The New Zealand Transport Agency has published its Major Transport Projects Pipeline (the Pipeline) which forecasts investments into transport infrastructure over the next decade. The key takeaway from this announcement is that NZTA will be taking a phased approach to these projects rather than building them all at once. This reflects the Government’s financial constraints and the infrastructure sector’s finite capacity.
What’s in the Pipeline?
The Pipeline is dominated by the Government’s Roads of National Significance (RoNS) but also includes Roads of Regional Significance and council-led projects. Four RoNS are currently under construction; Otaki to North of Levin, the Hawke’s Bay Expressway, Takitimu North Link Stage 1 and SH29 Tauriko (Omanawa Bridge). Next off the block will be stage one of the Northland Expressway (Warkworth to Te Hana) and Cambridge to Piarere with construction expected to start within 12 months.
Phases two and three of the Pipeline are described as the “future pipeline”. Projects in phase two are being prepared for construction or are undergoing route protection, although some are implementation ready. The phase two projects ready for implementation are the Belfast to Pegasus Motorway and Woodend Bypass, Mill Road Stage 1, Takitimu North Link Stage 2A and Stage 1 of the Hope Bypass. The remaining RoNS in phase two are the SH1 Wellington Improvements, Northland Corridor – Brynderwyn Hills alternative, SH29 Tauriko (wider scope), Hamilton Southern Links, Takitimu North Link Stage 2B and SH16 Northwest-West Alternative Highway. Rounding out phase two is Auckland’s Northwest Busway. Minister of Transport, Hon Chris Bishop, said that RoNS in phase two will be built “as funds become available”.
Preparatory work will continue for projects in phase three. Phase three includes the following RoNS; the Northland Corridor – Te Hana to Whangarei (excluding the Brynderwyn Hills alternative), the East-West Link, Mill Road – Alfriston to Drury, Petone to Grenada, and the SH6 Hope Bypass Stage 2. Phase three also includes three council led projects: Stages 3 and 4 of the Airport to Botany Busway, the Wellington’s Cross Valley Link, and the removal of level crossings on Auckland’s rail network.
Key Takeaways
The key takeaway from the Pipeline is that New Zealand’s next generation of major transport projects will be built in phases. This reflects the fact that the country cannot afford, and the infrastructure sector lacks the capacity, to build all these projects immediately. The Pipeline follows the National Infrastructure Plan’s (the Plan) suggestion that major land transport projects be prioritised and sequenced.[1]
The Pipeline aims to provide industry with a clear picture of what’s coming so it can confidently invest in the people and plant needed to deliver the planned projects. Increased visibility as to future investments will be welcomed by the infrastructure sector. However, the Pipeline expressly states that timeframes are “indicative and subject to change”.
While announcing the Pipeline, Mr Bishop confirmed that it would sit alongside significant investments into maintaining, renewing and strengthening resilience of existing infrastructure. The Plan states that 60% of capital spending should be on maintenance and renewals of existing infrastructure.
Finally, the impact of financial constraints can be seen in the Pipeline. The Plan recognised that cost of New Zealand’s major project pipeline outstrips available funding. The Minister appeared to acknowledge this issue by noting that fuel excise duty has fallen 21% in real terms since 2020, while construction costs have increased significantly. Funding appears to be the primary constraint preventing projects in phase two from getting underway. However, while projects can carry significant upfront costs, deferring those projects can cost even more in the long run. Inflation increases construction costs, and the economic benefits that the projects would otherwise generate are postponed. The Government will have to grapple with how to pay, or who pays, for these projects in the years ahead.
[1] National Infrastructure Plan at 66-68.
