Crown Infrastructure Partnerships initiative could transform infrastructure and housing delivery
"The Government's announcement today that it will set up Crown Infrastructure Partnerships to seed fund private
investment in road and water infrastructure provides a means to dramatically increase housing supply," says
Infrastructure New Zealand Chief Executive, Stephen Selwood.
"Timely delivery of trunk infrastructure is a major constraint on developers' ability to deliver housing across New
Zealand," Selwood says.
"Under this model, Crown Infrastructure Partners (CIP) will facilitate partnerships between the Government and local
councils to enable private investment in roads and water treatment plants to unlock land for development.
"Traditionally councils have been unable to deliver infrastructure soon enough because of other demands on funding and
political constraints on their ability to increase property rates and fund debt.
"Under this model, the debt will be covered by private investors.
"The $600 million seed fund announced today will enable CIP to cover initial demand risk until the developments are in
place and new ratepayers are able to pay for the infrastructure. As the Crown is repaid, it will then be able to recycle
that capital into new developments.
"A key advantage of this approach is that the cost of the infrastructure is not included in the up front cost of a home.
This will reduce house prices, meaning smaller mortgages.
"Instead, home owners will pay for the infrastructure services over time through targeted rates on their properties.
"The Crown partnership agency is similar to the successful Scottish Futures Trust model in Scotland and the Municipal
Utility District approach in the United States. Both countries use these models to deliver better outcomes sooner by
leveraging private capital and expertise.
"Re-purposing Crown Fibre Holdings into Crown Infrastructure Partnerships in New Zealand is a very smart move.
"Crown Fibre Holdings has a track record of successful partnerships with the private sector and this approach has
enabled a step change in the roll out of high speed broadband.
"Successful evolution of that model into integrated development of infrastructure and housing at scale could transform
housing supply and make a significant contribution to delivering affordable homes sooner rather than later." Selwood
says.
ENDS