Transport infrastructure will receive $708 million from the Government’s $3 billion COVID Response and Recovery Fund.
This includes work on ports, roads, cycleways and walkways across the regions with projects in addition to the $12 billion New Zealand Upgrade Programme and existing Provincial Growth Fund investments.
Finance minister Grant Robertson and infrastructure minister Shane Jones announced the fund on Wednesday.
It follows engagement with local councils and businesses through the Infrastructure Reference Group (IRG) to identify a pipeline of “shovel-ready” projects.
The IRG received a total of 1924 submissions from around 40 sectors of the economy.
Proposals were scrutinised under criteria set by the Government and a short list of 802 projects presented to ministers.
Cabinet has now approved in principal more than 150 projects worth $2.6 billion while officials carry out final due diligence to ensure projects are viable and offer the benefits stated by applicants.
On top of transport, $464m goes to housing and urban development, $460m for environmental projects and $670m for community and social development.
It’s estimated to create more than 20,000 jobs and “unlock” more than $5b worth of projects throughout New Zealand.
The package also includes about $210 million for climate resilience and flood protection projects, $155 million for transformative energy projects, about $180 million for large-scale construction projects and $50 million for enhanced regional digital connectivity.
“This is about creating jobs as we recover and rebuild from the recession caused by the global COVID-19 pandemic,” Robertson says.
“Because we went hard and early with our health response, we’ve been able to open up the economy quicker than other countries and get a head start on our recovery.
“Building infrastructure is a key component of our economic recovery plan. It creates jobs and provides much-needed economic stimulus,” he says.
Infrastructure Minister Shane Jones says the pipeline of projects will create immediate economic activity in the metropolitan centres as well as the regions.
“Not only has this massive undertaking provided us with the largest stocktake of infrastructure projects we’ve ever had but it’s enabled us to partner with central and local government, the private sector and community groups to deliver projects for all Kiwis,” Jones says.
Good start but let’s see more – AA
Though it welcomes the Government’s initial list of infrastructure projects in the COVID-19 recovery package, the AA says it’s waiting to see whether the two national programmes it has called for are in the yet-to-be-announced full list.
They are a five-pronged road safety programme, and a big increase in investment in road maintenance.
The Government has identified 12 of the more than 150 projects from around the country that will be included in the $3bn fund, and broke the investment down across regions and across sectors.
AA principal advisor Barney Irvine says the association is pleased that $700m has been earmarked in the fund for transport infrastructure.
“But the big question for us, and for other stakeholders, is whether the projects we put up to the fund have made the cut.”
In road safety, the AA recommends five separate initiatives: electronic speed signs outside all schools; adding 200km of median barriers on state highways every year for five years; upgrading highways that have a two-star safety standard to at least three-star rating; engineering work to support safer speeds, and installing at least 20 new red light cameras in main centres outside Auckland.
More certainty needed says Infrastructure NZ
Infrastructure New Zealand chief executive Paul Blair says the shovel ready infrastructure fund is welcome, but “to avoid major lay-offs in the engineering, design, consulting and construction sectors, projects must be urgently brought to market”.
He says there are employers hurt by the sudden drop-off in local government and private sector investment who still need even more certainty to retain underutilised staff.
“In the six weeks since the Infrastructure Reference Group provided their list of 800 projects, a significant gap has emerged in the infrastructure forward works programme.
“Civil Contractors NZ and the Association of Consulting Engineers NZ have estimated that engineering and construction job losses could hit 10,000 without money rapidly flowing into projects and programmes of deliverable work.
“The fundamental challenge still facing the industry is the lack of clearly defined projects and a timeline for when they will be brought to market.
Of the 12 projects signalled in the announcement, there are still no details of when they would be tendered.
“A survey conducted by Infrastructure NZ in March showed that few employers can afford to wait 12 months on the basis of future spending promises.
“Will we use accelerated delivery models to rapidly move from announcements to money flowing into actual projects which put people to work?
“The industry strongly supports government infrastructure stimulus efforts, but urgently needs more detail on the projects and to proceed at pace,” Blair says.
