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THE NEW ZEALAND INFRASTRUCTURE COMMISSION / TE WAIHANGA – ESTABLISHED WITH GOOD INTENTIONS BUT WILL IT DELIVER?
PPT Construction

The New Zealand Infrastructure Commission / Te Waihanga Bill has been referred to the Finance and Expenditure Committee, with a report from the Committee due by 26 August 2019. The Bill sets out the functions of the Commission. But for all its good intentions, will the Commission have enough force to effect real change in the infrastructure sector?

The New Zealand Infrastructure Commission / Te Waihanga Functions

The New Zealand Infrastructure Commission/Te Waihanga (the Commission) will be an independent Crown entity, made up of a maximum seven members of both public and private sector infrastructure professionals.

This Bill sets out the functions of the Commission, which are to co-ordinate, develop, and promote an approach to infrastructure, and related services, that encourages infrastructure that improves the well-being of New Zealanders.

The Commission will address how New Zealand plans for and delivers infrastructure by;

  • developing broad public agreement on a long-term infrastructure strategy, by identifying opportunities to strengthen the New Zealand infrastructure sector and remove barriers to entry for new parties;
  • enabling co-ordination of infrastructure planning, including the publication of pipeline information from central and local government to present a collated and uniform pipeline of infrastructure projects; and
  • providing advice and best-practice support to infrastructure projects, including producing best-practice guidance on infrastructure procurement and delivery.

 The Commission has been tasked with publishing a strategy report, to present a view of New Zealand’s infrastructure priorities for the next 30 years, and to which the Government must publicly respond to. This report is to be published every 5 years. 

Going forward the Minister may direct the Commission to provide a report on any particular matter relating to infrastructure or the Commission may report on infrastructure matters on its own initiative, and provide other advice, using its general powers.

Why is the Commission being established?

The Commission has been established in light of widespread concern that our current infrastructure is struggling to meet the growing demands and changing needs of New Zealanders. Our current housing unaffordability, congestion, poor quality drinking water and loss of productivity are a direct result of this. There are also growing concerns about pipeline uncertainty, skills shortages, injuries and contracting issues.  Ad hoc and short-term investment decisions, politicisation of infrastructure funding, and a lack of strategic and collaborative planning by Government departments means we have made little progress in developing our infrastructure during the last few years.

Food for thought

Given the long-term planning horizon (30 years) dictated by the Bill, there is the potential for greater co-ordination of infrastructure provision. This would be a great outcome.

The requirement for the Commission’s strategy report to include statements about the ability of existing infrastructure to meet community expectations, will require the Commission to understand what those expectations are.  That insight will be useful information for infrastructure providers.

Furthermore, the requirement for Government to respond to the reports will increase the transparency and deliberateness of Government infrastructure decisions.

The Minister responsible for the Bill, Shane Jones, has stated that the Commission will have the credibility and influence required to effect real change.  However, that effectiveness will be undermined by a number of structural weaknesses.

The Commission has no power to fund or direct the actual provision of infrastructure. With two functions, strategy and planning and support for projects, the Commission is expected to provide an over-arching strategic perspective to New Zealand infrastructure. With only an advisory role, it is questionable if the Commission will have the strength to effect any real change in the infrastructure sector.  

There will still be a large number of bodies involved in infrastructure provision (local government, central government, SOEs, companies, private individuals). All these parties need to be consulted, and accept the co-ordination recommended by the Commission. In our experience any one infrastructure project will inevitably impact on the existing and future provision of other types of infrastructure. There are real efficiencies to be gained from coordinating infrastructure provision, but it is rare for all players to be willing, funded and able to work together to achieve those efficiencies.

Decisions about the funding of infrastructure, and timing of its provision, will still be made by the infrastructure providers. The Commission will be able to identify or give advice on current and future infrastructure needs or the priorities for infrastructure. However, infrastructure providers respond to their board directions, customer demands and legislative requirements.  The Commission will not override these factors.

The Commission will be reliant on the infrastructure providers for much of its information. The Commission’s strength and success will depend on its information gathering ability. The Bill does support the Commission in this function by requiring certain State sector agencies to comply with information requests to enable the Commission to carry out its functions. There are, however, areas which this power does not extend, and at the end of the day, the sharing and collaboration of information depends on the cooperation by those at its source, the infrastructure providers. 

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