Infrastructure report: Michael Wood says we need to get transport infrastructure moving

Newly appointed Cabinet Minister Michael Wood.

Newly appointed Cabinet Minister Michael Wood has high ambition for his transport portfolio. Some of the top-line goals he says are priorities, are to get the city moving, improve freight connections, safety, and progress decarbonisation.

"A lot of this work was set up in the last term, I really see this term as about driving those things through in a practical way and getting them done through projects and programmes," he says.

Wood says the additional components since the Government's last term is the "build back" aspect — the fact that infrastructure investment will also be a critical element of the economic recovery and rebuild from Covid-19.

"We are looking at a $54 billion transport pipeline over the next ten years that we're able to deliver and that is going to be really significant on the jobs front, on the skills development front, on the productivity front as well.

Auckland light rail, a personal pledge
The coalition government was unable to reach agreement on light rail last term. Cabinet suspended progress on the flagship project until after the election. Since then, Wood has taken over the portfolio from Phil Twyford, and for him, making progress on the project is personal.

One of Wood's key promises when campaigning in the Mount Roskill by-election in 2016 was to fast-track a light rail system from Auckland's Wynyard Quarter to his electorate in Mount Roskill.

The project will connect the two largest employment hubs in Auckland — the central city and the area north of the airport — along with the Government's largest housing development in Mount Roskill and Māngere.

"As much as anything it is about connecting up the network," says Wood. "It is not just people using that line, but from it they will be able to access the western line, the northern busway, the southern line, the airport, out to Botany — and you're adding greater additional capacity to the whole public transport network in Auckland."

He is now getting up to speed with the detail of the two options put forward during the competitive bid process by Waka Kotahi NZ Transport Agency and NZ Infra (a consortium that includes the NZ Super Fund and CDPQ Infra, a Quebec-based pension fund). "There are questions that come up — methodology, the route, financing, ownership structures — and we need to work very carefully through those," he says.

But Wood says the project will go ahead on his watch. The next milestone for the project will be a report from the Ministry of Transport, which was tasked by the previous Cabinet to do further work and consider the best option for the project.

"We want to get the decision right at this point," he says. "As Auckland continues to grow, if we don't make these kinds of investments we are going to choke on our own growth."

Open-minded but cautious
As the new Minister, Wood is coming up to speed with several issues in the portfolio, including congestion charging and his level of appetite for public-private partnerships to fund and build transport infrastructure.

On congestion charging, Wood says he will soon receive a report from the Ministry of Transport with analysis into the impacts of various congestion pricing scheme options, and their technical requirements. He says he wants to see what the analysis shows, describing his position as "open-minded, but tinged with a bit of caution as well."
"We haven't got any international comparators with a fully integrated road pricing system that some people are proposing," he says. "I'd be a little bit cautious about leaping into that although I am open-minded to the fact that it could be a useful tool for demand management and managing congestion."

He says there is a sequence in question before Auckland could go down a congestion charging track, which would ensure that are effective public transport alternatives in place before imposing charges on people for using private vehicles.

It raises an equity issue — Wood says that while congestion charging wouldn't necessarily change the way he moves around the city, for those on low incomes it would.

"I would want to see some good analysis and thinking around it before I'd be prepared to take it further," he says.

Wood says he is also open-minded about the use of public-private partnerships to fund transport projects, but wants to take care to make sure the arrangement is right for New Zealand's interests.

"I have a responsibility to look after the Crown's position and make sure that any arrangements we enter into are done responsibly, that the long-term value is right and that the risk allocation is right," he says.

Construction staff
Wood says while there are calls to keep adding to the transport pipeline, it will be important to ensure New Zealand has the workforce to deliver. An underdeveloped workforce strategy has been a long-term problem for New Zealand, particularly in the infrastructure sector.

"In the long-term, we have a vision to build up a largely domestic workforce that is capable of doing that work and capable of sustaining it over a long period of time," he says, pointing to the Government's free trade training and apprenticeship scheme that was put in place is part of the Covid-response as one way this is being encouraged.
"A lot of work done in the previous term was done by a group of ministers to get the construction sector to work more collaboratively on skills and training along with procurement and all the other range of issues. It's a work in progress there."
Wood says that at this point there will still be a requirement for the workforce to be supplemented with offshore labour as well — particularly in specialist areas.

Eye to the future
Over this term, Wood says he expects to deliver on the manifesto that Labour was elected to implement.

"That will include rolling out those investments that are already in place, but not yet delivered. The big programme that's in the Government Policy Statement on Land Transport (GPS), the shovel ready projects and New Zealand upgrade projects, light rail."
He says the Government is very committed to carrying forward its balanced approach to transport — "there are a mix of transport priorities — yes, roading, but also public transport, rail, walking, cycling, coastal shipping as well," he says.

"We want to get the right solution to the particular transport problems we face in different areas and be mode neutral — starting out with what are we trying to achieve and then considering what mode and what investment is going help to get us there."
Wood says the Government is very conscious that if it doesn't keep up the core investment in maintenance on the state highway network and regional roads they will degrade very quickly.

"There is a big spend that is going on there as well — not necessarily building new roads, but making sure that they are maintained well and that there are constant improvements in terms of the safety profile of them as well," he says.

He says another big aspect of his role will include the agenda around decarbonisation.
"Next year we get the first carbon budget from the climate commission — and transport is about 20 per cent of it."

One thing that Wood makes clear: the next three years won't be about reformulating plans and new strategies — it will be about delivery.
"After a lot of planning, the fruits of that are going to start to be seen," he says.

— Additional reporting Fran O'Sullivan