Find the Silver Lining - Opportunities for Capital Projects

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Public Sector

While it is tempting to dial down the energy a little in this time of enforced lock-down, it may be that exactly the opposite is needed.

Last week announcements from the Ministers of Environment, Economic Development and Infrastructure offered the potential for a rapid uplift in infrastructure development when the construction sector hits the re-start button.  The Infrastructure Industry Reference Group (IIRG), headed by Crown Infrastructure Partners Chairman Mark Binns, has been tasked with seeking out infrastructure projects that are ready to start as soon as the construction industry returns to normal, to reduce the impact of the COVID-19 lock-down on the economy.  There is every chance that the local government sector stands to advance some ‘aspirational’ projects from these initiatives.

Funding for projects

Primarily the IIRG will be looking for projects that are ‘shovel-ready’ or likely to be within six months.  Many of the projects put forward for the Provincial Growth Fund are likely to fall into this category, including some not or not yet approved.  The  Project Information Guidelines note that qualifying projects may include maintenance and asset replacement that requires little design or consenting, such as roading and three-waters projects.

The Government has made it clear that these new projects  will be in addition to and build on its $12 billion New Zealand Upgrade Programme and the existing Provincial Growth Fund infrastructure investment.  Consideration will be given to funding water, transport, clean energy and building projects that have a public or regional benefit and create jobs.  Preference will be given to large scale projects with a value of over $10 million, but smaller projects demonstrating a direct and immediate benefit to regional  economies and communities will be considered.  The Guidelines suggest that  smaller applications for programmes of work such as road maintenance /resealing or three-waters reticulation from smaller regions or districts will be submitted to the  Provincial Development Unit for consideration.

The overall criteria for consideration are:

  • Construction readiness
  • Public or regional benefit infrastructure
  • Size and material employment benefits 
  • Overall benefits and risks.

The payoffs for districts and regions that pitch successful projects are multi-fold, including advancing development, improving the business environment, and protecting and/or creating employment.  But applicants must act fast.  The Guidelines require project information to be submitted to:  by 5.00pm on Tuesday 14 April 2020.

Leaping consent hurdles

Alongside this additional economic stimulus for infrastructure development the Government is once more looking at measures to speed up consents, this time specifically for development and infrastructure.  Whereas there have been other pressures to reform or up-end the consenting process under the Resource Management Act 1991, the COVID-19 pandemic has provided a real incentive to do so to facilitate economic recovery.  The Minister of Environment says he has:

…directed my officials on March 18 to develop options around how resource consenting processes for certain infrastructure and development projects can be fast tracked once we are in the recovery phase from COOVID-19.

The Minister went on to state:

… in these extraordinary times we do not want the standard RMA consenting processes to constrain the pace of recovery.

While we can see the rationale for such measures, we reserve comment and judgement until the details are available.   However,  we hope the wealth of knowledge and expertise residing in the specialist Environment Court is utilised and not overlooked.  Further announcements are expected before the end of the lock-down period.

© Brookfields Lawyers 2020 – All Rights Reserved

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