The National Party would set up a National Infrastructure Agency to tackle New Zealand's infrastructure deficit

The National Party would create a National Infrastructure Agency and give it a mandate to pursue public-private partnerships and bypass some public input into key projects.

Chris Bishop, the party’s spokesperson for infrastructure, unveiled the plan at the Building Nations conference in Christchurch on Wednesday. 

National would expand Crown Infrastructure Partners into a National Infrastructure Agency which would invite domestic and offshore investors to co-fund local projects.

It would also coordinate the various government infrastructure investment funds and act as a specialist delivery agency for complex projects.

Privately funded infrastructure projects would be allowed to impose tolls and other value-capture instruments to recover costs at a competitive rate. 

National would also implement a permanent fast-track consenting process based on Labour’s pandemic recovery rules which allowed quick consents for “shovel ready projects”. 

The opposition would establish a class of projects called Major Infrastructure Priorities which would get approved or declined within 12-months.

All these priorities would be wrapped up in a 30-year infrastructure pipeline and plan overseen by the Infrastructure Commission. 

“Infrastructure is critical for economic growth and higher living standards. Where Labour has talked, National will deliver,” Bishop said in a press release. 

Years of neglect

A policy document, shared with media, said New Zealand had a large historical infrastructure deficit.  

“This deficit is directly responsible for severely unaffordable housing, costly congestion, and poor quality water infrastructure in many parts of the country”.

Fixing these problems could help to unleash economic growth, lift incomes, and build resilience.

The policy document blamed the deficit on a range of issues, including not allowing infrastructure to earn enough revenue to cover costs of maintenance and capital. 

It did not provide any examples, but a number of private businesses which own infrastructure have regulatory limits on how much they are able to profit from consumers. 

For example, fibre network company Chorus has a maximum revenue it is allowed to earn which is set in consultation with the Commerce Commission. 

Similarly, Auckland Airport has some of its aeronautical prices monitored and was pushed to lower its target return to 6.8% in 2019 after being criticised by the Commission. 

Publicly held infrastructure, such as water assets, could also be allowed to charge more for their services to help cover the cost of maintaining and upgrading their assets. 

Water charges

National’s National Infrastructure Agency would be in charge of helping councils fund water infrastructure as part of “Local Water Done Well”, which is the opposition’s alternative to “Three Waters” — now called “Affordable Water Reform”. 

This could involve borrowing money to help councils or a private investor build better water pipes and then recouping those costs in the form of higher water charges. 

The new agency would be built out of the existing Crown Infrastructure Partners which was initially set up to manage the government’s $1.7 billion investment in a fibre internet network. 

In 2017, it was tasked with looking for commercial models that could attract private investment in water and roading infrastructure that would enable more housing. 

Under National, it would be put in charge of coordinating central government funding, connecting with investors, and improving the delivery of infrastructure. 

Existing infrastructure-related funds, such as the Infrastructure Acceleration Fund, the Provincial Growth Fund, the Tourism Infrastructure Fund,  and the NZ Upgrade Programme, would all be consolidated into the new agency. 

This approach has been endorsed by the Infrastructure Commission which said in a report last year that fewer funds would result in better prioritisation and coordination. 

“Reducing the number of funds would make it easier to apply consistent, rigorous and transparent criteria and ensure that project evaluation and selection is done by professional management and governance boards,” it said. 

The agency would seek out co-investments with public and private investment vehicles such as the NZ Super Fund, the Accident Compensation Corporation, and KiwiSaver funds. 

In 2018, the Super Fund pitched a proposal to build light rail to Auckland Airport in a joint-venture with a Canadian pension fund, but was blocked by NZ First.

National has since promised to scrap the entire light rail project, which is still in the detailed planning and consenting process. 

Fast-track

The Infrastructure Commission has pointed to this process as one reason that projects are more expensive and time consuming in NZ than elsewhere. 

National would attempt to make this process easier by making Labour’s pandemic response ‘fast-track’ into a permanent part of the system. 

Under emergency rules in place till July, an expert panel was able to issue resource consents for infrastructure projects which would otherwise have had to go through the process.

The opposition party would establish a permanent Infrastructure Fast-Track Process for  public transport, roads, rail, and water projects that are referred to the panel by the Minister for Infrastructure. 

This process would require much less consultation with the public and allow governments to better push ahead with their priorities. 

National would also introduce a new class of large, complex projects called ‘Major Infrastructure Priorities’, which would currently require public notification and public hearings under the RMA process. 

The Minister for Infrastructure would be able to classify a project as a major priority and require a decision to be issued within one year. 

This could include permissions for state highways, public transport infrastructure, power plants, mobile towers, gas pipelines, and even airports.