The more our construction sector knows about what’s on the horizon, the better it can plan for the people, skills and equipment it needs.  

Te Waihanga (the New Zealand Infrastructure Commission) works to provide a National Infrastructure Pipeline to offer a clear picture of what projects are already underway and the confirmed projects that are in the planning stages.

‘The infrastructure system requires the right people, at the right time, in the right place. That requires a clear view of what infrastructure projects are in the investment pipeline,’ says Geoff Cooper, Te Waihanga General Manager – Strategy.

The pipeline can provide industry with more certainty to invest in its workforce – including training, along with new technologies and equipment. 

‘For years, the construction sector had been signalling the need for greater certainty. While there are several construction investment pipelines in New Zealand that cover different sectors, what we’re aiming to provide with the National Infrastructure Pipeline is the big picture of short- to medium-term investments across all sectors,’ says Cooper. 

Why is that important for New Zealand?

‘New Zealand is one of the least efficient high-income countries when it comes to turning public investment into quality infrastructure,’ says Cooper. 

‘At Te Waihanga, we’ve been taking a closer look at why that might be the case – and how we can fix it. International evidence shows that good decision-making, robust public investment management, and a stable long-term pipeline of investment intentions are all essential for lifting performance. The pay-off is significant, with countries that have the best public investment management practices in place getting about twice as much out of their infrastructure investment compared to countries that do poorly in these areas.

‘We need to get better at this as every project in the infrastructure pipeline represents an opportunity to deliver a set of wider public outcomes – from health care, to education, to emissions reductions. The pipeline offers an opportunity to better plan our workforce and resourcing requirements, but also enable a more coordinated approach to investment,’ says Cooper.

The pipeline draws project data from government, councils, the construction sector, utilities and private sector organisations on infrastructure projects, and makes that data publicly available through an online tool on the Te Waihanga website. Currently, the information is updated on a quarterly basis, with 66 organisations regularly contributing. 

‘The amount in the pipeline currently sits at $92 billion and growing. We’re continuing to build on the pipeline to get a more accurate picture of where and when infrastructure is being delivered.

‘An important caveat to the number and type of projects in the pipeline is that these are expected to change as agencies use it to coordinate, plan and prioritise projects based on the recovery work underway in parts of the North Island. We often hear that funding is a constraint for infrastructure, but so is market capacity. Pushing your foot on the accelerator when there is no gas in the engine might not make you go faster,’ Cooper adds.

The role of the pipeline in good times – and bad

As part of the recovery responses for Cyclone Gabrielle and the flooding that occurred over the Auckland Anniversary weekend, the government asked Te Waihanga and the Construction Sector Accord to provide an overarching view of construction demand and workforce needs across the affected regions. 

‘For Te Waihanga, this has meant accelerating some of our work on the pipeline, which will ensure we’re better prepared for future events and shocks we may face,’ Cooper says.

Looking towards the Horizon

Te Waihanga is leading another piece of work that will foster additional confidence and transparency across the construction sector – the Infrastructure Priority List. Still in the early stages of development, the Infrastructure Priority List will offer an opportunity for unfunded project proposals to go through a robust assessment before firm commitments are made.

In December 2022, Te Waihanga released research that looked at the cost to deliver infrastructure in New Zealand. That research highlighted several ways we could build good infrastructure at a lower cost, including strengthening independent advice for infrastructure prioritisation, and establishing a list of future investment to help lift productivity and reduce costs. The Infrastructure Priority List is one way that we can do this.

‘The aim of the Infrastructure Priority List is to build an early and enduring consensus on infrastructure priorities and projects so that, when the time is right, we can move forward with confidence and speed. To do this, we’re looking at ways to improve early-stage knowledge of needs and priorities, standardise assessment frameworks, and improve project assurance so that we can be confident of strategic alignment and value for money. We’ve seen multiple examples around the world where such an approach has improved infrastructure outcomes, including greater confidence across the sector to better plan and invest in building and training our workforce,’ says Cooper.

‘Together, the National Infrastructure Pipeline and the Infrastructure Priority List will build a clear picture of funded projects that are planned or underway, as well as potential projects (where we know them), or what the key infrastructure problems are that require greater attention. This will allow us to think about and plan for the short, medium and long term in a way that we haven’t been able to before.’

Thinking beyond new infrastructure

The National Infrastructure Pipeline is currently focused on new projects in development, but there’s a need to reflect on our investment pipeline when it comes to renewals and maintenance, too. 

‘From our work on the New Zealand Infrastructure Strategy, we found that of every $100 spent on infrastructure, $60 should be spent on repairing and renewing worn-out infrastructure – a cost that amounts to around 4.6 per cent of gross domestic product annually. Many of these assets are owned and looked after by public institutions – central government agencies and entities, and local councils,’ Cooper says.

‘In many cases, what we’re spending on maintenance is lower than depreciation rates, which suggests we’re not spending enough on maintenance and renewals in certain places. This could be because of underfunding and underpricing, or it could be because we are spending maintenance funding on other assets. 

‘New assets always grab the headlines, but prudent investment management would have us moving towards a world where maintenance makes up the bulk of our infrastructure spend,’ Cooper says. 

‘The pipeline identifies what’s coming in terms of new work, but it can also be an indicator in terms of what levels of ongoing maintenance – and the costs associated – on these new projects will be required. There can be hard trade-offs when it comes to funding, so the more visibility we can bring to the wider system the better.’

Currently, there isn’t enough information available together in one place to tell us much about asset management capability or performance. Te Waihanga is working with a team of independent asset management consultants to develop the State of Play of Asset Management in New Zealand report, due out later this year.

‘To say the infrastructure system is complex is an understatement,’ says Cooper. ‘We need to find ways to plan, prepare and adapt. Tools like the National Infrastructure Pipeline and Infrastructure Priority List can help us do that. They help us see where we’re at and where we’re going.’ //

You can search the National Infrastructure Pipeline at www.tewaihanga.govt.nz/projects/search-the-pipeline/.
Organisations do not need to be invited to submit their data to the pipeline. If your organisation has project information that is not included in the pipeline, please contact the pipeline team via email at pipeline@tewaihanga.govt.nz.