Solving traffic congestion is one of the top priorities for Auckland, but it shouldn't be addressed in isolation.
Solving traffic congestion is one of the top priorities for Auckland, but it shouldn't be addressed in isolation.
Tim McCready talks priorities for the new Auckland Council and mayor with ANZ's Patrick Brockie and John Vetter
Patrick Brockie is Head of Global Loans at ANZ and John Vetter is Executive Director, Institutional Relationships. We have new leadership in Auckland with Mayor Phil Goff and the council. What should be their priorities when it comes to infrastructure to service Auckland's growth?
Patrick Brockie: Clearly congestion is continuing to be a major issue, and it only seems to deteriorate. I think Phil Goff is very aware of that as everybody else is.
The ability to accelerate the infrastructure rollout to try to unlock the congestion that is getting noticeably worse by the day is crucial, and I don't hear anyone saying anything differently, no matter who you're talking to. It's a matter of putting an action plan in place.
It is very important to have good public transport links with housing development through the Unitary Plan. It's all very well building within special housing areas, but if they don't have good transport links, then they're just going to worsen the congestion issue. The devil is in the detail though on how you get transport and housing to go hand-in-hand.
John Vetter: It's crucial to link housing and transport together. If you look at them individually, you could solve one problem and create another.
Do you get a good sense that the new council is prepared to take action?
Brockie: It's still early days with the new administration. Deputy Mayor Bill Cashmore spoke recently at the Infrastructure New Zealand AGM.
He recognised that there probably won't be one solution, and council will look at all options to accelerate infrastructure. Everything is on the table -- nothing has been ruled in or out.
It's very important we have strong collaboration between central and local government to deal with the congestion issues.
People take it for granted, but it's only over the last few years that Auckland Transport and government transport agencies have aligned. They now have a shared view -- you would have thought that would have happened 20 years ago. It's very important.
ANZ head of global loans Patrick Brockie. Photo / NZ Herald
What do you think of government initiatives to support council to develop infrastructure?
Vetter: The infrastructure development fund is a good example of collaboration and balance sheet optimisation. Particularly recognising the constraints within which council has to operate.
It can turn very quickly into an effective tool -- it won't be the silver bullet -- but it could be a very strong string in the bow and contribute to a solution. But while it's a council and central government initiative, you have to have developers and land banks available in Auckland that want to participate.
It's a three-way Bermuda Triangle that must be worked through to find a solution.
Council must bring Auckland business with them, which may involve changes in attitudes and expectations.
What mechanisms do you think Auckland Council needs to put in place in order to raise the required funding for Auckland's infrastructure?
Brockie: It's a question of how much they raise. Many forms of funding don't move the needle too much. When you have a funding gap of $400-$500 million a year, you need to implement something that will allow the city to develop the infrastructure it needs.
Each funding option has a different impact in terms of quantum and effectiveness. There is a large need, and Auckland will likely need more than one particular method of funding to allow the city to catch up with the backlog of infrastructure.
From a banking perspective, the banks have liquidity. The Government has done a lot of good things on alternative procurement. That includes the PPP model and the other private sectors obviously have capital.
John Vetter is ANZ's executive director, institutional relationships.
We should be open-minded to alternative procurement methods. There is liquidity available and there are plenty of recent examples that have been successful.
If you look at Puhoi, it attracted international companies, who would not have participated in the New Zealand construction infrastructure market without that model.
Should Auckland look elsewhere for best-in-class models?
Brockie: We should look at what has been done successfully offshore. There are a lot of good examples of funding methods -- we are not first by any means.
None of these things are terribly new. It's just a case of looking globally, taking the best model, and moving forward with a bit of urgency.
There is an opportunity cost every day that we don't take action. There is undoubtedly a significant cost that comes from sitting in traffic -- particularly to Auckland, which has a lot of small businesses.
What role is ANZ playing in building Auckland's infrastructure?
Brockie: ANZ is an active participant and has played a leading role in many of New Zealand's largest infrastructure projects, including the Government's initiated Public-Private Partnership (PPP) program, and New Zealand Transport Agency's national roading program. There is quite a bit of activity coming up in the defence sector, social housing, and potentially a prison as a PPP.
What we like about the PPP model is not so much the funding, but bringing best practice and learnings into those sectors.
The public sector always dominates -- but can we take lessons or learnings from privately run prisons or roads, and use best practice. It's about the best outcomes for New Zealand. We believe the learnings can be applied across the whole sector.
