Infrastructure Commission tots up spending plans worth $21b

Tuesday, 12 November 2019

The Transport Agency has projects worth $3.9b in the pipeline, and KiwiRail projects worth $2.3b.

More than 500 investments in public infrastructure with a total value of $21.1 billion are in the pipeline over the next 10 years, according to a refreshed estimate published the Infrastructure Commission.

Government spending on infrastructure has become a sensitive topic.

Some commentators have argued economic growth has hitched a ride on increased migration, without the required investment yet having been made to support the country's higher population.

New Zealand's resident population hit 4 million in 2003 and is expected to top 5 million next year.

Commission chairman Alan Bollard expected construction activity would increase 'throughout 2020 and 2021'.

Controversy over whether the Government is spending fast enough to support the country's growing population means the Infrastructure Commission's projections are unlikely to escape politics.

* New Zealand construction firms desperate for more work as bust looms

* New Crown Entity set up to deal with infrastructure deficit**

'Early indications are that nearly $670m of works are expected to move from business case to procurement between now and March,' he said.

While not all of the investments tallied by the commission are in the bag, it said the 506 projects being pursued by 15 state-owned organisations were all credible.

Spenders include some government departments such as the Health and Education ministries, two councils, KiwiRail and Otago University.

The commission's first estimate of pending investment, published in May, contained data from only five government agencies and counted 174 projects that were expected to be worth $6.1bn.

The list of organisations contributing to the latest list still appears to be far from comprehensive.

Bollard said measuring the pipeline of future projects was an 'iterative process'.

But hebelieved the latest update would provide 'some useful guidance to the market'.

'As with any tool of this kind, it is only as valuable as the information it contains.

'We welcome the 10 additional contributors to this version and encourage all government agencies and councils to share their plans.'

Transport projects make up the largest proportion of the $21.1b of projects tallied so far, counting for about a third of the forecast spending.

Overall, project dates were provided for about 30 per cent of projects by both volume and value.

Infrastructure Minister Shane Jones said the Government's ambition was for 'world-class infrastructure in our cities and regions'.

'The purpose of this exercise is to provide the sector with greater information and certainty about anticipated capital expenditure over the next five years,' he said.