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'We're tripping ourselves up': Infrastructure chief on what's needed to reduce the price

Publish Date
Fri, 1 Dec 2023, 9:43am
Construction work north of the Wainui Saddle, part of the 27km Transmission Gully Project near Wellington. Photo / File
Construction work north of the Wainui Saddle, part of the 27km Transmission Gully Project near Wellington. Photo / File

'We're tripping ourselves up': Infrastructure chief on what's needed to reduce the price

Publish Date
Fri, 1 Dec 2023, 9:43am

The price of infrastructure in New Zealand could fall, but only if the Government gets better at negotiating and planning what the country's needs are, according to the country's leading voice on infrastructure projects.

Some projects in New Zealand cost four to five times as much to complete here as in Europe, City Rail Link chief executive Sean Sweeney has claimed.

Infrastructure New Zealand chief executive, Nick Leggett partly blames geography, but also slow consenting and the ability of officials to negotiate.

On the Mike Hosking Breakfast, he responded to figures that proved the same project costing almost $1 billion to complete in New Zealand might only cost $321 million in Australia.

"[Officials] try and screw down the market because they think they can get out of the risk, but the market just prices the risk into the contracts so things are more expensive."

Leggett said officials also avoid up-front discussions with contractors to tackle the risks head-on. The Government also doesn't have a pipeline of work that would allow the market or people to gear up for what's ahead.

"It's efficiencies. We spoke a year ago about all of this and it hasn't changed."

He believed there needs to be a bi-partisan approach that starts at the fiscal end of a project, but with a greater capability within the Government to negotiate and set the scene around what projects New Zealand needed in the next decade.

"When you get those guarantees in place, you actually streamline your delivery,” he said, adding that would lead shorter consenting times too.

“There's really good evidence that New Zealand [costs] two or three times more for consenting," he said.

“All these things add cost - not just into the project itself but often throughout the life of the project. We're just tripping ourselves up at every point."

Leggett said he was optimistic things can change. He wants the country to look to people such as City Rail Link chief Sweeney who has experience with international markets and can provide guidance for what's required to bring costs back to a reasonable level.

"If we don't - we're not going to realise our potential and we won't be productive.”

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