Delivery key to record $42 billion capital programme


The government’s announcement that this year’s Budget will allocate $42 billion to capital investment over five years demands a specialised procurement agency according to the country’s leading infrastructure body

The announcement will provide a welcome boost for regional and urban development but establishing a specialised strategic procurement agency is now a priority to ensure projects are sequenced and delivered at best value, says Stephen Selwood, CEO of Infrastructure New Zealand.

“Details of the exact programme will become clear on Budget day, but with major investment needs in health, education, justice, housing and of course transport, the challenge for the government will be getting best value out of its programme.

“There is a risk that costs will inflate if project sequencing stretches the market by location, portfolio or skill set.

“A carefully-conceived project pipeline, developed with the industry and comprising the full spectrum of central and local government major projects, is essential to delivering a programme this large.”

Just as important will be the way in which projects are procured, Selwood adds.

“Infrastructure Minister Shane Jones’ procurement agency idea now takes on immediate priority, not only to develop the project pipeline but also to ensure that hospitals, schools, roads, railways and other infrastructure are delivered on time, to specification and to budget.

“Recent reports that the SuperFund has made an unsolicited bid to deliver light rail in Auckland underline how sophisticated major project procurement has become.

“It’s great news that investors are looking at national infrastructure as an investment opportunity and we need serious expertise across government to ensure this type of approach will be a success.

“A specialised procurement agency will consolidate public procurement expertise and enable the 5-year $42 billion pipeline to be delivered in a way which benefits all New Zealanders,” Selwood says.