Fast track $500m transport infrastructure spend

22 November 2005

Call to fast track $500m transport infrastructure spend

The New Zealand Contractors’ Federation (NZCF) is questioning why a one-off $500 million roading election pledge is going to be drip fed into infrastructure spending until 2010.

The one-off $500 million windfall for transport infrastructure was announced in June by then Transport Minister Pete Hodgson. The Land Transport NZ board has decided to spend the money between now and 2010, concentrating on three main priority areas – State highways ($390 million), local government transport projects ($52.5 million) and Auckland passenger rail ($50 million). Only $87 million will be allocated during the 2005/06 financial year.

“We’ve lobbied hard for the Government to ‘get real’ about infrastructure spending and we’re very pleased that the Government has responded to our concerns,” said NZCF chief executive Richard Michael.

“This funding will finally bring New Zealand up to OECD averages in terms of infrastructure funding. However, there is an issue about how quickly the money is going to be spent – and we haven’t even taken into account any extra demand needed to gear up for the Rugby World Cup in 2011.

“We have the opportunity to fast track some much needed work but it appears the way this money has been allocated lacks urgency.”

Mr Michael called for more certainty around national infrastructure spending, saying that without it the contracting industry would find it virtually impossible to upskill and upresource to effectively meet future demand.

“The civil contracting industry isn’t sitting around waiting for this work. The industry is dealing with high demand while facing a skills shortage. Large contracts require civil contracting companies to invest heavily in their own equipment and resources. For every $1 billion worth of contracts, the industry has to invest $200-$300 million in equipment and resourcing to make sure we can deliver.

“We believe that the Government, industry and other funders should be working to develop a 10-year work plan that can provide some certainty around this funding and make sure that the industry is in a position to deliver,” Mr Michael said.

ENDS

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