IN THE PINK

In the country’s busiest and most complicated section of highway, 660m of a redundant motorway off-ramp has been repurposed to make a cycleway, which has seen a 29 per cent increase in people new to cycling in the city centre

Bold investment for big opportunities New Zealand’s twin requirements of infrastructure investment and a need for non-monetary stimulus may provide fertile ground for an ambitious programme of government investment, writes James Penn

Industry players are calling for bold investment to address New Zealand’s burgeoning population and the problems that come with it. Earlier this year in the Herald, Fulton Hogan chief executive Robert Jones asked: “How is our national infrastructure coping with population change and growth? Not too well, if you take our national housing and urban traffic issues.”

“We believe it’s a very big brake on small business,” says Patrick Brockie, Chairman of the New Zealand Council for Infrastructure Development (NZCID). “To get around Auckland during the day is hard; to get from one side of the bridge to the other.”

At the same time, some commentators are suggesting monetary stimulus has run its course. “I think there’s an emerging view that monetary policy stimulus is not really delivering the sort of growth that people were expecting it to deliver,” says Paul Goodwin, Managing Director, Institutional at ANZ NZ. “Therefore, there’s a huge responsibility on central and local government to start thinking about fiscal policy stimulus to try and stimulate growth.”

This presents a unique opportunity for a marriage of these two emerging trends — calls for infrastructure investment and calls for fiscal stimulus — which New Zealand may be particularly well-placed to act upon.

With the Government’s announcement of a 2015-16 surplus of $1.8b, up from the forecast of $176m, there may be room for some more public infra- structure investment. Similarly, private markets seem eager to play their role in new projects.

“We have private sector investors willing to sit alongside central and local government to drive investment into infrastructure to deliver long term growth,” says Goodwin.

Brockie agrees: “Involve the private sector to allow us to accelerate the infrastructure spend, as the Government have been doing with the PPP (Public-Private Partnership) model.

“But it doesn’t have to be exactly like a PPP. It can be different procurement models, but working hand in hand with the private sector, central government, and local government together. We could accelerate the infrastructure rollout, I think.”

According to the Auckland Chamber of Commerce, there has been interest from private parties in working alongside the public sector to bring a key element of the Auckland Transport Alignment Project (ATAP) to fruition. That element is Penlink, a proposed alternative route between the Whangaparaoa Peninsula and State Highway 1 (SH1) at Redvale.

“Private sector investors have approached the chamber stating interest in undertaking Penlink as a PPP where they finance, build and operate the road while Auckland Transport pays for it to be open,” says the chamber.

During the recent local election campaign, now-mayor Phil Goff scoped a vision for infrastructure investment funding. “Limits on borrowing capacity and the inequity and inappropriateness of using rates as a major funding mechanism