By Julien Leys, Chief Executive, Building Industry Federation of New Zealand
Aotearoa New Zealand needs a clear infrastructure vision: to be more resilient and productive; focused on building smarter, faster and, importantly, with infrastructure as the foundation stone of our society, economy, and communities.
Aotearoa New Zealand faces considerable infrastructure challenges after decades of not only underinvestment, but also lack of coordinated and strategic planning between various key players in the sector – government, local construction companies, specialist contractors (tunnellers, etc.), global infrastructure operators and investment banks. We lag Australia and our OECD partners in our lack of a strategic, long-term and collaborative approach to infrastructure delivery and quality.
As a country, we have also made it far too complex to get any sort of infrastructure done well and on time. The legislative consenting and consulting processes required by the Resource Management Act and other regulations has become onerous, costly and a way to avoid hard decisions and risk, and kicks the proverbial can down the road.
Not surprisingly, New Zealand’s infrastructure asset base – ranging from schools, hospitals, ports, wastewater and energy, to road networks – are all struggling to operate way beyond the capacity they were originally designed for. New Zealand’s overall population growth is also exceeding forecasts (1.7 per cent in 2024 – above the average of 1.2 per cent), despite the record level of migration in 2024/2025). The other challenge to our ‘catch-up’ approach to infrastructure has been the impact of climate change; most notably, the more extreme weather events such as cyclones and atmospheric rivers, which have caused billions of dollars of damage to existing infrastructure in recent years.
It is now recognised by the government and every community across New Zealand with aging infrastructure that delays and neglect in dealing with major projects will only lead to growing costs. For example, Wellington City Council’s capital expenditure in its long-term plan to 2034 will need to increase by 34 per cent. This means mounting deficits will negatively impact amenity value, quality of life and productivity across the country; however, a profound and overdue shift is underway as the government and industry recognise that it is time to allocate significant infrastructure funding, as well as providing certainty, to encourage both local and global companies to tender for major projects. The subtext is also about New Zealand building a lot smarter and being innovative in our approach, which includes how we finance infrastructure through mechanisms like public-private partnerships (PPPs).
Recently, The New Zealand Herald published its Infrastructure Report, which highlighted that while planning frameworks have improved, delivery remains a big hurdle. Too many projects wallow in pipeline limbo land, delayed by consenting processes, cost escalations or cancellations. Nonetheless, other projects like Auckland’s City Rail Link (CRL) demonstrate what’s possible once a commitment is made and followed through by government and multiple parties. The CRL is set to boost Auckland’s inner city transport capacity by 50 per cent once fully up and running in 2026, which will ease congestion and hopefully help revitalise economic activity in the CBD. It is an obvious lesson that spending more by itself is not the magic silver bullet. Instead, in the recipe that makes for a successful infrastructure project, we also need a stronger, more resilient supply chain, and a commitment to innovation and scale.
Unlocking the supply chain
One reform with potential to help drive the new era of infrastructure is the Overseas Product Certification Bill, which will allow a broad range of internationally certified products easier entry into the New Zealand market. It will also mean greater competition for a wider range of building products and materials brought into New Zealand. We import 90 per cent of our building materials – from steel and construction glues, to tools – and the upheaval to global supply chains post-COVID, bottlenecks and inflated costs have hindered project commencement and delivery. Liberalising the rules around what building materials we can import is the first step to stabilising costs, accelerating infrastructure projects and accessing cutting‑edge building materials.
It is not just about imported building materials, however. The government’s Investment Boost scheme will also play a part in getting more local companies to participate in infrastructure by helping these firms invest in new plant, machinery and technology. Investment in specialist building and construction machinery, as well as everything else that is needed – from prefabrication facilities to digital design platforms like 5D building information modelling (which reduces waste and enhances precision) – will provide another much-needed boost for infrastructure. If New Zealand wants to deliver more infrastructure with fewer delays, these innovative tools, machinery and materials must become the norm.
Victoria, in Australia, offers a good example of how long‑term vision and certainty attracts infrastructure investment. Victoria’s Metro Tunnel Project, which opens in December, well ahead of schedule, will be able to manage millions of passengers, thereby reducing commuting times by 20 per cent. The results in Victoria are visible in outputs like upgraded transport networks, revitalised urban precincts and a globally competitive infrastructure system that has attracted billions in private investment. The Metro Tunnel is one of many infrastructure projects that are part of the state’s 30-year strategy, which has created a stable pipeline transcending election cycles. New Zealand must learn from this and, regardless of what coalition government is in power, there must be certainty that is not subject to the whim of our three-year political cycles. A bipartisan, long-term plan in New Zealand’s mixed member proportional political system would provide the certainty the supply chain needs to invest and signal to international partners that our market is worth committing to.
It needs to be acknowledged that the infrastructure gap in New Zealand over the next 30 years is too big for government alone. In basic terms, New Zealand cannot fund or deliver its infrastructure plans on public money alone. The country doesn’t have the tax or savings base to make this possible. PPPs have proven themselves a successful vehicle that can leverage private sector capital, expertise and efficiency. In New Zealand, the Transmission Gully motorway, delivered via PPP, has provided $80 million in annual benefits through improved safety and reduced travel times, despite initial challenges. Internationally, PPPs have also proven themselves. Thus, the Sydney Metro, a PPP-led project, expanded the city’s rail network efficiently, delivering on time and increasing economic productivity.
For PPPs to work efficiently, New Zealand also needs clear procurement processes and confidence that regulatory hurdles won’t delay investment, project delivery or increases in cost. So, if implemented properly in a conducive regulatory environment, PPPs could bring not just increased infrastructure funding, but also global expertise that strengthens New Zealand’s local building and supply chain through collaboration and knowledge transfer.
Infrastructure delivery models used previously in New Zealand have often focused too heavily on supporting local capability, to the detriment of scale and fast project delivery. In simple terms, we don’t have building and construction companies with the scale to take on mega projects by themselves. It makes sense, therefore, for the mega infrastructure projects to allow global construction companies to use a vertical integration model, which means using their own workers, materials and methods (i.e., 24/7 shifts) as an acceptable way to efficiently deliver projects on time and to budget. This model doesn’t need to ostracise local firms, but rather broadens delivery options and creates partnerships where New Zealand companies can learn and grow alongside global infrastructure players.
Not surprisingly, this approach is commonplace internationally. Thus, Google and Amazon both vertically integrate supply chains to control everything from materials sourcing to construction, reducing delays by up to 30 per cent and ensuring quality in their infrastructure projects – from data hubs to distribution centres. Likewise, companies like VINCI in Europe have used vertical models in motorway projects across Asia, streamlining delivery. In this way, New Zealand can foster more competition, efficiency, and faster infrastructure outcomes by attracting the large global construction companies that might otherwise view New Zealand as too small or too hard.
The infrastructure future for New Zealand is bright. The challenge is not insurmountable if we follow through by creating the right regulatory frameworks, and the right building and supply chain environment, combined with long-term vision, backed by bold decisions.
Over the next 10 years, New Zealand must strive to build a resilient, sustainable and future-focused infrastructure backbone for the county. Every aspect of New Zealand society will benefit, from its economy to improved wellbeing from having a higher-quality built environment. Central to this vision is making the supply chain more competitive, innovative and open to global collaboration, which will mean that, within a generation, New Zealand can not only catch up on our infrastructure deficit, but also leap ahead.