From time to time Te Waihanga will respond to key issues facing the sector and investigate emerging trends.
Reports and Think Pieces could identify current issues, good practice, potential solutions or opportunities for improvement. They form part of an ongoing conversation between the public and private sector on how we collectively lift the performance of New Zealand’s major infrastructure projects.
Views expressed before October 2019 were those of Treasury’s Infrastructure Transactions Unit (ITU), which has now been absorbed into Te Waihanga.
Evaluating non-price outcomes in tender processes (March 2022)
Government needs to get better value from public infrastructure if it’s to address Aotearoa New Zealand’s infrastructure challenges and create a thriving future.
Our tender processes are part of this. They’re a powerful driver of project outcomes, and when designed well can support such things such as whole of life costs, carbon footprint, and broader social outcomes (including our capacity and capability to deliver further infrastructure).
This has caused agencies to shift away from price-centric evaluation. However, the way we assess non-price outcomes are not always consistent and can often still cause price to be the determining factor. So improved procurement processes were highlighted as a need in both the Construction Sector Accord(external link) and the Commission’s own Draft New Zealand Infrastructure Strategy(external link).
Te Waihanga engaged Aurecon to review international ‘best practice’ in construction price evaluation and identify which elements could bring practical benefits in New Zealand. The research draws from international best practice across eight countries and has found some areas where New Zealand can learn from overseas experience, as well as some pockets of best practice that already exist in our public service.
The report makes a range of recommendations around different methods and considerations that are used in project procurement.
Health Infrastructure Review (March 2022)
Over the last year, Te Waihanga conducted a review on NZ government Health Infrastructure, to recommend how Health NZ could in future optimise the way health infrastructure is planned, delivered, and maintained based on learnings from the health infrastructure systems in Victoria and New South Wales.
The review was led by Expert Reviewer Robert Rust, former CE of Health Infrastructure in NSW.
While the review focuses on health infrastructure, its recommendations could equally be relevant for other asset intensive government agencies with extensive portfolios of ageing infrastructure.
Infrastructure Construction Sector: COVID-19 Recovery Study (January 2021)
In August 2020, Te Waihanga commissioned Deloitte to undertake a study on COVID-19 recovery in the infrastructure-related construction sector. This includes horizontal construction (roads, bridges, utilities) and vertical construction (hotels, offices, retail, industrial buildings and social infrastructure such as prisons, schools and hospitals). It excludes the residential construction sector.
The report draws on the results of an industry-wide survey, as well as interviews with several key industry bodies. It also uses existing research, sector surveys and data published by both government agencies and the private sector.
The four principal questions addressed by the study were:
• What was the state of the sector pre-COVID-19?
• What impact has COVID-19 had on the sector in the second and third quarters of 2020?
• What could recovery look like over the next five years?
• What are the key challenges/opportunities facing the sector as it recovers?
Regional Consultation Report (September 2020)
During 2020 Te Waihanga undertook consultation with local, regional and unitary councils to better understand the key challenges of infrastructure, encourage contribution to the Pipeline, and raise awareness of the Commission. The result of this consultation is the Regional Consultation Report.
Lifting Our Gaze (2020)
EY was commissioned to explore the role of infrastructure investment as a catalyst for delivering wider public outcomes for New Zealand.
This report finds that consideration of broader social outcomes will require a concerted effort by Government procuring agencies, the construction industry and the wider infrastructure community. It also examines the shift in mindset required to consider infrastructure investment from a pan-Government perspective – including to challenge current Budget and business case processes. The report is closely aligned with other Government and industry initiatives such as the revised Government Procurement Rules, the Construction Sector Accord and the Living Standards Framework, and is intended to foster conversations among agencies and across the industry about how to start putting these ideas into practice.
National Construction Pipeline Report (Sept 2019)
The National Construction Pipeline provides a forward view of national building and construction activity over a six-year period. The report is based on building and construction forecasting by the Building Research Association of New Zealand (BRANZ), and data from building economics consultancy Pacifecon NZ Ltd on known non-residential building and infrastructure intentions. It includes national and regional breakdowns of actual and forecast residential building, non-residential building and infrastructure activity.
Civil Contractors Construction Survey (Aug 2019)
Civil Contractors New Zealand and Teletrac Navman commission an annual survey to gauge the issues for New Zealand’s civil construction companies. The survey results are used to shed light on industry topics, stimulate discussions, inform decision makers and voice your views to media, local and central government. The ITU’s response to the findings and themes of the report is below.
AECOM Sentiment Report (Aug 2019)
AECOM publishes an annual infrastructure and buildings construction survey that focuses on sentiment across the infrastructure market. The ITU’s response to the findings and themes of the report is below.
An examination of issues associated with the use of NZS Conditions of Contract (Aug 2019)
The ITU commissioned a review titled: An Examination of the use of NZS Conditions of Contract. Issues identified in the Infrastructure New Zealand Report: Creating Value Through Procurement, A Report into Public Sector Procurement of Major Infrastructure Projects(external link) (referred to as the Entwine Report) prompted the review.
Public sector and industry leaders were interviewed regarding current issues, good practice, and potential solutions. This report identifies issues from both a public sector and industry perspective and opportunities for improvement.
The findings indicate a culture of mistrust between the public sector and industry and are broader than the use of contracts themselves. The review identified seven key challenges centred on this theme.
Responses from the annual AECOM Sentiment – Infrastructure and Buildings Construction Survey closely align with the findings of the review, with an increase in concern about poor procurement.
This review is intended to assist the ITU in its role to lift the performance of New Zealand's public and private sectors in procuring and delivering major infrastructure projects.