The announcement of a $2.4 billion, 10-year construction partnership between Watercare and Fulton Hogan and Fletcher Construction is a positive development for the wider infrastructure industry that will lead to better outcomes for all parties, says Infrastructure New Zealand CEO Paul Blair
By committing to a long-term programme of work rather than one-off projects, Watercare is giving the certainty that construction companies like Fulton Hogan and Fletcher Construction need to be able to invest in skills, drive efficiencies, and innovate.
The collaboration is good for Watercare, which needs partnership to drive its ambitious sustainability, cost, and well-being goals, as well as for its key suppliers.
This partnership is consistent with the Construction Sector Accord, established earlier this year, that aims to bring the public sector and construction industry together to support a long-term, sustainable, and innovative construction industry in New Zealand.
Infrastructure New Zealand is delighted to see that this type of collaborative partnership uses the best-practice guidelines established in our 2018 report, Creating Value Through Procurement: A Report into Public Sector Procurement of Major Projects.
With a national infrastructure pipeline of $129 billion over the next 10 years, we call on all public sector entities to closely examine this model. Watercare is aiming for 20% cost savings, but if our country saved even 10% we could deliver at least 20,000 new social homes or pay for 15 transport projects the size of Transmission Gully.
The agreement has occurred while Watercare remains tied to the Auckland Council’s balance sheet, limiting the CCO’s capacity to raise debt to finance major infrastructure projects.
Imagine how much more Watercare could do if it had financial independence. The scale and depth of infrastructure investment would be much greater, leading to both better results for the construction sector but also to better, safer, and more sustainable water infrastructure for Aucklanders.
We look forward to the Government’s forthcoming water sector reforms to enable more long-term, large-scale and strategic investment in New Zealand’s essential water infrastructure.