Our water sector is beginning to benefit from a renewed focus on optimising water-use, with construction now under way on Central Plains Water, a ground-breaking scheme that will irrigate 60,000 hectares of farmland and create up to $1.4 billion in new economic activity.
Transport is enjoying significant growth and re-investment too, across ports, airports, air transport and roading.
The Government's recent announcement on Transmission Gully opens the way for a roading project that will cut congestion, improve safety and support economic growth across the Wellington Region.
First mooted almost a century ago, the benefits of Transmission Gully will be unlocked through New Zealand's largest public-private partnership (PPP).
And private sector involvement is, to varying degrees, now a feature of many other nationally significant developments. The New Zealand PPP market is well under way and delivering public benefits. Projects such as the Hobsonvillle Primary and Secondary Schools, Wiri Prison and Transmission Gully have brought successful private sector engagement which confirms the potential for bringing forward other critical infrastructure.
All of these projects have been supported by debt and equity providers, and markets have the capacity to support a pipeline of new initiatives.
The Government is looking to apply what it has learnt from the alternative procurement models behind these projects so the advantages of public-private sector delivery can be replicated elsewhere in its activities.
The private sector, for its part, has shown a willingness to play a role in finding solutions for delivering infrastructure.
The advantages to New Zealand are clear: bringing in expertise and capital to secure or bring forward projects whose benefits to the economy and society might otherwise be deferred, or lost.
There is now an opportunity to build further on this success.
In Christchurch and in the health and waste water sectors, in particular, there is significant potential to explore greater private sector involvement in projects which would deliver clear benefits to the community in outcomes, cost and delivery timeframes. The public-private partnership capability now established in New Zealand, and its growing track-record of delivery, provides decisionmakers an opportunity to assess the innovation and value that new procurement methods would bring towards delivering a new world-class city to the people of Christchurch.
As activity and demand grow across the infrastructure sector, some constraints are beginning to emerge, particularly around the ability to secure supply chains and source skilled labour in the construction sector.
These issues are particularly evident in the Christchurch rebuild, which in itself is the largest infrastructure event in New Zealand's history.
And the constraints in capacity emerging in Auckland as residential construction picks up to meet demand are adding to the capacity challenges for the infrastructure sector.
Engaging the private sector in alternative procurement models to deliver infrastructure could help alleviate some of those constraints.
We have seen this through the Transmission Gully project, and the pipeline of further New Zealand Transport Agency projects, in their ability to attract large international players to the New Zealand market providing both capacity and international best practice.
Strategic leadership continues to be a key requirement in securing the development of what will be long-term, strategic assets for New Zealand.
In the lead-up to the general election, the industry will be listening with great interest to what our political leaders have to say about their visions for the future.
Investors from New Zealand and offshore will be looking for a sense of stability, consistency of approach and certainty over regulation. They will be seeking confidence and a shared sense of direction which goes beyond the three-year electoral cycle. The establishment of the National Infrastructure Unit has been a positive development in this direction.
And the long-term strategic plans of local authorities are providing some welcome certainty at a local level. But at a strategic national level, there remains a need for New Zealanders to decide what infrastructure is important for future success.
This is a discussion which needs to involve a wide range of stakeholders.
The objective should be a long-term vision in which investors and developers can have confidence, regardless of who is in government. Matched with this is a need for greater clarity, and certainty, over the process for converting projects from aspiration to reality - particularly around consenting requirements for infrastructure related to harnessing New Zealand's natural endowment.
An environment of stability and certainty will help to secure private sector backing and reduce the cost of capital by allowing would-be participants to plan and invest with confidence on the sort of large-scale, long-term basis demanded by major infrastructure development. In doing so, it could help this country secure development that might otherwise not be possible.
The opportunities across the sector are on a scale never before seen in this country. The private sector participants, from investors, financiers, advisors, construction firms, industry bodies and service providers, are all positioned to deliver into this opportunity, working with local and central Government. The potential is significant -- success will help to underpin future growth and prosperity for New Zealanders.
* David Green is Managing Director Institutional at ANZ New Zealand.
