Building a better city in a better way

The massive pipeline of new infrastructure for Auckland isn’t just an opportunity to build a better city, but to build it in a better way. ANZ Institutional Bank's Head of Institutional Relationships Stuart McKinnon looks at the opportunites and challenges these projects present.

Aucklanders weary of living and working in what often feels to be a giant building site won’t welcome hearing this: the current construction work that has turned the CBD into a sea of road cones, hi-vis and heavy machinery is just the beginning.

The current pace of construction and development is due to roll on for years to come as Auckland plays catch-up with its own success as a desirable place to live.

Plans are being drawn up for major works on housing, water, electricity, roads, schools and hospitals, to name just the large ones.

Not only is Auckland well behind the pace already, but an estimated one million more people are expected to live in the region by 2050, ramping up the pressure even further.

The need for better infrastructure is acute, but so is the need to make sure the work is done to the highest international standards, and represents the best return on investment for the taxpayers and ratepayers of Auckland.

Funding for these projects will come from central government, local government and some will need the involvement of the private sector.

Irrespective of who funds the projects, it’s more important than ever for the procurement process to continue to provide offshore firms the ability to collaborate with local and central government, communities, iwi and local firms on the delivery of New Zealand Inc’s infrastructure menu.

By tapping offshore markets, we will not only benefit from the best overseas experience and technology, but will reduce project risk, direct specialised talent to where it’s most needed and provide invaluable knowledge transfer for the local construction and engineering sector.

The $709.5 million Puhoi to Warkworth motorway is a great example of this principle in action.

The project will extend the four-lane Northern Motorway by 18.5km, from the Johnstone’s Hill tunnels to State Highway One just north of Warkworth, providing a safer and more reliable link between Northland and Auckland, and help boost economic growth in Northland.

The Puhoi to Warkworth project is being delivered by Public Private Partnership (PPP) consortium Northern Express Group (NX2), made up of companies with considerable experience in design, construction, finance, maintenance, and management of infrastructure projects in New Zealand and overseas.

NX2 has sub-contracted Fletcher Construction and Spanish firm Acciona Infrastructure to build the road. The project will then be operated on behalf of NX2 for 25 years by a joint venture involving Acciona Concessions and Higgins.

Although this is Acciona’s first project in New Zealand,  it has extensive experience in roads and bridges, railways and tunnels, in 30 countries on five continents.

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One of the most exciting aspects of the project is the high sustainability standards that the partners have set. It is aiming to meet the Greenroads Silver standard - an international sustainability certification system that is specific to the design and construction of roading projects.

Points are earned for delivering sustainable outcomes such as habitat conservation, work zone health and safety, and recycled and recovery of roading materials.

While NX2 is responsible for financing, building and operating the highway for 25 years, the motorway will remain a public asset.

As part of the deal, NX2 is committed to ongoing communications with both NZTA and the wider community.

There is great opportunity for more of these sorts of partnerships, in a range of infrastructure projects, such as light rail.

With our roads - and buses - becoming more congested the need for light rail is becoming more urgent.

It is not only a way to move people from their homes to work, but also a way to revitalise the areas that sit alongside the rail corridors, boosting the economy and providing transportation for people who will live in new housing developments.

The Government is currently looking at two competing proposals for the procurement of Auckland Light Rail, one involving NZTA and the other a joint proposal by the NZ Superannuation Fund and Caisse de dépôt et placement du Québec (CDPQ) Infra, a wholly owned subsidiary of a Canadian pension fund. 

The successful procurer will design and select the firm or firms that will build the light rail.

Bringing in overseas expertise and workers shouldn’t be done at the exclusion of local firms, and at all times local and central government need to remain in control of the process.

Offshore expertise is a great asset to tap into, although we must ensure that the best ideas from overseas need to be adapted to our local situation and challenges.

Stuart McKinnon is Head of Institutional Relationships for ANZ Institutional Bank.