How NZ’s infrastructure pipeline compares to Australia

The Australian and New Zealand Infrastructure Pipeline (ANZIP) currently tracks a healthy pipeline of major infrastructure across the Trans-Tasman market – projects with a capital value over A$300 million in the Australian market, and over NZ$100 million in New Zealand – with the Kiwi market contributing A$88.5 billion (NZ$95.9 billion) worth of infrastructure across 64 projects.

In contrast to the Australian pipeline, which has many large-scale projects at the pointy end of delivery, the New Zealand pipeline is heavily skewed toward the front end. A number of major projects are in the early stages of planning – such as Waitemata Harbour Connections, Otaki to North of Levin and the Nelson Hospital Redevelopment – while others in planning are now on the ‘at risk’ register following the election – including Auckland Light Rail, Let’s Get Wellington Moving Program, and the Lake Onslow Pumped Hydro. Figure 1 provides a stage-by-stage breakdown of New Zealand’s pipeline.

• A four-lane highway from Whangārei to Tauranga, comprising four projects:
  • Whangārei to Port Marsden – NZ$1.3 billion (A$1.2 billion)
  • Warkworth to Wellsford – NZ$2.2 billion (A$2 billion)
  • Cambridge to Piarere – NZ$721 million (A$667 million)
  • Tauriko West State Highway 29 – NZ$1.9 billion (A$1.8 billion)
• Mill Road Stage One – NZ$1.3 billion (A$1.2 billion)
• North West Alternative State Highway – NZ$2.3 billion (A$2.1 billion)
• Takitimu Northern Link Stage Two – NZ$627 million (A$580 million)
• Second Mt Victoria Tunnel and Basin Reserve upgrade – NZ$2.2 billion (A$2 billion)
• Hope Bypass – NZ$250 million (A$231 million)
• Pegasus to Belfast Motorway and Woodend Bypass – NZ$270 million (A$250 million)
• Eastern Busway – NZ$717 million (A$663 million)
• Airport to Botany – NZ$1.1 billion (A$930 million), and
• Lower North Island Rail – NZ$874 million (A$808 million).

Included in the Transport for the Future policy document is a commitment to investigate all options for funding and financing transport infrastructure, including using private finance in the delivery of transport infrastructure. Key projects earmarked for private finance include:

• East-West Link – NZ$1.6 billion (A$1.5 billion)
• Southern Links – Hamilton, with an estimated cost of NZ$600 million (A$555 million)
• Petone to Grenada Link Road & Cross Valley Link – NZ$1.8 billion (A$1.7 billion), and
• Northwest Rapid Transit – NZ$2.9 billion (A$2.7 billion).

Prior to any pipeline cancellations or additions, delivery of New Zealand’s pipeline is forecast to accelerate. Over the next five years, quarterly expenditure on infrastructure will grow from A$920 million (NZ$1 billion) to A$1.9 billion (NZ$2.1 billion) and average A$1.7 billion (NZ$1.8 billion), equating to A$554 million (NZ$600 million) in major infrastructure expenditure hitting the ground each month in New Zealand.

Elected with an infrastructure mandate, the new Government should be granted a grace period as changes are made to its pipeline, including selecting projects and how they are delivered. However, to ensure smooth operation of a growing pipeline, the Government must move quickly to establish project certainty and provide necessary funding. Delays in establishing a firm pipeline of funded projects could have ramifications for service delivery and see a busy Trans-Tasman industry flow to markets with greater certainty.

While many of the resources for New Zealand’s infrastructure market can be drawn from domestic capability, New Zealand has always had to contend with the two-way task of attracting and retaining capital, plant and labour from Trans-Tasman neighbour Australia. The scale of this challenge is set to become more difficult, with quarterly infrastructure expenditure in Australia rising to an average of A$20.6 billion over the next five years. Figure 2 shows the forecast expenditure for New Zealand and Australian jurisdictions on ANZIP.