Over the course of 2015, there have been key advances in New Zealand’s infrastructure development, particularly in terms of Auckland and the transport sector. Enabling works for Auckland’s city rail link have commenced. It is very positive that the central government and Auckland council have agreed a process to reconcile strategic investment priorities and how they will be funded.
Auckland has a $60bn plan over the next 30 years, of which $45bn is capital, with the remainder set aside for operational costs and the like. The capital investment includes the Auckland Harbour Crossing, as well as the rail link and several other significant arterial road and bus-way projects. There remains a big question as to how these and the other projects in the plan get funded, and it’s clear there is an opportunity there for PPP.
The other major development has been the progress being made on rebuilding Christchurch after the earthquake. The tender for the Metro Sports facility has recently been issued, with plans for an early contractor engagement approach rather than private finance at this stage.
In terms of sectors, there is a big shift to intensify Auckland’s urban development practice around public transport infrastructure.
Affordable housing is also a big area. Auckland has a 25,000 unit backlog in housing. We should be building 13,000 houses per year to keep up, but we are currently building 8-9,000 per year. Hence a desire for medium density housing. In the Tamaki region, the government owns around 2,500 homes of 5,000, and it is looking to double or even triple that number. They are creating a salt and pepper package with social, affordable and market-price housing. We’re expecting to see a preferred procurement pathway developed over the next 12 months.
In education, we have seen two schools PPPs to date and we are expecting there to be more, this time going out at around eight to nine schools in a package, which is bigger than has been done previously.
The planning process remains of concern. We have published a discussion paper on planning reform, because most agree that the existing situation is not providing good outcomes. In particular, the environmental outcomes are not as strong as we as a nation would aspire to. Nevertheless, the prospects are looking pretty strong for the New Zealand infrastructure market.