$12 billion not nearly enough
The pipes are leaking, the rail is creaking and the roads can’t handle a little rain.
Wellington may be a 21st-century city but it’s got old bones, which are starting to show their age after years of underinvestment.
New Zealand is set to spend $138 billion on infrastructure over the next 10 years, as much as 6 per cent of GDP over that timeframe.
That figure includes network infrastructure, such as water and transport, but not housing or commercial buildings.
Wellington’s projected spend is $11.8b in the next decade, but experts are warning that it won’t come close to the scale of investment needed.
The fact that it took four hours of gridlocked traffic to clear three wheelbarrow loads worth of dirt from an unsecured bank of State Highway 2 is indicative of Wellington’s entire infrastructure problem: The city isn’t prepared enough for preventable problems and, when those problems arise, it takes too long to deal with them.
An underdeveloped infrastructure not only constrains Wellington’s ability to grow, it risks damaging the capital’s reputation.
‘‘That is a risk for any city when the infrastructure is not working and people see it is not working,’’ mayor Andy Foster said.
Wellington’s pipes are old – an average age of 51 years – and are being replaced at less than half the rate they wear out.
In order for service levels to be maintained, investment in the three waters – stormwater, wastewater, and drinking water – should be at least match the level of depreciation, according to Water NZ standards.
Wellington isn’t even close to standard, with average spending of just 44 per cent across the three waters in 2019.
Wellington is far from alone in underspending. In fact, Tararua District Council was the only one of New Zealand’s 67 councils to meet replacement standards for all three waters but the capital has seen the most high-profile examples of pipe failures.
‘‘If we’re looking at a capital city that has poo running down the street, it does present issues,’’ said Infometrics economist Brad Olsen.
‘‘We’ve got to come up with some better solutions. The status quo is not working.
‘‘It’s like playing whack-a-mole. Eventually, you’re going to get tired and you won’t be able to play the game any more.’’
Earlier this year, Porirua City Council was warned it would cost $2b to bring its water network up to scratch, and Hutt City Council was told it had underbudgeted by $240 million over the next 10 years.
‘‘We really need to front up to this,’’ Lower Hutt Mayor Campbell Barry said.
Two-thirds of the rates increase for his council this year was due to the costs of water infrastructure.
‘‘We are really selling future ratepayers down the river if we don’t do something about it . . . the longer we hide away, the more those will stack up,’’ Barry explained.
Across the entire road, rail, and water infrastructure, New Zealand lags behind our international partners.
Every year since 1997, New Zealand has spent less per capita on infrastructure than the United Kingdom, United States, Canada and Australia.
‘‘We have an infrastructure deficit built up over the last 30 years, which we haven’t even started addressing. Moreover, we’re not planning for what the future will bring,’’ Olsen said.
As Chamber of Commerce chief executive John Milford puts it: ‘‘Our future city needs to look different than it does today. We need to adapt for the future.’’
Over the next few decades, infrastructure is expected to face more extreme weather events due to climate change, and increased volume pressure from a growing population.
An additional 80,000 people are expected to move to Wellington in the next 30 years. The strain that will put on roads is obvious but it will also affect pipes, as both drinking water and wastewater pipes will be required to handle more volume, presumably putting them at greater risk of bursting.
An ANZ report last year found New Zealand was falling way behind in terms of tracking building spend to population growth, and had been in the negatives since 2013.
The Covid-19 recovery package has been a much-needed boost for New Zealand’s infrastructure, though so far the only ‘‘shovelready’’ project announced for Wellington is a $14m upgrade of the District Court.
The lack of a long-term national plan for infrastructure spending was concerning, Olsen said.
‘‘New Zealand does this quite often, we have these artificial boombust cycles. A certain type of spending becomes the flavour of the month, and we get periods of very high investment, then everyone thinks we’ve solved it,’’ he said.
‘‘This is not going to be three years worth of investment then it’s all done. It’s got to be an ongoing thing.’’
Olsen said he had recently been reading planning documents for Wellington’s transport spine from Ngauranga to Wellington Airport which were written in the 1990s and promptly forgotten about.
‘‘We keep realising that the same problem exists and never follow through with any action. We still have no firm plans for what Wellington’s transport infrastructure looks like over the next 10 years.
‘‘We’re doing a lot of great talking and no action.’’