AsiaPacific Infrastructure - Feb&Mar 2015

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INFRASTRUCTURE February/March 2015

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BECA wins International Project of the Year for artesian heating and cooling at Christchurch Airport

In this issue

RMA Reforms • Infrastructure priorities review and preview • Local government funding • Water woes • Ruataniwha update

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FIRST WORD >> Resource Management Act Reform

Curtain to rise on new resource act New Zealand’s primary legislation for the sustainable management of natural and physical resources such as land, air and water isn’t fit for purpose says the minister responsible


here will be some 10 major alterations to the Resource Management Act if the minister for both the Environment and Building and Housing portfolios has his way. Dr Nick Smith wants to see the government include the following “pragmatic and moderate” changes in its second phase of reforms in 2015: • adding management of natural hazards • recognising urban planning • prioritising housing affordability • acknowledging the importance of infrastructure It cost $64,000 to get a change of designation so that part of under-used Auckland • giving greater weight to property rights Point School could become Nelson’s new Young Parents’ School • introducing national planning templates • speeding up plan-making • encouraging collaborative resolution • strengthening national tools • encouraging online platforms for simplicity and speed.

vant, standardise council plans and simplify the process for gaining consents.”

new information by estimating the actual cost of its flaws,” Dr Smith believes.

Dr Smith bolstered his argument with the release of an independent report by Motu Economic and Public Policy Research (see page 8) – commissioned by the Treasury and the Ministry of Business, Innovation and Employment – into the impacts of planning rules, regulations, uncertainty and delay in residential property development .

“It indicates that over the last decade, the RMA has added $30 billion to the cost of building and reduced new housing stock by 40,000 homes.

He claims the current legislation has produced over 80,000 pages of plans and rules across New Zealand’s 78 councils that are adversely affecting housing availability and The report concludes that the RMA is environmental governance. adding an extra $30,000 to the cost of an “This 10-metre mountain of red tape is apartment, an additional $15,000 to the holding back the development of new cost of a home, and that it is reducing the houses and jobs, and it is not performing capacity of housing development by 22 well enough in managing key resources like percent. freshwater.” “This report is consistent with the concluThat’s why the government is planning what he claims is “the most significant overhaul of the Act” since its inception 25 years ago. “We want to modernise the purpose to make it more practical and rele-

sions of the Productivity Commission and the Organisation for Economic Cooperation and Development in highlighting the high administrative burden of our system of environmental regulations, but also adds

“Our first phase of RMA reforms has made a positive difference in getting consents processed more quickly, including for major projects like the Waterview Connection in Auckland, but we have always made plain more substantive change was required,” Dr Smith says. Dr Smith aims to have the Bill before Parliament and through a full select committee process this year. “We want to reduce the mountain of plans and rules that make the RMA a barrier to new housing and jobs, but retain the core environmental controls that ensure we keep New Zealand special and such a great place to live.”

A quartet of complaints


r Smith’s cites four examples from his • a couple in their 60s who abandoned own Nelson electorate to support plans for their dream home in Marsden his case for Resource Management Valley after being required to change the Act reform: design so that the garage would be at the back and the living area facing the road, • $57,000 spent by the Stoke Medical because under the RMA the house had Centre in a six-month process to get an to provide a “positive private to public amended resource consent to expand its space relationship” staff and hours, with a new requirement for seven new bicycle stands the result. • Aquaculture consent applications lodged “The bike stands cost $35 each but the 20 years ago for Golden Bay but still unbureaucratic paper associated with each resolved, “with lawyers joking to me that meant they ended up costing over $8000 the battle over where the farms might be a stand,” Dr Smith observes. located has got at least another five years of legal machinations and fees to play • $64,000 to get a change of designation out”. so that part of under-used Auckland Point School could become Nelson’s new For expert opinion and analysis on Young Parents’ School last year, catering Minister Nick Smith’s plans for RMA for teenage mothers and their preschool reform turn to pages six to eight of this children issue February/March 2015

Environment and Building and Housing Minister Nick Smith aims to have the RMA Reform Bill before Parliament and through a full select committee process this year – 3

Inside this issue Cover Story


Christchurch International Airport and Beca create a new era of Flooding and erosion will have a large impact on many New Zealartesian-based systems that makes smart use of the sustainable anders in their lifetimes P42. resource flowing deep beneath Canterbury. Transport – Auckland Resource Management Act The suggestion of a light rail network to relieve traffic congestion The RMA isn’t fit for purpose says Government Minister Nick harks back to bygone days P44 while Ports of Auckland will need Smith P3. It can obviously be improved, but the many other fac- more multi-cargo wharf space to grow P45. tors need to be acknowledged P6 and spare us the claims that the COMMENT latest round of RMA reforms will make housing more affordable P6 Many other factors need to be acknowledged to improve RMA P7. MOTU Research report says complying with council design de- says Luke Hinchey of Chapman Tripp. mands has caused developers to abandon projects while LGNZ P7 Spare us claims that the latest RMA reforms will make housing lends some qualified support for government reforms P8. more affordable says Local Government expert Leigh Auton. Local Government NZ P9 State housing modernisation needs private development exDiscussion paper on the Local Government Funding Review is pertise to succeed says NZCID Chief Executive Stephen Selwood. now available for public consultation P36. Key themes from fund P10-13 NZCID senior adviser Hamish Glen adds up the score on review P38. Some issues with Health & Safety Reform Bill P39 and last year’s infrastructure projects and outlines what is needed in local roads will receive $38.7 billion total funding for land transport 2015. over the next 10 years P40. P22-24 Irrigation NZ chief Nicky Hyslop says alpine water will help


reduce the effects of the devastating drought.

Infrastructure What progress was made on the country’s 10 infrastructure priorities in 2014 and what still needs to be done this year? P10-13 Social Housing Prime Minister John Key outlines plans to sell up to 8,000 state houses by 2017 p32. The Prime Minister’s is welcome news, but P26 Hawkes Bay DC project leader Graeme hansenuts up the without private development expertise is not likely to achieve govcase for ernment’s objectives P9. P26-29 Ruataniwha Water Storage Scheme argues project leader Water – Irrigation Graeme Hansen. Alpine water will help reduce the effects of the devastating P34 Clever coaching builds better business say PeopleCentric drought that is currently affecting many parts of New Zealand P22- principals Elizabeth Howells and Moira Howson. 24 and a district council says the continuing dry underlines the P36 There is a need to review the way local government is funded need for the Ruataniwha Water Storage Scheme P26-29. says LGNZ President Lawrence Yule. Energy

P42 Flooding and erosion will impact many New Zealanders in Initial exploration is expected to start soon on the 15 new oil and their lifetimes according to Parliamentary Commissioner for the gas permits despite recent dramatic falls in oil revenues P30-31. Environment Dr Jan Wright. French construction giant VINCI Energies takes over Electrix and P43 Be vigilant to potential bias and unfair practices to keep our has some new lighting ideas P33. procurement environment balanced says Plan A managing partner Caroline Boot. Management P45 Ports of Auckland will need more multi-cargo wharf space to Clever coaching builds better business P34 and vigilance needed grow or some of its business will go to competing ports according to keep our procurement environment balanced P43. to the NZIER. Security P46 Encouraging Baby Boomer retirees to relocate into our smallUS research holds valuable lessons for New Zealand companies er provincial centres in pursuit of lifestyle will avoid potential financial crises says Hopper Development Director Evans Young. facing a steadily growing cybercrime problem P44.

Editor Geoff Picken 0212 507 559 geoff@ Managing partner Phil Pilbrow 027 564 7778 Production manager Jamie Laurie

Web development Neo Chen 021 507 318

Publisher Mike Bishara 027 564 7779

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Much more at stake than the Auckland housing market Luke Hinchey Senior Associate Chapmann Trip Auckland is now ranked the ninth least affordable major city in the world on the annual Demographia International Housing Affordability Survey, with median house prices sitting at around eight times median income


he potential implications of this ranking at both the human and the national level are serious. The effect on the banking system of a sudden and severe price correction in Auckland is exercising the mind of the Reserve Bank and may even be keeping the RBNZ Governor awake at night. Which will be why the government chose to promote its planned reforms to the Resource Management Act 1991 as part of a multi-faceted solution to the Auckland housing crisis and as the “most significant overhaul” in the RMA’s turbulent 25-year history.

pensive (by comparison with • streamlined plan-making Australia) building materials processes, and – supply issues which have • more national (as opposed to been aggravated by the local) regulation. Christchurch earthquake and Additional action leaky building syndrome • fragmented land parcels pre- Adding urban planning, housventing large-scale land de- ing affordability and infrastructure to the RMA principles velopment • infrastructure availability and is likely to give these issues greater prominence in RMA costs decision-making. The updates • building regulation and lack seem a valid movement with of access to development the times and will be welcomed finance by developers and infrastruc• land banking ture providers. • a taxation system which fa- Having said that, major legisvours investment in housing. lative change of this nature can

have occurred is hard, expensive and can take generations to resolve. One way to manage these sorts of issues which the government is promoting as part of the next phase is to develop more prescriptive bottom lines and more national direction. It has already made good progress, for example, in the areas of air and freshwater standards.

Prescriptive standards will, however, be more difficult to implement on more subjective planning matters such as what is “good quality urban design” and how to manage a city’s spabring with it a wave of litigation. tial growth. The government will need to be careful with the new termino- There are good learnings and experiences from the range of logy. special procedures brought in Balancing environmental proby government in recent years tection with economic and soto tackle particular bottlenecks. cial needs is also potentially These are provided for through fraught. Arguably, there is the Housing Accords and Spemore pressure on the natural cial Housing Areas Act and environment than when the within the Auckland Unitary RMA was first brought in. Care Plan. should be taken to learn from our past mistakes in this space. Adding such “fast-track” proAnyone involved in freshwater cesses to the RMA tool kit could reform will know that fixing en- help relieve some of the pres-

Planning restrictions and processes undoubtedly add time and cost to development. However, they can also confer environmental and social benefits which are harder to quantify so don’t feature much in the reThe RMA can obviously be porting. improved, but the many other Inconsistent and overly burfactors at play need to be ac- eaucratic approaches by counknowledged. These have been cil staff also add substantially noted in reports by the Pro- to the regulatory burden. That ductivity Commission and other issue is also hard to quantify, organisations and include: let alone fix. Further, no one is • rapid population growth – suggesting removing all RMA Auckland continues to be the regulation, which means some vironmental problems after they Continued on page 7 city of choice for migrants regulatory costs will remain. from overseas and from A proper cost-benefit analysis No matter needs to be undertaken. within New Zealand what it is or who commenced it, I’m • demand for large, high- So what does the governagainst it! end housing – the weekend ment’s proposed revamp of the Herald Homes section sug- RMA look like, and how will it gests apartments are more help? There is plenty of work to affordable and are available do to wordsmith the details, but in abundance but New Zeal- the current proposal includes: But is RMA reform a ‘Get out of Jail Free’ card for Auckland’s housing problems? And even if it is, are there broader considerations which should be weighed in the balance?

anders still want a self-contained house, with room for backyard cricket, within a stone’s throw of the CBD • a building industry dominated by small independent companies constructing bespoke homes out of ex6 –

• the addition of four new matters to the RMA principles (natural hazards, urban planning, housing affordability, and infrastructure) • national planning templates to standardise plans February/March 2015


Dubious claims made for reform proposals Leigh Auton Director Auton & Associates Spare us the claims that the latest round of RMA reforms will substantially reduce housing costs and make housing more affordable


cannot believe the rhetoric that somehow the RMA is to blame for all our housing woes. It is simply not true - decent, affordable housing is a product of demand and supply. Currently we have substantial demand for housing, especially in Auckland, driven by high net migration and significant internal population growth – especially amongst particular demographics.

Financial and cultural bias towards property likewise drives investment into the housing market rather than more productive enterprise. Expectations of bigger houses, matched by changing cultural needs of new migrant populations, also impacts on demand. Supply is impacted by land availability, the risk appetite of developers and housing companies, profitability, building costs, infrastructure costs, financial conditions, regulatory practices and – significantly – government policy. From decades of working at the coal face of housing provision in Auckland, I would argue that each of these factors sure. However the experience is that, while they are definitely quick, they are also resource heavy and bring a range of new process challenges. National planning templates would also appear a good idea to get some consistency and efficiency across the country, but will take time to bed in. The government will need to think carefully about adding more process burdens to communities. February/March 2015

But the biggest issue in my view, especially at the lowest end of the housing market, is that Minister Smith’s government has no real appetite to support lower income people into housing ownership. Traditionally Labour has built state houses while National has supported individuals to purchase lower cost housing through mortgages and other financial Regulatory practices, includ- support. ing both the written rules and The current government policy the actual practices of councils, is to support the development will highly impact on housing of social housing through developers’ appetite for risk. NGOs, a policy I support. But its Too many hurdles to leap over, backing for the policy is limited too much time taken to process and slow. It will be many years consents certainly reduces de- before this sector has any real veloper appetites. Significantly, impact on housing supply. developers look at the leaderSo the apparent remedy from ship and culture of regulatory central government for an unauthorities as to whether develaffordable housing market is opment is ‘worth the candle.’ to change the RMA. I would strongly suggest the governCompetition curtailed Previously in Auckland, de- ment looks at more effective velopers were offered a choice remedies, including national of council areas to operate in policy statements on land sup– too hard in one, work in an- ply, if it really wants to effect other. While not necessarily ar- change.

would also help, including reviews of the many urban design requirements which have remarkably appeared of late. Many of these, in my opinion, have substantially driven up cost. Support for a better infrastructure investment framework would be especially helpful. Stronger disincentives for land banking, driven by the ‘hands off’ capital gains, would likewise assist.

Process fatigue has set in for those going through major planning processes in the Auckland and Canterbury regions. The major corporates and government entities are hanging in there, but the smaller players have been almost completely shut out.

RMA’s various functions and will only be able to take us so far as housing affordability is not just about regulation.

has a bearing on the supply of housing. Critically too little confidence in forward land supply will impact on developers making the long-term commitment required to produce residential sections for houses. Limited supply of land will attract the land bankers, confident that they will make big capital gains – something very evident in Auckland today.

The list goes on. Changing the RMA to a more economic focus, won’t change much of anything. Changes to incentives, land development and house construction, audit and review of regulatory practice and cost, creating the conditions for the right culture and leadership, and critically supporting the building of houses for lower income people will, in my opinion, make the key difference.

Leigh Auton has 35 years’ local government experience. He is a chairman/director/trustee on several boards and provides consulting advice to public guing against the “Super City”, Ensuring that the practices of and private sector companies. this element of ‘competition’ no councils are fully audited by longer exists in the region. central government agencies 0274 88 44 58

The elephant in the room is public participation. Relatively open participation has been a basic tenet of the RMA since its inception and is the root of

many of the RMA’s delays in the planning and consenting of medium to large-scale projects. While it is easy to suggest that participation rights should be restricted, many people will be concerned about closing down the voice of legitimate public interest.

Luke Hinchey specialises in resource management and environmental law. Luke.hinchey@ Ultimately, the RMA can and 027 599 5830 should be continually improved, as resource management issues of importance evolve. However, the reforms should respect the – 7


Developers’ dilemmas driving decisions

Research report says there is significant cost in incorporating all council preferences in a development’s design, and as a result developers abandon a significant number of projects


requirements, retention of heritage building and protected trees, and the need to provide on-site infrastructure over and above what was required to service the development.

he Motu Economic and Public Policy Research report was based on interviews with 16 Auckland developers responsible for 21 developments, all of whom had abandoned one or more projects as a result of expected project length and/or uncertainties.

Furthermore, as a result of residents’ objections, council has hitherto tended to notify non-complying consents even when the effects are relatively minor. “This increases uncertainty and timeframes for consent applications,” the report notes.

The Impacts of Planning Rules, Regulations, Uncertainty and Delay on Residential Property Development report found that building height limits and balcony requirements can each have cost impacts of over $30,000 per affordable apartment. Conforming to council’s desired typologies and increased minimum floor to ceiling heights can each add over $10,000 per unit. “Minimum floor area requirements reduce the supply of affordable units,” the report adds. Elements that can raise residential and standalone dwelling costs by at least $15,000 include: • infrastructure contributions that are not directly related to a specific development • section size requirements • extended consent processes and other urban design considerations (stemming, in particular, from council’s urban designers).

design requirements are subjective, so increasing the length of time required to gain consent, increasing the costs of the planning process, reducing the saleability However, there is significant of units within developments cost in terms of incorporating and increasing costs. all council officers’ preferences Council-imposed rules and in the development’s design regulations result in a significant and the process may result in loss in potential development a sub-optimal product in terms capacity – a median loss of 22 of market demand – as a result, percent for developments that developers abandon a significproceeded. ant number of projects. “For apartment buildings, the Conversely, the “non-complyDevelopers also felt that: loss of capacity was primarily ing developer” is prepared to • they were increasingly being due to height restrictions or work with longer timeframes asked to fund key community issues relating to view shafts,” with less certain outcomes, but infrastructure beyond infra- the report explains. this requires the developer to structure directly related to In other developments, the be well-capitalised in order to their own project loss in capacity related to issues fund long-term legal processes

A range of other elements cause lesser, but still material, cost increases per dwelling, with the result that the developers believed that council has “not balanced or arbitrated contradictory demands of different parts of council and council controlled organisations (CCOs) when considering consents”, leaving them to mediate disputes over how the development should be designed and adding significant uncertainty and risk.

• council-imposed

urban associated with urban design with uncertain outcomes.

Local government supports sensible change


ocal Government New Zealand welcomes change to the RMA signalled by Dr Smith, says LGNZ President Lawrence Yule.

management regime could look like and could consider, among other matters: • what are the key drivers for change?

“Local government’s role is to • what outcomes are we seekimplement the RMA. As such, ing? local authorities want a law that • what is the relationship beis simpler and less complex to tween the economy and envimanage, and one that provides ronment, specifically: better outcomes for both com1. how can a future resource munities and the economy.” management regime better LGNZ will start work this year deal with natural resource on a project that will consider allocation and “urban matwhat a fit-for-purpose resource ters” at the same time? 8 –

The business strategy adopted by the developer impacts on the level of uncertainty and amount of time required to complete the consenting process: the “complying developer” attempts to minimise the consenting timeframe.

2. how can a resource manage- • what improvements can be ment regime deal with inmade to “practice” vs what creasingly complex matters? needs to change in law? 3. how can a resource manage- • what incentives need to be in ment regime better enable place for all parties to stimutimely policy and plan setlate growth while ensuring we ting and decision-making? maintain our natural resourc4. how can we stimulate busies? ness growth and provide the Mr Yule says councils across right incentives for commuNew Zealand will be working nities and their councils? • what is in the public interest collaboratively with the governto regulate a round of private ment to shape, simplify, reduce and remove unnecessary rules property rights? • what is the right balance be- and put in place new provisions tween central direction and to enable local government to local decision-making and be- proactively manage natural haztween elected members and ard risk, including coastal eroindependent commissioners? sion and flooding. February/March 2015

COMMENT >> Housing

Partnerships key to tackling

social housing challenge

The Prime Minister’s announcement that state housing would be significantly modernised is welcome news (see page 32), but without private development expertise is not likely to achieve the government’s objectives


ecades of underinvestment and politicised management of New Zealand’s state housing service has left an astonishing one-third of the $18.6 billion of state housing stock either in the wrong place or of the wrong configuration to meet need, says New Zealand Council for Infrastructure Development chief executive Stephen Selwood.

agement provided by organisations like the Salvation Army, iwi or other groups will “not only see better stock delivered but an improvement in support” given to tenants. “The opportunity to add private sector capital, construction and development expertise will grow capacity to deliver social and affordable housing at a scale not seen before in New Zealand.”

“Of the remaining two-thirds, an undisclosed number would not meet developing requirements for a rental Warrant of Fitness.”

Mr Selwood maintains that redeveloping Housing New Zealand stock will enable the government to leverage land value to offset the cost of new homes, but that unfortunately this policy – which has “huge potential” to deliver new social and affordable housing, improve outcomes and achieve much better value for money for tax payers – has not been But these opportunities will well-understood. only be realised when the old “In some areas like Tamaki privatisation dogma is rejecin Auckland, existing Housing ted and when the government, New Zealand stock is 50 or community housing associmore years old and in immedi- ations and private sector capate need of replacement,” he ital, construction and developobserves.” By aggregating the ment markets work together large sections allotted in the in partnership. “These kinds of aftermath of the Second World innovative relationships provide War, three, four or five new units a real opportunity to tackle the can be delivered on the same social and affordable housamount of land - the number of ing challenge and should be social houses can not only be welcomed,” Mr Selwood conretained but potentially even cludes.

Mr Selwood believes it is “extremely difficult” to reach any other conclusion than that the traditional approach to managing the government’s housing portfolio and providing homes for people in need is not working. “It is therefore encouraging to see the government looking at different ways to provide better homes for better value.”

The opportunity to add private sector capital, construction and development expertise will grow capacity to deliver social and affordable housing at a scale not seen before in New Zealand, says NZCID Chief Executive Stephen Selwood from the sale of private units can be used to fund more and better social housing. “The second is that by integrating social and private housing units the stigma of state housing can be dispelled,” Mr Selwood says. “Bundling wrap-around social support services into new development can target truancy and anti-social behaviour at the community level to help foster liveable, healthy communities.”

In some areas like Tamaki in Auckland, existing Housing New Zealand stock is 50 or more years old and in immediate need of replacement. By aggregating the large sections allotted in the aftermath of the Second World War, three, four or five new units can be delivered on The government intends to the same amount of land boost the community housing sector by extending maximum ering how best it can redevelop housing subsidies to approved larger holdings of Housing providers and, over the next New Zealand property to deyear, selling between 1000 and liver more affordable housing. 2000 state houses to the ‘third “These changes should see a housing sector” to provide a stronger, more financially sesocial housing alternative to cure community housing sector complement the activities of emerge which can reinvest in doubled with remaining units Stephen Selwood is Chief sold privately.” Housing New Zealand. new units,” he predicts. Executive at New Zealand In addition, Mr Selwood notes, The localised and more ‘hands This approach carries two be- Council for Infrastructure the government will be consid- on’ approach to tenancy man- nefits, the first financial: income Development

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INFRASTRUCTURE >> Comment : 2014 review & 2015 preview

Greater effort needed

to hit key targets What progress was made on the country’s 10 infrastructure priorities in 2014 and what still needs to be done this year?

This time last year we identified New Zealand’s top 10 infrastructure priorities: • the Christchurch CBD rebuild • Auckland planning and transport funding • transport (including the outcome of the first transport PPP, the evolution of Kiwirail and Auckland motorway investment) • telecommunications • regulation • energy • social infrastructure • urban and rural water • local government • planning reform.


review of all 10 priorities at the end of 2014 indicates mixed results, with greater effort required in virtually all areas during the coming 12 months if New Zealand is going to enjoy and benefit from the infrastructure it deserves and in several areas urgently needs. Christchurch

fice relocations suggested signs rangements for the central city of life might soon return to the rebuild. CBD. A discrete ‘project within a proGeneral satisfaction with the ject’, the CBD rebuild requires degree of progress in Canter- a unique blend of both public bury was ultimately revealed in and business skills covering September when Earthquake property development, major Recovery Minister Gerry Brown- project procurement and delee and the government in livery, financial management, general received the strongest public relations and leadership. possible commendation from It is a local project largely voters. dependent upon national reThis year may be more interesting for two reasons.

First, the government late last year announced that recovery agency CERA, whose mandate was due to expire in 2016, At something in the vicinity would be moved into the Prime of $5 billion for the CBD com- Minister’s office and gradually ponent alone, regenerating the wound down. central area of New Zealand’s We should therefore start to second-largest city rightfully oc- see the first signs of a resurgent cupied a top rung on the ladder and revitalised Christchurch City of national importance. Indeed, Council, particularly if the new the rebuild features in the list of council is able to address public government priorities. concerns over asset sales, bal-

lion new residents can be accommodated within existing planning limitations, the city risks hobbling its way forward in much the same manner as it did in 2014.

The challenge of planning and funding our largest city did take a step in 2014 with the release of two broad options for covering an estimated $12 billion transport funding gap (plus an adsources: public money depend- ditional third ‘minimal’ option, ent upon private investment. where funding is not obtained How the government and coun- and projects are removed). cil reach agreement on what Aucklanders are now being sort of body should oversee this asked whether they prefer a work and how much independ- combination of additional rates ence it should have from dual and fuel tax levies or a motor‘hands-on’ political manage- way access charge to fund the ment is 2015’s big Christchurch Mayor’s Auckland Plan. question. While this is an important step, Auckland even if the council receives a strong mandate from voters for any funding option, which is still unclear, the government is going to have to revise legislation to enable that to proceed. Tangible steps to address It should become gradually Auckland’s headline infrastruc- clearer throughout 2015 how ture problems were not taken the Auckland Council and government are going to manage last year. Unless government and coun- this issue.

But, interestingly, Christchurch ance its books and take greater appeared to fall a little off the control over the rebuild. national radar as last year pro- The evolving dynamic between gressed. the government and city counHeat went out of the political cil will be an important one for debate as a series of public both parties. projects came to market and a Second, there remains a crit- cil agree how poor projected At the very least, an accord stream of property investment ical decision to be made over transport outcomes can be between government and announcements and head of- the appropriate governance ar- addressed, and how half a mil- Auckland Council on a long10 –

February/March 2015

term strategy for land use and Transport transport investment is a top The sector saw progress on the priority. This will require a willingness to consider new ways to meet future growth in Auckland that do not lead to serious deterioration in congestion that is expected to result from existing land use and investment plans.

round, is an extension to the RoNS programme. No new RoNS initiatives have been launched since the 2008 campaign, despite investigation being earmarked in the government’s Building Infrastructure progress report.

What may provide the greatest impetus to the planning and funding debate may in fact have less to do with transport policy and much more to do with growth. An interesting feature of 2014 was the return of growth in vehicle kilometres travelled (VKTs).

Auckland’s critical East-West Link seems a likely candidate for enhanced focus, given sizeable demonstrated transport benefits.

Roads of National Significance (RoNS) but ongoing challenges for Kiwirail. This year looks like much of the same, with further consolidation of the government’s six-year old RoNS programme but still no sign that an alternative has been found to steady public capital injections There has been enormous dein the state rail provider. bate behind the scenes as to whether a structural shift in con- In 2014 we saw New Zealand’s sumer demand had led to fall- first transport public-private ing VKTs or whether the driver partnership (PPP) close. A conwas slow economic growth. We sortium led by Leighton won found out last year it’s a bit of the $1 billion capital project both with new car registrations and is now progressing with returning to record levels as construction. economic conditions improve.

Progress developing a commercially sustainable rail freight network remains an outstanding issue to be resolved this year. The government has now injected around $1 billion into Kiwirail in a bid to turn the rail freight provider into a standalone business, but with mixed success.

Anecdotal reports are that the PPP process was successful. This year we will find out whether a second PPP will be used to deliver the Puhoi to Warkworth Road of National Significance.


As anticipated, the most significant telecommunications development last year was, as it was the year before, wielded by the regulator. This year will almost certainly be the same, though a major announcement on new international connectivity would in the eyes of many trump domestic market decisions. In December, the Commerce Commission released its draft final pricing determination for the rate Chorus can charge retailers for use of its copper network. The commission’s earlier preliminary decision wiped several hundred million dollars off Chorus’ book value, launched a review of the Telecommunications Act and sparked a national debate on government

The business in its current form If projections for the city looks unlikely to achieve total eventuate, the resulting budgetary independence from pressure on transport networks the government, leaving only is likely to provide sustained politically sensitive service cuts pressure on both the council and government to deliver What we did not see last year, or more regular access to public Continued on page 12 better outcomes faster. but will look out for this time funding as the two options.

Keeping Delivering value to NZ moving transformational infrastructure projects across New Zealand Waterview Connection: Lead Technical Advisor to client, NZTA Auckland City Rail Link: Principal Technical Advisor to client, Auckland Transport Southern Corridor Improvements: Consultant to client, NZTA

TRA_Advert_2014-10-14_Infrastructure news NZ.indd February /March 2015


17/10/2014 2:49:58 – PM11

INFRASTRUCTURE >> Comment: 2014 review & 2015 preview Continued from page 11

legislation currently in effect. Previous recent changes, including the streamlining of major project consent, have by all accounts worked well, so these changes should be cautiously welcomed. However, serious questions remain as to whether the RMA can continue through a permanent state of reform. A priority for this year should be launching an independent review of the RMA, including options for replacing the Act, at the same time as reforms take place.

involvement in the affairs of an independent regulator. The December decision shifted the alarm from the side of Chorus to those of consumers and retailers, raising questions as how such a process could be in effect. When the final April decision arrives, many of these questions will be asked again. Following this decision, a priority for this year should be a public review of how such a sequence of events was allowed to occur and what changes are Energy necessary to ensure it does not happen again. A second priority for this year which quietly moved along in 2014 is work on a second international cable connecting New Zealand to the US. The government has conditionally committed $65 million to the Hawaiki scheme, but it is otherwise a privately led business venture. Late last year, Vodafone and Spark announced they would jointly progress a separate cable to Australia. This was a positive development and a new cable to the US may go some way to reducing the high international data costs New Zealanders pay relative to many of our competitors. An announcement on the Hawaiki cable venture is imminent. Regulation In no small way related to the copper pricing issue, regulation was the next biggest infrastructure priority for 2014. Energy regulation, including that impacting electricity generators and electricity and gas transmission and distribution, can be just as unclear for operators and investors, as can airport and port regulation. No substantive progress was made through 2014 in this area and there appears little prospect of greater progress this year. What is, rather, attracting the full scope of government regulatory attention is what we think of the 22nd revision of the Resource Management Act 1991 (RMA). In an effort to remove impediments to construction, the government is moving ahead with some of the most significant changes to perhaps the most modified piece of

targeted at Housing New Zealand itself and the way it manages its assets. Around onethird of state houses are in the wrong place or the wrong configuration to meet need. The government announced it was commissioning a strategic review of Housing New Zealand assets, would look to sell down 1000-2000 state houses over the next year to approved social housing providers and was examining how best it could leverage its existing land holdings to deliver more social and affordable housing.

New Zealand’s monopoly approach to social housing is increasingly unusual relative to our peers and, given performance issues, new thinking should be welcomed. But a lot more work is clearly to be done on how best the government can deliver more affordable Last year was a big year for en- housing sooner at a higher ergy, principally because of the quality and lower cost. potential for structural market Announcements in this area change following the election. will be closely monitored, but That change did not occur, but one area in particular which will something to watch over the be of interest is whether the next two years is the degree government can attract private to which residential electricity capital to advance public obprices rise. Electricity demand jectives. In places like the UK, has just started to turn around public agencies have become after several years of little or no expert at using public land growth. If that demand quickly holdings and other tools to soresults in increasing residential licit private property developers prices, structural reform may to regenerate run-down areas well again return to the opposiand provide social housing at tion agenda. minimal cost to the state while profiting from private property Social infrastructure Social housing ranked fairly sales. Auckland’s Tamaki area low on the list of infrastructure stands out as the biggest oppriorities last year, but ongoing portunity for land value apprestrength in the Auckland hous- ciation to drive more affordable ing market, limited progress in housing on public land and the sector to date and recent there will likely be some angovernment announcements nouncements later this year. have underscored how polit- Water ically important social housing will be in 2015 and 2016.

The Prime Minister’s January speech foreshadowed several new policy initiatives which should improve the delivery of social and affordable housing. One of these was the decision to extend maximum housing subsidies to approved housing providers (i.e. community housing associations and other such organisations). This policy is expected to strengthen alternatives to Housing New Zealand.

limits and fluctuating investor confidence. Last year no significant headway was made on the two really substantive issues holding up not only Ruataniwha but irrigation as a national development programme: how to mitigate nitrate leaching into waterways and how to get investment underway with uncommitted demand. It does not look likely that things will change markedly this year, potentially meaning another decade could be lost before New Zealand makes better use of its freshwater resource. Progress has been better in the urban water sector, thanks in large part to Local Government New Zealand’s Three Waters initiative. The issues paper released late last year found that water infrastructure remains in an acceptable state but that demographic and financial challenges in the future may test desired service levels across many parts of the country. A white paper due out shortly will consider options available to budget-constrained councils. It is difficult to see, however, the greater proportion of local councillors in any given area supporting a water model which reduces their ability to tax and allocate rates income. Currently, councils have wide scope to pull back spending on water treatment, for example when rates increases are politically sensitive, and use that money on roads or parks. That is why there are approximately 100 cases a day of acute gastrointestinal illness contracted from networked drinking water due to non-compliance with the standards. Real improvement in urban water services is probably only likely if and when there is more fundamental consideration given to a broader and more complex issue: local government reform. Local government reform

Last year was a mixed one for irrigation. The national picture This year will be another big continues to be focused on the one for local government reHawke’s Bay Ruataniwha project form. Last year the Local Govand exactly how that develops ernment Commission came out A second group of policies is in light of strict environmental

12 –

February/March 2015

“Finding answers to Auckland’s growth pressures, bridging the transport funding gap, providing a more stable regulatory environment which promotes investment confidence, making better use of New Zealand’s water resources and reform of the local government and planning law framework are the significant issues the National Infrastructure Plan 2015 must progress” with its proposal to amalgamate and more jobs. all of the existing Wellington The other point is that all the councils, for which submissions councils of the Wellington rewill close in March. gion share the benefits of the Leaders of the smaller councils city centre as an employment in particular have demonstrated and recreational hub, but not all dismay at the suggestion, as share the costs. Growth coundid their pre-reform Auckland cils tend to be the ones under counterparts. Some make the financial pressure because they quite reasonable point that they must shoulder the costs of a have managed their assets and dynamic region even though all services well and that there is eight local authorities benefit no need for an Auckland-style from proximity to Wellington city’s amenities. solution. What is missing from this debate, however, are two major things. One is the opportunity cost of not establishing a single council with a single voice, vision, plan and resource base to implement strategic direction. This has resulted in Auckland attracting a disproportionate amount of central and private investment over the past five years, leading to faster growth

February/March 2015

Whether the Local Government Commission will be able to voice reason through all the emotion will be a big question in 2015 and, subsequently, what the response will be from other regions around New Zealand. Planning Finally, planning reform was an infrastructure priority for 2014. The Resource Management Act, Local Government Act and

Land Transport Management runner of wider improvements. Act in particular need to be reNew initiatives for 2015 vised to better enable national planning supported by the re- The National Infrastructure Plan 2015 will be a major landmark this year. We expect this iteration to enlarge upon the 2011 version and set clear direction for how the government expects infrastructure to be delivered nationwide. Finding answers to Auckland’s growth pressures, bridging the transgions, cities and districts. We port funding gap, providing did not see much activity over a more stable regulatory enthe year, however, with chang- vironment which promotes ines to the RMA focused on the vestment confidence, making regulatory rather than planning better use of New Zealand’s wacomponents of the Act. Some ter resources and reform of the welcome additions were made local government and planning law framework are the significat the national level, notably ant issues this next iteration of with the release of the National the plan must progress. Infrastructure Unit’s national evidence base and 10-year capital Hamish Glenn is Senior Policy intentions plan, but this may Advisor at the New Zealand be another area for which local Council for Infrastructure government reform is the fore- Development – 13

Christchurch International Airport Ltd and Beca are leading the way for a new era of artesian-based systems with an innovative approach that not only makes smart use of the sustainable resource flowing deep beneath Canterbury but also won International Project of the Year at the 2015 CIBSE Building Performance Awards in London

Project team Design

Photos and images courtesy of Christchurch Airport and Beca

Project management: Coffey Projects Quantity surveyors: Rawlisons Architects: Hassell and Warren & Mahoney joint venture Mechanical services: Beca Construction Main contractor: Hawkins Construction Mechanical contractor: David Browne Contractors Electrical for mechanical contractor: Dickson-Gray Electrical

COVER STORY >> Christchurch


he CIBSE Building Performance Awards is the latest accolade for Christchurch International Airport’s $237million Integrated Terminal Project (ITP). It is a shining example of the ways buildings can benefit from artesian heating and cooling systems efficiencies having already won the Building and Construction category at the 2014 Institution of Professional Engineers New Zealand Engineering Excellence Awards and a Gold Award of Excellence at the 2014 Association of Consulting Engineers INNOVATE NZ Awards. Started in 2004 to replace the original 1960s building and cater for future growth, the project’s sustainable, energy-efficient operations ethos underpinned the development of a 30,000 square-metre, threestorey, diamond-shaped integrated terminal building that features a long list of innovative and energy-efficient features.

gineering consultants Beca and energy around the building. utilises the artesian water that Christchurch Airport’s Terminal flows beneath the city and the Facilities Manager, Mike Parker Canterbury Plains. says, “The system helps the terEasily accessible through minal building’s temperature to wells and already tested in a remain constant, improving the pre-cooling application at the experience of the millions of airport, the artesian water pro- passengers who pass through vides the airport with a cost-ef- the airport.The system’s elefective, long-term solution and gance is undeniable and it has a super-efficient, sustainable not missed a beat. energy source for energy ef“It has provided huge energy ficiencies, reduced carbon savings. The thermal comfort emissions and lower operating through the new terminal is costs. fantastic, even on the coldIt also reduces the need for est and hottest days. Being cooling towers and boilers of- customer focused, it is so imten found within airport build- portant to us with respect to ings, which not only benefits people’s perceptions of the airthe environment and reduces port,” Mr Parker says. maintenance but also helps to reduce the need for plant space Natural, renewable energy and structural loadings. The innovative, cost-effective Chillers act as geothermal heat and energy-efficient features pumps, providing both mech- best associated with Christchanical cooling and heating and urch Airport were not selected 12 degrees Celsius artesian or designed to visibly demontemperature water for direct strate the airport’s commitment to the environment, but to encooling. This innovative system enables able the airport to be truly enartesian water to heat or cool vironmentally conscious.

vide the region with an abundant supply of artesian water (groundwater). Water enters the aquifers from the surrounding snow-capped mountains and rivers, which can then be extracted from wells. The aquifers provide the people of Christchurch with a natural, high-quality water source for consumption as drinking water and irrigation. They also offer an opportunity to exploit a renewable energy source in a non-consumptive manner, such as taking and returning water from the aquifer. Christchurch Airport’s existing international terminal building was using artesian water in a pre-cooling application, pumping artesian water directly through pre-cooling coils, and it was initially envisaged that the new terminal building would use a similar system. However, Beca Business Director – Canterbury Rebuild, Keith Paterson, believed the artesian water had more to offer and more could be done to make

The ‘jewel in the crown’ is the award-winning artesian heating the building, or do both, at any Christchurch has one of the and cooling system, which was one time, and has the ability to best water supplies in the world. designed and delivered by en- recover and redistribute heat Aquifers below the ground pro- Continued on page 16

3000 heads are better than one Whether it’s a major infrastructure project, industrial facility, commercial development, power station or airport, if we’re involved, you can bet it’s had input from smart people all over our business. No matter where in the world they are located, our people routinely collaborate with each other, and their clients, to deliver the best of Beca.

Teamwork is so much a part of our culture that we wrote it into our vision: “Creative people striving together to transform our world.” Can we support your team? Or could you be part of ours? Find out more about how our team can help yours at Join our team at linkedin/company/beca

February/March 2015 – 15

COVER STORY >> Christchurch

The artesian water filters in the Main Central Plant Room help maintain thermal comfort on the hottest or coldest days

Continued from page 15 better use of this sustainable resource. “Thinking further, we found the artesian water, which had a fairly constant year-round temperature of 12 degrees C, would lend itself well to a heat pumptype system where we could not only reject heat energy to the aquifer, but also take heat energy for heating purposes,” he says. Beca Technical Director and Christchurch Building Services Manager Justin Hill explains that artesian water can be extracted from the aquifers Christchurch Airport is currently working to install a new artesian heating and cooling system through a number of wells on within the existing international terminal building in lieu of the current gas and diesel boilers the airport campus. water passes through heat ex- taken (with only the temperat- taining two 1,500kWr and one “We drilled three new wells to changers, which increase or de- ure altered). 600kWr multi compressor screw supplement two existing and crease the water’s temperature The artesian water is returned chillers which act as geothermal otherwise redundant wells. This to extract or reject heat energy. to the aquifer via a discharge heat pumps. When the heat enabled sufficient water to be energy is exchanged with the abstracted to meet our 3.6MW Cooling the water provides soak pit beneath the on-grade artesian water, it is used by the car park, thus making the proheating to the building (by ex(1,000RT) cooling demand. tracting heat energy), while cess totally non-consumptive chillers to produce heating and “Each well is capable of exand clearly demonstrating the cooling water. A ‘closed loop’ tracting around 35 litres per heating the water provides virtues of artesian water as a system then circulates the wasecond (L/s) to give a total peak cooling to the building (by re- readily available, sustainable ter around the building through flow of 175 L/s, with the ability jecting heat energy). and renewable energy source. coils that heat and/or cool the to increase this to 210 L/s with The heat exchangers create a an additional well. To put this physical separation between Simultaneous heating and air throughout the building. in perspective, the current peak capacity is equivalent to filling an Olympic-size swimming pool every four hours,” he says.

the artesian water and building water to help prevent cross-contamination of the artesian water. The water is therefore returned Once extracted, the artesian in the same condition it was

16 –


Housed within the new terminal itself is the heart of the artesian heating and cooling system – a main central plant room con-

The central plant has four modes of operation which between them decide the amount of artesian water that needs to be extracted from the February/March 2015

aquifers via the wells: Artesian temperature cooling – the 10-12 degrees C water, i.e. artesian temperature water, bypasses the chillers and feeds directly into the secondary chilled water reticulation. Mechanical cooling – chillers produce cooling water for use in the secondary circuit which cools the building, with the resultant heat energy in the condenser water rejected to the artesian water.

“The initial solution we looked at consisted of one chiller dedicated to heating and another dedicated to cooling. However, while both chillers could operate simultaneously, the system was unable to recover and redistribute excess heat energy – i.e. remove heat energy from somewhere requiring cooling and move it to somewhere requiring heating, and vice versa,” Mr Hill explains.

Heating – heat energy is extracted from the artesian water by the chillers, effectively cooling the artesian water, and the resultant heat energy in the condenser water is then circulated through the secondary circuit to heat the building.

Maximising efficiency performance

and required, the system has been designed to operate solely on The heating and cooling re- artesian temperature water – quirements of the integrated negating the need to run chillterminal building are somewhat ers and further improving energoverned by the outdoor air gy efficiency. temperature, humidity and the internal loads generated by appliances and people – factors that cause chilled water and heating water demands to vary during the day and seasonally throughout the year.

When greater cooling is required, the system can use a combination of artesian temperature cooling and mechanical cooling. Therefore, if the target temperature cannot be achieved using artesian temperature water alone, mechanical cooling is enabled in stages to match the demand of the building, further maximising the use of the artesian temperature cooling and the efficiency of the system.

Beca designed the artesian system to maximise efficiency when accommodating changes in heating and cooling loads. For instance, when one side of the building is in direct sunlight and the other in the shade there’s a high cooling load and The system was also designed low heating load. to operate with a floating temBuilding efficiency can then be perature setpoint to further improved by operating one of maximise energy efficiency the chillers in cooling mode and during changes in heating one in energy transfer mode, and cooling loads. Instead of satisfying the heating load as controlling the hot water and opposed to operating both in chilled water temperatures to 40 degrees C and 6 degrees C energy transfer mode. The direct use of artesian wa- respectively, the system enables ter to serve cooling loads can energy to be saved by gradually

“A concept was therefore developed – chillers and heat exchangers would be configured in a manner to ‘move’ this heat energy around the building, greatly increasing the energy efficiency of the system. With Recovery and redistribution – this solution only the excess or heat energy is recovered and shortfall of energy is rejected or redistributed around the build- taken from the artesian water. ing using the condenser hot wa“The challenge here was to ter in the secondary heating cirtake or reject only the shortfall cuit and the evaporator chilled water in the secondary cooling or excess energy, whilst maintaining stable control, and three circuit. The system is configured to chillers that could independ- reduce or even avoid the need provide any one or a mixture of ently operate in any of the four for mechanical cooling. For areas where year-round cooling is Continued on page 18 modes,” he says. these four modes at any time.

MYANMAR INFRASTRUCTURE SUMMIT 2015 1 - 2 April 2015 Sule Shangri-la Hotel, Yangon, Myanmar

Building A Liveable And Sustainable Myanmar

Hosted by:

Organised by:

Supported by:

The Republic of the Union of Myanmar Federation of Chambers of Commerce & Industry

Ministry of Construction

Endorsed by: Machinery & Equipment Manufacturers Association

Association of Consulting Engineers Singapore

The International Society of City and Regional Planners

Media Partners:

Hosted by: The Republic of the Union of Myanmar Federation of Chambers of Commerce & Industry

February/March 2015 Endorsed by:

Organised by:

Supported by: Ministry of Construction – 17

COVER STORY >> Christchurch Continued from page 17 reducing the heating setpoint or increasing the cooling setpoint until the optimum temperature is reached. Heating water temperatures were analysed and calculated to optimise the flow and return temperatures. “We investigated the inter-relationship between chiller efficiency, which increases as temperature decreases, and coil size, which decreases as temperature increases, with respect to operational efficiencies and capital cost, along with the reliability and longevity of the chillers at various hot water temperatures. The outcome was an optimised and robust heating The Integrated Terminal Project was among the first in New Zealand to adopt and harness the water temperature of 40 de- power of 3D design and coordination when the design began in 2005 grees C flow and 25 degrees C return,” Mr Hill explains. two percent for both terminals of maintaining continuous air- Beca used Revit 3D software to port operations throughout the draw and coordinate the servicas a whole. Every aspect of the system es within the main plantrooms entire project. design was analysed, chal- Beca have subsequently unand optimise the plantroom laylenged and developed to max- dertaken a study on enhancing Beca’s holistic approach to the out, which would have initially system design played a major the performance of the central imise energy efficiency and susbeen done by hand some nine role in the project’s success. plant system. With chiller containability, with the end result years ago. dramatically reducing Christch- trol strategy modifications, a Cost-effectiveness, energy-efurch Airport’s energy consump- reduction in annual energy use ficiency and future flexibility The ITP was among the first tion, carbon emissions, oper- from the central plant of ap- were high on the priority list – projects in New Zealand to adational costs and dependency proximately 10 percent of chiller it was the ethos of the building opt and harness the power of electrical input power could be and aligned with the airport’s 3D design and coordination, on fossil fuels. realised. This is the first of a environmental policies and car- and led the way in the market An initial independent energy with the level of construction number of modifications to be boNZero accreditations. review showed that while the documentation produced. rolled out to continuously fineoverall area of the terminal Future-proofing tune the system to improve enA ‘cradle to grave’ approach building increased by approxFuture flexibility was meticergy efficiency. was adopted. Primary plantimately 18 percent, energy use ulously planned into the terper square metre was predicted The true elegance of the solu- minal design, with replacement rooms, for example, were deto decrease by about 17 percent tion is demonstrated by the strategies, easy maintenance signed, so additional equipto 310kWh/m². This equates to future-proofed design and the and easy access incorporated to ment and technology could be an overall predicted reduction seamless integration of the new accommodate future changes in energy consumption of about terminal, despite the challenge in technology and/or use. Continued on page 19 Environmental benefits

Innovative, cost-effective and energy-efficient


eca also helped deliver a range of additional mechanical solutions to the ITP which were also cost-effective and energy-efficient:

volume air handling units (AHUs) and fans distribute over 600m³/s of air throughout the building – equivalent to changing the air within the concert hall of the Sydney Opera House every 44 seconds! The quality of air is continuously monitored and controlled to minimise any wasteful over-supply of fresh air. The AHUs also have economisers to make use of ‘free cooling’ when outside air temperatures permit.

A Building Management System (BMS) ties all the buildings systems together, offering efficient monitoring and control throughout the terminal. The Flight Information Display System, Nose In Guidance System, lighting control, electrical metering, heating and ventilation, Heat energy from the engines fire alarms and maintenance are of 2MW electrical generators all integrated into the BMS. is recovered and fed into the Demand-based variable air heating water system. Not only 18 –

are the generators able to maintain airport operations during a power loss, but they can also operate during peak demand periods at the request of the electricity supply company.

baggage make-up hall provide baggage-handling staff with a temporary refuge from the cold weather. They supply heating much like the sun, which is an efficient alternative to heating Hot water to public washrooms cold air. and the like is generated by Approximately 12km of electric air-to-water heat pumps. Aquatherm pipework was used Their positioning within the for mechanical services. This plantroom is designed to effect- environmentally conscious ively recover heat radiated from product is non-metallic, less susoperating chillers, boosting the ceptible to erosion and reduces efficiency of the domestic hot the quantity of chemical additwater heat pumps whilst cooling ives to the heating and cooling the plantroom. water. It also reduces fire risks Gas (LPG) radiant heaters in the because welding isn’t required. February/March 2015

installed and replaced in the minal Facilities Manager Mike and construction was continuously rethought, tested and Parker says. future. This included provision of a The solution was also designed questioned to provide the best route for pipework through to using standard ‘off the shelf’ outcome for the project and for the international terminal build- equipment, eliminating the cost the airport,” Mr Hill says. ing to make use of the efficient artesian plant serving the integrated terminal building, as well as the ability to add a sixth artesian well to increase the capacity of the system. They were designed so there was adequate space around the equipment, and located equipment that requires regular inspections or maintenance at an appropriate height for easy maintenance and access. For example, most of the heating and cooling equipment is located outside public and tenanted spaces to minimise maintenance staff and equipment interaction with the public and disruption to occupants. “We have some great solutions on the mechanical side that specifically address our needs such as back-of-house routes between plantrooms and the plant being located out of tenancy spaces wherever possible for 24/7 easy access,” Ter-

Construction and site tours have been held for various engineering and technical groups, since many of the technical aspects could only be truly appreof bespoke or special equip- “This approach enabled the ciated when viewed up-close. ment and further reinforcing its essential services to be main- Beca’s unique artesian water tained until new services were solution is also leading the way robustness and serviceability. constructed and operational. It for a new era of artesian-based Seamless integration also required a number of diver- systems that aim to make smart A major challenge for every- sions of services and temporary use of this sustainable resource. one involved in design and services, which were all incorpoA number of organisations are construction of the ITP was the rated into the design.” referencing the project as ‘the need to maintain continuous Former Christchurch Airport way forward’ and a preferred airport operations. Chief Executive Jim Boult was method of providing heating The new building footprint sat “delighted” with the artesian and cooling for artesian-based largely across the old building heating and cooling system the systems. footprint, so maintaining airport Beca team designed. “The sysThe artesian heating and cool“The system has dramatically reduced ing system is scalable and can be adapted to other buildings our operational costs and removed or applications, making it a benchmark for Christchurch dependency on fossil fuels” operations throughout the pro- tem has dramatically reduced that is being utilised extensively ject was an enormously com- our operational costs and re- in the redevelopment of the moved dependency on fossil city. plex task to undertake. fuels.”

Various Christchurch projects are now incorporating Engineering legacy artesian-based heating and The project epitomises ex- cooling, including the Terrace cellent engineering in almost development, Environment every aspect of the design and Canterbury office building, has attracted wide interest from “The staging of demolition the engineering sector. Continued on page 20

The design recognised the need for the new terminal to be seamlessly integrated, which included designing the central plant so it was constructed in the first stage.

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February/March 2015 – 19

COVER STORY >> Christchurch Continued from page 19 Arts Centre, Bus Exchange and posed District Energy System. Justice Precinct. There is potential and opporIt is also the recommended tunities for the system to be solution for the Metro Sports used at other locations around Facility and the Christchurch the city – it may also be feasConvention Centre, as well as ible for artesian water to be being at the core of the pro- substituted with an alternative

water source, such as sea or of system, which is truly showing the way forward in terms of lake water. The Energy Efficiency and maximising the potential and efficiency of artesian water. Conservation Authority and the Christchurch City Council Christchurch Airport victory are both providing grants to Successful and fully operationpromote the use of this type al for the past four years, the artesian heating and cooling system has gone on to win numerous accolades. Christchurch Airport are so happy with the system they are currently working to install a new artesian heating and cooling system within the existing international terminal building in lieu of the current gas and diesel boilers. The ITP has also proved to be a resounding success with airport passengers and visitors, having been judged “Airport Project of the Year” by the New Zealand Airports Association in 2013 and recognised by the Property Council of New Zealand as Best in Category (Tourism and Leisure). Christchurch Airport was also found to be the best airport in Australasia by an independent international survey of airports. Critical to the project’s success was the working relationship developed between Beca and Christchurch Airport, particularly the latter organisation’s appetite for knowing and understanding the options available and being part of determining the solutions. “Beca was proud to be involved in the project,” Mr Hill says. “We engaged with Christchurch Airport’s facilities maintenance team right from the start so we could really understand their business needs. We established regular meetings and design workshops to discuss progress, proposed solutions and outcomes. This extended throughout the design and construction period and has now extended beyond the handover period, to work on fine-tuning the central plant.”

The Living Wall at Christchurch Airport, the secondlargest international airport in New Zealand that receives approximately six million passengers and 80,000 commercial aircraft movements every year 20 –

February/March 2015

The jewel in the crown


eca’s award-winning artesian heating and cooling system is the jewel in the crown of a facility that was the only New Zealand airport recognised in last year’s Route Awards, which are widely regarded as the most prestigious awards in the airline community.

with a landscape plaza and airside works. Responding to the latest developments in air travel, the new terminal is unique in a number of ways:

• its new check-in hall accommodates innovative self-service kiosks and compact Christchurch International Aircheck-in desks for faster pasport is: senger processing • the second-largest interna- • traditionally separate airside tional airport in New Zealand, departure lounges have been receiving approximately six centralised to maximise flexibmillion passengers and 80,000 ility, improve way-finding and commercial aircraft movemaximise space utilisation ments every year • the landside approach is across • The South Island’s busiest an innovative traffic-free plaza. air connection to the world’s The new building brings totrade and tourism markets gether the check-in facilities of and the natural gateway to the both domestic and international South Island, which has long operations, maximising the use been New Zealand’s brand enof the counter infrastructure and gine room. also combining the baggage However, the airport’s ongoing system to save space and make success placed considerable trans-shipping easier. pressure on a domestic terminal originally built in 1960 to accom- Three swing-style boarding modate 200,000 passengers an- gates further enhance flexibility, enabling certain gates to nually. be used for either domestic or Although the old terminal uninternational services and allowderwent several expansions and ing some flights to arrive interupgrades, continuous growth nationally and proceed domestmeant it was clearly time to conically on the same gate. sider a replacement. The existing international terThe $237 million Integrated minal was substantially re-modTerminal Project (ITP) begun elled, including an extra rein 2004 would see the old doclaim belt, re-configuration of mestic terminal replaced with customs and MAF services to a new 30,000m2 three-storey current standards, arrivals hall diamond-shaped integrated remodelling and changes to the terminal building designed to airside/landside boundary conimprove passenger experience figuration. and cater for future growth. Other innovations include: Designed by Warren and Ma• a large landside retail and honey and HASSELL (Australia) food precinct in association, the development consists of the new integrated • a new $15 million domestic and expanded international terminal, offices, a multi-storey baggage claim areas inclusive car park, surface car parking

The new building brings together the check-in facilities of both domestic and international operations of a separate regional/small of construction; a challenge overcome by completing the aircraft baggage claim • a new international customs new terminal building in two arrivals area, inclusive of a nat- stages.

ural experience of New Zeal- Stage 1 of the new terminal, including the new check-in hall, and • a new taxiway incorporated new food/retail precinct, new into the domestic aircraft park- single domestic security screening, and the new regional deing apron to allow for more efparture lounge and baggage ficient aircraft movements claim of the new terminal, was • and new coach and drop-off finished in May 2011. facilities that eliminate the terThis in turn allowed the old minal frontage road in accordinternational check-in and the ance with new International old domestic terminal north of Civil Aviation Organization the main pier to be demolished guidelines. to make way for Stage 2, which Passengers now check in, drop includes the new domestic bagoff their luggage and then con- gage claim and the northern tinue to the departure area on half of the new domestic deparLevel 1 that contains screened ture lounge that was completed and unscreened passenger in February 2012. lounges with retail and flight The final stage of the project gates to aircrafts, retail shops, a was completed in March 2013 bar, and food court. despite 11,000 earthquakes durLevel 2 hosts two airline lounges with views of the Southern Alps as well as the primary mechanical and electrical plantrooms, which are augmented by other plantrooms distributed throughout the building.

ing construction, snow storms and volcanic ash clouds.

A significant challenge was the careful staging required to allow airline operations to continue handling 300,000 commercial aircraft movements and 44 million visitors during the four years

For the people of Christchurch, the new terminal provides a gateway to the world and sets the standard for the rebuild of the city after the 2010 and 2011 Canterbury earthquakes.

The building was officially opened on 18 April 2013 by Prime Minister John Key, who publicly declared it “the best airport in New Zealand.”

why are things not happening as you planned? Thirty years of research has shown that 70% of all major change efforts in organisations fail to deliver the expected results in the medium to long term – frequently due to a lack of engagement and commitment by the people directly involved. Contact PeopleCentric to find out how we can help you engage your people and develop a productive and safe workplace climate.

February/March 2015 – 21

WATER >> Irrigation

Mountain-fed lakes offer

reliable water supply

Alpine water will help reduce the effects of the devastating drought that is currently affecting the east coast of the South Island, argues IrrigationNZ Chair Nicky Hyslop

Alpine-fed water storage refers to dams and water storage lakes which are replenished by rainfall and snowmelt from alpine-fed rivers such as the Rangitata (pictured here) or Rakaia in Canterbury


arnessing the potential of alpine systems will generate considerable economic and social benefits for all New Zealanders and build resilience within both provincial regions and urban areas where crops are processed and farm machinery and products manufactured.

Lower Waitaki Irrigation Company and many other towns also rely on alpine-fed supply. Alpine water storage is therefore an investment in New Zealand’s future environmental sustainability.

replenished by rainfall. While these forms of water storage are essential, they have limited reach and more critically offer less reliable supply than alpine-fed storage.

Alpine-fed water storage reThe flipside is the status quo: fers to dams and water storage do nothing and we continue to lakes which are replenished by suffer dry spells and droughts rainfall and snowmelt from al-

A reliable drought-proof water supply means farmers can “do nothing and we continue to suffer dry diversify agriculture into higher spells and droughts which wreak havoc on value crops that require both significant investment and a the economy and the viability of farming” guaranteed water supply, thus generating more return per which wreak havoc on the eco- pine-fed rivers such as the Randrop of water. nomy and the viability of farm- gitata or Rakaia in Canterbury. Importantly, alpine storage also ing. Our hill-fed streams, rivers Because alpine rainfall is more creates wins for under-pressure and lowland streams will also consistent and plentiful than hill-fed and lowland streams. continue to be the subject of rain that falls on New Zealand’s Moving irrigators off these wa- yet more unproductive litiga- plains and foothills regions, it’s ter sources and providing them tion over access to water – com- more suitable to provide reliawith alpine water instead will mercial use versus environment ble water supply. allow natural flow conditions to protection. New Zealand currently has resume during summer. In some Many farmers have invested in relatively few examples of alinstances stored water may also shallow ponds and lakes that pine-fed water storage sysbe used to top up summer hold water from nearby river tems and most were built for flows or replenish groundwater and stream systems which have hydro-generation – the Waitaki that feeds lowland streams. been consented for irrigation. and Clutha Rivers for example. Alpine water can also future Larger dams like the Opuha in But we have plenty of river and proof domestic and industrial South Canterbury are fed by lake systems which could prowater supply: reliable water for foothill streams and both stor- vide the basis for new water Oamaru is supplied from the age types are predominantly storage. 22 –

Sound strategy Several years ago, the Canterbury Water Management Strategy (CWMS) looked at potential water storage sites, coming up with 20 options for the region based on 12 storage reservoirs. Irrigation and storage were key drivers for developing the CWMS, based on the need to capture both economic and environmental benefits from water use, says David Caygill, Environment Canterbury’s Commissioner with particular responsibility for water. “Through the CWMS we are looking at increased reliability of water supply through storage, for example the use of Lake Coleridge, and in tandem making sure that we stay within water quality limits,” he explains. “The strategy also sees improved water use efficiency – which is simply making better use of what we have – as a very important part of water management in Canterbury, and one that the irrigation sector is making great progress on.” The CWMS Stage 3 final report concluded large-scale water February/March 2015

antee a high reliability of supply year in and year out. “The situation with our water storage continues to deteriorate and the outlook is not good – a seemingly strengthening El Nino weather pattern and the possibility of an empty lake before the end of February,” Mr McCormick observes. These conditions truly are unprecedented in the history of the dam but, at the same time, are not conditions that have not Chief Executive been experienced here before, Tony McCormick he adds. “It emphasises how we have had something of a fortuThe situation with our water storage continues to deteriorate and the outlook is not good … and nate run over the last 15 years the possibility of an empty lake before the end of February, says Opuha Water Chief Executive and have not had the climatic Tony McCormick sequence such as occurred in the 1980s and that we are now storage, with the community’s with chilling accuracy. “The Tough times seeing to a similar degree this backing following consultation, South Canterbury evaluation Opuha Water Chief Executive season.” was necessary for Canterbury’s confirmed how ‘water short’ Tony McCormick is at the foreIt also emphasises the fact future. “Current approaches to the area is unless it can access front of the fight to ensure irrigthat the South Canterbury reriver management do not ad- water from alpine rivers – the ation water can be eked out this gion is a naturally water-short equately protect flow variability Waitaki and Rangitata Rivers,” season. Farmers irrigating from region that is always at risk of and the water storage options the report said. Opuha in South Canterbury are insufficient water supply, even proposed would lead to sub- “The current Opuha scheme is now on 50 percent water restricwith storage, while reliant only stantially reduced flow variab- unlikely to meet demand from tions and have been warned to on the rain that falls within the ility in some rivers at, or near, its existing irrigators in all years. prepare for tighter limits if the catchment. “We must look to minimum low-flow for much of In dry years, like 1988, the lake lake continues to drop. accessing alpine water if we are January through March.” may not refill in autumn/winter He says alpine water feed into to realise the full potential of reSouth Canterbury’s current leading to irrigation restrictions the Opuha system will be the dire situation was predicted of three months or more.” only way in the future to guar- Continued on page 24


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WATER >> Irrigation Continued from page 23 liable irrigation in our region.” For IrrigationNZ, this summer highlights again the need to move on alpine-fed water storage infrastructure. Despite the focus upon irrigation development over the past five years New Zealand has made very limited progress on storage. We have invested heavily in modernising and developing our irrigation distribution systems but have failed to invest in alpine water storage to our detriment. It’s almost as if we’ve lost sight of the prize that reli-

able alpine-fed irrigation water being expected to fix today’s storage could bring to both the environmental issues which are largely the result of yesterday’s environment and economy. Certainty of water supply al- decisions whilst providing for lows investment in SMART irrig- future generations, just doesn’t ation technologies that greatly stack up. The only way we’re going to realise New Zealand’s water potential is through the community co-investing alongside irrigating farmers. Irrigators need to pay their way but the community also needs to be making an investment in its fuThe investment hurdle, a small ture resilience. group of progressive irrigators improve nutrient management and production. There are also direct benefits from storage, including the augmentation of summer river flows or being able to release flushing flows that cleanse rivers of summer algal growth.

Irrigation and storage were key drivers for developing the CWMS, based on the need to capture both economic and environmental benefits from water use, says Environment Canterbury Commissioner David Caygill

Waitaki working wonders Waitaki’s alpine storage means irrigating farmers in the lower half of the catchment are well placed to ride out this summer’s extended dry, says the collective’s Policy Manager Elizabeth Soal


relatively unsung collective irrigation scheme at the bottom end of Canterbury is proof positive of the benefits of alpine-fed water storage.

Waitaki Irrigators Collective Policy Manager Elizabeth Soal says the Waitaki’s alpine storage means irrigating farmers in the lower half of the catchment are well placed to ride out this summer’s extended dry. “This storage in the upper catchment means that irrigators in the lower Waitaki enjoy some of the most reliable water supply in the country, as low flows in the Waitaki generally occur during winter, outside of the irrigation season,” she explains. “This also means that there is not the added environmental pressure on the lower river of full abstraction during times of low inflows, so the Lower Waitaki is able to sustainably supply reliable water for irrigation of well over 100,000 hec-

tares across North Otago and Plan was developed in 2004 meant that the river was over-alSouth Canterbury.” Alpine lakes Tekapo, Pukaki, located in terms of abstraction and Ohau and man-made hy- (although, contradictorily, other dro lakes Benmore, Aviemore, policies within the plan guarand Waitaki provide storage in anteed that those with existing permits at the time the plan was the Waitaki system, with about written would maintain their re50 percent of the spring and liability of supply). summer inflows into the Waitaki system coming from alpine The susceptibility of the Maerewhenua River to low flows in snowmelt. summer meant those irrigators Tributary inflows into lower abstracting from the river faced rivers such as the Maerewhenua significantly reduced reliability River that flows from the of supply, which would have Kakanui Ranges into the Lower major economic and social imWaitaki are much less reliable pacts on the local community. and typically have low flows However, the Maerewhenua during summer. District Water Resource ComWater has been abstracted pany (MDWRC) had, in addition from the Maerewhenua River to its long-held consent, gained for over a hundred years, be- a water permit to take and use ginning with gold mining rights, water from the highly reliable which were then later converted Lower Waitaki main stem (water to irrigation permits. which was able to be abstracted The environmental flow regime within the allocation block availand allocation limits put in able under the plan). place when the Waitaki Catch- The Maerewhenua Water Users ment Water Allocation Regional Group came together to de-

24 –

velop a process whereby some of those abstracting from the Maerewhenua River would relinquish their consents and instead receive supply from the MDWRC. This has come at significant cost to the farmers involved, but it has resulted in a win-win outcome, with farmers who stayed on the Maerewhenua and those who relinquished their consents improving their water supply reliability while surrendered water led to improved environmental outcomes for the Maerewhenua River. “This great outcome would not have been possible without reliable alpine-fed water being available from the Lower Waitaki River,” Ms Soal believes. “The Waitaki Irrigators Collective is now undertaking work to determine whether this successful example can be replicated for the other tributary waterways of the Lower Waitaki.” February/March 2015

WASTEWATER >> Sponsored article

Reducing costs drive membrane bioreactors into the mainstream The decrease in price of the membrane bioreactors, together with increased operational knowledge in successfully applying the technology, has led to a rapid growth in its their use in recent years, says Dr Matt Savage


ver the last decade, membrane bioreactors have become increasingly popular as a form of wastewater treatment for municipal sewage treatment, industrial wastewater treatment and for water reclamation projects. The ability of membrane bioreactors to provide a reliably high quality of treated wastewater that can be easily recovered for reuse drove the initial establishment of this technology. The increasing number of membrane suppliers in the market and developments in manufacturing methods has seen the cost of membranes in New Zealand more than halve in recent years. This has now reached the point where, in many instances, package membrane reactor plants can be offered at similar – if not lower – cost than traditional sequencing batch reactor or packed bed reactor treatment plants whilst maintaining the added benefit of a substantially higher level of treatment being achieved. This also has significant benefits for existing plants, as the membranes, which typically have an operational life expectancy of five to seven years, can now be replaced at the end of their useful life by next generation membranes that cost significantly less and have been proven in long-term real-world

membranes possible due to their extremely high cost, system designers can now allow significant contingency in the installed capacity of the plant and still come in at a lower capital cost. These recent advances have transformed membrane bioreactor technology from a niche product, used only where the highest levels of environmental The membrane bioreactor in action and the clear water that performance are required, to a comes from the treatment process mainstream solution that can reliably deliver exceptional peroperation to perform better reduced power use and reduc- formance at a cost that comthan the original membranes tions in chemical dosing re- pares favourably to more tradiquired for phosphorus removal tional technologies. used. The case of the largest flat compared to when the original Dr Matt Savage is a sheet membrane bioreactors in flat sheet membranes supplied chartered engineer with New Zealand switching to next with the plant were in use. a PhD in the design of generation membranes has The availability of a high qual- equipment for industrial seen a reduction in membrane ity, lower cost membrane has wastewater treatment. He replacement costs of more than also gone a long way towards has 15 years experience de-risking the installed capacity in the development, 30 percent. In addition to reduced direct of these systems. commercialisation and membrane costs, plant man- Where there was previously a manufacture of wastewater agement report a significantly strong economic driver to in- treatment plant and increased plant throughput, stall the minimum number of equipment

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WATER >> Ruataniwha

Drought fears driving Ruataniwha development

Hawkes Bay’s continuing dry weather and soil moisture levels at drought levels underline the need for the Ruataniwha Water Storage Scheme argues project leader Graeme Hansen


here’s been a significant amount of work undertaken in the last four years to assess the feasibility of developing a water storage project in Central Hawke’s Bay. This work has centred on the Ruataniwha Plains, where irrigated agriculture is established on a modest scale but there is significant potential for expansion. The concept is simple – store winter water to use in the dry summer months, taking the pressure off the Tukituki River. The reality is without water storage there will be no expansion of the irrigation opportunity in Ruataniwha and almost certainly further pressure on existing groundwater and surface water sources as government freshwater policy initiatives come into effect. The Ruataniwha Water Storage Scheme is one element of a long-term water management strategy for the Tukituki Catchment in Hawke’s Bay. It’s not just an irrigation scheme; it’s aimed

at delivering intergenerational environmental, cultural, social and economic benefits to a region where climate change forecasts predict a significant drying and warming trend.

The $275 million Ruataniwha Water Storage Scheme is designed to hold 93 million cubic metres of water that will irrigate 25,000 to 30,000 hectares

irrigators, leading the HBRC to industries and the mitigation to begin looking at water storage. the biggest risk to the region’s The scheme will consist of a HBRC started with over 20 economy (water shortage for 93 million m³ storage reservoir potential sites within the catch- agricultural production)”. located in the upper Makaroro ment, with the view of having Who will build the dam? River in Central Hawke’s Bay. multiple storage sites, all offDeciding on the design and Reservoir water from the river. However, one by one construction company for a scheme will be released, im- extensive geotechnical and multimillion dollar infrastructure proving river flows in the seismic assessments, along project such as the Ruataniwha Tukituki Catchment through with economic impacts, ruled Water Storage Scheme has summer for river life and other out potential sites, ultimately been an involved process. river users while at the same refining the process down to Five international consortia extime providing secure water to one site on the Makaroro River, pressed an interest in building irrigators. west of Tikokino. Although the the $275 million water storage The multimillion dollar water Makaroro dam site is complex scheme, and after an extensive storage proposal has a long and challenging, it has been process two companies were history going back several proven to be financially, tech- shortlisted to participate in the years when, driven in part by nically and environmentally competitive design and congovernment policy, Hawke’s feasible. struction phase. Bay Regional Council (HBRC) A report prepared for HBRC They were a joint venture staff began looking at the river by independent consultants between Spanish global infraflows and water allocation in the Nimmo Bell & Company says structure company Obrascon Tukituki River. “the Ruataniwha Scheme re- Huarte Lain (OHL) and New It was clear that some options mains the most economic al- Zealand-based Hawkins (OHLto improve the flows in the ternative and a viable invest- Hawkins) and French-based Tukituki River would have a dev- ment for the region considering contractor Bouygues Construcastating economic impact on the importance of the primary tion (Bouygues).

26 –

February/March 2015

It was accepted early on in the selection process that the size, scale and technical complexities of the project were such that international expertise in geotechnical and large project management would be required. The competitive bid phase saw both consortia provide a “fixed price, fixed time” offer to deliver the project. These comprehensive bids were evaluated by an expert panel which assessed everything from the companies’ past experience in large infrastructure and dam building to their financial capability and ability for innovative solutions. Late in 2013 the OHL -Hawkins joint venture was announced as the preferred contractor to move forward with and determine the exact design and cost of the proposed scheme, including an 83m high Central Core Rockfill Dam (CCRD) and an extensive distribution network of open canals and pipes across the Ruataniwha Plains. A final design and construction contract will be signed once investors and resource consents are confirmed and 40 million cubic metres of water contracts has formally been signed up by farmers.

The dam and primary distribution design team is led by GHD, an Australian-based consultancy with a strong New Zealand presence and good experience in detailed design of a range of dam types.

sist of an embankment of two million cubic metres of locally sourced river gravels, rip-rap and core material, with extensive foundation and abutment treatment, a multi-level intake tower, concrete spillway and Water Infrastructure Group NZ 6.5Mw power house. (WIG) is responsible for the sec- Construction is sequenced to ondary distribution design. WIG minimise build risk by programhas current design and con- ming in-river diversion works struction experience with canal through summer and a strong and pipe optimisation work on emphasis on achieving “above the Ashburton Lyndhurst Irriga- ground” status as early as postion scheme and Barrhill Chert- sible. During the optimisation sey Irrigation. phase of dam design the storWhat kind of dam will be built age capacity of the reservoir has been refined from 96 million and why? m³ to 93 million m³. The feasibility phase of design identified a Concrete Faced The distribution network inRockfill Dam (CFRD) as the pre- cludes three major intake strucferred dam type to deal with the tures, 16 kilometres of open seismic and geotechnical issues lined canals, 14 kilometres of primary headrace pipeline and at the Makaroro site. potentially 200 kilometres of However following the extenssecondary HDPE plastic pipe ive bid process OHL-Hawkins network to farm gate. had identified sufficient flexible core material within the The ultimate configuration of area to promote a Central Core the secondary network will be Rockfill Dam, a design that is determined by the water sales considered a preferred option process, so some staging of to deal with the site’s technical construction is expected. A series of 20 pump stations is issues. Innovations such as the flexible also proposed to pump and dam core material, inclined dam pressurise water to farm gate, intake tower, canal alignments at a minimum of 3.5 bars, minmaximising grade and gravity imising on-farm pumping repotential, canal hydro genera- quirements.

Who is OHL-Hawkins Joint tion potential and pressurised Venture? water to farm gate, to name a Obrascon Huarte Lain (OHL) is few, have been a feature of the established globally as one of OHL-Hawkins bid. the largest infrastructure players and is currently ranked 21st The project will take three years among the 225 largest interna- to design and build, separated tional contractors. Hawkins is into two primary elements - the one of New Zealand’s largest dam construction and distribuprivately owned construction tion network. companies.

The dam components will con-

HBRC ownership. There will be a potential proportional share for iwi and farmer investors. The cooperative financing model, used extensively on South Island projects, is not ideally suited to the Ruataniwha Scheme due to the significant total capital cost, the wider environmental benefits and need to balance uptake risk. Economist Peter Fraser has stated that the project had a net present value (NVP) of minus $27m when discounted at the public sector discount rate of eight percent over 35 years. However, high discount rates such as this are now generally recognised as being inappropriate for large infrastructure projects as they encourage public bodies to favour shortterm strategies, especially in a world undergoing climate change. Indeed, reports undertaken by long serving economic and business research company Butcher Partners considers a 70 year NPV analysis (+$26m) to be a more likely reflection of the financial benefits of the project. (This analysis co-relates with the proposed concession period as per the financial structure.)

This increases to $410m when external financial benefits to the community and farmers are Funding the scheme taken into account (using the A Build, Operate, Own and social discount rate of five perTransfer (BOOT) model is being cent). promoted for the Ruataniwha Assertions that the public secScheme. Under this structure, tor must completely subsidise investors would buy into the the project at a nil return on scheme and receive returns for capital are simply untrue. It has an agreed concession period of 70 years, after which the scheme would be transferred back to Continued on page 28

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February/March 2015 – 27

WATER >> Ruataniwha The upper Makaroro River in Central Hawke’s Bay will host the 83m high x 415 m wide central core rock fill dam that will release reservoir water in summer, improving river flows in the Tukituki Catchment while also providing 6.5 megawatts of electricity

Continued from page 27

return on capital that reflects the mix of environmental, culbeen stated in the public do- tural, social, economic and main on a number of occasions financial benefits. that public sector investors will The price of 37.5 cents per require either at minimum pre- cubic metre calculated by Mr servation of capital and/or a Fraser in the New Year edition

Ruataniwha Fast Facts

likely he has underestimated the supply capability of the scheme and not recognised the significant on farm savings (opex and capex) that farmers While not being privy to Mr will achieve from pressurised Fraser’s calculations, it seems water. of AsiaPacific Infrastructure is 44 percent higher than the fully pressurised water price which the Ruataniwha Scheme is offering farmers at 26c/m3.

to achieving uncontested consents HBRC expects to achieve • Dam type: Central core rock Increased regional income that uptake figure prior to curfill dam of eight percent (est $200M/ rent financial close on 31 March year) 2015. • Dam: 83m high x 415m wide Improved resilience to cliSeventeen consents have been • Storage volume: 93 million mate change and drought. granted with a further three uncubic metres Estimated cost: $275 million. der conditional review - should • Surface area: 372 hectares litigation continue past March • Irrigation footprint: 25,000 to The scheme will cover two percent of Hawkes Bay farmland the financial close date will be 30,000 hectares reassessed. • Electricity generation: 6.5 and include approximately 370 Institutional and local eligible farms comprising 78,000 hecmegawatts tares, 40,000 of which is irrig- investors are being approached • Environmental flows: in- able land - 28,000 hectares will for investment – a Treaty creased summer flow plus be supplied at full uptake. Claimant group with mana four flushing flows Central Hawkes Bay farmers whenua in the Central Hawkes • Environmental mitigation: had signed up to take 5.4 mil- Bay area is also a possible in$10M over 30 years lion cubic metres of water a year vestor. • Estimated regional economic from the Ruataniwha Scheme as Assuming the Ruataniwha Wabenefit: of December 2014, with a fur- ter Storage Scheme proceeds Four percent GDP increase ther 18 million cubic metres in then the Crown is also likely to invest in the scheme via Crown Seven percent increase in the contracting phase. employment (over 2000 The minimum target is 40 mil- Irrigation Investments Ltd. jobs)

lion m3 of water and subject

28 –

the region and the Tukituki catchment will be left with plan change six alone, which reduces water security for irrigators through increased minimum flows and stiffens up nutrient regulation – all of which will reduce primary sector activity.

Assuming climate change forecasts hold true then the catchment and region will continue to experience a warming and drying trend, which over the long run will further exacerbate the decline in rural productivity with attendant social-economic effects on, in particular, rural servicing towns such as Waipawa, Waipukurau and Hastings. Under this scenario the Hawkes Bay Regional Council would anticipate water storage would re-emerge on the agenda at some future point at If the plan doesn’t proceed, a vastly increased cost. February/March 2015

Assertions by some critics that the only sector capable of using the water is dairy farming are misguided and being proved wrong by the water contracts coming in from farmers.

is well advanced, including negotiation of the final contract detail. Construction is scheduled to start in late 2015 to meet water delivery for the 2018/19 irrigation season but is It is useful to consider the cli- dependent on meeting agreed matic and soil information for conditions around water upthe Ruataniwha Scheme irrig- take, investment and consent. ation footprint. Hawke’s Bay, Water uptake including Central Hawke’s Bay, is predominantly a red meat, ar- Hawke’s Bay Regional Investable and horticultural economy, ment Company Ltd staff will which in part reflects its warm continue to work closely with farmers considering options to and summer-dry climate. take water from the scheme. All the work that has been For the scheme to go ahead undertaken on water uptake farmers need to sign up to take and irrigated land use shows a at least 40 million cubic metres mixed land use appearing, in- of water by financial close. cluding a material proportion of arable and sheep and beef and The scheme will operate on a ‘Take or Pay’ system, which is around a third dairy. common in irrigation schemes What does 2015 hold for the in New Zealand. Put simply, it scheme? means farmers pay for the waThere are important milestones ter whether they use it or not – to reach in each of the four main an approach necessary to fund work streams for the Ruatani- large infrastructure projects that also allows them to farm with wha Scheme to go ahead: confidence and certainty. Design and construction Work on optimising the design Investing in the scheme

the scheme, subject to agreed conditions. Discussions are also ongoing with other potential private investors and the government about investment options. These investors need to be confirmed before the scheme can proceed.

Graeme Hansen

Consents for the scheme An extensive Environmental Protection Authority process undertaken for the project and HBRC’s Tukituki Plan Change has resulted in High Court appeals. A referral back to the Board of Inquiry has sought comments from all parties on recrafting one specific rule in the Plan Change to make it more effective. A final decision is expected early this year. Satisfying the remaining elements of the four major work strands above is the challenge for the scheme at this time and will ultimately determine if and when the scheme proceeds.

Graeme Hansen is Hawke’s Bay Regional Council’s Water Initiatives Group Manager and for the scheme with the pre- HBRC has committed to in- Ruataniwha Water Storage ferred contractor OHL Hawkins vesting up to $80 million in Project Leader

February/March 2015 – 29


Full steam ahead for new oil and gas projects Low energy prices expected to have little impact on the latest search for viable oil and gas deposits


nitial exploration is expected to start soon on the 15 new oil and gas permits awarded in Block Offer 2014, despite recent dramatic falls in oil revenues. The first few years of exploration consist of either seismic acquisition or seismic re-interpretation explains Len Houwers, Director of Aretê Consulting, which services Australasian oil and gas companies operating in the mid-to-upstream market. “These are fairly low-cost activities and I wouldn’t expect any company that has taken up those permits to resolve from those as it is effectively gathering data to see whether it is worth making major investments,” he says. “Basically, they need to find out whether they have a sufficient resource and where the drilling location might be.” It generally takes about three years before a drilling commitment might have to be made and, as Mr Houwers notes, a lot can change in that time. “Plus the companies that have signed up for these blocks will have committed to doing that under the Crown Minerals Act,” he adds. “So I don’t think the current oil prices would discourage those parties from doing the basic exploration work before drilling.” However, if low oil prices persist for up to three years as suggested recently by BP Group Chief Executive Bob Dudley, the prize will have to be “substantially larger” to encourage drilling. “There are certain economic limits for blocks to produce oil, particularly offshore, and that is an important driver,” Mr Houwers notes. Any decision to drill would depend on how long the price stays low and the level of investment needed. “Companies making drilling decisions for offshore work firstly need to be clear about the potential size of the prize – the current oil price wouldn’t discourage a company putting down an exploration

well if there was a very large potential oil pool,” he believes. “On the other hand, if it’s more marginal drilling commitments may be cancelled.” Companies making drilling This caution is understandable decisions for offshore work as it is extremely costly to drill firstly need to be clear about exploration wells, with Andarko the potential size of the prize spending US$100 million last – the current oil price wouldn’t year only to see deep-sea drill discourage a company putting ship Noble Bob Douglas come down an exploration well if up empty-handed after reach- there was a very large potential ing the 4,619m total depth of oil pool says Director of Arete the Romney 1 well in the Deep- Consulting Len Houwers water Taranaki Basin 160 km off the Raglan coast. Feasibility factor Drilling nearer shore costs around half that amount and onshore it’s down to $20-30 million per well. “The economic feasibility of drilling in New Zealand depends on the size of the reservoir – drilling one well to recover one million barrels is obviously different to drilling one well to recover 100 million barrels,” Mr Houwers says. “Basically, it’s orders of magnitude.”

than Europe in terms of area, though most if it is under water. “The potential is still there but it’s very much frontier exploration territory for everybody other than the Taranaki basin, which even by global standards is probably underexplored as well,” Mr Houwers says.

BP’s Bob Dudley – expects low oil prices to last for up to three years

Energy and Resources Minister Simon Bridges is similarly sanguine about petroleum prospects. “While the drop in oil prices will obviously be of interest to the industry, there’s no evidence to assume it is affecting exploration and production decisions in New Zealand,” he believes. He too notes that there are “very long lead-in times” to many of the projects off the New Zealand coast and investment decisions are made over long periods of time. “Individ-

The general rule of thumb is that it’s obviously cheaper to drill onshore than offshore and cheaper to drill nearer shore than distant offshore. “Onshore Taranaki, where the oil pool seems to be quite small, the current oil price would be a discouragement to drilling – but that’s not to say that if someone found a 20-million barrel oil pool that they wouldn’t actually drill a well.” That said, New Zealand is considered to have a lot of underexplored areas relative to other basins. “The basic geology suggests that we have potential for petroleum systems in about a dozen different basins,” Mr Houwers observes. “Basically we have only very limited information – we know we’ve got basins, we know we’ve got sediments; the thing we don’t know is whether we have a functioning petroleum system in those areas.” He adds that the New Zealand continent is effectively larger

30 –

February/March 2015

“The basic geology suggests that we have potential for petroleum systems in about a dozen different basins” ual companies would have a Two of the newcomers are marange of differing considera- jor overseas companies with sigtions when evaluating when, nificant resources and extensive where and how to invest”. worldwide experience – ChevBlock Offer 2014 included ron, in a joint venture with Stasix onshore permits across toil, and ONGC Videsh – while the Taranaki, West Coast and the third new entrant is local East Coast basins, and nine company New Endeavour Reoffshore permits across the sources. Reinga-Northland, Taranaki, Mr Bridges stresses that the and Pegasus basins; covering oil and gas industry is already a a total of 47,690 square kilo- “vital part” of the New Zealand metres. economy. “Oil is our fourth-largCollectively these permits have est commodity export after a committed work programme dairy, meat and wood, and oil expenditure of around NZ$110 and gas combined contribute million, with a potential one bil- more than $2.7 billion to GDP lion dollars of further activity if each year.” contingent work and drilling is To date, however, all producrealised. tion in New Zealand has come Emerging entrants Mr Bridges says the results show New Zealand continues to cement its reputation as a “key destination” for investors in oil and gas exploration. “Block Offer 2014 has attracted three new companies to explore here, as well as expanded interest from local and international companies already operating in New Zealand.”

from just one of the country’s 18 basins – Taranaki. “If any of the other 17 basins has anything like the success of Taranaki, it would truly be an economic game changer for our country,” he believes. This would be a direct result, he adds, of the “significant changes” the government has made over the past three years to expand the understanding of New

Zealand’s petroleum potential “Our first annual Block Offer in 2012 saw 10 petroleum exploby: • i ntroducing new legislation to ration permits granted to seven govern activities in the Exclu- companies,” he recalls. “The following year, Block Offer 2013 sive Economic Zone saw another 10 exploration per• a mending the Crown Minerals mits granted.” Act to ensure industry can operate without disruption from The 15 exploration permits for Block Offer 2014 therefore make unlawful protest it the most successful Block Of•p utting in place a “worldfer the government has run to class” regulatory regime date, and the most competitive. •e stablishing a Health and Safe- “A major success of Block Offer ty regulator, WorkSafe New 2014 has been the quality we Zealand, with a High Hazards have seen in the bids received Unit to oversee health and and the operators we are atsafety practices. tracting,” Mr Bridges adds. “My More recently, the government officials tell me that the calibre introduced significant changes of bids for Block Offer 2014 was to data confidentiality provisions exceptional, including detailed in the Crown Minerals Act that work programmes targeted to have enabled multi-client seis- specific acreage.” mic acquisition companies to Regardless of whether drilling acquire data and then on-sell it begins or not the Block Offer to industry. 2015 process for awarding oil The government has also and gas exploration permits has moved to the exclusive use of already started, with consultaannual Block Offers to allocate tion with iwi and local authorities exploration permits, which Mr in four proposed offshore areas Bridges believes has positioned and three proposed onshore New Zealand as an investment areas that cover a total area destination where companies of around 476,000 square kilometres. can manage their financial risk.

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February/March 2015



Scan for our online catalogue – 31

CITIES >> Social Housing

Prime minister takes keys from state houses Community housing providers may want to buy properties on their own or they may go into partnership with other organisations that lend them money, contribute equity or provide other services, Mr Key says


rime Minister John Key has outlined plans to expand social housing offerings by selling up to 8,000 state houses by 2017 and moving up to 5,000 tenants to make way for needier cases. Tenanted state houses could be sold to approved community housing providers or iwi at a discount provided they remained as subsidised rentals, creating more developments such as the Tamaki Redevelopment Company partnership between the government and Auckland Council that has resulted in social housing cohabiting with private affordable housing.

continue to be “by far” the biggest social housing provider and would provide at least 60,000 properties by 2017, although 5,000 tenants who were paying market rents to Housing New Zealand or near market rents would have their tenancies reviewed. “People will be encouraged and supported to move into other housing if they are in a position to take that step,” Mr Key says.

He also wants Housing New Zealand to accelerate its reconfiguration of properties to meet future demand - 30 percent of people currently on the waiting list required a one-bedroom Existing Housing New Zealand home but they made up only properties could be transferred nine per cent of Housing New to a special urban development Zealand properties. entity, Mr Key says, though his Urban increase first objective was to ensure that Mr Key further aims to provide people who needed housing affordable housing by increassupport received it – whether ing major urban redevelopfrom Housing New Zealand or a ments such as that happening community provider. at Tamaki. “A large redevel“The experience of coun- opment could involve existing tries like Australia and the properties being transferred United Kingdom is that having out of Housing NZ ownership non-government organisations and into a special urban develinvolved in social housing, opment entity,” he says. “But I alongside the government, is a want to emphasise again that better way of doing things,” he the total number of social housmaintains. ing places across Auckland will The government currently pays increase as a result of what we $700 million a year in subsidies are doing.” for income-related rents and the State houses could also be aim was to spend a further $40 sold, with tenants enjoying million to increase the number guaranteed tenancy for the of subsidies from the present duration of their need. “Com62,000 to 65,000 by 2017-18. munity housing providers may The difference between the 25 per cent of income the tenant pays and the market rent, the subsidy used to be paid only to Housing New Zealand but last year it was paid to approved social housing providers. “Locally based providers were closer to their communities and could be more responsive to the needs of tenants, such as in the mental health, disability or budgeting areas.”

want to buy properties on their own or they may go into partnership with other organisations that lend them money, contribute equity or provide other services,” Mr Key says.

“We might not get the book value of the properties, but that’s only because under accounting rules the value of houses in the government’s books is based on a theoretical sale in the open market and Housing New Zealand would that’s not what we are doing.”

32 –

John Key

“We might not get the book value of the properties, but that’s only because under accounting rules the value of houses in the government’s books is based on a theoretical sale in the open market and that’s not what we are doing” The government has also com- set for its social housing reform: missioned a strategic review of • Housing New Zealand and Housing New Zealand, which community housing providers has about 68,000 properties on will collectively provide more its books including some 3,000 social housing places than leased homes, while Social there are now – particularly in Housing Minister Paula Bennett Auckland and Christchurch has asked for a higher priority • Housing New Zealand will to be given to dealing with the continue to be “by far” the needs of homeless and those largest owner of social houssleeping rough. ing and by 2017 will provide at She also says the state housing least 60,000 properties sell-off won’t reduce the num- • Properties will be sold only if ber of social housing places this results in better services available – indeed she claims for tenants and fair and reasthese will increase by 3,000 by onable value for taxpayers 2017/18. “It just means more • Tenants in properties that tenancies will be managed by are sold will continue to be registered community housing housed for the duration of providers rather than Housing their need New Zealand,” Ms Bennett • The government will spend maintains. more on income-related rent Closer cooperation subsidies and ensure that Housing New Zealand Minister Housing New Zealand has Bill English says the whole packenough capital to build new age is consistent with five botsocial housing and to develop its existing properties. tom lines the government has February/March 2015

LIGHTING >> Electrix

New Electrix owner to unveil infrastructure contracting strategy

“In France our performance contracts must include guarantees that 15 percent of our locally-hired employees are from among the city’s unemployed, French construction giant VINCI Energies will unveil its innovative approach to and typically also include enviinfrastructure contracting at a road lighting conference in Auckland next month following its acquisition of Electrix from McConnell Dowell ronmental requirements to undertake studies to ensure that raditional four-year light- in Auckland and Tauranga in percent savings for Cergy-Ponnesting birds and night-active ing infrastructure main- New Zealand and in Victoria, toise, an urban area 20km from animals are not disturbed by tenance contracts are Australia. Paris,” Mr Garric says. lighting developments.” being surpassed by 18-20-year Last month Electrix won a new The Cergy-Pontoise project turnkey Design-Build-Operate tender to undertake public will upgrade 40-year-old infra- Garric says performance-based (DBO) and Public Private Part- lighting maintenance in the en- structure with 1000km of un- contracts provide huge advannerships (PPP) contracts with tire CitiPower network area and derground wiring, a mapped tages for urban authorities. performance guarantees that parts of the Powercor network and digitised asset inventory for “For example in our 20-year save energy, provide smart area in Victoria. 27,000 lights, networked con- PPP for Rouen, launched in city solutions, offer local emtrols for dimming and adaptive 2007, we not only halved the ployment, and return assets to The new contract means the lighting. A programme to renew city’s electricity bill, but we also owners in better condition, says company will have served the the lighting on a rolling basis developed a traffic manageVINCI Energies Regional Direc- area for more than 20 years means the infrastructure can be ment plan that’s reduced the and an expansion in the contor Guillaume Garric. returned to the city in 18 years time for crossing the city by 25 tract scope means Electrix now with an average 10-year age. “We monitor technology all percent,” says Mr Garric. serves 13 councils in the Melover the world to provide what Performance-based bourne suburban area. “Our business model is simple. is best for a client – depending smart contracts All our work and all the data we on the city, the type of street, “The renewal of this contract the electricity network and pric- is recognition of the extensive “We operate with performance collect belongs to the client. We ing structure, and in ways that knowledge and experience of guarantees and financial penal- work to understand their needs, most benefit the inhabitants,” Electrix with these public light- ties for non-performance on at save them money, and provide ing assets … and the ongoing least 20 major indicators. These the right tools and services to says Mr Garric. include maximum response and develop tailor-made solutions.” Electrix and VINCI Energies’ good performance of our field repair times, minimum energy crews in meeting Public Lightculture and values are very savings, minimum carbon and “We aim to provide a service ing Guaranteed Service Level much aligned with a strong cost reductions, and an average that will encourage clients to commitment to health and targets,” the company said. infrastructure age that requires renew - currently 75 percent of safety issues and customer ser- Electrix has also completed us to invest in renewing the in- our contracts are rolling over – major projects in Southeast Asia vice, says Mr Garric. frastructure throughout the life including our long-term turnkey “VINCI Energies is a global and the Pacific. of the contract,” he says. operations.” operator acting locally through The synergy between the two 1500 subsidiaries in 50 countries companies is obvious. Key road lighting conference in March to provide energy efficiency and VINCI Energies has been operVINCI Energies Regional Direc- The conference is renewable energy solutions.” ating under the Citeos brand in tor Guillaume Garric is one of 20 designed to assist The French multinational’s France for more than 30 years international speakers at Road road controlling audecentralised model means fulfilling “traditional” contracts Lighting 201”Smart City Invest- thorities in Australia Electrix, which it purchased in to maintain more than two milOctober last year, will continue lion streetlights, and now also ment on 9-10 March in Auck- and New Zealand to to operate as an autonomous managing long-term “turnkey” land. VINCI-owned Electrix is a find the best solutions on offer for Australasian brand. contracts for 115 cities that in- major sponsor. lighting infrastructure Guillaume Garric The conference was launched clude 19 PPPs. Electrix has been in business in New Zealand since 1955 and “These contracts include a for the first time last year by spe- through the first-hand expericommenced operations in Aus- 200,000 lighting infrastructure cialist management consultants, ence of international infrastructralia in 1997. DBO for Paris, and France’s Strategic Lighting Partners Ltd, ture managers, transport offiThe company currently has ma- largest-ever PPP – a €200m to examine the advantages of cials, standards experts, road jor lighting contracts in place project to renew the lighting new road lighting technologies, safety researchers, financiers, including long-term contracts infrastructure and provide 47 including LED. underwriters, and others.


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February/March 2015 – 33

COMMENT >> Managerial Coaching

Elizabeth Howells Director Moira Howson Senior Consultant PeopleCentric It’s a hot subject and a fast-growing industry but what does coaching really mean for local companies?


oaching often means different things to different people, but the goal of effective business coaching is simple – sustained behavioral change.

well as improved profit, client vides managers with the skills have a good idea of what they service and organisational com- and support needed to be ef- need and want coaching on. This requires self-awareness of petitiveness. fective coaches. These outcomes are, howev- Coaching is all about interper- strengths and vulnerabilities, er, not a given – the success sonal dynamics and relies on and of their current role and of managerial coaching is de- the effective facilitation of per- overall career goals.

The work context generally pendent upon the organisa- son-focused learning by doing. sees coaching in terms of “ex- tional culture and processes, It involves attentive listening ecutive coaching”, where ex“The success of managerial coaching is ternal consultants work one-onone with senior leaders to help dependent upon the organisational culture them achieve professional and and processes, and the interpersonal skills organisational goals. However, there is an increasing focus towards “hierarchical” or “managerial coaching”, which involves managers acting as coach to their direct reports. Here the focus tends to be on improving skills, competence and performance – anytime, anywhere. There is no clear data on the extent of managerial coaching in New Zealand, but a UK Chartered Institute of Personnel and Development (CIPD) survey of over 600 organisations found that coaching by line managers was the second most effective form of learning – particularly in the area of performance and leadership development. In addition, managerial coaching was starting to be incorporated into formal organisational development and performance management programmes as a way of driving organisational change.

of the coach and coachee”

They also need to accept responsibility for their own development and ask the manager open and facilitative questions.

“That was a tricky meeting; this is an area I want to improve; can we talk about how I handled it?”

With evidence for coaching and the interpersonal skills of and open questioning. The pro- citing a return on investment cess is a dialogue, not a one- of 5.7% in terms of ‘tangible’ the coach and coachee. For managerial on-the-job on-one training session. or quantifiable outputs, such coaching to be successful, it The manager needs to feel as increased productivity, and needs to be supported by the comfortable acting as a sound- an even higher return for intanorganisation’s leadership and ing board, making observations gible impacts such as improved internal processes. If the lead- as appropriate, and supporting relationships and team work, ers see themselves as coach- and challenging beliefs. It is not it’s little wonder that coaching es, and recognise the value of the role of the coach to inform is moving out of the executive coaching, it is more likely to be or provide solutions; the focus realm and into the mainstream taken up by others in the com- is on the coachee’s thinking and organisation. behavior and enabling them to This is seeing an increasing depany. mand for managers to become Organisational people pro- generate solutions. coaches, which can exponencesses that embed the practice Anytime, anywhere tially increase individual and of managerial coaching are Although a one-to-one meet- business effectiveness. Howimportant too, from selection ing might be a good uninter- ever success rests on the skills through to performance and rupted time to coach an em- of the managers, alignment development programmes. We ployee, facilitative coaching can with strategic goals and the suggest four key steps for buildhappen anytime. It’s as simple organisational culture in which ing a coaching culture. as asking and encouraging they are operating. Firstly, set coaching as a key questions. PeopleCentric is a team of business value. Then recruit for “That was a tricky meeting. You industrial and organisational learning potential, coach others doing okay? What went well? psychologists who work with in coaching and finally measure, What could have gone better?” organisations to maximise reward and promote coaches. Some form of evaluation needs The manager is coaching as a employee potential and to be involved – how is the im- way of improving performance promote the value of psychology in driving business pact of a coaching programme and upskilling direct reports. measured? Possibly, in terms Interpersonal dynamics is a performance. of level of learning, retention, two-way process, so the coa- 09 963 5020 employee engagement, in- chee also needs to understand creased performance and clear their role in the process. The

Research from Europe’s International Coaching Federation is just as supportive, with the key benefits of managerial coaching listed as increased individual performance and motivation, team cohesiveness, improved succession planning. Arguably coachee needs to feel commanagement and staff relation- the central factor for success is fortable and confident apships and greater retention as whether the organisation pro- proaching their manager and 34 –

February/March 2015

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COMMENT >> Funding Review

Future funding for local infrastructure and services Lawrence Yule President LGNZ Local government plays an essential round-the-clock role in the lives of everyone living in New Zealand


post-earthquake rebuild costs. However, options for local government might deliver many others have to plan how to fund re- better outcomes for the country. sponses to the growing number of extreme Additionally, it will be crucial for local and weather events. central government to work together in an Local government is an important con- effective partnership to develop and proThese services are the bedrock of our tributor to economic growth but the right gress towards shared goals and strategies communities and something every resident incentives and resources must be in place to address the funding gap. has a strong say in through elected repre- to drive this. Some councils, such as Rangitikei District sentatives – but local government across Council, have already taken steps to develReview required New Zealand is currently facing an unprecop innovative approaches to address fundedented funding challenge in the face of Clearly there is a need to review the way ing gaps. local government is funded for the benefit demographic and economic change. of communities. LGNZ’s goals for the fund- Rangitikei is considering a number of In response to this challenge, last year Loing review paper just released are to stim- measures to tackle the issue of population cal Government New Zealand (LGNZ) beulate discussion about the various funding reduction. Likely changes to infrastrucgan a major review to examine issues facing opportunities and constraints in New Zea- ture by 2046 include a smaller number of funding and consider alternative options to land, promote the development of options council-managed community facilities, with fund communities’ increasing demand for and alternatives to complement the fund- some transferred to community ownership, services and infrastructure. ing tools available to councils, and identify and a larger network of roads, some in private ownership, and modifications to its LGNZ’s discussion paper on the Local incentives to stimulate economic growth. water and wastewater provision. Government Funding Review is now availFor the second phase of the review, LGNZ able for public consultation. It outlines the will collate ideas and responses into a final Other areas are planning for growth. Auckfindings and potential options for addresspaper proposing a long-term strategy and land is the obvious example but there are ing current and likely future funding shortsustainable funding model for local govern- others. Tauranga City and Western Bay of falls in local government. Plenty District, for example, are collaboratment in New Zealand. ing on a spatial plan, called Smart Growth Councils spend approximately 10.5 perBay of Plenty, which is a comprehensive, “Councils spend approxcent of all public expenditure, yet they raise only 8.3 percent of all public revenue. imately 10.5 percent of all long-term strategy to ensure infrastructure is available for new residents. In a recent report on local government fiverything from the water for your morning shower, to the roads you travel to work on, the parks children play in and the street lamps which light your way home at night.

nances, The World Bank describes this as a vertical fiscal gap caused by a “mismatch between revenue means and expenditure needs”. This funding gap only accounts for basic operational expenditure; it does not include long-term capital improvements. Add to that Auckland’s anticipated spend of $10 to $15 billion over the next 30 years, and the gap widens further. Many urban areas across New Zealand are continuing to grow, requiring significant investment in infrastructure to accommodate this. Conversely, a number of others face the situation of having to maintain and renew infrastructure with declining populations and funding bases.

public expenditure, yet they raise only 8.3 percent of all public revenue”

Tasman District Council has responded to multiple major extreme weather events in its district in a number of ways, including increasing its capital operations and mainAs part of the solution, LGNZ proposes a tenance budget for vulnerable infrastrucprinciples-based partnership model with ture and creating a clear policy on coastal central government. This would include erosion to guide future investment. central government fully considering the Before pursuing fundamental changes to costs and benefits of decisions for local the funding regime, local government is communities and co-funding costs where aware it needs to assure communities that policy proposals have significant national it is open to innovation in service delivery, and to build confidence in the quality of its and local benefit. spending decisions. Although the core purpose of this first paper is to elevate the key issues, it also An appropriate funding mix includes the examines some of the options that could greater use of tools already available to sit alongside a property tax (rates) based local government, such as the use of pricfunding system. Options suggested for dis- es (user charges) where appropriate and a cussion include local income tax, local ex- prudent use of debt for assets that have an penditure tax, selective taxes, regional fuel intergenerational benefit. taxes and transaction taxes. Lawrence Yule is the President of Local

This is occurring alongside increasing community and central government expectations, increasing natural hazards impacts and environmental challenges. The goal is not to increase the overall tax Government New Zealand. The Local Christchurch is an obvious example as burden for New Zealand, but rather to de- Government Funding Review discussion it considers options to meet its share of termine whether a different mix of funding paper is available at 36 –

February/March 2015

PIPELINES >> Sponsored Article

Experience and innovation is the Iplex hallmark

Among local councils and infrastructure contractors the Iplex name is synonymous with client support, product reliability and new ways of looking at perennial problems Sewer rising main, Eltham to Hawera

and upsizing of an existing 150mm steel-reinforced concrete gravity sewer pipe with a new DN300 RESTRAIN PVC gravity sewer pipe. RESTRAIN was installed by STP using an ITT 800G Hydraulic bursting rig. The pipeline passed beneath existing homes with pipe insert at a depth of 2.5m. Pipe strings are not required with RESTRAIN, so the construction site footprint was minimized, allowing public access to properties.

The 200mm, 10500m rising sewer main conveys Eltham’s waste water from their treatment ponds, delivering it to Hawera’s Western trunk sewer main in a single pipeline. An in-depth study on suitable pipeline materials resulted in the choice of bi-axially oriented PVC pipe. PVC-O stood out as the preferred material of choice, meeting the projects durability performance requirements, including the cyclic fatigue and surge environment.

Contractor: Infracon and Eastcoast Utilities for Hastings District Council.

Contractor: Hurlestone Earthmoving for South Taranaki District Council. Design consultant: Beca, New Plymouth.

Design consultant: MWH, Hastings. Carlton Mill Rd, Christchurch

Kaiapoi to Rangiora transmission main The Kaiapoi to Rangiora transmission water main was built in DN525 PN9 rubber ring joint PVCU pipe. It was in service during the September 2010 earthquake that caused extensive damage to Kaiapoi and Christchurch. The 8500-metre main pipeline was undamaged during this event and in more than 11,000 subsequent earthquakes and aftershocks that followed. Originally designed in concrete lined mild steel pipe, the decision to use PVC-U pipe was made due to concerns over stray current corrosion - part of the pipeline route ran parallel to 33kV power lines. Contractor: C & A Cox and Shayne Higgs, drainage contractor for Waimakariri District Council. Design consultant: Opus International Consultants, Christchurch. Havelock North sewer upsizing Trenchless installation of 300mm RESTRAIN PVC pipe using static pipe-bursting (STP) technology. The project called for renovation

Following severe earthquake damage to nearby pipes in 2010 and 2011, two new 24m length DN450 gravity sewer pipes (some four metres below one of the highest volume traffic sites in Christchurch) were urgently needed to create alternative gravity sewer service for the surrounding residential area. The new sewer pipe alignment grade was extremely flat (0.14%). Other factors such as a high water table, working space constraints, public disruption, soft ground and pipe depth needs made replacement by conventional open cut or horizontal directional drilling methods impractical. Downer’s install technology partner, Foot and Brown, chose laser-guided, auger-boring technology. This installation method required a segmented pipe system, allowing jointing to be completed at depth within the drive pit. Iplex’s solution was to supply DN450 LaserboreTM rebate in-wall flush jointed pipe utilising PVC-M Series 1 PN 12 Rhino pressure pipe For technical services: Iain McNaught 027 243 3000, Frank O’Callaghan 027 495 4523, Todd Randell 027 211 4838

innovative 0800 800 262 There is more to Iplex than pipe manufactured and delivered to your project site. Talk to us about what you need. Iplex Pipelines, manufacturing and supplying PVC, PE and GRP pipeline solutions to the New Zealand market.

February/March 2015 – 37

LGNZ >> Funding Review

Time to talk money matters

Several key themes evolved from the six high-level, multi-organisational Working Group meetings held between July and December 2014 to compile the Local Government New Zealand Funding Review circumstances the issue is how to maintain infrastructure and services previously funded by a larger funding base. Funding solutions need to take account of these differences and, in considering solutions, an investment approach that ensures that funding contributes to the long-term sustainability of communities is warranted.”

They include: • A need to develop an effective partnership between local government and central government around shared goals and strategies for the activities pursued by local government, and how those activities can be prudently funded over time. The Working Group believes a “principles-based” partnership between central and local government is essential in order to enhance and strengthen New Zealand’s democratic model. “This will provide an opportunity to move away from a regime that sees frequent tweaking of local government policy settings to a practice that incentivises, in the medium to longterm, the right outcomes sought by all.” • Before pursuing fundamental changes to the funding regime, the local government sector needs to assure communities that it is open to innovation in service delivery so as to build confidence over time in the quality of the spending decisions that it makes. “There is no free lunch. All activities and resources must be paid for, but the manner in which we address those needs must be fair, transparent and appropriate. Solutions to funding issues must be specific and must work within different environments, demographics and economies.”

Funding Review chair Penny Webster - There is no free lunch. All activities and resources must be paid for, but the manner in which we address those needs must be fair, transparent and appropriate

that “there is no easy answer or silver bullet” to the funding debate that lies ahead – instead, a mix of old and new tools • An appropriate funding mix are more likely to offer a more that includes greater use of rounded and credible solution tools already available to lo- than the present status quo. cal government, in particular Options for discussion should the use of prices (user charg- include changing views on ores) where appropriate and a ganisational form, perhaps prudent use of debt, espe- reviewing where and how pubcially for assets that have an lic-private partnerships may be inter-generational benefit. more effectively utilized as well “There are 78 local govern- as how and where a regional ments in New Zealand and all perspective on infrastructure prioritise and value resources may assist in lowering managedifferently. Where choices are ment and cost burdens. “Theremade to fund services from a general rates pool rather Powerful panel than user charges that should be transparent to ratepayers. The Local Government New Similarly, not using debt for in- Zealand Funding Review pater-generational asset invest- per was developed by a Workment means that the current ing Group drawn from a broad generation of ratepayers is spectrum of sector interests: assuming that cost – a choice • Penny Webster (Chair) – that should be transparent to Auckland Council; ratepayers.” • Peter Bodeker – Otago ReLift the debate quality

gional Council;

fore a key consideration will be openness to investigating different ways of doing things. Without that nothing is likely to change for the betterment of New Zealand’s communities.” The Local Government New Zealand Funding Review paper aims to stimulate discussion about the various funding opportunities and constraints in New Zealand, with LGNZ collating ideas and responses into a final report due to be released in June that will propose a longterm strategy and sustainable funding model for local government in New Zealand. • Adam Feeley – Queenstown Lakes District Council; • Dr Oliver Hartwich – The New Zealand Initiative; • Raf Manji – Christchurch City Council; • Chris Ryan – Waitomo District Council; • Professor Claudia Scott – Victoria University of Wellington;

Growing the understanding of • Mark Butcher – New Zealand • Stephen Selwood – New ZeaLocal Government Funding these choices will, the Workland Council for Infrastructure Agency; ing Group feels, require central Development; government to contribute to • Rob Cameron – Cameron • Michael Barnett – Auckland lifting the quality of the funding Partners Ltd; Regional Chamber of Comdebate. “Sound bites criticising • Nick Clark – Federated Farmmerce; and • The diverse nature of New debt or rate levels that deter ers of New Zealand; • Phil Wilson – Auckland Zealand’s communities raises needed infrastructure investCouncil. ment is unhelpful both to the different challenges. local authority and to the counThere is a need to develop an effective partnership between “Communities in New Zealand try.” local government and central government around shared face quite different economic and demographic pressures. Local government, in return, goals and strategies Many of our cities are experi- needs to ensure that it is perencing growth - and in some forming to best-practice levcases substantial growth - els, is open to finding the most which places pressure on the efficient organisational forms provision of infrastructure and through which to deliver servicservices. In contrast, some are- es and be able to demonstrate as have no growth or have pro- this in a transparent manner. jected retrenchment. In those

The Working Group concedes

38 –

February/March 2015

LGNZ >> Health & Safety Reform


Risk of over-legislating volunteers and public places


SYSTEM Unique in NZ

Local government supports many of the proposed changes under the Health and Safety Reform Bill but there are some that could adversely impact the involvement of communities in local activities


ne such change would treat all volunteers as workers, making councils liable for local residents who choose to pitch in at events and projects. Local government is seeking changes to the Health and Safety Reform Bill for the benefit of communities, to allow councils to continue working with local residents on voluntary environmental, school and community projects. The sense of engagement people receive from volunteering is important for residents to feel they are connected and contributing to their community. Councils would no longer be able to effectively work with the vast numbers of people who do various volunteer activities if the proposed changes take place. “Volunteers play an important place in communities across all of New Zealand but these changes would threaten councils’ resources for events such as stream clean-ups, and their ability to support vital community centres where volunteers work,” LGNZ President Lawrence Yule says. “Rural areas that have volunteers in libraries, museums and local information centres would be hit the hardest.”

the proposed changes also have some worrying aspects that would affect our much loved Kiwi lifestyle,” Mr Yule says. The bill also proposes new provisions for volunteers and that threatens the Kiwi way of doing things: up and down the country volunteers plant trees, pick up rubbish, fundraise and deliver myriad other community projects. Volunteers are also involved in events run by councils such as summer festivals. Everyone should be safe but to treat these people as employees will see their expertise sidelined - not only will community spirit be quashed but some councils will choose not to run projects which could be made possible by volunteers. Another issue is that the new legislation considers a public place such as a park or civic square to be a workplace, with the council responsible for the health and safety of all those using it.

LGNZ has asked that the liability for health and safety risks posed by workplaces is amended to exclude situations where their use is not actually capable of being regulated by the council, otherwise councils may On average people in New have to consider closing off Zealand spend 13 minutes per some public spaces. day in volunteering activities – No legislation can make life the most in the OECD, where totally safe, says Mr Yule. “We the average is four minutes per all must still have personal day. responsibility and the sector It seems New Zealand legis- considers the correct balance lation has failed to keep pace between the imposition of a with international best practice duty and the potential to incur and changes in work practic- liability for volunteers is already es. “While most people would achieved under the current agree to a law that prevents Health and Safety in Employworkplace injuries and deaths, ment Act 1992.” February/March 2015

What is SonaSafe™?

Sensor vehicle mounted – Quantity to suit application

SonaSafe™ is an intelligent and unique vehicle safety system designed in New Zealand to help protect workers around large vehicles, forklifts and heavy plant. It uses a blend of proven technologies to warn the vehicle operator of personnel working close to their vehicle.

Why use SonaSafe™? Speaker with flashing light warning

Main controller

Keeping your workforce safe and healthy is paramount. Installing SonaSafe™ into your business is a worthwhile investment to offset the potential dangers and costs arising from workplace injury. The use of SonaSafe™ creates behavioural change within the working environment. The stored data may be analysed to determine how to do things safer, better and more cost effectively.

How SonaSafe™ Works

Employee wears

Vehicles are fitted with sensors. Personnel wear a personal detection unit. When someone enters a high risk area the driver receives a warning that someone is at risk. It’s simple to say, but in practice, not easy to do... until now.

BE SEEN, BE HEARD, BE SAFE Visit Tel. 07 928 7970 • Mob. 027 571 8648 – 39

LGNZ >> Roads

Funding boost to bring local roads up to speed Local roads will receive increased funding under the recent Government Policy Statement on Land Transport (GPS 2015) that will provide $38.7 billion total funding for land transport over the next 10 years


ore than $3 billion will allocated each year for the next decade towards the maintenance and renewal of local and regional roads, which represents an increase of $1 billion over the first three years.

is the government’s primary tool to communicate what it wants to achieve in land transport, and how it expects to see funding allocated across the likes of road policing, road safety promotion, state highways, local roads and public transport.

In addition, GPS 2015 will direct funding towards regional improvements for the first time, providing up to $90 million a year for non-urban areas to develop their strategic networks.

The government is committed to ensuring the continued development of high-quality connections between New Zealand’s key areas of production, processing and export, Mr Bridges says. “To achieve that, the GPS directs funding towards priority transport initiatives, including continuing the Roads of National Significance,” he explains.

The investment in land transport will help local government to address current and future demand for roading infrastructure while supporting the growth of regional New Zealand by providing better access to markets.

Our rural roading network makes a huge contribution to the profitability of the country and is crucial for the farm gate to factory process, says LGNZ President Lawrence Yule their strategic networks.”

the GPS 2012

The GPS also sets out object- • local road maintenance anives and expectations around nual maximum available fundvalue for money. “The governing increased by 2.4 per cent ment expects to see the funds per annum, compared to 2 per raised for land transport mancent aged and invested effectively • public transport maximum and efficiently to deliver the available funding lifted by Additional Crown funding will right infrastructure and services 3.5 per cent per annum, comimplement the Auckland Trans- to the right level and at the best pared to 3 per cent port Package, Accelerated Re- cost,” Mr Bridges says. • and walking and cycling imgional Roading Package and Local government is required provements is increased by Urban Cycleways Programme. to develop Regional Land 3.5 per cent per annum com“Providing the support necesTransport Plans which are consary to repair the land transport pared to 1.9 per cent. sistent with the new GPS, and network in Christchurch remains the New Zealand Transport Regional funds known as a top priority,” Mr Bridges in- Agency is required to develop R-funds will expire in March sists. a National Land Transport Pro- 2015 and will be replaced with

LGNZ President Lawrence Yule says the local government sector is a critical co-investor in roading with central government. “The additional funding, along with the share from local government, will be used to continue improving and strengthening the local road Fully funded network,” he adds. GPS 2015 funding is collecTransport Minister Simon ted primarily from road users Bridges says the government through petrol excise duty and will invest $38.7 billion in New road user charges, while an adZealand’s land transport system ditional $1.23 billion was conover the next 10 years, with re- tributed by local government in gional networks, public trans- 2012/2013. port, cycleways and road main“The government’s Safer Jourtenance to benefit. neys programme is also sup“Investment in the transport ported with investment of up sector drives economic devel- to $113 million over the next opment and productivity, and three years for ‘Road Safety GPS 2015 outlines the agenda Promotion’ which, along with for improvement programmes the programme’s ‘safe system’ for the next decade,” Mr approach, targets safer roads Bridges says. “GPS 2015 reaf- and roadsides, speeds, vehicles firms the government’s focus and road users,” Mr Bridges on economic growth and pro- says. “GPS 2015 will, for the first ductivity, road safety and value time, direct funding towards for money investments”. regional improvements, providIssued by the Minister of Trans- ing up to $90 million a year for port every three years, the GPS non-urban areas to develop 40 –

gramme which gives effect to the Regional Improvements the GPS before it comes into activity class for funding of inforce on 1 July 2015. vestments outside of non-met“Local and regional roads ropolitan areas, with funding reowned by councils across New maining at a comparable level Zealand make up more than 88 as the existing arrangements. per cent of the country’s road “Our rural roading network network,” Mr Yule says. The makes a huge contribution to increase in funding as part of the profitability of the counthe GPS 2015 is welcomed, he try and is crucial for the farm adds. “Sustainable investment gate to factory process, from in local roads supports eco- Northland roads that carry dairy nomic growth and productivity trucks and significant tourist through provision of better ac- traffic, Southland roads which cess to markets, employment service many rural industries and business areas.” to Gisborne and Tasman roads The latest plan sees funding that bear countless trucks shipincreases across the board with: ping logs to port,” Mr Yule says. • annual maximum available “It is essential that local roads funding for local road im- receive adequate investment to provements boosted by 4.3 be functional, safe and help to per cent per annum com- realise economic benefits for all pared to 2.8 per cent under New Zealanders.” February/March 2015

SECURITY monetary gain. APTs specifically target more sensitive data including passwords, competitive intelligence, schematics, blueprints, and digital certificates and are paid for by third party clients or resold in the underground.

Recent US research holds valuable lessons for New Zealand companies facing a steadily growing cybercrime problem that is already estimated to cost hundreds of millions of dollars a year

General cybercrime operations, meanwhile, are direct “for profit” attacks and target customers’ personal and financial information, which can be quickly monetised and laundered underground for ID theft and fraud.


our out of five New Zealanders agree with the experts – businesses and organisations in this country aren’t well prepared to deal with computer hacking and keeping confidential data secure.

A recent Insurance Council of New Zealand (ICNZ) review highlighted the ever-increasing importance of robust cyber security measures, ICNZ CEO Tim Grafton says. “Experts are warning that New Zealand is woefully underprepared for the increasing threat of cyber attacks and it seems the public agrees,” he notes.

Cybercriminals will either provide the hijacked information to the third-party who hired them to steal it, or they will repackage and resell the data underground to interested parties such as nation states or competing organisations.

ICNZ estimates that cyber-related crimes cost NZ businesses over NZ$625 million, but concedes that this is probably a “conservative” figure because some businesses are reluctant to disclose a cyber-breach of their systems.

Targeted Information: Intellectual property; proprietary infor• implementing new policies (35 mation; geopolitical, competipercent) tive or strategic intelligence • and investing in advanced • Insider Trading Theft malware detection technology Targeted Information: Pend(34 percent). ing M&A deals or contracts; Increased expenditure on cy- upcoming financial earnings; bersecurity also pays dividends future IPO dates as 78 percent of companies with security budgets between • Financial & Identify Theft US$750,000 and US$1 million Targeted Information: Emreported infections, but that ployee and customer personinformation; number decreased dramatical- ally-identifiable ly to 35 percent when security payment transactions; account budgets exceeded US$1 million numbers; financial credentials – demonstrating that organisa- • Technical Espionage tions with the right resources Targeted Information: Passand making the right invest- word or account credentials, ments can significantly improve source code, digital certificates; their security postures. network and security configu-

What is known is that global cyber attacks increased more than 2,000 percent in the past four years, with about half originating from the Asia-Pacific region and roughly 75 percent of organisations in the region having experienced a cyber attack in the past two years alone. Mr Grafton says while high-profile technology breaches such as eBay and Target occurred overseas, New Zealand was still at risk. “The hacking of NIWA’s supercomputer last year was a stark reminder that New Zealand is not immune to the increasing global threat of cyber-crime,” he says. “And the recent high profile computer hacking of emails and private messages has further emphasised the need for vigilance.” The ICNZ survey’s findings are supported by ThreatTrack Security, a leading US cybersecurity firm which specialises in helping organisations identify and stop Advanced Persistent Threats (APTs), targeted attacks and February/March 2015

There are many different types of targeted attacks, including: • Economic Espionage other sophisticated malware designed to evade the traditional cyber-defences deployed by enterprises and government agencies around the world. ThreatTrack Security’s recent survey of 200 US IT professionals found that nearly 40 percent said it was either a “certainty or highly likely” that their organisation would be the target of an Advanced Persistent Threat (APT) or targeted attack within the next 12 months.

Yet, while it is positive that so many security professionals are preparing themselves for a wave of advanced malware attacks their ability to effectively combat these threats is quesSome 50 percent of respondtionable, the ThreatTrack report ents overall said that email was notes. the top threat vector through The survey found that 35 per- which their organisation encent of respondents reported counters the most malware, endpoints on their network had with 34 per cent citing the web been infected by malware that as their top threat vector for evaded their defences during APTs. the last 12 months: moreover, Corporate cyber threats 58 percent of respondents cited However, while all APTs are the complexity of malware as vehicles for cybercrime not the most difficult aspect of deall cybercrimes involved APTs fending their organisation. according to The Evolution Organisations are responding of Corporate Cyberthreats, a by focusing on: recent Kaspersky Labs report • training their IT staff on new which notes that there are sigtechnology and cybersecurity nificant differences – despite strategies (50 percent) the fact that both are based on

rations; cryptographic keys; authentication or access codes • Reconnaissance and Surveillance: Targeted Information: System and workstation configurations; keystrokes; audio recordings; emails; IRC communications; screenshots; additional infection vectors; logs; cryptographic keys. The reports revealed that the primary method for infecting targeted organisations was spear-phishing emails rigged with common vulnerabilities found in corporate applications or programs. – 41


Climate change to drive sea level rises and increase flooding Flooding and erosion from rising sea levels will have a large impact on many New Zealanders in their lifetimes, Parliamentary Commissioner for the Environment Dr Jan Wright warns in her latest report

Damaging coastal floods such as that which engulfed Auckland’s Northwestern Motorway and some of the eastern suburbs three years ago will become increasingly frequent in some parts of the country


hanging climate and rising seas: Understanding the science explains the science of sea level rise that is one of the major consequences of climate change, while a second report due next year will show which towns and cities are most vulnerable and will also assess the risk to roads, buildings, stormwater systems and other infrastructure in those areas. The report says there are three processes that are causing the sea to rise: • the water in the sea expanding as it gets warmer • glaciers are melting – most of the mountain glaciers around

Councils and central government will need to prepare for increased costs because some public infrastructure such as roads, waste water systems, and buildings will be affected by rising seas, says Environment Commissioner Dr Jan Wright

on Climate Change (IPCC) ex- land’s Northwestern Motorway • loss of ice from Greenland pects it to rise up to a metre or and some of the eastern submore by the end of the century. urbs three years ago will beand Antarctica. Sea levels have risen by about The IPCC is inherently cautious come increasingly frequent in 20 centimetres over the last 100 since it relies on hundreds of some parts of the country. the world are retreating

years and the commissioner’s scientists from many countries latest report warns that a rise of reaching consensus, Dr Wright a further 30 centimetres or so by notes. 2050 is now inevitable. “The IPCC’s prediction of a 30 “A rise of 30 cm may not sound centimetre rise in average sea much, but its impact will be very level by the middle of the cencostly for many landowners,” tury is ‘locked in’ – it is expected says Dr Wright. to occur regardless of action “But how high and how fast taken to reduce greenhouse the water rises will be influ- gas emissions. It is not until the enced by the speed at which second half of the century that the world including New Zea- the effect of any such action will land reduces greenhouse gas be seen.” emissions.” Damaging coastal floods such

“The Insurance Council of New Zealand has released a 15-point plan on dealing with natural hazards, with the chief executive making special mention of sea level rise,” Dr Wright adds.

It is not just private property that will be affected, Dr Wright adds. “Councils and central government will need to prepare for increased costs because some public infrastructure such as roads, waste water systems, and buildings will be The Intergovernmental Panel as that which engulfed Auck- affected by rising seas.”

Facing the facts The climate report warns that drastic action must be taken if the • a rise in the global mean temperature at the surface of the Earth world in general and New Zealand in particular is to avoid the has followed the increase in greenhouse gas concentrations catastrophic effects of climate change. • over the 20th century sea levels around the world have risen It notes that: around 20 centimetres on average since the beginning of the 20th century • climate change can be traced back to the Industrial Revolution when the burning of huge quantities of coal began • three processes are driving the rise in sea level – an expanding volume of water in the oceans, melting glaciers, and shrinking • the combustion of fossil fuel – coal, oil, and natural gas – releases polar ice sheets carbon dioxide into the atmosphere; carbon dioxide and some other gases, most notably methane, trap heat in the atmosphere • the IPCC predicts that sea levels will rise by a further 20 to 40 centimetres by the middle of this century after 2050 • the concentration of carbon dioxide in the atmosphere has risen over the last two hundred years – from 290 parts per million to • the forecast rises in sea level will become increasingly dependent around 400 parts per million today on the actions taken to reduce future greenhouse gas emissions • this rise is impact is multiplied, or greatly exacerbated, by pos- • the IPCC’s ‘Business-as-Usual’ scenario predicts that the mean itive feedbacks sea level will be as much as a metre higher in 2100 than it is now. 42 –

February/March 2015

COMMENT >> Management

Government rules of sourcing now extended Caroline Boot Managing Partner Plan A The move spells good news for most, but changes are imminent for others


f you work for a government organisation that’s involved in tendering, you may be Those organisations are now required to in for a few changes: you can no longer meet definite standards for their tendering ignore the Government’s Principles and processes, including, for example: Rules of Sourcing. • allowing set minimum time periods It’s nearly two years since the government for tender responses (mostly these are introduced its Five Principles of Procurearound 20 – 25 business days, with some ment – which have to be built into every deductions possible) public procurement activity. • openly advertising opportunities on GETS Sadly, evidence shows that the majority • preparing and using Annual Procurement of procurement staff in all kinds of public Plans and Extended Procurement Foreagencies (from councils to ministries and casts, aimed at giving suppliers advance everyone in-between) still has little knownotice of possible contract opportunities ledge of how these should apply to their • avoiding applying technical specifications work. or conformance standards that would creThey may be in for a shock. The ‘ante’ has ate obstacles for some suppliers definitely been ‘upped’: the Five Principles • including the evaluation criteria, and an of Government Procurement are now not indication of the relative importance of the only thing that’s mandatory for many each, in the RFT. government procurements.

their best to the contracts they bid for and win; and one that builds healthy, viable regional economies to support New Zealand Inc. When compared with the plethora of systems and the back-handers that influence procurement of public goods and services in many other places in the world, New Zealand’s sensible and encouraging procurement climate is way ahead of its time.

From February 1 this year, the Govern- Training time ment’s Rules of Sourcing have been exten- While all of these requirements are folded to include many public organisations. lowed by organisations that already use Since their introduction in October 2013, best practice procurement methods, there the Rules of Sourcing have been regarded will undoubtedly be some who need to rewith passing interest by many government organisations, who have been able to dis- “Being vigilant to potential miss them (to a degree) because only organisations such as ministries, public ser- bias and unfair practices is vice departments, Police and the Defence everyone’s responsibility in Force were required to follow the rules.

Our playing field in New Zealand is among the most level anywhere, and many enterprising New Zealand companies who work on tenders with the Plan A team have proven their ability to compete and flourish in a procurement environment that’s mostly free of corruption and bias.

Other government agencies were only expected or encouraged to have regard environment balanced” to the rules. In practical terms, this meant vise their procurement protocols and – imthey could get away with ignoring the rules portantly – train their staff, in short order. and continuing to do what they had always Anecdotal evidence from hundreds of done. tenders that the Plan A team has been inAfter a comprehensive consultation exer- volved with since the rules came out is that cise in 2014, the government is about to many government organisations are unrelease its third edition of the rules, and the aware of the substance of these rules. mandate for following the rules has been But the Rules of Sourcing have not been extended to a long list of additional gov- put in place to make things difficult for proernment agencies, including District Health curement people. On the contrary, they’re Boards, Crown Entities, and Crown Agen- aimed at providing a consistent, fair, fit-forcies. purpose and cost-efficient framework for That list, together with other useful in- procurement processes. formation about the Government’s One that encourages competition and Rules and Principles, can be found at innovation, that inspires suppliers to give

There are many, many government procurement specialists out there who would benefit from learning about how they can make procurement processes more transparent, fairer, better suited to the priorities of their projects, and more cost-efficient.

keeping our procurement

February/March 2015

No system is perfect however. Being vigilant to potential bias and unfair practices is everyone’s responsibility in keeping our procurement environment balanced.

But for the meantime, we’ll give a round of applause to the good people at MBIE who are providing a structured, sensible and focused approach to improving public sector procurement. Keep it up! Plan A Tender Specialists and Clever Buying™ www. 0800 752 622 021 722 005 – 43

TRANSPORT >> Auckland Modern light railcars can be battery powered and recharged by non-lethal road surface induction plates, while operating costs are lower than buses despite light rail being more expensive to introduce

Queen City heading

back to the future

The suggestion of a light rail network to relieve traffic congestion harks back to bygone days


uckland Transport has called for an investigation into a light rail link to relieve congestion on some of the city’s busiest roads, replacing tram tracks torn up in 1956. The city’s transport authority is keen to replace buses with electric light rail on a handful of busy routes as part of its Draft Regional Land Transport Plan 2015 – 2025. The initiative follows the City Centre Future Access study in 2012, which responded to a government request to develop a robust and achievable solution for access to the CBD.

cing serious congestion across all major road entry points which would worsen if not addressed.

ficient, environmentally friendly public transport services in parts of Auckland which buses alone will not be able to cater for in the near future. “There is very little that we can do in terms of widening those roads currently out for public consul- so we have to be smarter about how we use that limited space.” tation. Light rail would move more He admits that the potential than three times the number cost is likely to be “significant” of people per hour than buses, and is not currently provided carrying approximately 18,000 for in the Regional Land Transcommuters and at higher port Programme or the Auckspeeds, relieving pressure on a land Council’s Long Term Plan, bus system that is already run- which are currently under pubning over operational maximum lic consultation. “Therefore a on some routes. key focus of the ongoing work Proponents note that modern is on how we may be able to light railcars can be battery introduce private sector investpowered and recharged by ment.” non-lethal road surface induc- Dr Levy expects an update tion plates, while operating to come back to the Auckland costs are lower than buses des- Transport Board in late March pite light rail being more ex- but Mayor Len Brown isn’t enpensive to introduce. thusiastic, insisting light rail has

Key arterials Sandringham, Manukau and Mt Eden Roads and former tram lines such as Dominion Road and Symonds Street were identified as major bus routes which will be significantly congested in the future as the demand for public transport grows in tandem with increased jobs and residents in the city Australian analysis Auckland Transport chairman, centre. Dr Lester Levy, says cities such The population of adjacent as Sydney, Canberra and the suburbs such as Ponsonby and Parnell is also projected to al- Gold Coast have reached the most double between 2011 and same conclusion and projects 2041, leading Auckland Trans- in Australia can be drawn on for port to consider light rail - es- more detailed analysis.

That showed that the City Rail Link, together with surface bus improvement, provided the sentially high-speed trams - as Any light rail solution will be best regional solution. a possible solution referenced complementary to the critical However, it also identified that in the draft Regional Land City Rail Link and the existing the city centre was already fa- Transport Programme which is rail network, providing fast, ef-

to be weighed up against all the other transport options. However, the light rail proposal has won broad political and community backing with both Labour and the Greens indicating support for the investigation along with the youth group Generation Zero, while many Aucklanders are also apparently keen to return to the good old days of tram travel.

Ambitious agenda


uckland Transport’s Draft Regional Land Transport Plan 2015 – 2025 that is currently out for public consultation has several bold aims, namely: • completion of those projects already underway including the Western Ring Road, improvements including Waterview Tunnel, cycleways at Dominion Road, Old Mangere Bridge, roading projects in the North West transformational area and comple-

• Significant progress on pubRing Route in 2021 lic transport improvements • additional lanes at bottleincluding integrated fares, necks for SH1 (from Greville tion of the Glenvar Rd project the integrated network and Road in the north, and from in Long Bay addressing looming bus conTakanini in the south) gestion • The City Rail Link, with design • Puhoi to Warkworth new mocompleted in the next three • 40 percent of the Auckland torway. years and construction of the Cycle network completed The final Regional Land TransBritomart to Albert Street tun(from 33 percent now) port Plan that will be amended nel The New Zealand Transport following public consultation • Puhoi to Warkworth highway Agency is proposing to spend and the funding decisions of commencement of construc- $2.2 billion in the first three Auckland Council and the New tion in 2018/19 years of the Regional Land Zealand Transport Agency will be adopted by the Auckland • Public transport patronage Transport Plan and $3.8 billion Transport Board and reviewed over the 10-year period with reaching 100 million passenagain in 2018. ger journeys per annum by major projects including: • completion of the Western 2021

44 –

February/March 2015

TRANSPORT >> Auckland

Auckland ports to

run dry, study finds Ports of Auckland will need more multi-cargo wharf space to grow or some of its business will go to competing ports according to the New Zealand Institute of Economic Research


he New Zealand Institute of Economic Research (NZIER) Port Study 2 report found that the relatively modern Fergusson container terminal will reach capacity around 2035, assuming incremental productivity gains and annual 3.2 percent container growth.

of central city wharves to provide for improved public space and growth in cruise ship visits and ferry numbers

Ports of Auckland Ltd (POAL) Captain Cook and Marsden multi-cargo wharves are adjacent to Queens Wharf, which is used as public space and to service the cruise ships that have increased visit numbers from 32 in 2004 to nearly 90 last year. “The increase in the length of cruise ships are putting pressure on wharf facilities and can conflict with transport ferry services, particularly as these grow in future,” the report observes.

by any party to proceed,” the report adds.

The City Centre Integration Group’s draft strategy is to use Captain Cook Wharf for cruise ships and to remove Marsden Wharf, with the problem of lost POAL cargo wharf capacity poSimilarly, the multi-cargo tentially addressed by reclamwharves are also coming under ation at the end of Bledisloe increasing pressure as ships Wharf. are getting larger and require This will produce public amenlonger berth lengths and more ity gains through improved back-up wharf storage capacity public transport facilities, – particularly for the temporary greater public access to the wastorage of vehicles. “The situ- ter, and the removal of vehicles ation is further aggravated by stored on Captain Cook Wharf. the rapid increase in the num- “The strategy is at the planning ber and increased size of cruise stage; a business case is yet to ships,” report author Nick Alli- be developed and no formal son adds. commitments have been made

Council also resolved to review this rule pending the conclusion of the port study, which notes that it is important that the regulatory rule applied should give effect to a regulatory regime that is “appropriate, consistent and evidence-based, thus removing the council from any perceived conflict of interest between its port-ownership, regulatory and place-shaper NZIER was commissioned by roles.” Auckland Council to inform deFlexibility vital cision-making on the draft rule on port reclamation provided NZ Council for Infrastructure for in the Proposed Auckland Development Chief Executive Unitary Plan (PAUP), which Stephen Selwood believes the states that reclamation within NZIER report shows that the the Port Precinct is a non-com- proposed Unitary Plan will have to allow flexibility to increase plying activity. port productivity if the council’s The study included consideraexpectations for export growth tion of several key issues includand increased earnings are to ing: be met. • POAL’s capacity to cope with “The Auckland Council has set increased throughput on its demanding objectives for the current footprint, without the port, including a 12 percent per need for further reclamation annum return on equity, and • impacts of the growth in even more ambitious targets POAL’s throughput on trans- for regional economic performport rail and road links ance,” he notes. “The Auckland • the strategy for development Plan envisions 6 percent per February/March 2015

The Fergusson container terminal will reach capacity around 2035 annum increases in exports and 5 percent per annum increases in economic growth every year for the next 30 years - both of which are dependent upon port performance.”

ary Plan currently defines any additional reclamation around the port as ‘non-complying’. “At the very least this should revert to the existing designation under the operative plan which Adding further to pressures on provides for any additional the port, the council’s Auckland reclamation to be ‘discretionTourism, Events and Economic ary’,” Mr Selwood maintains. Development division (ATEED), This would still require resource anticipates annual cruise ship consent and would bring reguvisits to increase 30 percent lation into line with other New over the next five years and 60 Zealand ports. “If the council wants a competitive port percent to 2030. providing jobs, an acceptable But, Mr Selwood observes, return on investment, higher NZIER also notes that if proexports to reduce Auckland’s ductivity projections do not dependency on consumption eventuate or if growth is and more cruise ships bringing stronger than expected the port high wealth tourists into downmay require expansion as early town Auckland, it must allow as next decade. “Compoundthe port to grow,” Mr Selwood ing the challenge, accominsists. “That growth is not gomodating additional growth in ing to happen tomorrow, but cruise ships will require more POAL will need to initiate the frequent use of wharves cur- consenting process within the rently used for general cargo,” life of the first Unitary Plan if it is he contends. to have any chance of meeting The Proposed Auckland Unit- the council’s targets.” – 45

LAST WORD >> Housing

A win-win contribution to the housing crisis

Evans Young Director Hopper Developments By encouraging the growing number of retiring baby boomers to relocate into our smaller provincial centres in pursuit of lifestyle, local government has an opportunity to address a number of pending financial crises such as housing affordability in Auckland and infrastructure utilisation and replacement in the provinces


ith the recent release of the annu- How to address conflicting paradoxes? al Demigraphia Residential Hous- One suggestion worthy of consideration is ing Affordability Index, attention to encourage the growing number of retiris again focused on Auckland’s housing ees to move out of big cities to the more crisis. relaxed lifestyles provided in our smaller Commentators and interest groups are quick to step forward and articulate their “expert” opinion on the cause of the rapidly deteriorating affordability crisis.

And they are equally quick to offer their solutions to a situation which they claim threatens to impede Auckland’s transition into the country’s commercial and economic powerhouse. Basically the fear is that if the drones can’t afford to live in Auckland, who will provide the labour required to undertake the dreary repetitive work underlying and fuelling economic growth?

ment opportunities for existing residents increased.

If local government looks to the wealth of information in its rating records and identifies absentee residential ratepayers (holiday/bach owners), there is a pre-qualified urban settlements. By cashing up in the city, a further existing database of potential new residents who dwelling is provided to fill the growing void have a quantifiable affinity to the area. By recognising, and building on, the between supply and demand. drivers which attract regular seasonal visitRetirees benefit on two fronts. They can capitalise on elevated city prices and then ors to these smaller service centres, there is the ability to suggest and encourage this buy in a depressed provincial market. sector to plan and provide for an eventual This should also result in a cash surplus relocation.

“Encourage the growing number of retirees to move out of cities to the more relaxed lifestyles provided in smaller urban settlements”

There are numerous examples of where such an approach, either deliberately or accidentally, has worked – Bay of Islands, Orewa, Tauranga, Kapiti Coast and Nelson are prime examples.

Smaller communities such as Kerikeri, Bream Bay, Coromandel East Coast, Katikati, Papamoa and Whakatane are now available for re-investment, either in assist- recognising the opportunity and attemptThe root cause of the underlying affording offspring into a home or the conven- ing to compete with the more established ability crisis is universally agreed to be the destinations. tional savings/investment market. high cost of new (replacement) housing. Further benefits accrue to the city in that They are highlighting their natural attracDepending on who is trying to get their seniors tend to have been rather settled in tions of coastal lifestyle, climate and access point across, this is caused by the RMA, their existing dwellings which are conven- to health services while actively encourcouncil, land availability, labour and skill iently located in desirable suburbs and are aging the market to invest in senior specific shortages, material costs, immigration, foroften larger properties close to schools, infrastructure such as integrated medical eign investment, Christchurch rebuild – or transport and shops. This is just what the centres, retirement villages and age orientany combination thereof. ated service industries. new, younger purchasers are looking for. What makes the situation more bizarre is It offers new blood for existing established All this is nothing new – it merely articuthe report of the Auditor General to Par- facilities such as schools, medical services lates what many of us dream of doing but liament last year warning of the impending and recreational facilities, as opposed to always find a reason to avoid doing it. crisis facing the rest of New Zealand from the costly alternative of infrastructure dupli- By recognising the fears and anxieties the growing exodus of population towards cation in newer greenfield developments. associated with implementing such a dethe major metropolitan centres – particularcision, local government could take some Seniors are the growth consumer market ly Auckland. simple steps to re-assure and assist the This results in a combined fall in provincial Retiree needs include a high level of bank, transition. property values, their rating bases, infra- retail, medical, travel, entertainment, rec- All it takes is recognition, consideration structure utilisation, all of which threatens reation and support services – all of which and co-operation. face extinction in provincial service centres. local government viability. Business Development Director Meanwhile the Retirement Commissioner By encouraging the introduction of a new Evans Young is highlighting the growing proportion of source of clientele, the reduction in essen09 427 0015 tial services in some of our rural communiretirees in our community and the need to ties may be delayed or reversed. make provision for this significant tion of non-working, fixed income mem- New service industries specific to senior’s bers of our communities. needs will be encouraged and employWill Auckland choke on its own success through its inability to meet that most basic of commodities, housing?

46 –

February/March 2015



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