas don’t make it to the business case stage without cornerstone financial backing which Labour seeks to address courtesy of the fund, which will be managed by an independent panel of experts including local government, business and iwi. “We want to see regional development funding enable step changes in regional economies,” he adds. Mr Cunliffe stresses that the projects supported must make a real difference to regional growth plans, and will involve better use of resources. “They must have measurable economic and social returns with clear and documented rationales that must complement private sector investment.” Welcoming this support for regional economic development, which is one of LGNZ’s seven key strategic policy priorities in the LGNZ 2014 Election Manifesto, LGNZ President Lawrence Yule says activity that helps regions needs to be sustainable. “New Zealand’s economic growth strategy needs to consider the nation as a whole and the needs of its regions,” he believes.

There is a need to find ways to make regional centres attractive for investment and for skilled migrants to settle. “For this to occur, there needs to be a shared national strategy developed with central government,” says Labour leader David Cunliffe

Mr Yule says there is a need to find ways to make regional centres attractive for investment and for skilled migrants to settle. “For this to occur, there needs to be a shared national strategy developed with central government.” LGNZ is also advocating for the distribution of a share of royalties from mineral, oil and gas extraction to the communities where it takes place, Mr Yule adds. “We look forward to continuing discussion and dialogue on regional development with all political parties in the lead up to the elections, as it is vital the sectors have strong communication and a shared strategy to create economic growth across all of New Zealand.”

Skills Organisation Outstanding Contribution to Local Government This award went to former Southland Mayor, Frana Cardno. This award, judged by the LGNZ National Council, was awarded to a local government leader who showed outstanding commitment to the sector and led her local community between 1992 and 2013.

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NZ CONFERENCE 2014

Spreading wealth evenly Economic wealth is unevenly shared in New Zealand and gaps in economic outcomes and opportunity will get wider if current policies don’t change says New Zealand Institute of Economic Research Principal Economist Shamubeel Eaqub Secular and unstoppable forces – technology, urbanisation, globalisation and ageing – are marginalising many regions, he states. “Current policies are not working,” Mr Eaqub says. “It is an uncomfortable reality, but it is not without hope. It cannot be a conversation of envy about Auckland and the rest, rural and urban, environment and economy.” Mr Eaqub told the 550-plus delegates to the LTNZ annual conference that each region will be different and unique so the same policy for all is not going to work and that “place-aware” policies are needed. “Economies are not like a game of rugby – you can have two winners if we co-operate and work together for a better New Zealand,” he maintains. “We must own up to the challenges facing our regions and the solutions, leveraging local

“Economies are not like a game of rugby – you can have two winners if we co-operate and work together for a better New Zealand,” says NZIER economist Shamubeel Eaqub

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strengths, must be for our young people.” LGNZ President Lawrence Yule says economic growth across all of New Zealand is one of the single biggest priorities for the sector, but it is not just an issue for local government. “Local and central government need to work together to reduce regional inequalities across all of New Zealand,” Mr Yule says. “We need to find ways to develop our regional centres into environments which offer opportunities in education, employment and business, as places where skilled locals want to stay and set up business, and where skilled migrants want to settle.” LGNZ will launch a series of roadshows over coming months to explore how local government can enable and support economic growth across the whole country.

Location no barrier Technology is transforming the way in which countries and communities do business New Zealand is the country furthest away from its trading partners but this is no longer a handicap reckons cloud-based accounting software firm Xero’s head Rod Drury. He outlined for delegates the opportunities for regional New Zealand and ways that local government can work with business to lead economic transformation. “Technology is changing the game, allowing even service-based businesses to play globally,” Mr Drury says. “We’re moving away from manufacturing and export production to having strong knowledge-based businesses, like Xero. He believes New Zealand regions are well-positioned as the ideal balance between lifestyle, creativity and working globally as location becomes irrelevant, with his own company a case in point. Xero could be based anywhere in the world but Mr Drury keeps the NZX-listed on-line accounting company’s head office in Wellington, running a business with 200,000-plus small business clients in some 100 countries and more than 600 staff in four countries while living in his home town in Hawke’s Bay. However, he says that there

Outstanding local government achievements The winners of the inaugural LGNZ EXCELLENCE Awards were announced at the Local Government New Zealand conference in Nelson

New Zealand regions are wellpositioned as the ideal balance between lifestyle, creativity and working globally as location becomes irrelevant, says Xero Chief Executive Rod Drury.

is work to be done to maximise regional potential. “Small towns need to start building their digital brands, with WiFi connectivity available as soon as people arrive at the airport for example,” Mr Drury maintains. “I see conversations taking place between businesses and local government in Hawke’s Bay, and I encourage businesses and councils to continue to engage with each other - businesses are generally pretty eager to help.” Making regions attractive for business is therefore a key priority for local government as the country faces uneven economic growth, with some regions growing faster than others and some regions attracting population and others losing population. “The country’s economic growth strategy needs to consider the nation as a whole and the needs of its regions,” LGNZ President Lawrence Yule says. Local government is committed to enabling and supporting economic growth across the whole country. “The sector is actively exploring and embracing options to stimulate our local economies,” Mr Yule says. “We need central government to partner with us on a shared strategy to deliver growth that will provide benefits to all regions of New Zealand.”

The Awards are designed to recognise and celebrate the leadership role local government plays within communities. “These awards give national recognition to the strong impact projects driven by local authorities have through community, infrastructure and economic development,” LGNZ President Lawrence Yule says. “The sector should be proud of its achievements as we celebrate these outstanding projects and individuals.” The LGNZ EXCELLENCE Awards were judged by a panel of experts in the fields of economics, infrastructure, community and local government, including former Wellington Mayor Kerry Prendergast, BERL Chief Economist Dr Ganesh Nana and the Chair of New Zealand Council for Infrastructure Development John Rae.

Fulton Hogan EXCELLENCE Award for Community Impact

Kawerau District Council’s Kawerau Adopt a Nation – 2013 World Rafting Champs won the Fulton Hogan EXCELLENCE Award for Community Impact. Having part of the 2013 World Rafting Champs held on the Tarawera River’s grade 2/3 rapids spurred the Kawerau District Council to create a project to unite its community and spur its young residents’ interest in white water rafting. Kawerau had been struggling due to industrial changes. This event was a great example of a council leveraging the champs to get its community working together on an initiative that had significant positive media coverage both here and overseas. Highly commended: Wairoa District Council’s Raupanga Amenity Area and Canterbury Water Management Strategy by Environment Canterbury on behalf of Canterbury mayors.


NZ CONFERENCE 2014

Fulton Hogan EXCELLENCE Award for Community Impact

MartinJenkins EXCELLENCE Award for Local Economic Contribution

LGNZ Community Event of the Year

Beca Infrastructure Project of the Year

MartinJenkins EXCELLENCE Award for Local Economic Contribution Hauraki District Council’s Hauraki Rail Trail won the MartinJenkins EXCELLENCE Award for Local Economic Contribution. Built in association with Matamata-Piako and Thames Coromandel District Councils, the Hauraki Rail Trail

exceeded all predicted benefits including economic contribution. The economic benefit was expected to be $8-$16 million over five years, but trail users spent $4.5 million in just one year between March 2013 and February 2014. Highly commended: Wanganui District Council for its 100 percent Connected project.

Beca Infrastructure Project of the Year

LGNZ Community Event of the Year

Kapiti Coast District Council’s Kapiti Water Supply Project won the Beca Infrastructure Project of the Year. Kapiti Coast District Council was tasked with finding a secure, reliable and sustainable water supply to last Waikanae, Paraparaumu and Raumati communities for a century to come. In its 2009 Long Term Plan, the council committed a budget of $23 million for the project. The council learned to engage with the wider community early and work with them to establish their values, which can then be used as the basis for multi-criteria analysis of options.

Napier City Council’s Tremains Art Deco Weekend won LGNZ Community Event of the Year, for its enduring appeal bringing more than 35,000 people to the community each year for a festival of architecture, fashion, outdoor concerts and vintage car parades. Napier City Council works in close partnership with non-profit Art Deco Trust on planning and implementation of the event, with private sector sponsors from local businesses and community groups to national companies such as real estate firm Tremains, Air New Zealand, TSB Bank and AMI Insurance. Highly commended: Auckland Council for its Dick Smith NRL Nines event. i

www.infrastructurenews.co.nz

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C O M M E N T > > Construction by John McKay

Decision looming on retentions trust account issue The vexing issue of construction contract retentions has been caught in the pre-election squeeze but relevant legislation may well be passed this year

“Designing a workable and fair trust retentions scheme is a bit like climbing Mt Everest – much more easily said than done and you must pick the right route”

Retentions are often slow to be released and are used by head contractors as working capital. The sliding percentage scale often means that the head contractor can retain much more against the subbies than the amount retained by the developer

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onstruction contracts typically provide for a portion of contractual payments otherwise due to the payee to be retained as a form of performance security. Due largely to the alchemising effects of the Mainzeal collapse and a boost from overseas reform, the issue of whether retentions should be held in a trust account will be dealt with in the context of the Construction Contracts Act Amendment Bill. The Bill was caught in the preelection squeeze. It will not be passed until after the elections, but it has already been through

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its second reading and is at the stage where late amendments can be moved via a Supplementary Order Paper (SOP) before it goes to its final vote. The Bill may well be passed this year, requiring the industry to comment on the subsequent detail swiftly. Officials have already done a lot of the policy work behind a Government SOP to be presented by the Minister for Building and Construction at the relevant time. Given the National Party’s commanding lead in the polls and assuming the portfolio is not reshuffled, that Minister may well be Nick Smith.

But even if MMP delivers power to a Labour-led coalition we can assume there will be reform. Both Labour and the Greens have already tabled SOPs which would impose novel and some would say radical constraints on how retention monies are handled. The intent is to increase protection to the lower tiers in the construction project food chain. Mind the gap Retentions are generally calculated on a sliding scale according to the value of the job. Typically, half the retentions are supposed to be released when the practical

completion certificate is issued and the remainder at the expiry of the defects liability period. The complaint is that they are intended to provide security against defects in the work, but are often slow to be released and are used by head contractors as working capital. The sliding percentage scale often means that the head contractor can retain much more against the subbies than the amount retained by the developer. The Greens’ SOP states that when Mainzeal collapsed it had about $11 million in retentions held against it, but was withholding over $18.3 million in retentions from its subbies. The reasons behind that warrant decent analysis but the gap is stark. What will reform look like? There are two main legislative approaches available to the new government. Enact a complete package or do the equivalent of what the New South Wales Government did in 2013 – provide for the establishment of a retention trust in an amendment to their Building and Construction Industry Security of Payment Act 1999 with regulations to follow. The latter kicks the detail into touch for now. The other 2013 changes to the NSW Act came into effect on 21 April this year, but the regulations to set up the trust have not been finalised so the transition from aspiration to reality is incomplete.


Enact a complete package or do what the New South Wales Government did in 2013 – provide for the establishment of a retention trust in an amendment to their Building and Construction Industry Security of Payment Act 1999 with regulations to follow. The latter kicks the detail into touch for now This is not as inept as it might appear. Designing a workable and fair trust retentions scheme is a bit like climbing Mt Everest – much more easily said than done and you must pick the right route. First there are the questions of scope. Should it just cover retention payments (both SOPs) or capture all contract payments in keeping with the growing trend in the UK and elsewhere for larger government projects to require “ring fenced” Project Bank Accounts (PBAs) which have trust status? Should it cover all tiers of construction payers and payees (the Greens’ SOP) – from developer to sub-sub-contractors, or only cover head contractor payments (Labour’s SOP)? Should it cover residential contracts or just

commercial and industrial projects (the Greens’ SOP and Labour’s SOP respectively)? And should smaller jobs escape the net? Then you must design your model. A consultation paper released in November 2013 by the NSW Government laid out three broad options: • a “deemed trust model” – retention moneys are deemed by legislation to be held on trust for the benefit of the subbies even if they are not in a separate account. This is the least intrusive but least effective option. No segregated account is required, leading to inevitable issues with mingled funds and difficulties in trying to trace the trust money. The money might still be used by the contractor for other purposes and

Should it cover all tiers of construction payers and payees from developer to sub-sub-contractors or only cover head contractor payments? Should it cover residential contracts or just commercial and industrial projects? And should smaller jobs escape the net?

There are the questions of scope. Should it just cover retention payments or capture all contract payments for larger government projects to require “ring fenced” Project Bank Accounts which have trust status?

a liquidator or receiver will have a complex task deciding what is available for each class of creditor. • statutory construction trusts – retention money would be required to be held in a special account, the terms of which would prevent the money being used as general working capital and would also fence it off from the liquidator’s grasp. This avoids many of the “deemed trust” issues but the administrative burden is large and the model only works if the rules are followed. There are real risks that the contractors who are most likely to fail will be more prone to patchy compliance. • a statutory trustee – set up a trust to be administered by the Office of the Small Business Commissioner. The New Zealand equivalent would be the Ministry of Business, Innovation and Employment. The NSW Government prefers option three – a statutory trustee. It considers this would be simpler and more cost effective than option two, which would require the creation of thousands of separate trust accounts. But even under option three, the administrative burden is vast, involving many thousands of transactions every month. Reform is as much a part of insolvency law as construction law And there are broader issues of policy to resolve. How clear is it that the net economic benefits of the chosen model will be positive? The model matters most in the event of head contractor liquidation, so it must fit well with insolvency law and policy. There may be many other unsecured

and vulnerable creditors owed significant sums for the supply of goods and services. Does it necessarily follow that retention money owed to subcontractors and suppliers should be regarded as “their money” and deserve priority? If so, should it be unlimited? If these payments are protected by a trust the funds won’t be available to preferential creditors (notably the IRD and employees) or to secured creditors like the banks. The costs of borrowing in the construction sector may rise. Where to from here? Probably the easiest course for the New Zealand government would be to make a generalised provision in the Bill for the creation of retention money trust accounts and then to wait and see what detail emerges from the NSW consultation process. The differences between the two jurisdictions are not large and we can always shelter behind the trans-Tasman harmonisation agenda. Insights will also come from the growing use of PBAs (or similar concepts) in the government sector in New Zealand and in various Christchurch rebuild projects. Regardless of what route is taken, there is a strong sense here that soon at least a toe will be in the water. We can do better. Legislative change will happen and the industry will be asked to focus on the “how” not the “should we”? John McKay is a commercial litigation partner at Chapman Tripp who specialises in construction law and property disputes i

www.infrastructurenews.co.nz

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C O M M E N T > > by Hamish Glenn

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Important infrastructure initiatives await the next government New Zealand’s infrastructure has come a long way over the last decade, but it’s critical that the next government doesn’t lose momentum as there is still plenty of work to be done

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he minimalist approach successive governments employed for over two decades resulted in congestion in our largest cities, blackouts in the North Island, slow and expensive internet access nationwide and inadequate public housing. It will be a long time before we as a nation overcome national deficits, particularly in transport and housing, but both the Clark and Key-led governments should rightly take pride in turning around a burgeoning crisis. Yet with success often comes complacency and it is critical that the next government does not lose momentum around infrastructure. There are a number of vitally important initiatives that must be picked up by the next government if New Zealand is to tackle those infrastructure issues which remain unaddressed and maximise opportunities for future growth, efficiency and quality of life. Independent oversight First cab off the rank is the conversion of the existing National Infrastructure Advisory Board (NIAB) into a National Infrastructure Commission – an independent infrastructure monitoring and analysis unit reporting to Parliament. Currently, the NIAB does not maintain its own policy resource and instead receives support from

the National Infrastructure Unit inside Treasury. Nor does the NIAB monitor infrastructure itself, with this activity also undertaken by Treasury. The NIAB oversees and advises on infrastructure, providing its findings to the Minister of Finance. Given the intergenerational nature of infrastructure investment, there is a growing recognition in countries like the UK and Australia that infrastructure oversight must be independent of the government of

It will be a long time before we overcome national deficits but the Clark and Keyled governments should take pride in turning around a burgeoning crisis

The second priority is a Royal Commission of Inquiry into local government structure, funding and planning legislation the day and report to Parliament. Such an arrangement will also help keep opposition members well informed on infrastructure needs and challenges, encouraging better debate and policy. Royal review Equally important, but more

narrowly focused on the role of councils, the second priority is a Royal Commission of Inquiry into local government structure, funding and planning legislation. At present there are Local Government Commission reviews underway in Northland, Hawke’s Bay and Wellington; Canterbury remains under a short-term governance arrangement; and Waikato, Bay of Plenty and Wellington local authorities are actively pursuing cooperative service agreements with their neighbours. None of these initiatives are coordinated and there remains the potential for different directions to emerge as progress is made across the country. Nor do such reviews address the other major challenges confronting local government infrastructure delivery, including inadequacy of funding and complex planning laws. Meanwhile, the power of a single

Advisory Board to independent National Infrastructure Commission The third priority is an independent Urban Redevelopment Agency to oversee the Christchurch central city rebuild. Photo by NewZealand Now

A growing recognition that infrastructure oversight must be independent of the government of the day reporting to parliament

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Central government’s critical role in transport and other areas is vital to the success of council policy

the largest investor in Auckland. Central government’s critical role in transport, public housing, regulation and other areas vital to the success of council policy necessitates that central and local government agree on the path forward for Auckland and the need, timing and share of major investments. NZCID considers that a condition of parliamentary approval for regional spatial plans must be added to the Local Government Act. The multi-decade time horizon for spatial plans demands input not only from the existing government, but from future governments as well.

There are a number of vitally important initiatives that must be picked up by the next government The next priority is to resolve differences in the planning and resourcing intentions of central and local government in Auckland vision, single voice, single plan and consolidated balance sheet is attracting a disproportionate level of growth, interest and investment to our largest city. An independent, authoritative, resourced and respected assessment of local governance, funding and planning across New Zealand is urgently required. Only a Royal Commission maintains the gravitas and authority to adequately assess the needs of New Zealand’s 78 local authorities and provide government with informed recommendations for how local communities can best be heard and served in today’s world. Christchurch control The third priority is an independent Urban Redevelopment Agency to oversee the Christchurch central city rebuild. The legislative mandate of the Canterbury Earthquake Recovery Authority (CERA) expires in 2016 which means the coming Government must make bold decisions about future governance arrangements for the central city and region. Regional governance needs to be part of the Royal Commission review, but oversight of the central city rebuild and delivery of the Blueprint demands

Dissolve differences The next priority is to resolve differences in the planning and resourcing intentions of central and local government in Auckland. The Achilles heel of the local governance reforms in our most populous region has undoubtedly been the legislated requirement for the Auckland Council to identify a vision and plan for the region, but no specific requirement for central government input or Government approval. As a result, the council has devised a spending plan which does not have the explicit support of

Regulation review Finally, regulation nationwide must be improved if we want New Zealand to flourish. The Productivity Commission has recently completed a review of regulatory institutions and practices which the next Government must implement in full. In the past two years, a number of major infrastructure providers have seen their cost of capital increase and their share price decline following regulatory decisions. Multi-generational capital investment will always be risky and monopoly enterprise should rightly be regulated, but it has become clear that New Zealand’s regulatory environment is more risky and more unpredictable than other comparable nations. More risk and less certainty equates to higher costs, which will necessarily result in some combination of higher charges to consumers or reduced service standards. In addition to implementation of the Productivity Commission’s recommendations, continued reform of the Resource Management Act, if not the initiation of a replacement Act, needs progress throughout this next term of government.

Regulation nationwide must be improved - a number of major infrastructure providers have seen their cost of capital increase and their share price decline following regulatory decisions. Photo by Productivity Commission

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

a dedicated public agency with experience and specific expertise in major urban redevelopment. Global best practice is for such an organisation to be led by an independent board reporting to stake- holding parties (in this case, the government and Christchurch City Council). Board members should be appointed according to skills and experience and the board should in turn appoint a Chief Exceutive to oversee operational matters. The independent agency would take responsibility for managing committed public resources, have the capacity to leverage land holdings in the central city, employ world-leading expertise and be held accountable for delivering the

large number of public projects on time, on budget, to specification and in coordination with the private sector.

www.infrastructure.co.nz

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C O M M E N T > > by Dr Joel Cayford

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Centrally driven growth or locally planned development? Is the baby of good local government being thrown out in the reform bathwater drawn since the global financial crisis?

A lot different – National Party says “we’ll be crowd-sourcing ways to reduce the rules and regulations that stop people doing sensible things with their own properties… establish a Central Government and Local Government review group known as the Rules Reduction Taskforce

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tate policy settings in New Zealand have emphasised national economic growth rather than local economic development since the 2007 Global Financial Crisis. Headline examples of this strategy include regulatory support for massive increases in irrigation and dairy farming, for mining, and for red-tape-free redevelopment of Auckland’s built fabric. Territorial authorities have been made pawns in this game by local government legislation changes that drive institutional changes locally and ensure consistency with central government’s short-term emphasis. But there is a growing risk that the baby of good local government will be thrown out in reform bathwater. Recent reforms such as the Auckland Supercity forum and its Unitary Plan are well worth exploring, but first a quick canvass of the local government policies published by the main parties.

Pretty close – Labour says it will restore the four social, environmental, cultural and economic well-beings – the cornerstone of the Local Government Act 2002 – and the powers of general competence. The Green Party says reinstate the four well-beings into the purpose of local government as originally specified in the 2002 Local Government Act

the purpose of local government as originally specified in the 2002 Local Government Act. • retain the power of general competence conferred to local government in the 2002 Local Government Act. • develop national policy statements and national environmental standards under the Resource Management Act to provide better policy guidance to local government, promote national consistency and help reduce plan

preparation costs • identify ways to guarantee greater protection and independence for local government within New Zealand’s legal and constitutional framework. More similarities than differences, but very different from National. The National Party’s local government policy was the subject of Prime MinisterJohn Key’s speech to the Local Government conference in July this year.

Political promises Labour says that it will: • restore the four social, environmental, cultural and economic well-beings – the cornerstone of the Local Government Act 2002 – and the powers of general competence • establish a Central and Local Government Cooperation Unit dedicated to the development, promotion, monitoring and sustaining of partnership • restore the right of citizens to have the final say by way of a referendum on whether their council is included in any proposed amalgamation. The Green Party says that it will: • reinstate the four well-beings into

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Christchurch’s masterplan is an excellent guide for Auckland’s future development

He reminded delegates: “Our changes to the RMA will tackle housing affordability by freeing-up land supply…”. But National’s overall approach is summed up by this remark: “…we’ll be crowd-sourcing ways to reduce the rules and regulations that stop people doing sensible things with their own properties…” And by his announcement that his incoming government would: “… establish a Central Government and Local Government review group known as the Rules Reduction Taskforce…. will listen to local concerns and find opportunities to reduce and improve local regulation…. will root out local regulation that could be improved.” The central point of this speech is the clarion call to: “reduce the rules and regulations that stop people doing sensible things with their own properties.” This is a classic plea and appeal to the idea of common sense. But the longer I live, the more I see, and the more I understand that common sense is not at all common. Economics and land regulation The right of individuals to control their property has long been recognised, but that autonomy is counterbalanced by the fact that property use sometimes must be regulated for the common good. The common method of land use control in New Zealand is zoning, which allows local government to divide territory into districts or zones where particular uses or activities are permitted or prohibited. Zoning, which became common in the early 20th century, is the foundation of the modern local system of land use control. Any decision to regulate, not to regulate or to regulate less has an economic effect. There are winners and there are losers. Regulation can increase property values, and it can decrease property values. If Auckland’s residential development market was operating as a truly free market, then it would typically be argued by economists that no local government intervention or regulation would be required. The basic presumption is that market processes work best to allocate scarce resources (e.g. land) in the most efficient way.


Auckland Council’s Unitary Plan has aroused considerable debate

But when competition is imperfect, the consequent “market failures” can and must be corrected by local government (or central government). Market failure is the standard justification for local government action in welfare economics. Economists generally use the term market failure to describe a situation in which Adam Smith’s “invisible hand of the market” fails to allocate resources in a socially desirable manner, so as to maximize aggregate economic well-being (another phrase for “common good”). Market failure arises when economic agents face incentives that are distorted, leading to economic outcomes that are bad from society’s point of view. So let’s look at National’s policy emphasis on freeing up land supply as a preferred intervention. It wants local government to release more greenfield land for urban development. It says that this is to address the issue of housing affordability. But is that the only reason? According to a recent OECD study of 78 OECD metropolitan regions, Auckland had the third-highest average annual population growth rate. And Auckland had one of the highest proportions of its population comprised of overseas-born residents, just behind Toronto and Vancouver. Auckland’s exploding population – from immigration and from internal migration – is the real pressure for greenfield development. But this is not only a concern and policy priority for central government. Auckland Council has adopted a Spatial Plan named “The Auckland Plan”, whose central economic target is “to increase annual average real GDP growth from three percent a year in the last decade to five percent a year. for the next 30 years…”. That’s a huge increase. Creature of central government There have been many institutional and legislation changes since the Global Financial Crisis that affect the role of local government in

New Zealand, the most significant of which was the amalgamation of Auckland’s local bodies into Auckland Council, which was required to prepare a Spatial Plan. Legislation states that the plan: • 79 (4) (a) must recognise and describe Auckland’s role in New Zealand; Which is not something local government had been required by statute to think about much before. After all, we’re Jafa’s aren’t we? The Spatial Plan has adopted a target of five percent GDP growth for Auckland (recognising Auckland’s role in delivering Central Government’s economic strategy), that is largely to be achieved through high population growth and associated building development. It is a target that is to be delivered and implemented by other tools under council’s control, including the Proposed Unitary Plan. Ambitious growth targets like these that might not be a problem for existing residents if they didn’t have to suffer the consequences, or to subsidise the costs of that growth. But just as the deterioration of New Zealand’s rivers is apparently accepted as the cost of growth in dairy production, deteriorating urban neighbourhood amenity and increased rates to subsidise growth infrastructure will be a consequence for citizens of Auckland Council’s urban growth plans. While I appreciate the concerns about amalgamation that are expressed in Green and Labour Party policies, I read nothing in there to alleviate the mess that Auckland has been legislatively levered into. Getting out of the mess McKinlay Douglas Limited undertook a major project for Local Government New Zealand in 2006. It advised: “An extensive review of the experience of local government amalgamation, whether sector-wide as with recent New Zealand, English, Australian State and Canadian provincial experience, or

focused on individual authorities as with Halifax, is at best equivocal on the proposition that amalgamation will produce benefits in terms of reduced costs and/or improved services. The reasons include the normally unanticipated but common impacts of factors such as alignment of salary scales, incompatibility of systems or the need to upscale, staff morale, and the disturbance associated with major organisational change.” How prescient. Auckland media is awash with reports about salaries, systems change costs, further organisational change costs etc. The mess for existing residents includes dealing with the fallout from council’s growth policies. By fallout I mean that the common good will be reduced. This is because Auckland Council’s central government-inspired policies for more greenfield sprawl to accommodate high population growth will themselves cause market failure for at least two reasons: Infrastructure Subsidy Market Failure When a new housing development is built, roads and sewers must be constructed, as well as facilities such as schools, parks, and community facilities. The market failure arises because, under current financing arrangements (which will be exacerbated by central government proposals to reduce development levies), the infrastructure-related developer levy burden on new homeowners will be less than the actual infrastructure costs they generate. The rest of the cost is shared among all of the city’s residents rather than charged directly to those who require the new infrastructure. And developers pocket higher profits. Thus, by undercharging new homeowners for the infrastructure costs they generate, the current Auckland Council plan to subsidise growth-related infrastructure will inevitably incentivise more urban sprawl. Excessive Road Commuting Market Failure Commuters incur substantial costs, which include the out-of-pocket expenses of vehicle operation as well as the “time cost” of commuting. Together, these out-ofpocket and time costs represent the “private cost” of commuting, the cost that the commuter himself bears. And when the commuter drives on congested roadways to get to work, another cost is generated above and beyond the private cost. This cost is due to the extra congestion caused by the commuter’s presence on the road – which everyone else has to “pay”. We face this problem

in Auckland now. Some traffic such as heavy freight could be diverted to off-peak hours, when roads are less congested. Some car commuters would switch to public transport if it met their needs. The problem with these solutions is that they encourage people to commute long distances, the solutions effectively say “what you’re doing’s OK”, and unless there are congestion charges or some sort of toll, road users never have to face the true costs of excessive road use leading directly to market failure, and indirectly to more urban sprawl.

Number crunch To finish, some numbers. Auckland’s Proposed Unitary Plan generated 93,600 primary submission points. These have generated a further 400,000 secondary submission points. With all the good will and competence in the world, how will the independent commissioners manage the process? Thousands of submissions have come from residents and individual property owners concerned at what might happen to their asset. They are worrying about what they might lose if someone is permitted by the Unitary Plan to do “sensible things” next door. This worry is human. But it is not taken into account in Auckland’s Unitary Plan. This assumes all that’s needed is a few rule changes and the market will sort things out. There is no implementation strategy, master plan, structure plan or any other process available for whole communities to be able to have a say and a role in how their community develops and changes, and what infrastructure will be needed. Christchurch is an exemplar. Maybe it took a real earthquake rather than a political one, but in that city Master Plans for whole communities are being carefully used with communities and residents and commercial property owners to redevelop, intensify and regenerate mixed use urban landscapes in Lyttelton, Sydenham, Linwood Village, Ferry Road, Sumner Village, New Brighton and Edgeware Village. There the emphasis is on local development rather than economic growth. That’s what is needed in Auckland. That’s the local governance we need. Dr Joel Cayford is a planning consultant, blogger and planning researcher/teacher at the University of Auckland, and a former city and regional councillor i

www.infrastructurenews.co.nz

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C O M M E N T > > by Leigh Auton

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Progressive partnership paramount in post-election period Local government plays a key role in reflecting and representing the democratic rights of New Zealand communities – local, personal, and usually far removed for its citizens from the big and distant world of central government and its bureaucracies

There is an urgent need to reform the water and waste water industry along the lines of the vertically integrated and corporatised Watercare model in Auckland

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rom experience, it is a rare central government that understands the key role that local government plays in the good governance of our society. My primary election wish list item is for a government that genuinely views local government as a ‘partner’, albeit recognising that the local partner will always be the junior in this relationship. The key is for both ‘partners’ to respect one another in this relationship, to understand the needs and drivers of each other, and to have genuine dialogue on the myriad of opportunities that could be realised by active collaboration. Based on a partnership of government, my second wish item is for a more strategic approach to the reform of local government. The current approach to local government reform, for which there is a good case for review, lacks a principle-based approach. This is unlike the reforms of 1989, where there was a clear set of principles, and a good understanding of the outcomes to be achieved. Such an approach should address the need to retain and enhance local representation, but also review functional reform. A review of functions should include those of central government

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that could be undertaken by or alongside local government, and the key functions of transport, water and waste water and planning that should be agglomerated at a regional scale. I have written before about the need for the transport and roading function of NZTA and local government to be aligned and potentially operated together at a regional level. Likewise, and to drive effectiveness and derive effective outcomes, there is an urgent need to reform the water and waste water industry along the lines of the vertically integrated and corporatised Watercare model in Auckland. Resource Management policy functions, as well as bylaws, should equally be undertaken on a regional basis. Their administration can be undertaken at a more local level. Suitably armed with a set of guiding principles, the Local Government Commission should be asked to review the whole of local government in New Zealand. My wish list includes a comprehensive look at local government, rather than a piecemeal approach. There is a conversation being had around funding lines for local government. This is useful, but could be enhanced by an analysis of

Hopefully, we will see a genuine partnership between the two levels of government, both committed and unafraid to reviewing and reforming the functions that could, and should, be delivered what central government activities, such as levies for fire, earthquakes and emergency services, could be managed through local government financial processes. A review of local government funding should be aligned with governance structures that should come out of functional reform. A Watercare model, funded through user pays would greatly reduce the annual debate around rating increases, as well as deliver efficiencies and enhanced environmental outcomes. An ‘integrated’ NZTA/local government approach to transport would create an opportunity for shifting the roading burden from rates onto other funding models. A third wish is for local government to be more active in the commercial

and economic space. Local government has a very large property base, by way of example, that should be utilised to maximise its economic return. There are significant opportunities to work in partnership with the private sector, iwi, and with the Crown in this space. The opportunity, done well, is to greatly enhance the balance sheet of local government. My fourth wish is for central and local government to actively partner relevant activities in the community development and social space. There are good models operating across New Zealand, including shared community safety programmes, but much more could be achieved. My final wish for local government is for it to be more confident about itself. As stated, local government plays a critical role in our democracy, is more responsive to day-to-day concerns that impact on citizens than central government, and by and large provides good public services. But it can do much better. It should be much more open to reform, to lead the agenda on such key issues, without waiting for the central government to take the ‘stick’ to its activities. Delivery of functions such as water and waste water services, by way of example, should be governed by local government but it doesn’t have to be delivered individually or by ‘in house’ operations. So let’s see what happens in September and beyond. Hopefully, we will see a genuine partnership between the two levels of government, both committed and unafraid to reviewing and reforming the functions that could, and should, be delivered either at a regionalised level, or delivered together. Leigh Auton is a Director of Auton & Associates and has 35 years’ local government experience. He is a chairman/director/trustee on several boards and provides consulting advice to public and private sector companies i


C O M M E N T > > by Connal Townsend

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Interesting times call for interesting measures The election is looming and the infrastructure and property sectors are keen to see the next government complete infrastructure programmes already in place

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he biggest danger is any future coalition partners who might be opposed to completing infrastructure projects, particularly much-needed roading projects. That would be disastrous. Recently, media noted that the number of cars on roads is diminishing, with the possible implication that there is no need to build new roads. The opposition has always argued that if more motorways are built, more cars will end up on the road leading to further congestion, particularly in Auckland. Auckland’s motorways are worryingly jammed up, and indeed less cars on the road is desirable. While increased efficiency in motorway use is a good environmental outcome, it has meant decades of massive under-investment in roading infrastructure. This has resulted in delaying progress with national infrastructure. As the country’s commercial hub Auckland is a busy place. The Auckland Manukau Eastern Transport Initiative (AMETI) is ongoing and aims to improve key traffic bottlenecks by providing an urban busway on congestion-free lanes. AMETI also seeks to improve roading in these areas by creating flyovers and traffic lights where there are none. The other issue is the electrification of rail. Rail is hugely significant in terms of mass transit in Auckland. Wellington has always been on track with its rail patronage and usage, which is demonstrable, and it is important a new government ensures it continues to work well. Auckland has the electrical rolling stock but more work needs to be done on electrifying more lines and getting new trains on board. At the moment, there is only one working line, which emphasises the need to keep the pressure up. The elephant in the room for Auckland is irrefutably the city Rail Link. Its benefits are obvious, especially for West Auckland. However, the project is still suffering from a major funding gap. The difficulty this poses is whilst pundits deem the project desirable there is now a whole lot of slashing and burning being undertaken by Auckland Council. Fundamental cuts in expenditure are having to be made, such as maintaining public parks, swimming pools and libraries. Auckland Council may unsuspectingly

find itself on the receiving end of a public backlash. It is seriously short of target and a point of reckoning is inevitable; is the cost more than the actual benefit? If Labour wins, it is safe to say they would come with a similar set of infrastructure objectives, but the Greens might not. The Greens will place a lot more funding in public transport and trains, which is great in principle, but striking a balance between transport modes is critical. While cycleways and pedestrianism are commendable goals, the problem for the sector would be an ideological battle which forces political parties into extremes. The present government would be categorised as being motorwaydriven only, while the opposition would fall under cycleway radicals. In actual fact, National-led governments have built vast cycleways around the country and electrified the rail, while Labour-led governments have completed big motorway projects. Development contributions (DCs) are another biggie on the agenda. The Local Government Amendment Bill is still at the select committee stage and there is no way of knowing if it will go through before the elections. While both National and Labour have indicated their support for Property Council’s position, the risk of a repeat process is a reality which comes with a possible change of government. To reiterate, Property Council supports DCs and councils’ entitlement to them to fund local infrastructure, but they must be charged fairly and equitably with transparency. Progress is still slow in Christchurch, a problem which a new government will inherit. But the city’s blueprint is positive. The industry is aching to see the incoming government, irrespective of its mix of political persuasions, wholeheartedly commit to producing tangible outcomes. Wellington’s Transmission Gully will bring a host of benefits for residents once completed. It has taken a long time to get it off the ground but it looks like it is finally getting somewhere. A new government would have to see it through. The airport is a key commercial facilitator for the capital and there is a widespread desire to maximise international air connectivity to the rest of the Pacific for increased prosperity and productivity. Ultra-fast, fibre-optic broadband

Wellington’s Transmission Gully will bring a host of benefits for residents once completed. It has taken a long time to get it off the ground but it looks like it is finally getting somewhere

The elephant in the room for Auckland is irrefutably the city Rail Link. Its benefits are obvious, especially for West Auckland. However, the project is still suffering from a major funding gap would be a fantastic way to catch up with the rest of the developed world. This is the hottest new thing in the Western world and the benefits are too many to list. Fast, seamless broadband is the gateway to better commerce and New Zealand needs to upgrade. Last but not least, Hamilton and Auckland are strategically bound up in each other and faster connectivity would help commerce flourish. It is important for transport modes to be as efficient as possible, with improved train connectivity and

electrification. If residents in the outskirts of Hamilton or Huntley could hop on a high-speed electric train to get to work in Auckland’s Papakura or Manukau, while conserving their lifestyle, why wouldn’t they? Now imagine high-speed broadband internet on the train too. Dream results. 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 i

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C O M M E N T > > by Caroline Boot

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Whoever wins needs to spend our infrastructure dollars wisely Whichever way the election goes, it’s a given that this country needs to invest in its infrastructure in the next decade

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ecision-making on the best-value projects will need to be carefully managed to eke out the very best value available from our precious savings. So what can government organisations do, to boost our industry with the wisest investment of time and effort. New Zealand’s not the only country to have learned tough lessons from post-GFC austerity measures. We’ve learned that the cheapest is usually not the best; and that ‘jobs for the boys’ often don’t give us best bang for our buck. Kiwi companies are known everywhere for their ingenuity and resilience. Our ‘Number 8 wire’ mentality has been tried and tested since colonial days, proving time and again that we have the energy, the resourcefulness and the courage to trump the predictable corporate bureaucracy of many of our off-shore competitors. Not that we’re above borrowing their best gems and re-inventing them- faster, cheaper, more durable and smarter! We stand to maximise the value we deliver in infrastructure by targeting and rewarding the entrepreneurial spirit that drives our country’s home-grown businesses. There need to be opportunities for all sizes of companies to grow and prosper through our upcoming big infrastructure projects. Our SME businesses need to build their experience and their systems by standing on their own feet, not just subcontracting to the big boys (and, increasingly, girls). And our successful larger companies need to stretch their legs on projects of a scale and complexity that will give them the track record they need to take on the world. But here’s the challenge – the vast majority those responsible for the nuts and bolts of government procurement have little or no formal training in procurement.

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Hardly any of those people preparing RFTs, and only a few more of the people who evaluate and score tenders, have a deep understanding of the project they are procuring, or the best practice methods that are available to maximise the bang that taxpayers and ratepayers get for their buck. Here’s why that’s a problem. The RFT documents commonly used to assess the capability of tenderers and differentiate them on what’s most important to deliver value for money – are routinely generic. They’re too often packed with irrelevant or pointless questions cut and pasted from the last RFT; and they frequently leave out any consideration of the value that could be added by a clever alternative solution. Moreover, there’s little effort put into establishing clear parameters or justification for the scores that are given, that support award of the contract to one bidder or another. That’s like using the same questions to test students in History, Maths, Maori, and Technology; and giving little or no indication of how the responses will be marked! Like school subjects, different projects require different capabilities to be a success – and these need to be reflected in the assessment tools used to score and award contracts. What’s needed is stronger, more consistent, disciplined and transparent processes that clearly drive value for money on public projects. While much good work has been done by the Better by Procurement team at MBIE in putting in place Government Principles and Rules, we have yet to see this follow through significantly. It would be a simple extension to train and demand targeted, focused procurement practices that deliver best value for the money that’s spent on behalf of NZ Inc. So here’s our challenge to government:

New Zealand’s Number 8 wire mentality has been tried and tested since colonial days, proving time and again that we have the energy, the resourcefulness and the courage to trump many of our off-shore competitors

Like many other countries post Global Financial Crisis, NZ Inc has learned that the cheapest is seldom the best

1. Build on the momentum of the Government Principles and Rules, and put in place disciplines that demand intelligent and targeted buying by councils, ministries, and other government organisations. 2. Prioritise and reward quality, sustainable, lasting solutions – not cheap and nasty quick fixes that turn into false economies. Reduce weightings on tender box prices

–sharpen up your selection criteria so they’re relevant and projectspecific. 3. Encourage government organisations to limit the paperwork needed, and focus on what will really be needed to demonstrate a bidder’s competence for each job. 4. Use prequalification and supplier panels to collect and maintain generic information – then use targeted questions to find the best qualified amongst your worthy suppliers. 5. Be 100 percent transparent, objective, and methodical in your scoring systems – so all bidders are measured on their merits rather than their relationships. These tools will make you confident to justify your scores. De-brief constructively and encourage both government clients and their suppliers to understand each other’s environment better. 6. Maintain healthy competition in the market, by providing opportunities for all sizes of companies to compete for government work and grow – not only by subcontracting, but by developing and testing their own track record and management systems. New Zealand has an exciting future. Our small size, ingenuity, and appetite for exploration put us in a perfect position to lead the world in the robust integrity of our government procurement processes. We’re already on track, with solid processes in some areas that simply need better management, discipline, and extension.

Caroline Boot is the Managing Partner of Plan A, New Zealand’s largest tender specialist company. Plan A is committed to improving tendering processes for both clients and suppliers, working in almost every industry across New Zealand, Australia and globally. www.plana.co.nz caroline.boot@ i plana.co.nz


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