Fulton Hogan CEO NZ Robert Jones highlights the need to stay ahead of the curve in infrastructure.
In over 30 years in the infrastructure sector, I’ve observed that the only constant is the ever-increasing pace of change. Whether it’s new technologies and materials, changing models for social provision of infrastructure or ever-increasing globalisation, every day brings an opportunity to sharpen the way we ‘do’ infrastructure in New Zealand.
The next 30 years will see the change curve bend more steeply and we need to be ready for this as a sector.
With the accelerating pace of change, we must constantly look forward and imagine the possibilities. Whether we are contractors or clients, we simply can’t stand still.
We need to ensure that we don’t stay isolated when it comes to progress and innovation, instead closely monitoring and learning from emerging trends in other markets.
I make a point of checking in on how other countries are approaching infrastructure, always finding it insightful.
But we don’t just have to play catch-up with the frontrunners; we can set standards too. Our history is rich with examples of trendsetters and pioneers – so taking the lead with innovation in infrastructure is not too tall an ask.
One way we can embed this attitude is by introducing more incentives for research and development. This has worked in jurisdictions such as Australia and I believe it would stimulate more innovation on this side of the Tasman too.
From the top
Over the next 10 years, $110 billion will be spent on major infrastructure initiatives in New Zealand. This gruelling pipeline of work demands the full attention of our political leaders.
At present, oversight of our infrastructure at a central government level is spread across various portfolios, including transport, corrections and education. This means that at any one time our ministers by default are juggling many issues and are at risk of seeing things through the lens of a silo.
To limit distractions and create clarity around roles, governments in other countries appoint political sponsors of specific projects. This is evident in the UK, where High Speed 2, a multibillion-dollar rail project, has Robert Goodwill serving as a designated minister.
Canada and Australia are also interesting examples, as they have more focused portfolios with a Minister of Infrastructure and Communities, and a Minister for Infrastructure and Regional Development.
Back home, it has been encouraging to see leadership in action through the Roads of National Significance programme, which is delivering major works such as the Waikato Expressway and the Western Ring Route in Auckland. The fast-tracked delivery model and dedicated planning process show what an increased focus on infrastructure can achieve and I’m looking forward to seeing more of this in years to come.
There have been recent signs of New Zealand warming to the idea of public-private partnerships (PPPs). The 2011 National Infrastructure Plan from Treasury requires the government to consider procurement within a PPP model for capital projects greater than $25 million. Transmission Gully, the first state highway to be built using the PPP model in this country, is a litmus test for this procurement model.
These types of partnerships can work for all involved, as they can facilitate cheaper sources of funding and inject a greater degree of experience from outside operators.
Regardless of divided views on the value of PPPs, the real debate lies around the future of asset ownership by local councils and government. Central and local government, and the wider civil engineering community, need to be receptive to opportunities that sit outside the traditional procurement and asset ownership models, with thought given to striking the right balance between landing at the lowest price and creating long-term whole-of-life value for taxpayers.
As we power into 2016, we must take the long view in everything we do. Our communities will be all the better for us embracing the best of the change opportunities we all face every day.
This article was first published in the March 2016 issue of NZ Local Government Magazine.