Civil Contractors New Zealand says the release of the New Zealand Transport Agency’s 2018-21 National Land Transport Programme on 31 August has confirmed what has been known for some time – the Government intends to increase its investment in infrastructure, and is committed to a large-scale shift in priorities.
The National Land Transport Programme is a three-yearly investment programme providing investment in transport at a national, regional and local level.
CCNZ Chief Executive Peter Silcock said while the Programme featured increased investment in infrastructure, with a 34 per cent increase in local road investment, a 96 per cent increase in regional improvements and widespread increases in resilience and road safety, spending on big state highway projects was set to fall by 18 per cent – roughly $630 million over the next three years.
Mr Silcock said the lack of new state highway improvement projects was creating uncertainty, and only the Manawatu Gorge replacement route had been added to the pipeline, leaving little continuity of work for contractors after projects like Transmission Gully, the Waikato Expressway, Peka Peka to Otaki and Puhoi to Warkworth are finished.
“When this political football is kicked, it can take years for the industry to catch up. Time is needed to develop skills, recruit staff, and make sure the right equipment is available for the job at hand. This requires big parts of the civil construction industry to reinvest itself.”
The National Land Transport Programme is directed by the Government Policy Statement on Land Transport, and details land transport initiatives and activities both regional and national that the Transport Agency anticipates funding during the three-year period to 2021. Mr Silcock said it was not all ‘doom and gloom’, with policy going some way to smoothing out the boom and bust cycles that had long been a feature for infrastructure.
Investment in public and rapid transit and walking and cycling more than doubled to $2.5 billion in a move to more ‘mode neutral’ transport that could take people off the roads in high-density areas. Spending was set to increase on all fronts except major state highways, although maintenance spend on state highways would get a shot in the arm over the next ten years.
Mr Silcock said the planned increased investment in safety, maintenance and work to build resilience was laudable and necessary. But construction work on the ground would need to be put on hold while planning for new projects went ahead, and projects needed to be brought forward to fill the gap in short to medium term construction which would be a pivotal time for contractors while new works were planned.
Mr Silcock said Central Government was trying hard to work with industry to resolve these issues, to the extent of establishing a new independent national infrastructure entity to de-politicise the decision-making process, manage risk and reduce major swings in investment.
A full-scale ‘procurement reset’ was also announced, and plans such as the Ministry of Business, Innovation and Employment’s Construction Skills Action Plan placed a focus on consistent workflow and development of skills – important factors for contractors in planning future investment in their people, plant and systems, he said.
“It’s great to see appreciation of key concerns recognised in the reports and promises of political leaders, but we need to make sure actions are taken and concerns are addressed correctly so we can ensure we have a future to look forward to.”