Infrastructure: Plotting our best path forward

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Infrastructure: Plotting our best path forward

The theme for this year’s recent InfrastructureNZ Building Nations conference, “A Fork in the Road” was intended to highlight the urgent need to plot the sector’s — and New Zealand’s — route to future success, and there are challenges ahead.

With the conference held online due to Covid, over four days 770 delegates heard from more than 100 speakers and panellists including the Prime Minister, the Deputy Prime Minister, several cabinet ministers, opposition MPs, international and New Zealand experts on both current and emerging sector issues.

Attendees polled over the four days of the conference consistently highlighted three key concerns — New Zealand’s significant infrastructure deficit and how it will be funded and financed, climate change and the role of infrastructure to mitigate impacts, and attracting talent and retaining the skills the sector needs in order to deliver outcomes — which are increasingly urgently needed.

The Government has committed $57 billion over the next five years to a raft of large infrastructure projects, but the recently released Infrastructure Commission’s draft infrastructure strategy warns that if we continue as we are, we can expect the costs of infrastructure to grow significantly without necessarily meeting New Zealand’s needs, including population growth and climate change. Building the infrastructure we need would mean doubling what we spend to about 9.6 per cent of GDP over 30 years — about $31b a year. The Government expects to table a final strategy early next year.

It’s great the Government has a draft infrastructure strategy out for consultation, but we need to get cracking and meet the challenge.

There’s the basic state of some of our key infrastructure, with an increasingly urgent need to improve it, and the need to deliver and use our key infrastructure more effectively and efficiently. There’s the need to futureproof for emerging and sustainable technologies — investing in it at the eventual expense of current technology, which we need to maintain to enable transition until those new technologies gain enough traction.

At the same time, the key legislation that regulates how we conduct infrastructure projects — the phone-book-sized Resource Management Act — is subject to the biggest shake-up since it was enacted 30 years ago. Although legislative improvement has long been called for and is very much welcomed, reviewing such a hefty chunk of legislation is no easy task and the ease and certainty the review aims to provide is some time off yet.

Infrastructure: Plotting our best path forward

Allbirds store in San Francisco. Photo / Getty Images

Currently front and centre at a local level, our Three Waters infrastructure, vital to human health, is in pretty bad shape — a collective $50b asset that by one apparently conservative estimate will cost nearly four times that to fix. The status quo won’t solve that, but in the face of opposition to change, as yet there is no clear path ahead.

Local councils large and small around the country, collectively form a huge part of the infrastructure sector, and also face helping their communities adapt to the effects of climate change, with considerable efforts being made to identify vulnerable infrastructure that will require further investment. Central government, also a big player, could significantly streamline procurement processes and be easier to deal with. The appetite for public-private partnerships has for years been an ongoing conversation but an increasingly important one.

Meeting those challenges — and those costs — is what’s necessary to deliver a reasonably resilient infrastructure network well-placed to meet whatever challenge comes next.

Meanwhile, the infrastructure sector, like many others, has been both significantly impacted and held back by Covid-19 lockdowns and border closures. While many big projects have been able to continue, even if at a restricted pace, the sector has struggled to recruit skilled staff from overseas with a closed border and the need to secure MIQ spaces. Right now, it faces increasing costs and supply chain issues and significant challenges retaining the skills it does have, courtesy of significantly higher salaries being paid in Australia and further offshore.

We need more diversity — of thought and experience — and to accept it, welcome it and learn from it.

Infrastructure is just one sector where women are under-represented, to the point I’m sure my appointment to head Infrastructure New Zealand surprised more than a few.

We need to challenge that thinking, because we simply will not make the progress we need to if we employ people who think like — and maybe look like — most of us.

As highlighted by several speakers at Building Nations, New Zealand has a strong history of innovation, right back to the pioneer days and the famous quote attributed to Lord Rutherford “we haven’t got the money, so we’ll have to think” absolutely rings true.

But there are plenty of recent examples that highlight what’s possible with the sort of thinking we need. Companies like Allbirds, Rocket Lab, Animation Research and even the aptly-named Team New Zealand in the recent America’s Cup demonstrate the world-leading innovations New Zealanders can achieve. It’s making those sorts of radical solutions possible and then world-beating that will make New Zealand a better place for us all, and what we need in the infrastructure sector.

Companies are starting to get traction on sustainability, climate change initiatives and innovation, but the same old solutions will not get us where we need to be. The fork in the road is about following that lead — it’s a call to action that embraces change and opportunity.

Infrastructure: Plotting our best path forward

Claire Edmondson. Photo / Supplied

The bottom line is that our infrastructure is considerably behind where we should be and it’s vital we choose the right path, the right ideas and the right travelling companions for the journey ahead.

We need not only to catch up but surge purposefully forwards. The bill is mounting and the clock is ticking.

Claire Edmondson is general manager of Infrastructure New Zealand.

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