Inf aug sep15 digi by Media Solutions

AsiaPacific

INFRASTRUCTURE August/September 2015

Volume 5 No 4

ACENZ Innovate Awards

Saluting the

best of the best

In this issue

Public-private partnerships • LGNZ Conference report • Productivity Commission Housing Report review

Team work key to Arrow success The task of completing a multi-million dollar project on time in an extreme weather environment presents its own set of challenges

orking high above sea level, up a winding, mostly unsealed, mountain road where snow is guaranteed every month were just a few of the challenges Arrow faced during the Remarkables new base building. The Arrow International team scaled them all to bring the Remarkables new base building project home by mid June this year in time for the 2015 ski season and provide a fitting mark to the 30-year anniversary of the ski resort and of Arrow itself. The $45M upgrade project increased the capacity of the existing facility by 40 percent – enabling the ski field to accommodate 3,500 skiers per day. “The complex project had many unique and challenging issues for the Arrow team,” says Arrow’s Southern Director Nick Hamlin. “Working 1,600m above sea level on a site only accessible by gravel road is difficult on its own, but this was compounded with sub-zero blizzard conditions and potential avalanches,” he says. Innovative systems were implemented to tackle these issues including covers and heated pads to stop the ground

2 – www.infrastructurenews.co.nz

freezing prior to concrete pours. “It took an entire working day to pour 130 cubic metres of concrete due to the restrictive road access,” says Mr Hamlin. Because of melting snow Arrow had to devise a system to pump excess water away from site. Extensive permanent drainage channels were installed that are now proving beneficial to the completed building. Many procedures and construction methodologies were put in place to ensure the safety of all the sub-contractors, consultants, visitors and Arrow staff. These included precast concrete walls, panels, columns, beams and double-T flooring which were designed for the basement and ground floor areas to ensure they could be safely delivered to site and erected quickly. The first floor steel structure was set up on the adjacent learners’ slopes and then craned into place. The façade is an insulated Kingspan panel product. Stage one included the creation of new skiable terrain. Earthworks were completed in the summer of 2014 after 200,000 cubic metres of earth was moved to create the trails.

A new 1.2km long six-seat chairlift called Curvey Basin was completed and the installation of 48 new snow making guns and related infrastructure meant that 240 litres of snow can now be created per second at the ski field. The Arrow team also reshaped the last 300 metres of the access road and provided additional

parking facilities. Stage two involved a new 5,800 square metre, three-level base building modelled on the one at Coronet Peak - which was also built by Arrow in 2009. It houses guest services, retail tenancies, gear rental, a snowsport school and an extensive café and restaurant.

August/September 2015

First Word

Accepting a new commission Leigh Auton Director, Auton & Associates As some readers may be aware, I have recently been appointed by the government to the Local Government Commission for three years from 1st August 2015

am privileged to be appointed alongside Sir Wira Gardiner, who is the new Chair, and Janie Annear who has been reappointed for the full three-year term. Sir Wira has had a distinguished public service career, while Janie is a former long-serving Mayor of the Timaru District Council. My background is with the executive of local government, and more latterly within broader governance. I pay tribute to the outgoing members of the commission, and in particular the Chair Basil Morrison. Basil has been a wonderful servant and leader of local government in New Zealand and internationally. Like many that have had an association with Basil, I have always appreciated his wit, charm and intellect. It is not my intention to discuss the direction of the Local Government Commission. This is more appropriate from the Chair on behalf of the commission, and for the Minister of Local Government, Hon Paula Bennett in terms of broader central gov-

Basil Morrison

Janie Annear

Sir Wira Gardiner

the commission, to provide a snapshot of the commission’s work. The commission is resourced by a division of the Department of Internal Affairs. The division has a Chief Executive Officer, Sandra Preston, with a resource comprised of a number of policy analysts and administrators.

boards and the governing body of a unitary authority about the allocation of decision-making responsibility and proposed bylaws. The Chair of the Local Government Commission is also a non-voting member of the Representation Commission under the Electoral Act 1993. The commission also undertakes other Reorganisation organisation duties in respect of licensing trusts and ad The Local Government Commission is an hoc duties such as reviews on the operation independent statutory body established of the Local Government Act.

“The commission may of its own accord, or if requested by the Minister of Local Government, consider matters relating to a local authority or to local government, and make recommendations on them to the Minister in respect of a local authority” ernment vision and strategy for the sector. Readers may, however, wish to read a recent speech by the Minister to the Local Government Conference in Rotorua which gives a fairly clear message from her as to the government’s aspirations for the sector. These aspirations have particular relevance to the infrastructural industry. The speech can be accessed at http://tinyurl. com/pl9m68m and I recommend it. More recently the Chair of the commission, Sir Wira Gardiner has amplified on the minister’s speech, and his statement can be found on the Local Government Commission website. I thought it might useful for the reader, within the context of local government organisation and the ‘day-to-day’ activities of 3 – www.infrastructurenews.co.nz

under the Local Government Act 2002. The commission was first established in 1947 to consider proposals for local government reorganisation. Reorganisation is a core function of the commission, although the rules under which reorganisation takes place have changed over time. Likewise, over this period, dealing with local authority representation arrangements has become a core function of the commission. The commission may of its own accord, or if requested by the Minister of Local Government, consider matters relating to a local authority or to local government, and make recommendations on them to the minister in respect of a local authority. It also has a role in disputes between local

The reader will be aware of a number of high profile amalgamation issues in Northland, Wellington and the Hawkes Bay. It is not my intention to comment on these, other than to note that the commission has an ongoing role in working with local government in these areas on the issues behind the initial proposals. In the Hawkes Bay, we all await the outcome of a poll being undertaken in the area on a reorganisation proposal. For someone who has been closely involved in local government for around 40 years, the opportunity to serve on the Local Government Commission is an honour. I look forward to the role, working with and alongside local government which has such a critical role in the wellbeing of our society. August/September 2015

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tyres from being dumped into landfill Economical Apex Environmental P22-23 to transport

IPLEX Pipelines P 9

Iplex Pipelines does not invite any person to act or rely upon such information and recommends that expert advice should be sought for particular application intended.

August/September 2015

Saves non-renewable cement resource

FOCUS – Public Private Partnerships PPP Iplex Pipelines Ltd, Head Office, Palmerston North Growing international evidence shows that public-private partnerFreephone 0800 800 262 Phone:are 06 358a 2004sensible Fax: 06 356 2906way of funding large infrastructure projects ships www.iplex.co.nz Pre-engineered for NZ P12 according to Property Council www.apexenvironmental.co.nz most applications Why Skypath is not publically funded rather than a PPP is a moot Arrow2015 International P2 NZCID www.infrastructurenews.co.nz P43 A /s – 23 point P24-25 Eco-Retainer blocks can be used Plan A advises on how to win PPP bids P31 to build walls kilometres long A comprehensive KPMG report finds the PPP model is growing new zealand council forto infrastructure globally as one way to deal with a substantial infrastructure deficit People Centric Eco-Retainer structures have the unique ability be curved P29development or angled while&staying curve has a smallin the developmentP32-36 Bloxam Burnett Olliverlocked p11 together. If theAdvancing best practice of world into class the infrastructure radius, a concrete wedge segment can be inserted gap for the benefitNZCID explains the mysteries of PPP P37-38 of all New Zealanders. for enhanced visual appearance, strength and stability. www.nzcid.org.nz The Green Party ponders whether PPP are a blessing or a curse Plan A P15 P39 LOCAL GOVERNMENT Cancer Society P47 Truck tyres or We provide electrical engineering, project management and LGNZ promotes its10-point Funding Review Plan to incentivise maintenance services for asset owners and major infrastructure Car and tyresP44 economic growth P41 projects in Power, Water, Gas & Transport. Mobilise the regions to drive economic growth P42 We apply proven approaches in both traditional and new smart The LGNZ conference hears of the key issues worrying mayors technologies to support our clients. Min radius and the chairs of local authorities P42 To each and every engagement, we bring our experience and Paula Bennet tells the conference that local government must technical expertise along with our commitment to safety, quality face the need for change P43 and the environment.Red Cross P33 INFRASTRUCTURE INNOVATIONS If you have used tyres for collection or drop-off, or you’d like to know more about end-use products like Eco-Retainer, Apex Environmental adds a high performance economical answer talk to us today. Chapman Tripp P35 to pond aeration problems P22-23 Eco Retainer is a good news story about how Kiwi ingenuity has developed a way to turn environmentally damaging used tyres and waste concrete into a useful product suitable for a range of uses from retaining walls to road and bridge abutments P6-7 EcoRetainer Systems P7 Facebook in with programme linking families in a disasCall us todaychimes +64 21 572a603 ter P30 +64 9 973 4709 Robinson Seismic P29 or alternatively Investing in a sustainable future www.ecoretainer.com Iplex Pipelines shows the way with cartridge style static pipe bursting to provide a trenchless solution to a Hutt City sewer main Electrix P48 problem P9 Robinson Seismic to provide base isolation the Christchurch’s new Justice and Emergency Services Precinct P29 Solar Bright lights up icy roads P6 St John and Samsung work together to improve communications electrix.co.nz Pride Performance Value P8 Smart Mover takes the dangers out of moving heavy drums and Southeys Group P13 chemicals P8 Hopper- Infrasol P5 & P21 Southeys Group solves an excavation problem on a Wellington construction site with hydro excavation and a specialist team P13 SECTIONS Construction Arrow International completes a $45 million project in the Remarkables P2 Industry leaders in wastewater treatment

4 to 4.5Zealand tonnes, Apex Surface Aerators are Weight manufactured in New which means lower costs and faster delivery volume 2.88 cu.m, Check our website for full details large footprint cover: P 03 929 2675 E sales@apexenvironmental.co.nz 1.8 sq.m per block

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Eco-Retainer

Editor Geoff Picken 0212 507 559 geoff@ mediasolutions.net.nz Managing partner Phil Pilbrow 027 564 7778, 09 489 8663 phil@mediasolutions.net.nz Design & pre-press Jamie Laurie jamie@mediasolutions.net.nz 021 161 0602

Web development Neo Chen 021 507 318 neo@appsolutions.co.nz Publisher Mike Bishara 027 564 7779 mike@mediasolutions.net.nz Subscriptions Digital and print editions free to qualified readers. lisa@mediasolutions.net.nz Overseas rates on request.

4 – www.infrastructurenews.co.nz

www.infrastructurenews.co.nz Free access online to an interactive digital edition. Free access to searchable archives in key infrastructure categories such as Local Government, Construction, Cities, Energy, Environment, Transport, Water, Communication. Free access to daily news with the AsiaPacific Infrastructure online carousel

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August/September 2015

Hydro excavation equipment solves a dilemma on a Wellington construction site P13 In Wellington a large area of redundant and ailing waterfront infrastructure more than 100 years old has been revived so successfully it has won not one but two major industry awards P16-18 Property When there is no silver bullet try buckshot – that’s essentially the approach the Productivity Commission has adopted in its 37-recommendation draft report on Using Land for Housing P14-15 Transport Bloxam Burnett and Olliver is cited for a demonstration of “outstanding creativity and innovation in an example of best practice planning in an environmentally and culturally sensitive environment” for its work on the Huntly expressway P11 The Lower Hatea crossing is a spectacular 265-metre long Northland bridge inspired by the traditional Maori fish hook hei matau P19-21 Water Water New Zealand’s latest National Performance Review highlights the continued critical importance of the 3 Waters P10 Apex Environmental adds a high performance economical answer to pond aeration problems P22-23 Communications Straker Translations picks up an Innovative Service Product award for its cloud-based translation workbench. P26-27 Security Honeywell puts out a digital dashboard to monitor control systems at refineries, power plants and other automated production sites P27 Management Being assertive and clear with communication can save lives according to People Centric P45 CONTENT PARTNERS Auckland: Why a cycling and walking path tacked on to the harbour bridge is not publically funded rather than a PPP is a moot point says Dr Joel Cayford P24-25. Evans Young says the Auckland has managed to steal the limelight again with its poorly managed decisions. P46-47 Housing: Joanna Bain and Raj Gurusinge say the Productivity Commission has adopted the “buckshot” approach in its 37-recommendation draft report on Using Land for Housing P14-15 LGNZ: Chairman Lawrence Yule makes the case for its Funding Review 10 point plan. P41 Local Government Commission: Content Partner Leigh Auton is appointed to join a distinguished panel P3 PPP: Connal Townsend says PPPs are a sensible way of funding large infrastructure projects (P12) Focus: Caroline Boot offers advice on how to win PPP bids (P31) PPP: John Fitzgerald finds the PPP model is growing globally as one way of dealing with a substantial infrastructure deficit P32-36. PPP: Hamish Glenn sets out to explain the mysteries of PPP P3738 PPP: Julie Anne Genter notes that from a simple cost-of-capital perspective it is not clear why PPP are a good idea P39 Privacy: Catherine Somerville and Kate Fairbrother examine new rules being set down by the Director of Civil Aviation for the safe use of drones P45 Water: The sheer magnitude of 3 waters investment underscores the importance of having efficient and highly performing management says John Pfahlert P10 Workplace: Moira Howson says that the ability to communicate in an assertive manner is a critical and potentially life-saving skill. P45

August/September 2015

www.infrastructurenews.co.nz – 5

INFRASTRUCTURE >> Innovations

At last a sustainable, economical use for old tyres and recycled concrete EcoRetainer is a good news story about how Kiwi ingenuity has developed a way to turn environmentally damaging waste into a useful product

n EcoRetainer is a patented, modular, and interlocking civil engineering unit made from recycled tyres and recycled concrete. It looks like a very large plain concrete block but has at its core a compressed bale of 110 car tyres bound by galvanised, high tensile steel wire. About 2.5 tonnes of recycled concrete is used in each retainer, totally replacing aggregate. Cost saving modelling suggests that for large retaining projects Eco Retainer walls may be half the cost of any other design for the same job. The 4-4.5 tonne blocks are designed with dimples and locating channels to interlock at varying angles to form retaining walls, stop banks, sea walls and variety of other infrastructural uses.

EcoRetainer Systems Ltd (ERSL) was established to find an environmentally sound and economically viable use for used car tyres, which are difficult to recycle. Demand for the product is expected to be such that production will be needed in at least one North Island location and one in the South Island. “For a large infrastructure project, such as the Christchurch rebuild, or major civil works, road construction or repair, a whole manufacturing process could be relocated close to the project site. This would reduce costs and speed implementation,” says ERSL founder and engineer Stuart Monteith. “On project completion equipment could be shipped back to ERSL. This flexibility raises the prospect of local

Strategic merger

“Large structures can be installed without specialist equipment or major site works and will save significant time and money when deployed.” Stuart Monteith

communities eliminating stockpiles of waste tyres and using the resulting blocks in local infrastructure projects,” he says. End of life car tyres have been identified as a major environmental problem in New Zealand with 85 percent of the more than 6 million waste tyres (62,000 tonnes) sent to landfill each year. “The recycling of concrete is

The cold light of day

S Bronwyn Rhynd with CKL director Geoff Webster Environmental engineering consultancy Stormwater Solutions has joined forces with mid-size land development and civil engineering firm CKL as part of a strategic growth plan for both companies. CKL has over 70 specialist engineers and technical support staff across offices in Auckland, Hamilton, and Te Awamutu “We have worked closely on a number of projects and share a strong alignment of values,”says Bronwyn Rhynd, founder and Director of Stormwater Solutions who joins the CKL board.

6 – www.infrastructurenews.co.nz

widespread and is not unique to this project, but the use of waste tyres combined with waste concrete is unique,” says Mr Monteith. He has his eyes on the Christchurch rebuild, reusing concrete from demolition sites to reduce the amount being stockpiled or sent to landfill. “The rebuild of the city will be prolonged and require in-

olar Bright has come up with what it says is the world’s first icy-road warning technology - with solar-powered blue road markers that flash blue when conditions are icy. At least 800 blue road markers are already installed on state highway one around Dunedin, on state highway eight and in Central Otago. Managing director Nicola Martin says after installing the road markers in Dunedin and Central Otago, 82 percent of traffic slowed down when the

markers were activated. “We have had a lot of serious interest from other New Zealand cities and regions, insurance companies, St John, police, shopping malls, airports, councils, hospitals, fire departments and companies around New Zealand The road markers are trialling with Tasmania Government and interest has come the UK, US, Canada, Russia, Europe and Japan. “We soon hope to introduce a smart intelligent marker with telemetry capabilities, able to count, read traffic, monitor carbon dioxide emissions and light levels,” she says. August/September 2015

Considerably less expensive than other concrete or timber

Eco Retainer Features & Benefits

Eco Retainer constructive Eco Retainer aapproach to

Considerably less expensive than other concrete or timber

Unique tailored patterns can be inlaid on the facing plane

Unlimited applications in construction and infrastructure works

Potential to use NZ’s remaining supply of disposed tyres

recycling tyres! a constructive novative thinking. Its rivers must demonstrate it can op- to re-use a large number of will save significant time and approach to Saves non-renewable have been choked by silt due erate profitably. A number of tyres each year in a way that is money when deployed,” says cement resource Economical Weight 4 to 4.5 tonnes, beneficial.” to liquefaction and bank ero- companies have seen Mr Monteith. a possienvironmentally recycling tyres! to transport Considerably less volume 2.88 cu.m, sion. Parts of the Port Hills are still closed due to rock-falls and residents in many suburbs are still battling land slips,” says Mr Monteith. “It is not just a matter of contributing to waste minimisation. To be sustainable, the company

Prevents end-of-life tyres from being dumped into landfill

EcoRetainer walls can be ble business opportunity in reThis is a solution which adexpensive than other cover: cycling or re-usinglarge wastefootprint tyres dresses many of the challenges erected in hours forming perWeight 4 to 4.5 tonnes, concrete or timber volume 2.88 cu.m, 1.8 sq.m perfaced block but have failed either through where new building and manent structures. large footprint cover:is expensive and “If Pre-engineered at a later stage a decision is poor technology, lack of fund- reconstruction for 1.8 sq.m per block most applications made to replace the EcoRetaining or poor business skills. ERSL slow. is different,” says Mr Monteith. “Large structures can be in- ers, they can easily be removed Considerably less Considerably less somewherethan other “Our solution is deliberately stalled without specialist equip- and put into service expensive expensive than other Unique tailored low tech and has the potential ment or majorconcrete site works concrete or timber or and timberelse,” he says.

Eco-Retainer blocks can be used patterns can be inlaid to build walls kilometres long on the facing plane

Wall to wall Eco Retainer

Considerably less Eco-Retainer structures have the unique ability to be curved expensive than other or angled while staying locked together. If the curve has a small concrete or timber Eco-Retainer Ltdinserted has developed great product radius, a concrete wedge segment can be into the another gap constructive Unique tailored utilising New a Zealand’s end-of-life tyres. Tyres are collected Unique tailored for enhanced visual appearance, strength and stability. patterns can be inlaid approach patterns can be inlaid from throughout the Northto Island and recycled at the on the facing plane recycling tyres! plants. on the facing plane company’s Auckland and Waikato Weight 4 to 4.5 tonnes, Eco-Retainer Ltd has developed another great looks like aproduct plain concrete block, but inside is Eco-Retainer Truck tyres Unique volumetailored 2.88 cu.m, utilising New Zealand’saend-of-life tyres. Tyres collected compressed bale of 40are truck tyres or 110 car tyres, bound byfootprint patterns can be inlaid large cover: from throughout the North Island high and recycled at the Car tyres galvanised tensile steel wire. The blocks are designed with on the facing 1.8 sq.m perplane block company’s Auckland and Waikato plants. dimples and locating channels to interlock at varying angles,

Wall to wall

6m 6m

110

flexibility in building: plain concrete block, but inside is Eco-Retainer looks like aallowing a compressed bale of 40 truck tyres or 110 car ✔ Retaining walls tyres, bound by Min galvanised high tensile steelradius wire. The blocks are designed with ✔ to Bunker wallsat varying angles, dimples and locating channels interlock ✔ Stopbanks allowing flexibility in building:

Weight 4 to 4.5 tonnes, volume 2.88 cu.m, large footprint cover: 1.8 sq.m per block Weight 4 to 4 volume 2.88 c Super-fast installati large footprin 1.8 sq.m per

Min radius

Wall to wall

Eco-Retainer Ltd has another great product ✔ Sea-walls walls developed ✔ Retaining If you have used tyres for collection or drop-off, or you’d like utilising New Zealand’s end-of-life tyres. Tyres are collected from throughout the North Island and recycled at the to know more about end-use products like Eco-Retainer, ✔ Landscaping features ✔ Bunker walls company’s Auckland and Waikato plants.

talk to us today.

Stopbanks a plain concrete block, but inside is✔ Road & bridge abutments Eco-Retainer looks like✔ a compressed bale of 40 truck tyres or 110 car tyres, bound by and many other uses. galvanised high tensile✔ steel Sea-walls wire. The blocks are designed with dimples and locating channels to interlock at varying angles, New Zealand needs a sustainable ✔ Landscaping features allowing flexibility in building:

Being modular and easier to lift, Eco-Retainer blocks can be installed onsite much quic solution to the used tyre Super-fast installation than conventional retaining problem. Products like Eco-Retainer are making a difference. ✔ Retaining walls ✔ Road & bridge abutments Being modular and easier to Constructing retaini Motorway or river bank retaining walls built with Eco-Retainer systems. ✔ Bunker walls and many other uses. Eco-Retainer blocks canhas never been easier! ✔ Stopbanks blocks may usefully recycle hundreds of thousandslift, of old tyres. walls ✔ Sea-walls New Zealand needs a sustainable solution to the used tyre Call us todayonsite +64 much 21 572 603 be installed quicker ✔ Landscaping features Super-fast than conventional or alternatively +64 retaining 9 973 4709 problem. Products like Eco-Retainer are making ainstallation difference. ✔ Road & bridge abutments Min radius systems.www.ecoretainer.com Being modular and easier to or river bank retaining walls built with Eco-Retainer Constructing retaining Investing a sustainable future and many Motorway otherin uses. lift, Eco-Retainer blocks can blocks may usefully recycle hundreds of thousands of old tyres. be installed onsite much quicker walls has never been easier! New Zealand needs a sustainable solution to the used tyre

Eco-Retainer

problem. Products like Eco-Retainer are making a difference. Motorway or river bank retaining walls built with Eco-Retainer Ablocks ugust /September 2015 may usefully recycle hundreds of thousands of old tyres.

than conventional retaining systems. Constructing retaining walls has never been easier!

64 21 57

www.infrastructurenews.co.nz Call us today–+7

INFRASTRUCTURE >> Innovations

St John partners with Samsung

St John and Samsung Electronics New Zealand have entered into a partnership arrangement to collaborate on technology solutions to improve operations in ambulances and clinical contact centres

Samsung New Zealand managing director, Kenny Yeon marks the occasion with St John chief executive Peter Bradley

“S

t John has an innovative strategy for integrating technology into their services. Giving access to our market-leading technologies will help enable St John to bring these plans to fruition,” says managing director of Samsung New Zealand, Kenny Yeon.

“The two organisations have a mutual vision of improving lives through technology,” she says. Initially, the partnership will center on St John’s needs in the technology space, with Samsung’s hardware and solutions expertise being implemented to improve services, productivity and connectivity.

One of the first projects will include the roll-out of Samsung tablets into ambulances, as part of a new electronic system designed to replace handwritten clinical notes. Using the smart devices, ambulance officers can forward patient information electronically to an emergency department, specialist or GP – all while on the road. Samsung technology will also be used in St John Clinical Control Centres in Auckland and Christchurch. Thirty-four inch curved monitors, designed to mimic the natural curvature of the eye, will offer an immersive and more comfortable workstation environment for the 130 St John personnel answering 111 emergency calls and dispatching ambulance resources 24 hours a day, seven days a week. Samsung will also look to sup-

port the development of the St John in Schools programme - empowering, educating and giving young people the confidence to care for themselves in their community. “The partnership with Samsung is a positive part in the advancement of the organisations’ services,” says St John chief executive, Peter Bradley. “Technology has a significant role to play in enhancing patient care and the working lives of our staff and volunteers. Working with Samsung’s technology experts and having access to their new product solutions means a positive and strong partnership that will benefit New Zealand communities.” St John ambulance officers treat and transport more than 425,000 patients a year.

Smart low-tech solution for balanced, safe and reliable manual moving

Daryn Murray knows about health and safety – he has to if he is to survive. Working for 15 years as a shearing contractor with up to 80 staff and another 15 years as a shearer has given this Southland inventor a solid foundation and understanding of the importance of health and safety in the workplace. “Shearing is an industry that pays on performance so we are always looking for more efficient ways of doing things. And 8 – www.infrastructurenews.co.nz

safety – well that’s up to each individual to take ownership of.” The Smart Mover can load easily off pallets, be used safely on uneven surfaces or handling hazardous chemicals in steel or plastic drums. Today the Smart Mover has extended its reach way beyond the farm gate. A mini version is finding a ready market with small business operators who cannot justify the expense of a forklift and both sizes are impressing

bigger companies who find the Smart Mover more efficient than a forklift and less likely to cause product damage. “The hero is the Smart Mover which allows the drum to be delivered safely by one person into the Smart Tipper, ready for dispensing or inverting the contents,” he says. “It wasn’t just dairy farmers who were struggling, it was people involved in a range of areas including logistics, retail, manufacturers.

Central Southland Freight operations manager Corey Price says the company’s drivers love the Smart Mover. “The balance is perfect and it takes all the strain and hassle away. You can even walk it along with one hand.” Occupational Therapist Jane Llyal of NZROT told Mr Murray that he has “designed a beautifully balanced product to allow the drums to be moved easily, using an upright body position.” August/September 2015

INFRASTRUCTURE >> Innovations

From open cut to trenchless methods – save time and money RestrainTM was developed for installation using trenchless technology methods including guided auger boring, micro tunneling, horizontal directional drilling, slip lining and hydraulic, static pipe bursting

ction Civil Ltd Ltd (ACL) Bay of Plenty, New Plymouth, were awarded Hutt City Hastings, Whakatane, MasterCouncil’s Westminster ton, Wanganui, Oamaru and St sewer renewal in 2012. Invercargill. The project consisted of inRecently contractors in stalling about 800 metres of Christchurch City have began DN225/150 SN16 sewer main installing Restrain where more PIPelIneS >>SPonSored ArTICle with additional sewer laterals to than 2000 kilometres of sewer each of the surrounding prop- laterals were destroyed during erties. the Christchurch earthquakes Leading new Zealand manufacturer of plastic pipelines and systems for the infrastructure sector The DN225 sewer main was - ACL contacted contractors Fusible installed using traditional open to confirm that Novafuse 6-8 laterals in-PVCRestrain being installed within small entry pit in a narrow grass FPVC™ provides the only available method of installing existing a conberm - tunnelled beneath front fence immediately pipeline systems cutCivil methods, they began installed per day was possible. tinuous. monolithic, seal ring–free PVC pipe, capable of use in above and (right) the connection using traditional rubber ring http://tinyurl.com/pjztopz numerous trenchless stalling the sewer laterals after They then engaged Iplex or conventional open-cut installation. Applijoint PVCpressure fittings cations include pressure and non pipelines for drinking Iplex Case Studies thehttp://tinyurl.com/pb4taxf main was completed using Pipelines and the water,equipment wastewater, electrical, industrial and telecommunications industries. Fusedinand installed throughout the US, Canada, open cut methods as well. supplier to complete a trial and fast this method was,Cenby The pipe entry pits were small tral America, Hawaii, and NZ. Production was very slow, stallation at theProduct Westminster 1022am - just 22 minutes after in comparison to the open cut detail: http://tinyurl.com/pduvfsg Stormwater, sewer, roading and trenchless some days only two sewer lat- Street project. ACase trialStudy datehttp://youtu.be/VUR5v7raSH0 was beginning - the first sewer later- excavations, most lateral conAquacell Poliplex PE100 erals would completed. Withcellset. al had been installed. “Bugger nections were made within the Aquacell™ is a be stormwater management designed for use in PE100 polyethylene pressure infiltration, attenuation storage / reuse applications. Individual many laterals to orbe renewed Iplex and the equipment sup- how easy was that … I wish we entry pit excavated between pipe up to 2000 mm outside cells are assembled together to form an underground structure for diameter manufactured ACL exploredindustrial using faster sites plier’s staff arrived on and site at hadingot onto this technology the footpath and each properuse in commercial, or residential AS/NZS4130. http://tinyurl.com/pp86af5 methods. 9.50am with theaccordance Restrainwith pipe earlier, ACL’s Ben Jones said. ties front fence. Suitable for a diverse range Nexus™Hi-Way ACL Director David Murtagh and bursting equipment “We could have installed each In some cases this space was of infrastructure in applications Heavy-duty, double wall polyethylene pipe combining a smooth from water and waste-water to called Iplex Pipelines to ask hand - ACL had already exca- sewer lateral within the trench less than one metre and installinner wall with a corrugated outer wall welded together during sewer rising mains, irrigation how productivity could beroads, in- constructed vated the exit pitmainlines and a and 1.2m x ground while the open cut main was ers were able to tunnel beneath manufacture. Subsoil drains under in accordabove ance with Transit NZ Specification NRB F/2:1.2m 1989, entry construction creased. pit atpipelines. the trial prop- being constructed”. fences and other abandoned work-site drainage, subsoil drainage under carriageways or driveIplex had ofintroduced boundary. Flowtite GRP Pipe ACL immediately ordered services, then install pipe in exways, drainage rubbish tips and David public landerty fill sites. Glass reinforced polymer prohttp://tinyurl.com/nqsuovs to “static pipe bursting” a year The equipmentducing supplier set more a high strength, cor- Restrain pipe and pur- tremely tight spaces. rosion resistant, light chased weight the burster on the spot, Restrain providing case studies up the Hammer Head before, PB30 hyAll connections to the main pipe system suitable for water, waste-water, chemical and industry For gravity pipeline projects using trenchand technical support to prove draulic portable applications. burster using continued install the re- and existing house sewer latAvailable they from PN1 to PN Pn32 in to a range of diameters less technology. Applications include to 3000mm, Flowtite islaterals suitable for abovethis ground ap- eral were made using common gravity 6-8 sewer, stormwater, electrical and an excavator asfrom that sewer laterals could the300mm hydraulic maining using techplications and conventional trenched pipeline and is also available telecommunication ducting. Suitable for be renewed every day using power source. in jacking pipe and slip-lining nique.pipe options for trenchless installa- rubber ring jointed PVC fittings. use with horizontal directional drilling, aution. agertechnique called By 10am the burster was in “I was anti towards pipe burstBy using this technique it not boring, guided boring,“Cartridge pipe bursting/ cracking. Also: Style-Static Pipe Bursting”. place and the first lead pipe of ing first up, but time restraints only allowed the contractor to Product detail: http://tinyurl.com/p9uaotv BLUE BRUTE PVC-U Pressure Pipe CIOD Series 2. Standards: AS/ ThisStudies: method is completed by Restrain was connected Case http://tinyurl.com/ox25u5s NZ 1477 to the pushed me to review faster increase his installation rate BLUE RHINO PVC-M Pressure Pipe CIOD 2. Standards: AS/ but it had other benefits too, installing short lengths of Re- pull head. methods. I amSeries pleased I chose Apollo TMoriented PVC pressure pipe for use in water and waste NZ 4765 Biaxially strain PVC-U gravity sewer By this time also, Iplex had to use technique it deliv- these include: Westminster St NOVAKEY PVC-U Pressure Pipe this Metric Pipe Series as 1. Standards: water pipelines. 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Manufactured in accordance with AS/NZS4441. has been proven successful pit. it saved us time and money”. and overall lower installed cost. For technical services Iain McNaught 027 243 3000, Product detail: http://tinyurl.com/pocxtfl during installations in Auckland, ACL were amazed simple027David Murtagh commented. Frankhow O’Callaghan 495 4523, Todd Randell 027 211 4838 Case Studies: http://tinyurl.com/pkr68v9 For technical services Iain McNaught 027 243 3000, Frank O’Callaghan 027 495 4523, Todd Randell 027 211 4838 Check out the full range of Iplex products at www.iplex.co.nz or a selection 0800 800 262 of infrastructure targeted www.iplex.co.nz products at There is more to Iplex than pipe manufactured and delivered to your project site. www.infrastructurenews.co.nz/ Talk to us about what you need. Iplex Pipelines, manufacturing and supplying PVC, PE and GRP pipeline solutions to the New Zealand market. node/1017

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www.infrastructurenews.co.nz – 9

WATER

Recent report reveals mixed performances

Water New Zealand’s latest National Performance Review highlights the continued critical importance of water, wastewater and stormwater services - collectively known as the 3 Waters

he value of the total asset base managed by current NPR participants exceeds $21 billion, with water supply infrastructure accounting for about $8.29 billion, wastewater infrastructure about $9.8 billion and stormwater assets almost $3.18 billion. The total replacement value for all the country’s in-ground pipeline assets is estimated to be about $45 billion. The investment during 2013-14 by district and city council participants was significant – $561.96 million in operations and $917.5 million in capital. As well, over $1 billion in revenue was generated to help finance these services. The sheer magnitude of all these assets and continued investments underscores the importance of having efficiently managed, highly performing assets. The 2013-14 report collates and assesses asset performance, financial management, customer service and social and environmental criteria, and is the first to include overseas benchmarking. The number of NPR participants (regional, territorial local authority and council-controlled organisations) has improved markedly in recent years – from eight for the 2007-08 review to the current 31, which represents over 70 percent of the country’s population. International benchmarking studies referred to in the report include a Canadian National Water and Wastewater Benchmarking Initiative, a Pacific Water and Wastes Association Utilities Benchmarking study, a European Benchmarking Co-operation report, an Australian National Water Commission National Performance Report (Urban Utilities) and the International Benchmarking

Network for Water and Sanitation Utilities Blue Book 2014. One of the encouraging things about the latest Water New Zealand report is that the median age of NPR participants’ water pipes is similar to that of European benchmarking participants (34 years in NZ compared to 36 years in Europe). However, the economic sustainability of NPR participants ranks rather low against international benchmarks when using cost coverage ratios, metrics that relate revenue to expenditure. That is, NPR participants’ revenue does not appear to cover costs for most participants. An economically sustainable entity will have revenues that cover total costs by a ratio of 1.0 or more. But NPR participants have a median total cost coverage ratio of 0.64, significantly lower than the median total cost coverage ratio of 1.03 of European benchmarking participants. Cost coverage Operational cost coverage is also lower than international benchmarks, with a median of 0.95 among NPR participants compared with a median of 1.09 for over 1,000 utilities participating in the benchmarking exercise run by the World Bank. However, NPR participants are better than the Australians in some things, with the median NPR participant charge being $742 for the delivery/treatment of 200 cubic metres (cumecs) of water and wastewater services. This is just over half the median charge for residential water and wastewater in urban Australia during 2012-13 of approximately $1,280. Median water and wastewater charges include NPR participants that reported no targeted

10 – www.infrastructurenews.co.nz

John Pfahlert, Chief Executive, Water New Zealand

charges associated with water or wastewater service delivery. Two authorities reported no targeted water charge and three had no charges for wastewater. Targeted charges were even less common for stormwater, with nearly half (14 of 29) NPR participants having no targeted stormwater charge. Stormwater systems generally have lower revenue-to-cost ratios than water and wastewater systems. Four participants do not generate any revenue directly associated with their stormwater systems. For four others, contributions from developers involved in new subdivisions or building projects constituted the majority of these participants’ 2013-14 revenue stream. But revenue variations are also large. Metropolitan sector participants have median annual revenue that is over four times higher than that of their rural counterparts, with Auckland’s Watercare, the country’s largest 3 Waters entity, having 2013-14 revenue of just over $400 million; roughly 400 times higher than Wairoa’s total 3 Watersrelated revenue. On average 94 percent of non-residential properties were metered, but only 29 percent of residential properties, with average metering coverage of 33 percent across all participants. This is lower than Pacific Island participants in the Pacific Water and Waste Association benchmarking exercise that had average metering coverage of 68 percent. Despite low metering coverage, 13 NPR participants

reported using some form of residential usage-based water charging. For 12 participants this included a combination of fixed and user-based charges, and for Auckland’s Watercare charging for water was 100 percent usage-based. Two participants also reported using tiered water charging regimes that penalised high water usage. Median current real losses of NPR participants were 161 litres/service connection/day. This value was twice as high as participants in an urban Australian benchmarking study which had median annual real losses of 79 litres/service connection/ day. The median residential water use of NPR participant customers was 231 litres per head per day, higher than median residential water use volumes reported in Pacific Island and World Bank benchmarking exercises but on a par with Canadian benchmarking. Benchmarking for continuous improvement involves periodic performance assessment and subsequent performance improvement. The NPR provides participants and decision-makers with that performance assessment, which they should use to identify opportunities for further performance improvements. John Pfahlert is Chief Executive of Water New Zealand, a not-for-profit organisation that promotes and represents organisations within the water industry in New Zealand

August/September 2015

ACENZ INNOVATE AWARDS

More recognition for Bloxam Burnett and Olliver at ACENZ Awards Hamilton-based consulting engineers, planners and surveyors Bloxam Burnett and Olliver have received another award for their work on the Huntly section of the Waikato Expressway which gets underway in September

Scott Bready of BBO (centre) alongside Kaye Clark of the NZ Transport Agency and Tonkin and Taylor’s Peter Cochrane with the the ACENZ Silver Award

Taupiri Maunga

loxam Burnett and Olliver (BBO), in conjunction with principal sub-consultants Tonkin and Taylor and the NZ Transport Agency (NZTA), took home a Silver Award of Excellence for the Huntly project at the recent ACENZ Awards. The award is for outstanding and innovative engineering projects and was judged on technical excellence of design, innovation, elegance of the solution, environmental considerations and the client relationship. This latest accolade builds on the Supreme Best Practice

Award won by BBO at the recent New Zealand Planning Institute’s national awards, where BBO’s planning and resource management practices were cited. The judges there described the project as ‘demonstrating outstanding creativity and innovation in an example of best practice planning in an environmentally and culturally sensitive environment.’ The Huntly Section of the Waikato Expressway involves 15 kilometres of four-lane expressway, 4 million cubic me-

tres of earthworks, an 80 metre cut through the Taupiri Range, more than 100 hectares of forest, bush and wetland enhancement and the permanent protection of a sacred lagoon and two pa sites. “Even with large complex projects, by engaging with people early and including them in the design and development process, you can achieve outcomes that are acceptable to everyone, and avoid the cost and time of major planning hearings,” says BBO managing director John Olliver.

The project team partnered with iwi to ensure that Huntly section recognises the rich cultural history of the area. This close collaboration and engagement with key affected parties throughout the design phase resulted in there being no need for resource consent hearings and only a brief hearing to finalise the wording of designation conditions, and no appeals to the Environment Court. “The Huntly section of the Waikato Expressway will make a sizeable ecological contribution to the area,” says NZTA highways manager, Kaye Clark. “Collaboration with key stakeholders such as Waikato-Tainui, the Department of Conservation, Waikato Regional Council and Waikato District Council, along with good planning, created such a positive outcome”. A number of pou will be installed along the route and distinctive designs reflecting the awa (river) and native wildlife will be incorporated on several of the bridges. The historic pa sites of Otaahau and Te Uapata will also be recognised. The Waikato Expressway is one of seven Roads of National Significance identified by the government as key to unlocking New Zealand’s potential for economic growth.

Multi-disciplinary skills pay off for BBO

hile the Huntly section of the Waikato Expressway is one of BBO’s flagship projects, it is one of many Waikato projects the group has been delivering, quietly and efficiently, since the company’s foundation by Martin Bloxam, John Olliver and Reece Burnett in 1993. BBO has played key roles in completing the Ohinewai, Te Rapa and Ngaruawahia sections of the Waikato Expressway over the last 10 years. A mix of engineering, planning and surveying skills has August/September 2015

underpinned a diverse range of residential, commercial, industrial and infrastructure projects. Notable examples include the Northgate Industrial Park currently under construction at Horotiu and the PWC Centre in Hamilton’s central business district where BBO worked for the client, McConnell Property, to secure resource consent and undertake civil engineering, traffic design, and land surveying. BBO has also been involved in the staged consenting, civil engineering and traffic design for

The Huntly Section of the Waikato Expressway includes an 80 metre cut through the Taupiri Range the The Base retail centre for 10 years, and are the lead consultants for the Titanium Park business park at Hamilton Airport. A key current project is the redevelopment of the Temple View area on behalf of the Church of Jesus Christ of Latter-day Saints which involves a

brownfields master-planning, consenting and implementation process to revitalise and renew the area. The results of that work will become apparent in the next year or so as construction takes place.

www.infrastructurenews.co.nz – 11

COMMENT >> Property

Working together to create change Connal Townsend Chief Executive , Property Council NZ Growing international evidence shows that public-private partnerships (PPPs) are a sensible way of funding large infrastructure projects

his is because unlike the public sector’s traditional funding methods the private sector has a commercial and financial incentive to optimise construction and management of infrastructure projects. Often, what is distinctly lacking in public service delivery is private sector experience and expertise, which leads to inefficient, lengthy, and costly outcomes that cause delays, frustrations and a loss of faith and trust. In July, Local Government New Zealand (LGNZ) produced its Funding Review Plan that made 10 proposals to encourage more ‘fit-for-purpose’ funding methods to help incentivise local economic growth. For a number of years Property Council has advocated for tools that incentivise economic growth and we welcome their inclusion in the plan. Councils around the country need the right ‘tools in the toolbox’ to adequately and appropriately fund and deliver infrastructure for their cities and regions. To do this, central government needs to come to the party. Property Council has been calling for more collaboration between central government, local government and the private sector as one of its core advocacy positions. Without the willingness of all parties to participate and pull their share of the weight, New Zealand’s lagging infrastructure will continue costing us growth via the loss of skilled workers, housing shortages, and stagnating economies. Currently, the inability of central and local government and their lack of will has led to years of pulling in different directions and excessive debt levels. The status quo has become unsustainable. Property Council agrees with LGNZ’s statement that it is futile to discuss local government funding in isolation, as central and local government and the private sector must all be part of the conversation if they want to achieve shared goals and objectives.

12 – www.infrastructurenews.co.nz

Countries across the world are adopting PPPs as a means to fund crucial infrastructure. Dublin’s Railway Procurement Agency does an excellent job of stating simply its tangible benefits. These include: • delivering efficient, cost-effective projects, value for money through optimal risk transfer and management • integrating design and construction with financing, operation and maintenance • adding value by synergies between public authorities and private sector through the cross-transfer of skills, knowledge and expertise • mitigating capacity constraints and bottlenecks in the economy through higher productivity of labour and capital resources in the delivery of projects • using competition and greater construction capacity to deliver projects • using a performance incentive/regulatory regime to implement accountability for service delivery • prociding innovation and diversity in the provision of public services. Cost cutting The New Zealand Social Infrastructure Fund (ASIF) states that in Australia, on average the cost overruns of PPP projects are 1 percent of the project total compared to the 15 percent of the total of non-PPP projects. It attributes the significant margin to the public sector being able to pay for infrastructure assets over an extended period and focus on frontline services under PPPs, rather than having to manage capital works and maintenance. Outside of central government funding; development contributions, financial contributions, and rates are the main funding sources for our infrastructure. There are many (and increasing) cases of single residential dwellings incurring up to $30,000 in development contributions charges. The only way to recover this cost is to pass it

on to the customer, which is untenable and causes its own challenges around housing affordability. This reinforces the need for PPPs. ASIF reports that 3 percent of PPP projects in Australia are delivered ahead of schedule compared to the whopping 24 percent of non-PPP projects that run behind schedule (based on a value-weighted average basis). The reason is obvious; the private sector partner is more motivated to complete the job ahead of time and deliver quality results because payment does not usually begin until the project is built and delivers the necessary level of service. LGNZ’s plan also emphasises the importance of councils in New Zealand welcoming private investment in infrastructure, “every project funded by private capital means one less call on council and community resources”. Central government must support local government by empowering it to achieve the changes it needs to improve service delivery. The plan refers to the pressure under which local government is meeting its cost burdens imposed by central government, via increasing rates or reducing spending of other activities. The Productivity Commission has also previously highlighted central government’s lack of consultation with local government when developing and implementing new regulations that are too costly. According to the OECD Economic Survey of New Zealand, our lack of infrastructure is the reason why others will not do business here. As global players, we are paying a hefty price because of it. Now more than ever, we need central government, local government, and the private sector to come to the negotiating table and begin an open and honest dialogue about funding infrastructure and embracing non-traditional procurement practices to move New Zealand forward. Connal Townsend is Chief Executive of the Property Council NZ, which represents the interests of the commercial property investment industry – including commercial, industrial, retail and property funds August/September 2015

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There was only about 0.5m to 1.5m headroom so the use of heavy machinery was ruled out

When Fletchers wanted to add a few storeys to a building in Wellington, the company needed to excavate around the existing foundations so they could be strengthened

t was always going to be difficult getting the spoil out from the basement of the Moleworth St site. With only about 0.5m to 1.5m headroom, the use of heavy machinery was ruled out. A vertical lift of around 15 metres over distances up to 50 metres added to the difficulties. Whilst Southeys was initially unsuccessful and the work was awarded to a local competitor Hydro Excavation specialist, Southeys was asked to take the project over, after the initial contractor walked off-site after only six weeks of work. Not a lot could be done with the site until the concrete could be poured to strengthen the foundations - the problem needed to be solved fast if the project was to stay on track. “We had originally employed a quantity surveyor, so we knew how challenging the project was going to be,” says Southeys chief executive Rob Southey. “There was a huge level of urgency on what was a challenging and difficult site. Excellent gear was needed - there had been a lot of blockages in getting spoil to the truck so we needed to be quite innovative in how to overcome that problem,” he says. Whatever Southeys did, it worked. Mr Southey is a little coy in discussing the company’s competitive edge but within a week they were onsite and after

just another week had removed as much spoil with Hydro-excavation as had been removed in the full six weeks before they came on the job. After two months onsite, the job was done and Fletchers found plenty of other uses for hydro- evacuation in the project, like excavating around lift shafts and other tight areas. The success of a project is a reflection of the quality of the people you work with and the quality of the equipment you use, according to the Southeys’ mantra. “Fletchers are an extremely professional company to work for and on this job the company’s foreman Kevin was great to work with and all over the tasks that needed to be completed,” says Southeys general manager Dave Gulliver. “The Southeys guys who worked on the site with our foreman Dan Mirko were also superb – working in those conditions in a building site in the middle of winter in Wellington is not a lot of fun, no matter how good the equipment is,” he says. “Using the best equipment with a highly motivated and well trained staff is a winning formula,” he says.

With 10.5 cubic metres of storage available, the truck was able to stay onsite all day, empty overnight and be ready for work again in the morning

The finished job with foundations strengthened and earthquake absorbers installed Safe low pressure solution Hydro-excavation uses a low pressure stream, which a trained technician uses to wash soil away without disturbing sensitive utilities. It is not to be confused with hydro-blasting or hydro-demolition which uses up to 40,000psi for applications like removing paint, scale and hard calcium deposits to cutting steel. Southeys now designs its own equipment and builds it through a joint venture with Warkworth based MS Engineering. “It means our Hydroexcavation equipment is tailor made for the New Zealand market and can be easily customised to cope with the special conditions of any given project,” says Mr Southey. Water pressures are limited to between 1500psi and 2200psi

as Southeys believes that pressures higher than 2500psi run the risk of damaging utility covers or cable casings and increase the risk of operator injury. Water usage is minimised using the latest in green technology and pressures can be reduced to protect things as sensitive as tree roots when locating underground utilities. Other uses for Hydroexcavation include trenching through utilities or landscaping, cleaning over or under utility services and the ability to work in the proximity of energised services. “The Molesworth St project shows its ability to work in confined areas where conventional excavation equipment is not possible and in precision evacuation for the placement of foundations,” says Mr Southey.

HYDRO-Excavation Non-destructive and Non-mechanical Excavating August/September 2015

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Auckland • Wellington www.infrastructurenews.co.nz – 13

COMMENT >> Housing

Productivity commission takes buckshot approach to land supply Joanna Bain

Raj Gurusinge

When there is no silver bullet try buckshot – that’s essentially the approach the Productivity Commission has adopted in its 37-recommendation draft report on Using Land for Housing

key theme in the commission’s multi-faceted inquiry into New Zealand’s 10 fastest-growing urban areas is the need for integrated planning. Specifically, the commission notes that there is little point in zoning more land for residential development unless infrastructure services are available so that the land can actually be developed. An obstacle to achieving this alignment is the lack of integration between the Resource Management Act 1991 (RMA), the Local Government Act 2002 (LGA) and the Land Transport Management Act 2003 (LTMA). This problem is widely understood and has led a number of local authorities to develop spatial plans, setting out the anticipated pattern of growth in a city over a long period of time (e.g. 30 years), and providing for the associated release of land and provision of infrastructure. The commission observes that there is little data available on how effective spatial plans are, but submissions from territorial authorities identified a range of benefits, including greater intra-regional cooperation and more efficient infrastructure use and investment. The commission has focussed on how the spatial plan process might be improved. It comments that one issue with the longterm planning horizon is that policies setting urban limits and density or intensification targets, unless monitored and adjusted in response to market developments, can become too rigid, “creating negative impacts on housing supply.” A major barrier to the efficient implementation of spatial plans is the time and cost of transferring them into RMA regulatory plans. Spatial plans are prepared under the LGA consultation mechanism, and currently do not have any special legal status under the RMA. 14 – www.infrastructurenews.co.nz

They must therefore be translated into regional policy statements and district plans through RMA processes, involving cost/ benefit evaluation under section 32 of the RMA and further public participation. One remedy, recommended by several local authority submitters, is to remove or relax the section 32 and consultative obligations in the RMA, but the commission identified significant risks with this approach. Chief among these is that many people do not sit up and take notice until the RMA plans are brought into play. Certainly, this was our experience in Auckland. It was only when the Proposed Auckland Unitary Plan was publicly notified, rather than at the Auckland (spatial) Plan stage, that our clients became interested in making submissions, as this is where the ‘rubber hits the road’, and the impacts on property owners’ interests really crystallise. (Auckland Council is now over halfway through hearings on the Proposed Auckland Unitary Plan, and therefore well progressed in terms of translating its spatial plan into land use rules.) A new regime? The commission’s preferred solution to easing the translation of spatial plans into land use regulation is to create a new legislative avenue for larger or faster growing cities that combines elements of the RMA, LGA and LTMA. This could include a 30-year infrastructure strategy, already required under the LGA, longer term transport planning and thinking about the growth of the city, and the development of associated land-use rules, as currently occurs under the RMA. Council Long Term Plans and Annual Plans would remain separate, as they focus more on service delivery and need to remain flexible to changing community/ council priorities.

Separate legislation with a single purpose would be required. If the regime is to be effective, the commission considers that it will need to exhibit certain design characteristics. Focussed and targeted: spatial plans must hone in on the key activities for the growth, development and functioning of the city and the provision of development capacity for housing - e.g. land supply, infrastructure supply and transport services. Large numbers of objectives and goals that have no strong relation to the use/demand for land, such as reducing greenhouse gas emissions from transport, are likely to complicate the plan’s implementation. One size does not fit all: the regime should be voluntary so that local authorities can choose the statutory planning structure that best suits their particular circumstances and can avoid scenarios where unnecessary costs are imposed on smaller regions. Spatial plans tend to work best for larger cities, with smaller rural councils reporting fewer difficulties in working within the framework of the three Acts. More central government involvement: spatial plans should be developed in partnership with central government agencies and signed off by both the Cabinet and the relevant local authority. Central government’s only engagement currently in the spatial plan process tends to be through the NZ Transport Agency. However, its role and fiscal exposure in the provision of essential services is much wider, extending, for example, to education and health. Robust: robust regulatory analysis and development, in a similar vein to a section 32 evaluation under the RMA, is required. This could be achieved through peer review by the Treasury’s Regulatory Impact Analysis unit, or through the establishment of an Independent Hearings Panel to assess proposals and provide recommendaAugust/September 2015

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ACENZ INNOVATE AWARDS

Redeveloped wharf ties up national awards A large area of redundant and ailing waterfront infrastructure more than 100 years old has been revived so successfully it has won not one but two major industry awards

ellington’s Clyde Quay Wharf may no longer host luxurious ocean liners but it has found a stunning new lease of life as a prestigious mixed-use development. The original wharf was built between 1907 and 1910 to meet the needs of the burgeoning Port of Wellington and was the first reinforced concrete wharf in the city. The imposing structure found a new purpose in 1964 when the Overseas Passenger Terminal was built for cruise liners, but unfortunately the vision of the wharf as a gateway for visitors was never fully realised as the popularity of sea voyages declined in favour of air travel. The terminal was then used as a restaurant and exhibition space for many years before Wellington Waterfront Ltd issued a design brief 11 years ago for the redevelopment of the wharf and the Overseas Passenger Terminal. The brief identified a number of design issues and objectives including: • a high-quality development

was essential considering the visual prominence and significance of the Overseas Passenger Terminal • the design needed to attract enough visual complexity to excite and sustain interest • as part of the waterfront promenade Clyde Quay Wharf is both a shared pathway and a flat public recreational open space where pedestrians have priority over vehicles • the building, which had to increase the amount of shelter available to pedestrians • the new development had to offer much greater potential for public interaction with wharf-level uses than the previous building which had few active edges and provided limited points of entry • and the redevelopment needed to provide an opportunity to improve public access to the water. Recalling the submission process Willis Bond Project Manager David McGuinness says his firm’s proposal for a private sector mixed-use development answered the brief and also relieved the public purse of

16 – www.infrastructurenews.co.nz

the burden of cost while ensuring the city and its citizens gained a valuable asset. “On the strength of our proposal, we were granted the right to redevelop the wharf in return for a 125-year lease on it and the terminal building.” This classic ‘win/win’ scenario ensured an urban waterfront asset was redeveloped and a significant capital sum was paid to the council to invest in developing public open spaces on the waterfront. Willis Bond & Co’s winning proposal included 76 high-specification apartments on levels one and above, with retail and civic spaces at wharf level for public use and enjoyment. It also found a unique solution to the requirement for balancing public and pedestrian access with an increased number of vehicles requiring entry to the wharf. “This was addressed through accommodating the majority of the parking below the wharf in a specially engineered car parking facility,” Mr McGuinness explains. “This solution allowed us to main-

tain an emphasis on creating a strong, high-quality pedestrian and public environment around the wharf.” The redevelopment site also had to conform to the Regional Coastal Plan for the Wellington Region (RCP) and its subordinate Lambton Harbour Development Area policy. “Designed to stand the test of time, the new building fully meets current seismic, wind loading and structural durability requirements and is supported almost completely on 200 new piles,” Mr McGuinness says. “The wharf has also been strengthened to meet modern building standards and the new sub-wharf parking area enhances its strength.” Panel power The building retains a number of key heritage features including four large glass mosaic panels now housed in the two cut-through portico areas and the iconic spire. “The building is an elegant addition to the waterfront and reflects the scale, form and articulation of the original structures of the OverAugust/September 2015

seas Passenger Terminal and the wharf while standing out as a distinctive new landmark in its own right,” Mr McGuinness maintains. Construction company LT McGuinness began work on the 250-metre long building in mid-January 2012. It involved a huge number of people with more than 1,000 workers and an additional 300 consultants, designers and experts working on the redevelopment over the course of the project. LT McGuinness Contracts Manager John Malthus says his team engaged cutting-edge construction and design techniques to deliver the international-standard development in a unique position in Wellington Harbour in excess of 100 percent of the Building Code. “The site shape and location produced some unusual challenges as it was long and skinny and had water on three sides, while the southern end was accessed via a public road that fed nearby apartments and the

Continued on page 18 August/September 2015

Unique design aspects

arious innovative and original approaches and solutions were adopted within the project including: • essentially a new contemporary building but with clear reflection and enhancement of heritage townscape values, and respectful integration of valued salvaged components and forms • public amenity and access, with commercial and highend apartments configured to complement and support each other to contribute to a mixed-use waterfront community in a sustainable and responsive manner • the integration of open public space with commercial/ private use to enhance public access to the wharf with new amenities such as multiple levels, a fishing wharf, enhanced shelter and cross-wharf access • open space design keys the

development directly into the wider waterfront promenade and landscape • external air conditioning units are cleverly hidden within the building‘s roof line so they are not visible from the outside • a high level of acoustic separation was specified between apartments - any service item that penetrated the ceiling was carefully reviewed to ensure it did not provide a shortcut for sound transfer • the under-wharf car park required highly specified marine grade concrete, on-site pre-casting of large floor sections above high tide and hydraulic lowering into the sea • valued heritage components of the previous building were retained and integrated with new architectural interventions developed in response to context, use, and changing culture of the waterfront

• the project provided the mechanism to revive a large area of redundant and ailing waterfront infrastructure in an economically and socially sustainable manner • integration of sub-wharf car parking/servicing with seismic strengthening and repair of the wharf • clustered apartment model with minimal corridors, multiple cores and a high number of through (double aspect) apartments • breaking down a large new apartment population into a number of discreet clustered communities with individual addresses • a systems approach with a high level of flexibility and owner customisation incorporated into the process, design and construction.

www.infrastructurenews.co.nz – 17

ACENZ INNOVATE AWARDS Some 28 car park floor slabs weighing 90 tonnes were poured on site beneath the wharf before being lowered into place

Continued from page 17 marina. Deliveries to the site were carefully scheduled to ensure trucks weren’t backed up,” Mr Malthus says. “A gateman was employed to ensure deliveries were quickly managed and the public was kept safe.” The original concrete wharf structure was retained for cost and heritage reasons, but remedial preparation was necessary. “Demolition of some of the existing structure involved hanging scaffolding, which was submerged at high tide,” Mr Malthus explains. Conventional machinery would not fit below the wharf, so the construction team had to use jackhammers and wire saws. “The wharf and piles were strengthened with carbon fibre wraps and concrete donut jackets on the tops of the piles and

210 new piles were bored and driven in to a depth of 30 metres between the existing piles through holes specially drilled in the wharf deck.” The watertight residential car park covering about 200m x 17.5 m posed its own set of challenges, which eventually saw 28 car park floor slabs weighing 90 tonnes poured on site beneath the wharf before being lowered into place – a standout engineering achievement. The team was reminded of the sea’s immense power as there were only four-hour windows of opportunity either side of low tide. “Formwork was set up on ledges below the wharf and 40mpa marine-grade concrete was poured above the tide level under lights and in standing room of just 1.2 metres,” Mr Malthus explains. “Once cured, synchronised jacks allowed

formwork removal and the slab to be lowered into place.” Stitchbeams, the hydrophilic water-tightness technology and the PVC water bar cast into the concrete slab were all completed within five days of each section being put in place. “The tidal window of opportunity meant a lot of working around the clock, with 1.2 metre coffer dams placed across each section to provide dry conditions,” Mr Malthus adds. The Beca lead on the project Nick Baty adds “Ventilation was another critical aspect of the sub-wharf parking facility. We designed a solution which incorporated air intakes integrated within the façade on the west side of the building and discharges on the east side down through the wharf. The system was carefully integrated to minimise loss of useable area

at the wharf level.” Beca, the building services consultant on the project, also designed innovative solutions for a centralised heating/cooling system for the apartments, acoustically insulated service fitouts for lights, sprinkler heads and supply/extract grilles and external plant yards above stairwells which cleverly concealed rooftop mechanical plant areas. The hard work paid off when the project received the Supreme Award in this year’s prestigious Property Council New Zealand Rider Levett Bucknall Property Industry Awards, shortly after Clyde Quay Wharf opened in June last year. Less than two months later the Clyde Quay Wharf scooped a Gold Award in the 2015 Innovate NZ Awards of Excellence organised by the Association of Consulting and Engineering Professionals of New Zealand (ACENZ) to celebrate the best projects in the built and natural environments. Commenting on the project, Willis Bond & Co’s Managing Director Mark McGuinness says it was “immensely rewarding” to be part of a project that injected hundreds of millions of dollars into the local economy while also keeping key skills in Wellington during the global financial crisis. “The project was the largest private development underway in New Zealand and shows that although Wellington tends to fly below the radar nationally, it is moving forward and progressing.”

Key companies • Owner: Clyde Quay Wharf Redevelopments LP • Developer: Willis Bond & Co • Construction: Company LT McGuinness • Architect: Athfield Architects • Services Engineer: Beca • Structural Engineer: Dunning Thornton 18 – www.infrastructurenews.co.nz

• Mechanical Engineer: Beca • Quantity Surveyor: Rider Levett Bucknall • Project Manager: Willis Bond & Co • Work start date: January 2012 • Date of Practical Completion: 31 July 2014

August/September 2015

ACENZ INNOVATE AWARDS

Creative crossing receives recognition A spectacular 265-metre long Northland bridge inspired by the traditional Maori fish hook hei matau has scooped gold yet again

hangarei’s Lower Hatea River Crossing – Te Matau A Pohe has won a well-deserved Gold Award in the 2015 Innovate NZ Awards of Excellence, the annual awards of the Association of Consulting and Professional Engineers of New Zealand (ACENZ). The striking $32 million construction was a fitting winner of a competition that seeks to celebrate the best projects in the built and natural environments, having won a slew of other prizes since it was opened in July 2013. Based on a Maori design representing strength, good luck and safe travel over water, the bridge’s form perfectly reflects its function as the ‘fish hook’ (J beams) cantilevers and rolls

back to raise the bridge deck. The 400t bascule centre section smoothly opens to accommodate the passage of marine traffic underneath, while the road section handles more than 9,000 vehicles per day to provide a critical in Whangarei’s Strategic Road Network. However, the apparent simplicity and effortless opening of the new bridge belies the complexity and high level of engineering that have gone into it – particularly when the type of bascule constructed at Lower Hatea is so rare. Lower Hatea is a single leaf counterweighted rolling bascule that opens hydraulically using rams from one side in the centre of the bridge and counterweights which work with gravity to reduce the energy

needed to raise the deck. There are only a handful of structures of this type in the world and a major challenge was to construct the bridge to ensure it opened smoothly, safely and within the consented time frame. The unique design delivered by award-winning UK bridge specialist Knight Architects and the structure’s function result in a one-of-a-kind bridge that achieves the rare quality, as ACENZ judges noted, of being practical as well as aesthetic. The design team was led by New Zealand consultants Peters & Cheung, McConnell Dowell delivered the bridge works and overall management of the joint venture that comprised 65 percent of the work scope, while local Whangarei roading contractor Transfield Services undertook the remaining roading works and bridge approaches. McConnell Dowell’s decision to engage specialist offshore capability was a key decider in their team’s selection to deliver the project, the Whangarei

District Council (WDC) having sought an iconic structure that was functional, safe – and critical for a moveable structure – reliable. Knight Architects’ international reputation combined with mechanical designer Eadon Consulting’s experience constructing moveable structures throughout the world gave council confidence that the Lower Hatea Bridge would be operative as well as physically striking. The contract was delivered on an early contractor involvement (ECI) basis as a ‘target-cost’ cost reimbursable contract – if it costs more than the quoted cost both share in the cost overrun and if it costs less both share the benefit. The greater collaboration and innovation permitted by the ECI model was well suited to the Lower Hatea project – WDC had a tight budget to deliver the bridge and the ECI struc-

Continued on page 20

For the latest in Infrastructure innovation, case studies and news plus the same for Local and National government activities, visit our website www.infrastructurenews.co.nz August/September 2015

www.infrastructurenews.co.nz – 19

ACENZ INNOVATE AWARDS Continued from page 19 ture allowed the joint venture to explore more radical options that may not have been considered under a traditional contract model, helping to bring the project within budget. With works below water level, through a former landfill and over an operational channel, and incorporating civil, mechanical, electrical, and hydraulic engineering, the project was frequently logistically and technically challenging. For example, the eastern bridge approach was a former landfill site subject to ongoing consolidation and settlement creep and the team saved close to $2 million by developing an alternative method whereby aggregate pre-load was left to settle for 12 months rather than

using ground improvement piling. Knight Architect’s distinctive fish hook design was embraced by Whangarei District Council and the challenge for the McConnell Dowell team became to construct this innovative form using structural steel and still achieve the required budget. Testing the domestic market revealed that the required steel could not be purchased within budget, so McConnell Dowell’s Shanghai procurement and quality assurance division identified a manufacturer who could provide the steel and fabrication to the quality standards and timeframe required and at a cost that was a significant discount to local suppliers.

cule bridges are typically constructed in situ, but the Lower Hatea navigation channel had to remain open during construction so three bridges were constructed – one each side to the navigation channel and the third the moveable 400T Bascule section. This section was assembled on the newly constructed western bridge and then launched across the 25m-wide navigation channel to the eastern bridge; a challenging task given that failure to land safely and correctly balanced on the other side would have been catastrophic. Following the launch the necessary mechanical and electrical connection works were quickly made to allow the bridge to operate to minimise the river Engineering expertise closure. The moveable section of basWork over water, at height and

Clever solutions to complex problems

uch of the credit for the success of the Lower Hatea project was due to Auckland-based consultants Peters & Cheung, which led the project team and carried out structural and geotechnical design. Their efforts resulted in a bridge which: • satisfied the needs of pedestrian, cyclist, road and river users • met the budget • provided the opportunity for

local resources to contribute to its construction • reflected best engineering practice • and minimised maintenance costs over its design life. There were challenging geometric problems to go with design innovation for the firm and its joint venture partners, including the fact that the deep, soft alluvial sediments overlying the site and the on-going settlement of the landfill on Pohe Island would clearly play a crit-

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ical role in the way the bridge was designed and built. The geology at the site generally comprised soft to firm silt and clay alluvium and a grid of timber piles needed to be driven through the silts to support the geogrid reinforced approach embankment to the bridge. The eastern abutment on Pohe Island was located on a landfill site with refuse fill heights of up to 12m thick which was experiencing ongoing settlement; a problem which was limited by constructing an embankment made of lightweight expanded polystyrene and capped with a thin concrete slab. Meanwhile, the bascule span itself consisted of two structural steel “J-beams” supporting a lightweight orthotropic steel deck that was unique in New Zealand and reflected international state-of- the-art design. The counterweights at the top of the “J-beams” balance the weight of the orthotropic deck and minimise the power needed to raise and lower a bascule span which was designed to operate in up to gale force winds.

involving heavy lifting obviously creates an added risk of injury, yet McConnell Dowell’s attention to detail in the planning process combined with a very robust and interactive safety management system ensured that there was no serious harm or lost time injuries to site workers in line with the company’s Home without Harm – Everyone Everyday philosophy. “It was great working with McConnell Dowell and Transfield,” said WDC Group Manager Infrastructure and Service Simon Weston. “They are extremely professional contractors who pulled the project in extremely close to budget.” It was a sentiment echoed by Duncan Peters of the design team. “McConnell Dowell put up a fantastic team and the quality of workmanship is the

During an earthquake the eastern and western halves of the bridge were designed to undergo out-of–phase longitudinal and lateral movements, which had to be accommodated by the bascule span. A critical aspect of the design therefore limited these relative movements to a level that could be accommodated by the bascule span, seismic analysis showing it was necessary to use a group of small-diameter driven piles and a pile cap at each pier and the abutments to limit the lateral sway of the bridge. The spans, which have been carefully proportioned to harmonise with the bascule span while providing a very efficient structural solution, are supported by V-shaped reinforced concrete piers. A feature of the one main support pier’s V-columns is the large post-tensioned prestressing tendons that extend down their length to give them the extra strength required to support the bascule span, while this special pier also houses the hydraulic rams that open and close the 400 ton bascule span. August/September 2015

“There are only a handful of structures of this type in the world and there was really no precedent for how to construct the bridge to ensure it opened smoothly, safely and within a reasonable time frame.” best I have experienced in more than 30 years in the business,”. Once the council decided that Knight Architects had fantastic credentials, “we had the best team in the world”, he

August/September 2015

adds. “The tender design upon which the price was based hardly changed at all in what was a technically challenging project,” Mr Peters noted. Mr Weston adds that McCon-

nell Dowell pulled together its six-member, joint-venture team and it took only from April 2011 to October to get all parties comfortable with the developed design, have it evaluated

under Q-based methodology and achieve New Zealand Transport Agency sign-off. “We were running a lot of stuff at the same time,” he observed.

www.infrastructurenews.co.nz – 21

WATER >> Wastewater management

The Apex of cost and performance in wastewater pond aeration Pond-based biological management is one of the most common wastewater treatment systems in New Zealand. Aeration is essential but can be expensive. Apex Environmental has added a high performance, economical Kiwi answer to pond aeration solutions, says Apex chief executive Matt Savage

A wide range of surface aerators installed on an industrial wastewater treatment pond – New Zealand-made Apex 45kW aerator in foreground, imported 45kW model behind

rowing a microbial population in a wastewater pond is a widely utilised treatment - microbes eat the pollution entering the pond and turn it into carbon dioxide, water and more bugs. The bacteria that do the work require oxygen provided by mechanical aeration to breathe and effectively metabolise the con-taminants. In tough economic times the capital and operating cost of aerators are putting both municipal and industrial budgets under strain. Lower capital cost solutions for pond aeration to facilitate the process is prominent among the range of conflicting drivers being sought to improve performance. In many cases, a lack of access to ready capital or cash flow constraints has increased the demand for surface rather than submerged aeration. In other instances, the use of shallow ponds minimises the benefits of submerged aeration and makes surface aeration the best choice for the project. Traditional surface aeration solutions in New Zealand typically involve imported products.

New Zealand made Apex Surface Aerator As units larger than about 45kW in capacity are usually oversize for international shipping, which adds significant cost to the end user. Due to an inability to source high efficiency, reasonably priced units within acceptable timeframes from existing suppliers, Apex Environmental invested in the development of a local solution to this local problem. A local solution The combination of decades of local expertise, lean manufactur-ing and detailed hydraulic design has resulted in a low

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cost, high efficiency solution manufactured in New Zealand, that can be delivered in as little as a fifth of the time of most imported options. The locally produced aerators are provided with a foam filled Kevlar® float to provide extremely robust and reliable flotation. Kevlar is about five times stronger than steel on a weight for weight basis - it is also used to make bullet proof vests. The closed cell foam filling ensures that even in the extremely unlikely event that the Kevlar® float is punctured, the buoyancy of the unit is maintained. An

additional benefit of local, lean manufacturing is that the aerators can be produced at around 20 percent lower cost than even the most competitive comparable imported products. Existing pond upgrades One of the key issues identified for existing wastewater treatment plants, as opposed to new installations, is that the need for upgrades or an increase in aeration capacity usually require a very rapid response.This is not consistent with the four to six month delivery time usually required to obtain an imported aerator. A common example is when a wastewater treatment plant operator experiences peak loading events that require an urgent increase in aeration capacity in order to avoid breach of discharge consent or release of objectionable odour, only to find that the equipment required to increase their oxygen transfer capacity will take months to deliver. By manufacturing locally and tooling up for a high level of production from the start, Apex Environmental is able to offer a typical delivery time of only four weeks for most sizes of aerator. For select models, the longest lead time components are held in stock enabling a unit to be assembled to order in an even shorter time frame to provide a very rapid response. The alternative for many operators can be significant legal action due to environmental non-compliance. Success storyIn one recent such case where the site was already operating at the absolute limit of their available power capacity, two 45kW Apex surface aerators were installed to replace two existing lower efficiency surface aerators of the same size. With no change to the power consumption of the plant (as no more was available to use), the oxygen transfer rate was about double from what the previous aerators were providing. The very real risk of release of offensive odours from the August/September 2015

Apex is able to offer a typical delivery time of only four weeks for most sizes of surface aerator

Floating manifold of a submerged aeration system installed in a wastewater treatment pond

wastewater treatment plant was than three years. largely mitigated due to the In order to minimise power subsequently raised oxygen lev- consumption of wastewater els in the treatment pond. treatment plants, Apex Environmental has been a champion of The drive to maximise installing submerged fine bubefficiency ble aeration in aerobic wastewaFor treatment plant owners ter treatment ponds. who are able to commit the Because the amount of oxyadditional capital up front and gen that can be transferred into take a long-term view, sub- the water is proportional to the merged pond aeration is a depth at which the air and wasensible investment due to the ter come into contact, this has signif-icantly reduced on-going clear advantages over traditionoperating costs associated with al surface aeration systems.In a the higher efficiency of such a submerged pond aeration syssystem. Payback on installing tem, a blower is installed on the the more efficient submerged shore of the pond (typically in a aeration option is generally less small shed or building) and air

is blown down a floating manifold into fine bubble diffusers installed in the bottom of the pond. The diffusers, which are one of the key components of this system, are configured in such a way that they can be easily removed from the pond for maintenance and cleaning. Although significant power is required to blow the air into the bottom of a deep pond, at depths of 3 â&#x20AC;&#x201C; 10m this is more than overcome by the additional oxygen transfer that occurs at this increased depth Whilst surface aeration systems typically transfer 0.5-1.5kg of oxygen into the water per kW

of electricity used, submerged aeration systems are capable of achieving efficien-cies of 2-4kg of oxygen transferred per kW of power used depending on pond depth and the type of membranes used. Dr Matt Savage is a chartered chemical engineer with a PhD in the design of equipment for industrial wastewater treatment. He has nearly 20 years international experience in the development, commercialisation and manufacture of wastewater treatment plant and equipment.

Industry leaders in wastewater treatment Apex Surface Aerators are manufactured in New Zealand which means lower costs and faster delivery Check our website for full details www.apexenvironmental.co.nz P 03 929 2675 E sales@apexenvironmental.co.nz

August/September 2015

www.infrastructurenews.co.nz â&#x20AC;&#x201C; 23

COMMENT >> Public-Private Partnerships

Learning from mistakes and international best practice Dr Joel Cayford Consultant One of Auckland Council Mayor Len Brown’s priorities for Auckland is the delivery of “lower rates and more sustainable debt”

e writes “we are developing alternative funding options for transport, our first public private partnerships (PPPs) and new commercial sponsorships”. The mayor says “The Skypath project is likely to be one of Auckland’s first PPPs, and will eventually enable a great vision a cycle and walking path stretching across Auckland’s harbour bridge”. Why Skypath is not a publicly funded piece of cycling infrastructure, and whether it should be a PPP or not is a moot point. Other council PPP projects have been delivered in New Zealand, including the highly controversial wastewater scheme known as Ecocare at Mangawhai Heads, which was initiated by Kaipara District Council in 2002. Construction began in 2008 and the official opening was held in early 2010. Lessons still being learned from this project include a major inquiry by the Office of the Auditor General which was released in November 2013, a judicial review to the High Court in 2014 brought by Mangawhai Ratepayers and Residents Association (MRRA), and an appeal to the Court of Appeal by the MRRA which is set down for hearing in late August this year. At issue is whether the council has the legal right to enforce rate collection for the PPP bank loan funding a project that was decided by council unlawfully. International literature indicates that while urban areas across the globe are characterised by their own complex issues, the financial challenges are much the same - at all levels of economic development there is a far greater financing need for urban development projects than can be provided by the traditional public purse alone. Auckland’s transport infrastructure issues are a case in point. Recognising this, governments around the world are turning to PPPs as one possible financing option for large-scale investments in the provision of basic infrastructure assets and to assist urban re-

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generation. Many cities in the northern hemisphere have used and applied PPPs since the early 1990s. New Zealand has been one of the slowest countries to learn how to utilise PPPs in ways that maximise their advantages and minimise their disadvantages. Deloitte is one of a number of international consultancies that have relevant experience in providing advice regarding PPPs. They advise that not all infrastructure and services are suited to PPPs - contrary to the opinion of many local government politicians who view any private investment as low-hanging fruit and a way to avoid rate increases. Because of this, great care needs to be taken in the evaluation and structure of any PPP a council might undertake.

“Learning from international best practice and from mistakes that have already been made in New Zealand will play an important role in assessing and selecting effective PPPs for urban projects” Three stages Deloitte recommends a three-stage process. The first of these stages is a screening assessment against relevant high-level criteria to determine if a project is even a candidate for a PPP. Next comes the strategic assessment stage, which may be thought of as a preliminary delivery-model business case. And finally comes the value-for-money assessment, which attempts to quantify the difference in cost to council between traditional procurement (i.e. council funding) and PPP procurement. The high-level criteria that need to be satisfied before even thinking of a PPP approach for an urban project include, for example:

• are there likely to be at least three bidders for the project • are there precedent projects in other cities • is there a potential revenue component for the private sector participant • can payment be tied to measured performance • is there scope for innovation in the design of the solution? I note here that Auckland Council’s PPP policy whose “purpose is to allow council to consider if procuring a project through a public-private partnership (PPP) will deliver the best value for money outcome for council and its stakeholders” does not recognise the range of high-level criteria that international best practice calls for, and instead focuses on the last step – which is important of course – and that is the value-for-money assessment. Considering the two PPP examples mentioned earlier, the answer to these high-level questions would mostly be “no”. But in the case of Skypath, the answer is “yes” to the last two payment questions, whereas for Ecocare the answer would be “no” – and this exposes a major disadvantage of PPPs which must be managed. While a PPP involves a relationship between a public entity and a private partner who is responsible for the delivery of the project, there is also the bank or lender providing the finance. In the case of Ecocare the lender appeared to take not the least interest in the project because it believed it was “protected” from anything going wrong by the so-called “protected transactions” provision of the Local Government Act, and that even if things turned to custard Kaipara District Council could and would enforce rates to repay the loan. Investor due diligence was not required. However international best practice suggests that where the investor is appropriately tied into PPP arrangements then it becomes as interested as the other parties are in the success of the project. Stringent August/September 2015

The Skypath cycle and walking stretching across Auckland’s harbour bridge is likely to be one of the city’s first PPPs but should it be PPP or a publicly funded cycling infrastructure?

standards result in a bank seeking out their own set of technical, legal, and other advisors to monitor the progress of the project. Separate contracts can provide additional guarantees between the lender and the public authority to allow for closer monitoring of construction timelines and budgetary conditions. In the event that a private company does not perform the project agreement obligations, lenders can rectify the problem by going as far as to replace the private partner. That would have been a turn-up for the cards at Mangawhai. Potential problem Another potential disadvantage of PPPs that is recognised in the literature is the risk of loss of control of public assets. In view of the fact that the private sector absorbs a significant portion of project risk, important decisions over outcomes are typically shared with that partner. This can result in the loss of public control over important decisions concerning a range of public issues – for example, how basic public goods August/September 2015

such wastewater and transport services should be delivered and priced. In the case of large urban projects, such as the regeneration of downtown Auckland where a PPP is being established between private investor Precinct Properties, Auckland Council, and transport infrastructure provider Auckland Transport, there is a risk that public interest issues in public space provision for CBD residents, playgrounds for kids and high pedestrian amenity environments will be pushed down the priority list if they compromise or complicate PPP objectives. Alternatively, second-best options for these amenities might be required of the private developer as part of the partnership, risking a public backlash because of perceptions these services are provided at least cost and are of low quality. Poor governance of a major urban PPP can generate considerable resistance to private sector participation. If a service is undermined due to a drive for profit, or if there is slow responsiveness to a problem,

the predictable result will be strong public resistance to the partnership and a general distaste for private sector involvement in the urban sector overall. Keeping the public well-informed and supportive of the urban project is an on-going challenge for all governments. Auckland Council should facilitate early and constant dialogue with stakeholders in addition to providing widespread information regarding public issues to allay speculation and deal with concerns. Learning from international best practice and from mistakes that have already been made in New Zealand will play an important role in assessing and selecting effective PPPs for urban projects, and appropriate governance structures will be necessary to ensure outcomes that meet reasonable public interest expectations and needs. Dr Joel Cayford is a planning consultant, blogger and planning researcher/teacher at the University of Auckland, and a former city and regional councillor www.infrastructurenews.co.nz – 25

COMMUNICATIONS

Spreading the word It’s a big leap from a British army paratroop regiment to founding one of the world’s fastest growing translation companies – not to mention landing a prestigious Hi-Tech Award as well

rant Straker’s post-army career plan was to become a successful commercial pilot – or so he initially thought. Unfortunately, a driving accident cut short his plans so he returned home to New Zealand in 1994 to study mechanical engineering at Waikato University. Having taught himself programming, the West Auckland native left his engineering job to start his own company, after initially selling software to companies to fulfill their own translation needs. “I had never even switched on a computer until I was 30, but I found I had a gift for programming so I started a computer programming business in my front room in Ponsonby in 1999,”Mr Straker recalls. Together with wife Merryn he founded Straker Translations as a web content provider in 2009 before pivoting to a ‘full’ translation service provider in 2011, turning his seemingly remote Auckland location into a clear competitive advantage. “We start our working week earlier than the rest of the world, but because we are principally working in the cloud and use technological solutions to drive our business, time zones and geographical boundaries aren’t really an issue,” Mr Straker explains. The company enjoys the fact that it’s operational 24/7, providing ultra-fast translation services and carving out a high profile in a $40 billion global translation industry. “That’s why we have a presence in Barcelona and additional offices around the world,” the founder and Chief Executive says. “No matter where in the world the client is located, we can answer queries through our customer service team, provide

instant quotes, process jobs through our project managers and begin the translation process immediately.” One of the fastest translation companies in the world, Straker Translations has focused its technology by: • s implifying and automating the content import and export process •b uilding a cloud-based translation workbench for translators • a nd developing a comprehensive project and translator management system. The advantages gained through a technology platform created and owned by the company results in “much higher” gross margins than the industry average and helps acquire new customers with a “much easier and faster” service. Cloud cover Straker Translations’ competitive advantage lies in its mature, stable and modular cloudbased technology platform, which the company has been developing since 2010. “The platform’s main advantage is that it simplifies and speeds the translation process,” Mr Straker maintains. A key element in the company’s technological philosophy is reducing the traditional obstacles associated with translation projects. “We reduce human touchpoints from beginning to end by automating the service to provide a faster and simpler system.” The Straker Translations platform supports more than 100 different file formats, including MS Word, Excel and many others, which can be instantly translated into more than 80 languages by machine translation. The human translator then

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Grant and wife Merryn receive the Grow Wellington Hi-Tech Innovative Service Product Award from Grow Wellington Chief Executive Gerard Quinn (left) uses his or her experience and expertise to apply specific rules regarding grammar, cultural nuances of language, and other variables to create the perfect translation match. “Our desktop publishing team can also apply layout changes to translation projects – for example, some languages use more character space than other languages – to provide a perfectly translated document.” The company has embraced machine translation as a core part of its technology platform. “When used in conjunction with our human translation teams, we believe we have the fastest, most accurate and effective solution in the translation industry,” Mr Straker says. In addition, the Straker Multilingual Translation Engine eliminates the need for localisation, centralises the translation of content application, leverages all the interactive functionality of the main site and avoids language workflow complexities. “Our team of translators also get in-context views of their translations, while clients have a smooth online proofing and sign-off system.” The firm’s 5,000 in-house, contracted and freelance professional translators are evaluated

and tested for quality and skill in their chosen language pair before they join the company and are continually evaluated and rated after each project they complete. “This maintains quality and enables us to match the very best translators with the right expertise and experience to each translation project,” Mr Straker believes. These factors in turn help maintain quality and increase work speed. “Our translators are also constantly tracked for quality via such things as spot checks, reviews and client feedback by our in-house team of senior translators and skilled project managers.” Localisation is a big issue for clients and there are many examples of companies not gaining a complete understanding of local differences in terms of everything from language and culture to working practises, or perhaps simply replicating a campaign from one territory in another. “Sometimes this doesn’t work,” Mr Straker observes. “We have the human and technological skills to provide world-class localisation services.” The proxy-based website translation system takes away the hassle of having to alter August/September 2015

SECURITY

an existing website, buying in expensive tools, or involving a busy web technical team. “Costs also tend to be very low for this kind of website translation,” Mr Straker adds. Simply speedy The website translation process has been equally streamlined and simplified: • the client provides the URL and the company provides a quote based on how many words and how much of the site needs to be translated • the translation is exported and translated ‘in context’ before being completed, reviewed and approved. It then goes live, with the language switched out as the requests go through the server. “So the client ends up with an identical site without the hassle – it really is as simple as that,” Mr Straker maintains. Innovations such as these drove rapid expansion, Straker Translations establishing its Barcelona production centre in 2013 and expanding the sales team following an increase in overseas market opportunities and revenue. “This came off the back of a successful Google AdWords strategy first developed in 2011,” Mr Straker adds. Straker Translations’ 10,000plus clients are evenly spread over various industries in numerous countries, including legal services, media and marketing, manufacturing and engineering, financial services and technology telecommunications. “Our growing portfolio of blue-chip clients includes Caterpillar, Fletcher Building, Fonterra, The Huffington Post, Samsung and Yellow Pages.” The top language translations are English, French, Simplified Chinese, Spanish and Italian, but the remainder is an even spread across many languages. “Our most popular services are multilingual website translations, technical documentation and InDesign translation services,” Mr Straker confides. The company’s continued sucAugust/September 2015

cess has been proven statistically and recognised officially – the translation industry’s leading research analysts, The Common Sense Advisory, rank it in the top 100 companies out of more than 27,000 global vendors operating in the sector. “We were the only New Zealand company to appear in the top 100,” Mr Straker notes. The NZ Hi-Tech Award’s Grow Wellington Innovative Hi-Tech Services trophy is the latest accolade for an organisation which the judges recognised as “one of the world’s fastest-growing translation companies, with a cloud-based translation platform that enables translations to be delivered with speed and simplicity 24/7, ensuring even the most urgent translations are delivered without issue.” It’s an impressive achievement for a company less than five years old which doubled its revenues over the past couple of years to turn over more than $8 million last year, but Mr Straker is aware that he and his team can’t rest on their laurels. “As more and more companies want faster results, so cloud-based translation companies are having to look for faster ways to translate clients’ materials,” he notes. “Market expectations for translations are changing rapidly and clients want faster, easier and more cost-effective solutions.” He’s taking solid steps to meet these needs with plans to raise between $5 million and $20 million through an initial public offering (IPO) on the nascent NXT exchange for smaller, high-growth businesses and a separate funding round seeking money from private investors. “The main purpose of the IPO would be to raise growth capital rather than provide an exit for shareholders because we intend to build on our successes to date and cement our hardearned position as one of the world’s fastest and best translation companies,” Mr Straker says.

Digital dashboard slashes cyber security risk

The Honeywell Industrial Cyber Security Risk Manager is the first digital dashboard designed to proactively monitor, measure and manage cyber security risk

oneywell Process Solutions (HPS) has launched the first digital dashboard designed to proactively monitor, measure and manage cyber security risk for control systems for refineries, power plants and other automated production sites that are at increasing risk of cyber attacks. The Honeywell Industrial Cyber Security Risk Manager is designed to simplify the task of identifying areas of cyber security risk, providing real-time visibility, understanding and decision support required for action. It monitors and measures cyber security risk in multi-vendor industrial environments, which is a major concern according to a global survey on cyber security conducted by Ipsos Public Affairs in September 2014. More than 5,000 adults in 10 countries were surveyed about the threat of cyber attacks on critical industries in their countries, three quarters of whom said they were fearful that cyber criminals could hack into and control major sectors and elements of the economy. In addition, two-thirds of those surveyed thought that the oil and gas, chemicals and power industries were particularly vulnerable to cyber attacks. The Honeywell Industrial Cyber Security Risk Manager is designed to change that by providing guidance on the potential impact of threats and vulnerabilities as well as possible resolutions, thus making it easier to manage cyber security risks.

Risk Manager uses advanced technologies that translate complex cyber security indicators into clear measurements and key performance indicators (KPI), and provides essential information through an easy-touse interface. The intuitive workflow allows users to create customised risk notification alerts and perform detailed threat and vulnerability analysis so they can focus on managing risks that are most important for reliable plant operations. Risk Manager means industrial customers don’t need to be cyber security experts, Mr Zindel says. “The easy-to-use interface allows users to prioritise and focus efforts on managing risks that are most important for reliable plant operations, protecting against vulnerabilities and threats such as insecure network and system configurations, rogue devices, intrusion attempts and malware – the list goes on.” Monitoring plant assets within and across all security zones of a plant, including third-party systems, Risk Manager understands security zones, is aligned with ISA 62443 and is able to calculate accurate risk scores. Risk Manager’s real-time measurement of risk is in line with industry standard risk management methodologies so that risk scores can be used consistently and accurately throughout a corporation’s risk and governance efforts.

www.infrastructurenews.co.nz – 27

TRANSPORT

Drones – an excellent tool within limits

The use of Remotely Piloted Aircraft (RPA) or drones (pilot-less aircraft) is growing exponentially in New Zealand, according to Catherine Somerville and Kate Fairbrother

lready they are being widely used in the real estate industry, for aerial photography in all forms and in news gathering, and new applications are developing quickly – even if we have yet to see the arrival of postal ‘delivery by drone’ in New Zealand. The efficiency and productivity potential they offer is immense. They can also be a fun, if expensive, recreational toy. But they are aircraft and pose a number of safety risks, especially close to controlled and busy airspace and over densely populated areas. There are also significant privacy implications. So it was only a matter of time before the New Zealand Civil Aviation Authority (CAA) joined aviation regulators around the world in setting down some rules for use. These came into force on 1 August. Operators must obtain prior consent from people before they fly over them or their land. If this cannot be obtained, or is impracticable, application can be made to the Director of Civil Aviation for a certificate of approval. The operational regulations are in two parts. Part One ap-

plies to RPAs weighing 25 kg or less and requires that the operator: • ensure before each use that the aircraft is safe to operate • takes all practicable steps to minimise hazards to persons, property and other aircraft • flies only in daylight • gives way to all crewed aircraft • keeps the RPA within eyesight (i.e. not through binoculars) and clear of cloud • doesn’t fly above 120 metres of the ground

Catherine Somerville

Kate Fairbrother

RPAs weighing between 15 and 25 kg must also be constructed or inspected, approved and operated under the authority of a person or association recognised for this purpose by the CAA. Currently the only approved organisation is Model Flying New Zealand. Operators who cannot comply with the Part One minimum re-

a permitted radio frequency to avoid harmful interference to air traffic control or cell phone and emergency services. People who use the wrong frequencies can be prosecuted under the Radiocommunications Act 1989.

“They are aircraft and pose a number of safety risks, especially close to controlled and busy airspace and over densely populated areas” • is familiar with the airspace restrictions applying in the area of operation • doesn’t fly closer than 4 km of any aerodrome • obtains an air traffic control clearance when flying in controlled airspace • and doesn’t fly in special use airspace without the permission of the controlling authority (e.g. military operating areas, low-flying zones).

Privacy paramount RPAs have the potential to be intrusive when fitted with cameras. The Office of the Privacy Commissioner has recommended that users follow its guidelines for CCTV use. These include clearly identifying before use that the purpose for using the RPA is justified and that there are no equally effective alternatives; having a clear plan about how the system will be operated and how the privacy impacts will be minimised, collecting only necessary images and using them only for the purposes for which they were collected.

quirements, or who wish to fly an RPA weighing more than 25 kg, must be certificated by the Director of Civil Aviation under Part Two of the regulations. To obtain a certificate, applicants must submit an “exposition” showing that they have identified and mitigated all relevant hazards and risks. Each application will be considered on its merits. All RPAs must operate within Catherine Somerville is a partner at Chapman Tripp specialising in environment, planning and resource management law who also has a pilot’s licence, while Kate Fairbrother is a senior solicitor and specialises in corporate and commercial law with an emphasis on ICT, outsourcing, commercial contracting and e-business

Drones are becoming increasingly common in New Zealand, with the University of Canterbury, for example, investigating the possibility of using them to help fight fires 28 – www.infrastructurenews.co.nz

August/September 2015

INFRASTRUCTURE >> Innovations

Steady path for justice and emergencies in an earthquake by the earthquake.” Once completed at end of 2016, the three-building precinct will house Christchurch’s justice and emergency services, including a purpose-built emergency operations centre and New Zealand’s first shared 111 emergency call centre for the entire South Island.

Robinson Seismic a world leader in the research, development and manufacture of seismic isolation and vibration will provide base isolation to Christchurch’s new Justice and Emergency Services Precinct

he IL4 classified building will be protected by a system of 50 lead rubber bearings and 83 slider bearings - IL4 means that after an earthquake the Precinct needs to be standing and fully operational. Robinson Seismic worked with Holmes Consulting Group base isolation specialist Alan Park to design and customise the bearings to the precinct requirements. “This is a critical building for the city and our modelling shows that it would remain fully operational after a substantial earthquake, and that people and property inside would be thrown around much less,” says Robinson Seismic’s Kate Canderle. “In an earthquake, this building would roll gently with the punches.” A common misconception is that base isolation is expensive, when in fact it adds very little

to overall construction costs of new buildings, she says. “Base isolation minimises earthquake strengthening requirements to surpass required levels of building code compliance, which also saves money, and there are substantial insurance benefits as a result. “Our system will allow the precinct to move around 250mm sideways in an earthquake the size of February 2011, or up to 600mm in a larger event,”. Lead-rubber bearings are a New Zealand invention by Penguin Engineering founder, the late Dr Bill Robinson, a world-renowned earthquake engineer. The company’s name was changed to Robinson Seismic in 1998. His invention is in use in more than 5,000 buildings worldwide, including at least 14 in New Zealand, notably Te Papa Tongarewa, Parliament Buildings and Christchurch Women’s

Hospital. The hospital is the only building in Christchurch that was base isolated prior to the two major earthquakes and it remained fully operational during and in the aftermath of both of them. The Justice and Emergency Services precinct will be cushioned by 133 isolators compared to 147 under Te Papa, 135 under the Wellington hospital and 40 under Christchurch Women’s Hospital. “Both rubber and lead make excellent base isolation materials as, while they are very strong and stiff vertically, they flex horizontally if the ground moves beneath them, then return to their original shape,” says Ms Canderle. “The rubber acts as a spring returning the building to its original position and the lead acts as a shock absorber to dampen the energy generated

Key links Use of Lead Rubber Bearings Internationally www.robinsonseismic.com/ case-studies-earthquakeengineering.html What are Lead Rubber Bearings? www.robinsonseismic.com/ our-products-base-isolators. html About Robinson Seismic Ltd www.robinsonseismic.com/ about-us-seismic-design.html About Dr Bill Robinson www.robinsonseismic.com/ bill-robinson-story.html Kate Canderle 021 148 2140 or email info@RSLNZ.com www.robinsonseismic.com

why are things not happening as you planned? Thirty years of research has shown that 70% of all major change efforts in organisations fail to deliver the expected results in the medium to long term – frequently due to a lack of engagement and commitment by the people directly involved. Contact PeopleCentric to find out how we can help you engage your people and develop a productive and safe workplace climate.

August/September 2015

www.peoplecentric.co.nz www.infrastructurenews.co.nz – 29

COMMUNICATION

Harnessing the power of social media

The sheer ubiquity of social media makes it an essential element in every disaster preparedness kit argues Head of Policy at Facebook New Zealand Mia Garlick

ntil lately Social Media has been largely overlooked as a potentially invaluable health and safety tool. Increasing numbers have been turning to Facebook to get information about what’s happening around them and to check in on whether their friends and family are safe in times of disaster. Over 2.5 million New Zealanders use Facebook every month on average, making it a powerful tool to assist organisations, communities and families prepare for, respond to and recover from disasters. Throughout the world and including New Zealand organisations like the American Red Cross, World Food Program USA, the New South Wales Rural Fire Service and Federal Emergency Management Agency use Facebook as part of their disaster response strategies. These organisations employ Facebook in a variety of ways, from providing tips on keeping people and property safe, sharing important updates as a storm front or fire approaches, or rallying people to help others after disaster strikes. An example close to home is, of course, the Student Volunteer Army, whose members took to Facebook to help others, particularly the elderly, in Christchurch after the devastating earthquakes in 2011. Civil Defence and the MetService also make effective use of Facebook to communicate important information when severe weather strikes New Zealand. Facebook aims to help everyone get more out of its services during difficult times, and as part of that strategy the company has developed a range of guides and tools for organisa-

tions as well as individuals. Prepare & respond June saw the launch of a New Zealand version of Prepare & Respond, a collection of worldwide best-practice examples for councils, civil defence teams and other emergency services to connect with their constituents and better prepare for and respond to natural disasters. The guide offers tips and case studies on how to maximise the impact of Facebook Pages, which are the foundation for a two-way communication with the community of people interested in an organisation’s work. The different features of Facebook Pages – like Timeline, Cover and Profile Photos, and the About section – allow an organisation to inform and engage members of the public as well as employees or volunteers from other stakeholders. For example, the guide provides tips about how organisations can manage their Page posting strategy to provide people with the information they need before, during and after a disaster. •b efore: create a Page posting strategy to keep people informed in advance of any disasters. Regularly posting helps your organisation stay front of mind as a credible and reliable resource during disasters. For example, post relevant tips to remind people of the steps they can take to prepare for a disaster that can strike at any time, like an earthquake, or severe weather or flooding. •d uring: timing is crucial – post regularly with photos and videos, share links to more indepth information, and, when appropriate, target posts to people in specific locations. Respond to questions and feedback in the comments

30 – www.infrastructurenews.co.nz

sections of your posts. • after: post direct and clear information about where community members can receive assistance and how they can help in the recovery effort through donations or volunteering opportunities. Ensuring that a Page posting best-practice strategy is in place can allow councils and other front-line responders to engage the public and help keep people informed.

Prepare & Respond Tips for how individuals, groups and communities can get the most out Facebook before, during and after of disasters

Help your community with READINESS

Support and organise RESPONSE AND RELIEF initiatives

Engage in on-going RECOVERY efforts

Help build community RESILIENCE

lows friends and family to check in to see if their loved ones in an area affected by an emergency are safe. Facebook decides to activate the Safety Check tool based on criteria about severity and type of incident, and in consultation with relevant government agencies in the affected area. The company also works closely with local government authorities including the Ministry of Civil Defence to identify if the tool can be helpful during an emergency. To date Facebook has activated Safety Check three times – after Typhoon Ruby, Cyclone Pam and the recent Nepal Earthquake – and millions of people have marked themselves safe and millions more friends and family have seen safety notices that their loved ones are safe. The comments on these safety notices from loved ones are typically expressions of love, gratitude and relief, confirming how impactful social media can be in times of disaster. Download the Prepare & Respond guide at https:// www.facebook.com/disaster/ app_190322544333196

Safety check In times of disaster or crisis its services have become an effective way to check on loved ones, particularly when large numbers of people are displaced. This was evident during the devastating 2011 earthquake and tsunami in Japan when more than 12.5 million people were affected nationwide and more than 400,000 people were evacuated. During that crisis people used technology and social media to stay connected and Facebook’s engineers in Japan took the first step toward creating a tool – Safety Check – to make it easier to communicate with others. It is in these moments that communication is critical for people in the affected areas and for their friends and families anxious for news. If activated by Facebook, the Safety Check tool, which is available globally on Android, iOS, feature phones and desktop, provides a simple and easy way for an individual to let their friends and family on Facebook Mia Garlick is Head of Policy know they are safe. It also al- at Facebook New Zealand

August/September 2015

FOCUS >> Public Private Partnerships

How to win PPP bids Caroline Boot Managing Partner, Plan A Tendering for Public-Private Partnership (PPP) projects which involve several parties in the bid process is a challenging task

ach party brings its own culture, systems, and pride to the table. Aligning those different teams to deliver a compelling tender on time – and making all of the tender’s components work effectively together – is one of the hardest tasks a bid team will ever face. Understanding and leveraging the individual strengths that each party brings to the table is a critical first step, as is clearly defining roles and responsibilities. In collaborative tenders, there’s a far higher chance of inconsistencies within the document – and it’s a lot touchier to resolve these issues. The value in appointing an independent Bid Director for these jobs is immense – as long as you select the right person for the job. What should you look for in a Bid Director? Resilience springs to mind. Strong positive connections and credibility with all the major players, including your client. A strong leader. Calm under pressure. Apolitical - that’s important! Knowledgeable and experienced in managing the tender process. Great people skills. A strong negotiator. Once you have your Bid Director on board, s/he will assemble the rest of your team and front/facilitate the overall decisions that are needed to get the job under way. You’ll want to tap into his or her insight into the optimal mix of partner companies to form your consortium. S/he will research the project and the client’s background carefully to drive the most important selection factors into the heart of your offer. And they’ll make those priorities clear to all who work on the bid. For very large or significant bids, it’s also worthwhile to engage a Bid Manager. While the Bid Director takes a governance role for the duration of the project, managing liaisons between the consortium partners and with the client, the Bid Manager takes responsibility for preparation of the deliverables. That’s a skill that takes outstanding coordination and project management skills. August/September 2015

Seven steps Here are seven important fundamentals that will need to be covered by the Bid Manager: Put in place a culture of keeping to deadlines from the start – writing and assembling a major tender document is a tightly staged process, involving repeated reviews which eventually need to fold together in the final document. There’s often no room for late entries; and a slack deadline pro-

“The value in appointing an independent Bid Director for these jobs is immense – as long as you select the right person for the job” cess will directly reduce the quality of your bid. Delegate effectively and monitor progress tightly – set an initial task to gauge the quality and timeliness of the responses from your contributors. This helps you identify who will struggle with delivering a quality response, and who the recalcitrant slackers are. Apply pressure and extra resource to those hot points from day one. Involve all reviewers in the first bid strategy meeting – the seagull treatment (fly in, squawk a lot, crap on everyone, then leave) is a time-honoured tradition of tender reviewers. Time and time again, late-entry reviewers do more damage to a well-structured document than good. Get them in on the ground floor, or not at all. Write your Executive Summary straight after the first bid strategy meeting – then circulate it to all the main contributors with a limited timeframe for comment. This is a powerful alignment tool, and it shows you are serious about getting the writing started. Thoroughly scope and allocate tasks – on multi-party tenders, it can be easy for some tasks to fall through the cracks. Don’t leave

it to chance that the right parties will take ownership of their contributions – it’s easy in these situations for one party to assume that another has it in hand. Use an overall Bid Editor – on smaller projects this role could form part of the Bid Manager’s role, but on larger tenders the Bid Manager is likely to be too busy with managing inputs to also keep a close eye on quality control. A Bid Editor will help to produce a cohesive document which consistently presents the ‘win themes’ and doesn’t reek of one party preparing one section and a different party preparing another. Leave this unchecked and your client may think that they’re not dealing with a strong and aligned team. Communicate, communicate, communicate – a breakdown in communication can have disastrous impacts. A good Bid Manager will keep all parties up to speed with changing requirements and expectations, and work to resolve any issues before they impact on getting the right solution into the tender box on time. To compete as a high-performing consortium for a PPP, and Alliance or a Design-Build project (or any kind of multi-party bid), you will need to prove that you already have strong well-organised working relationship. If you can demonstrate a cohesive and coordinated team approach in your bid document, the evaluators will have greater faith that you can work effectively together through the project. Caroline Boot is the Managing Partner of Plan A Tender Specialists and Clever Buying ™. She and her colleagues are dedicated to improving the skills and tools used by both clients and suppliers engaged in tendering. For more information, see www.plana.co.nz or www.cleverbuying.com or phone 0800 752 622

www.infrastructurenews.co.nz – 31

FOCUS >> Public Private Partnerships

Changing with the times The traditional public-private partnership model is evolving as countries around the world face a substantial infrastructure deficit says John Fitzgerald

ecent estimates indicate US$57 trillion in global infrastructure investment will be required over the next 15 years for transport, power, water and telecommunications, simply to keep up with projected global GDP growth. Public-Private partnerships (PPPs) continue to play a key role in the delivery of critical infrastructure the world over; however the status of global markets is changing. Although every country in the world has its own approach to developing and funding infrastructure, until recently the PPP model has been narrowly defined – particularly within mature markets. Countries such as the UK, Canada and Australia have benefitted from a wide variety of private investment opportunities in infrastructure and developed rigorous PPP procurement and governance frameworks over time. In broad terms, the PPP approach has traditionally referred to either the availability style model (with core service retention for social infrastructure) or the concessionaire model including demand risk (prior to the recent lack of market appetite for demand risk). Now, as global markets mature, the range of PPP models has expanded and many different models are considered applicable. This may be influenced by a variety of economic, financial – even political – factors. In many cases, value for money and changes in risk

appetite drive the structural change – especially in the wake of the financial crisis, which has required governments to become more flexible. The traditional model is changing in the UK, US and Australia In the UK, a range of alternate structures have been considered for new assets. The Non Profit Distributing (NPD) model of Scotland (and now Wales) is

to the development of various innovative, large-scale transport projects. This includes the Ohio River Bridges Project, which involves the construction of bridge facilities and motorways that require collaboration between the Ohio and Indiana state authorities and the application of two different funding mechanisms (a PPP and a Public Activity Bond offering). The proceeds from the tolls are split equally between the states. Australia’s recent transactions have also included a range of funding and financing models. In relation to economic infrastructure and toll roads, the use

“As governments look to maximise value and reduce costs associated with private sector finance, innovative models catalysed by the financial crisis are likely to result in permanent structural changes within the sector” one example. Unlike the traditional PFI model, the NPD model does not strictly involve private equity investment; instead providing subordinated debt. As a result, while shareholders may receive a return on capital invested, under the NPD model returns are essentially fixed at the time of contract execution. Surpluses may reduce the service payment, with any surplus remaining at the end of the contract distributed to the public sector authority (rather than as dividends to private investors). This model was applied recently in the Dumfries and Galloway Acute Services Redevelopment Project, which will result in the development of a new district general hospital for Dumfries and Galloway in Scotland. Demand in the US has also led

PPP connects the west

A 33km integrated road project to complete and expand the M4 and M5 corridors in Sydney and improve links to the airport and port precincts, the West Connex project is planned to be delivered in three stages over 10 years. A NSW government-owned company is funding the initial Stage 1 works currently under construction, which consist of the M4 widening and extension from Parramatta eastwards to Haberfield. Stage 2 will increase capacity on the M5 and skirts the Sydney

of an availability style model has enabled the continuing provision of critical infrastructure during a period of low investor appetite for demand risk. This model is now being further augmented to address planned future recycling of capital following establishment of proven demand – for example, WestConnex (see sidebar below). In addition, governments nationally are encouraging market-led proposals, which to date have predominantly targeted major civil works projects across the transport and freight portfolios. In respect of social infrastructure projects, recent transactions have ranged from full privatisation of services through to a blend of availability and performance-by-results models

KPMG Australia National Infrastructure Projects Group Specialist Advisor John Fitzgerald: “Public-Private partnerships continue to play a key role in the delivery of critical infrastructure the world over” (such as the recently transacted Ravenhall Prison Project in Victoria). The trend towards service-led PPPs is expected to increase in NSW with its preparedness to consider full outsourcing of services, as demonstrated by the Northern Beaches Hospital Project. In addition, a range of service contestability engagements (arrangements involving the purchase of complex services from the non-government sector) are drawing on the key principles of PPPs, such as linking payment mechanisms to performance and ensuring a clear allocation of key risks to clearly define service requirements between the parties. Trends in social infrastructure investment In relation to social infrastructure, governments around the globe are looking to new models of partnership between the public and private sectors to provide more efficient and effective social service delivery

Airport and Port Botany in Sydney’s south-east, with construction due to start soon. Once demand has been established, the stateowned company will look to raise capital via the securitisation of tolls following the proofing of traffic demand forecasts for the initial stage – including by issuing bonds to superannuation funds – to fund the construction of subsequent stages. The proposed model is similar to San Francisco’s Bay Area Toll Authority, which operates eight tolled bridges in the city and has raised private capital for new projects by issuing bonds.

32 August/September 2015

that contributes to the public benefit. The past decade has seen the evolution of social investment (SII), which provides finance to organisations addressing social problems with the explicit expectation of a measurable social, as well as financial, benefit. The UK has played a leading role in this initiative, establishing a Social Investment Taskforce during its G8 presidency in 2013 which seeks to raise awareness amongst potential social ventures, intermediaries and investors. Other OECD countries, including Australia, Canada and France, have also played a role in developing the SII market. The take-up and appetite for differing models and structures varies between local jurisdictions. Opportunity exists for greater adoption nationally. A number of other recent justice sector initiatives have included payment-by-results concepts, including recidivism and reintegration targets within the Ravenhall and Wiri prison PPPs in Australia and New Zealand. NSW has also considered the use of Social Benefits Bonds

August/September 2015

(equivalent to an SIB), targeting to reduce the reliance on direct improved criminal justice out- government contributions decomes. rived from traditional taxes and fees will be critical to facilitate Mega projects the continuing procurement of Nationally and globally there mega projects. has been a continuing trend Innovative project-specific towards the â&#x20AC;&#x2DC;mega projectâ&#x20AC;&#x2122;, re- funding sources may incorpoferring to large-scale complex rate a mixture of user-pays arprojects, frequently proposed rangements (potentially followin response to transport chal- ing demand-proofing periods) lenges created by urban mobili- as well as other appropriate ty requirements. value capture mechanisms, inAffordability is a key issue cluding special assessment digiven the size of the funding rect benefit taxation, developer requirement for many of these contributions and transit-oriprojects, exacerbated by cur- ented development revenue rently constrained fiscal envi- receipts. ronments. As a result, adaptive and innovative PPP arrange- Bundling of multiple smaller ments are required, including scale projects the flexibility to apply a range At the other end of the PPP of procurement models within spectrum, there are a number the one project. of recent examples of smallModels are increasingly re- er-scale, geographically disquired to interface across large persed projects being bundled civil works packages procured together under the banner of under alternate arrangements, a single large scale multi-asset as well as existing operational PPP. arrangements (such as potential Although the bundling of a franchisees). few facilities (including numerGiven the sheer magnitude of ous school projects) has been funding required for projects of implemented across a number this scale, the ability to attract of jurisdictions nationally and alternate private sector funding internationally, new projects of

a significantly larger scale (both in terms of deal value and geographic disparity) are now being considered. The recent Pennsylvania Bridges Project, for example, bundles 558 geographically dispersed bridges into one large project with a 42-month delivery deadline and a 28-year contract term (see sidebar page 34). Advantages of this approach include standardised due diligence and documentation processes and improved chances of attracting institutional investors to projects otherwise too small to be considered attractive. Funding and financing trends As governments look to maximise value and reduce costs associated with private sector finance, innovative models catalysed by the financial crisis are likely to result in permanent structural changes within the sector. A number of different approaches to the funding and financing of PPP/PFI projects have emerged since the financial crisis in 2008.

Continued on page 34

FOCUS >> Public Private Partnerships Continued from page 33 Key trends include: Capital contribution Numerous projects throughout Australia and internationally have now been executed using the capital contribution model as governments seek to solve affordability issues and improve Value for Money (VfM). There are a range of issues to be considered, including the quantum, timing and certainty of the senior debt repayment. A number of variances have been adopted nationally, particularly with respect to the timing of the contribution including: • pro-rata contribution during construction (i.e. contributed as a proportion of private sector finance drawn down by the PPP co.) • delayed drawdown during construction (i.e. as D&C phase contributions after significant contribution of private sector debt and equity) • upon completion of construction (i.e. upon the successful achievement of Commercial Acceptance) • repayment at a specified point during the Operating Term (for example once a ‘steady state’ of operations has been reached, referred to as a Satisfactory Operations Date). The optimal timing of the Government Contribution (GC) needs to be considered from both VfM and risk transfer perspectives. An earlier GC may result in prima facie, better quantitative VfM because the total capital funding requirement is reduced, including lower capitalised interest, fees and costs. However, government may be perceived to ‘take back’ some

risk that would otherwise have been transferred to the PPP co. Unsolicited/Market-Led Proposals and Inverted Bid Private investors within the market are initiating a number of alternate funding structures, including the provision of unsolicited proposals and the institutional investors’ inverted bid model. Governments nationally have introduced frameworks by which to assess unsolicited or market-led proposals. Although this approach encourages significant private sector innovation and investment in public infrastructure, one of the key challenges for the market and government alike is the demonstration of unique attributes and justification of negotiating with a single party for significant opportunities (often heavily subsidised or requiring significant government intervention). The private sector must carefully balance the degree of work undertaken and investment required to demonstrate uniqueness, given the proposal may not be ac-

al reforms required We believe there are a range of key factors and structur respond to the immense to ensure that the PPP model and market are ready to challenge outlined by the Australian Infrastructure Audit. ture plans, providing Political stability and sponsorship of long-term infrastruc delivery of projects. confidence to market participants and allowing efficient

delivery, including Development of new asset classes suitable for PPP nce works, the packaging of large-scale civil infrastructure maintena backlog. to address the significant infrastructure maintenance

visibility A stronger and more reliable pipeline providing greater respond with of the investment opportunity to allow the market to value for money. appropriate capacity and capability, improving overall

the re-emergence Return of long-term project financing, facilitated by financing sources. of debt capital markets to increase appropriate alternate

immense funding Attraction of alternate funding sources to offset the transport related value requirement, particularly in relation to user-pays and capture opportunities.

impact investing, Greater facilitation of payment by results and social outcomes. linking performance and payment to improved social

to facilitate continuing Better information and operational performance data as the identification enhancement of newly originated infrastructure, as well arrangements. of potential savings and modifications of existing service

frastructure investment in Australia. This is largely due to a lack of appetite to invest significant at risk capital (in bid costs)

“A number of different approaches to the funding and financing of PPP/PFI projects have emerged since the financial crisis in 2008” ceptable to government, or the opportunity offered to market. The ‘inverted bid model’ is a proposed new procurement process championed by Australian superannuation funds to facilitate greater institutional investment in Australian infrastructure. Under the current procurement model, Australia’s major infrastructure investors, rarely, if ever, participate in greenfield PPP projects either as bid sponsors or primary equity investors. Yet, combined, they control the majority of in-

Building better bridges

What is needed?

he Pennsylvania Rapid Bridge Replacement Project is a new initiative that seeks to address the state’s structurally deficient bridges, which number approximately 4,500. The bridges largely consist of crossings on smaller highways in rural areas, and are geographically dispersed across the state. The project aims to replace 558 bridges in three years, with construction

for the scale of investment associated with most PPP transactions, compared with alternate investment opportunities. Under the proposed ‘inverted bid model‘ the traditional bidding process is reversed by fixing the terms of project financing through a funding competition, prior to the tendering of construction, operation and maintenance (including raising any additional debt following determination of the proposed solution). This approach seeks to lev-

el the playing field for longterm equity investors seeking reasonable returns over the economic life of the asset versus fees generated during the initial bidding, structuring and delivery of the asset. Although this model may be successful in attracting greater institutional investment, challenges would likely present, particularly in relation to the pricing of equity and debt in the absence of a fully developed understanding of the technical solution and associated risks. Non-Profit Distribution (NPD) Following concerns regarding excess profits generated from early PFI projects in the UK, the Scottish government announced that PPP projects could also be procured using the NPD model. As the title suggests, the model does not allow for profit distributions to

complete by the end of 2017, and adopts a 28-year contract term. The project will be financed using up to US$1.2 billion in PABs issued by the US Department of Transportation, which will be tax-exempt and account for the majority of the total project capital costs. The project will be led by Plenary Walsh Keystone Partners, with 11 key subcontractors, forming a consortium of financing and engineering firms.

34 August/September 2015

Average value of PPP deals closed 12,000

80 PPP deals closed FY06-FY10 PPP deals closed FY11-FY14

United Kingdom

70 60 50

234

India

40 30

Portugal

406

10 0 88

Spain 255

261 Belgium 264

Germany Ireland 201 313 120

France 327

276

294

395 254

285

231

Brazil

Australia Canada United States 491 417 1,168

315 313

533

653

710

Average deal value (US$m)

Average value of deals (US$m)

Average number of deals closed per annum

Change in average number and size of PPP transactions from FY06-FY10 to FY11-FY14

Belgium 50% United States

-100%

France Canada Brazil % change in average deal value

50%

Ireland

100%

Australia

United Kingdom

-50%

4,000 2,000

Transport

Social

Other

Average number of PPP deals closed per annum

-50% Germany

6,000

Source: IJ Online data (accessed 15 May 2015) and KPMG analysis

Spain

Average number of deals per annum

100%

% change in average no. of deals closed per annum

India

FY06-FY10 FY06-FY14

8,000

Source: IJ Online data (accessed 15 May 2015) and KPMG analysis

150%

10,000

120

FY06-FY10 FY06-FY14

100 80 60 40 20 -

Transport

Social

Other

Source: IJ Online data (accessed 15 May 2015) and KPMG analysis

Portugal -100% Source: IJ Online data (accessed 15 May 2015) and KPMG analysis

equity investors; private capital is contributed as subordinated and senior debt with preagreed margins. Any additional returns result in an offset to the service payment (reduced payment) or a payment from the PPP co. to the procuring authority at the end of term. In general terms, the model is underpinned by the following key principles: • enhanced stakeholder involvement in management of projects – a Public Interest Director and non-voting observer sit on the PPP co board • no dividend-bearing equity –

the project financing vehicle only contains subordinated and senior debt • capped private sector returns, with surplus profits being returned to the public sector entity by way of an offset to the availability payment. Several transactions have now closed, with the most recent being the NHS Dumfries and Galloway Acute Services Hospital Redevelopment. The model seems to have been readily accepted by the debt, sponsor and contractor market, probably helped by the very liquid

and aggressive equity market in the UK. Availability-style economic infrastructure PPPs Civil projects, typically road PPPs that had recently used availability style payments to address concerns regarding demand risk, are now beginning to incorporate future provision of tolling securitisation following an appropriate demand-proofing period, providing funds for future stages and other infrastructure. Recent examples include the US 36 Managed Lanes and Australia’s WestConnex Project.

Value capture A broad assortment of fees or taxes levied on defined groups of beneficiaries expected to benefit from the provision of a particular project, typically transportation-oriented development, ranging from sales of air rights to increased land values and improved productivity resulting in a larger tax base. Recent examples include Crossrail 2 (UK) and Hudson Yards New York (US).

Continued on page 36

Strong foundations The best start to any infrastructure project is expert legal advice. Our team of specialist construction and major projects lawyers can work with you to deliver successful outcomes throughout the full life cycle of your project. Visit www.chapmantripp.com/construction August/September 2015

8 | Public Private Partnerships

FOCUS >> P ublic Private Partnerships Classification of PPP markets Classification of PPP markets North America Current focus of PPP players globally, with Canada providing the most active mature market in the world Northand America the US representing a Current potentially focus of PPP players globally, significant new opportunity, given with Canada providing the most active emerging political commitment. mature market in the world and

United Kingdom Formerly one of the leading PPP jurisdictions, the UK PFI (now PF2) market, is in decline. Although some United Kingdom pipeline exists for NPDFormerly projects one in of the leading PPP Scotland and Wales, England's PF2 the UK PFI (now PF2) jurisdictions, has just two projects currently in market, is in decline. Although some procurement, with no visible pipelinefuture exists for NPD projects in pipeline at this time. Scotland and Wales, England's PF2

the US representing a potentially significant new opportunity, given emerging political commitment. Canada The Canadian market continues to deliver an impressive and transparent pipeline of greenfield opportunities Canada within a strongly supported political market continues to The Canadian environment. It also contains deliver an an impressive and transparent active secondary market. pipeline of greenfield opportunities

has just two projects currently in procurement, with no visible future pipeline at this time.

China China's Government is actively promoting use of PPPs as a reform tool and the main procurement China methodology for infrastructure China's Governm projects, targeting foreign and use o promoting domestic players. tool and the ma

methodology fo projects, targeti domestic player

within a strongly supported political environment. It also contains an United States active secondary market. The US provides one of the largest infrastructure markets globally, with a substantial requirement for private United States investment. Almost all The jurisdictions US provides one of the largest have now introduced specific legislation infrastructure markets globally, with to enable PPP investment, with a requirement for private a substantial primary focus on the transport sector. investment. Almost all jurisdictions have now introduced specific legislation to enable PPP investment, with a primary focus on the transport sector.

Mature stagnant market Emerging markets Mature growth markets – India, Latin America and SE Asia PPPsmarket are increasingly used in growth High growth markets Mature stagnant markets such as India, Brazil and SE Asia. Emerging markets markets nations are introducing PPP Developing Low growth markets Mature growth – India, Latin America and SE Asia procurement regimes and policies to PPPs are increasingly used in growth markets Mature steady marketsHigh growth attract foreign investment. Although markets such as India, Brazil and SE Asia. private sector investment remains nations are introducing PPP Developing Low growth markets Small developing markets challenging, these markets are constantly procurement regimes and policies to being reviewed for investment readiness markets attract foreign investment. Although No information availableMature steady and actively pursued. private sector investment remains Small developing markets challenging, these markets are constantly being reviewed for investment readiness No information available and actively pursued.

Continued from page 35

Congestion pricing/ market-based pricing The introduction of variable tolls, including dynamic tolling arrangements for road projects, to help manage congestion, allowing motorists to self-select travel times based on perceived time value. Recent examples include the Washington Interstate Route 95 Express Lanes Project (US) and the M6 Toll (UK). Government syndication guarantees Governments guarantee the syndication, becoming the lender of last resort in the event the transaction is not fully syndicated. Recent examples include Australia’s Victorian Desalination Project. Debt competition Government selects a preferred bidder based on assurance of a financeable bid, and that preferred bidder, in consultation with government, then procures debt using a debt competition. The UK’s M25 PPP and Bristol Southmeade Hospital are recent examples. Tax Increment Financing (TIF) TIF is created by the generation of additional tax revenues based on an increase in the tax

base, not an increase in the tax rate or a new tax. TIF is collected within the area directly affected by the new infrastructure that catalyses the increased tax base. The Greater Paris and the Grand Paris Expressway, the UK’s Crossrail 2 and the Detroit Red Wings Hockey Stadium are classic examples. Government senior debt (‘wide equity’) model Originally developed in Canada, under this approach government provides all debt and the private sector provides a greater proportion of equity (e.g. 80 percent debt/20 percent equity). Fort St John Hospital and the BC Cancer Agency Centre were both funded this way, Private Activity Bonds (PABS) Application of tax-exempt debt instruments for private investment in highway or surface freight transfer facilities, resulting in access to the lower cost of capital from the US tax-exempt bond market. The Pennsylvania Bridges Capital Beltway Hot Lanes PPP (US) is a prime example. Bond market The financial crisis saw the widespread collapse of monoline insurers and project finance bond markets (for instance in

Australia A mature and continuing PPP market, PPP deal flow has recently strengthened after a slight contractionAustralia in the wake of the financial crisis. The need for and continuing PPP market, A mature significant private investment in the PPP deal flow has recently strengthened nation's infrastructure (highlighted in contraction in the wake of after a slight the recent Australian Infrastructure the financialAudit) crisis. The need for is anticipated to result insignificant the emergence private investment in the of a variety of innovativenation's fundinginfrastructure and (highlighted in financing models. the recent Australian Infrastructure Audit)

the UK and Australia). Recent innovations in bond financing structures such as delayed drawdowns and forward purchase bonds have seen a slow re-emergence of bonds (outside North America) as a potential source of project finance in PPPs, typically in the secondary markets. The San Francisco Bay Area Toll Authority, the Victorian Desalination Plant Refinancing and the WestConnex Project were financed in this fashion. TIFIA (US) credit assistance programme A US federal credit programme for eligible surface transportation projects of national or regional significance. Under this programme, the US Department of Transportation is authorised to provide three types of credit assistance – direct secured loans (most commonly used), loan guarantees and standby lines of credit – to attract greater private sector investment. The Ohio River Bridges East End Crossing is an example of this type of financing. UK guarantees scheme Provides credit support, leveraging off the UK’s sovereign credit rating, to stimulate continuing investment in infrastruc-

is anticipated to result in the emergence of a variety of innovative funding and financing models.

ture. In relation to PPPs specifically, co-lending has been considered alongside other funders on a pari passu basis, providing procuring authorities with an alternative to the capital contribution model. Recent examples include the Mersey Gateway Bridge, the Bendigo Hospital Project and the Sydney Convention Centre. Concluding thoughts Ultimately, investors and the public alike have increasingly high expectations around transparency, reporting standards and operational optimisation of PPP projects both during and after project construction. In adopting models that seek to leverage governments’ credit ratings and lower cost of borrowing, it is important that the incentives and integrity of the PPP model be retained – any approach should be cognisant of potential risk of take-back by government, while continuing to pay a premium within the PPP structure. Overall value for money must be preserved. John Fitzgerald is Specialist Advisor, KPMG Australia National Infrastructure Projects Group

36 August/September 2015

FOCUS >> Public Private Partnerships

Proven partnerships offer plenty of potential Public-private partnerships remain something of a mystery to many New Zealanders, even those operating in the infrastructure sector, Hamish Glenn believes

here’s been some confusion emerging from the recent review of Mt Eden remand prison’s operations contractor, Serco, but the concept is really quite straightforward. First and foremost, it’s important to note that the public and the private sectors cooperate on every single infrastructure project. Under more traditional approaches to procuring public assets like roads, schools, hospitals and prisons (and basically anything else that requires construction), the public sector contracts private sector companies to design, build, maintain and sometimes operate the assets. The public sector funds each of these activities out of revenue from taxes and contracts parties, generally independently, managing a tender process for each stage of project delivery. This approach works well for the overwhelming majority of infrastructure projects as it allows public agencies to drive competition without costs getting out of control, either from the public or the private sector’s perspective. The downside is that the public sector carries significant risk at each stage of infrastructure delivery and loses the ability to gain efficiencies – particularly whole-of-life efficiencies – from bundling different activities. For example, when price determines who wins a tender process to design or build a piece of infrastructure, there is a risk that long-term operating costs are passed onto the public agency who will own the asset in a bid to reduce upfront construction costs. That’s not a good outcome for taxpayers. Public-private partnerships (PPPs) address this by bundling all phases of project delivery into one single tender process. Private sector companies team up to design, build, finance, maintain and, sometimes, opAugust/September 2015

erate an asset on behalf of the public. In the New Zealand context the public sector owns the asset in law at all times and private finance must be included for the process to be a true PPP. PPPs are able to leverage long-term operational savings from better upfront design and construction by allocating risk more efficiently than under other procurement options. The basic principle is that the party best able to manage a particular risk should manage that risk because they will have the sharpest incentive to minimise problems. However, risk allocation, fi-

That is, generating wholeof-life savings for the taxpayer through private sector innovation and risk allocation didn’t always take priority. Sometimes, simply being able to shift payments for the construction of expensive public assets into the future was enough to justify a PPP. For smaller public authorities needing tens of millions of dollars in the bank to get a project off the ground, the attractiveness of 20 or 30 much smaller annual payments could be seductive. Indeed, for many councils, health authorities and others on fixed budgets, a choice between no asset or a privately fi-

Hamish Glenn

the more contentious aspects of PPPs as between 1999 and 2008 public infrastructure was not allowed to be privately financed. Although one could “New Zealand is yet to promote a PPP argue that this moratorium exacerbated New Zealand’s infrain housing, but the level of demand structure deficit, it also allowed combined with the dominance of the us to develop our own, unique private sector in property development and in some cases world-leading PPP models which to date suggests significant potential” have avoided the least desirnance structuring and fully inte- nanced asset at higher cost was able aspects of international grated whole-of-life operational an easy choice; the harder part PPPs. design for an asset that will last was the creative accounting three or so decades is expen- needed to convince Treasury New Zealand PPPs sive and can be time consum- officials that the cost of private To a great extent, New Zeaing. So PPPs tend to work best finance was worth it. land PPPs operate the way PPPs for larger and more complex As a result, a number of early are intended. All private finance projects with opportunity for PPPs in places like the UK did must remain on the balance the private sector to innovate. not deliver value for money and sheet, removing the attraction At the end of the day, every have subsequently led to public of pure financial motivations PPP must be able to beat a backlash. for selecting a PPP over other comparator generated by the Much of this backlash has models. This helps ensure value public sector or the project been led by labour unions, who for money remains the principal won’t go ahead as a PPP. have been the fiercest critics of objective from any procurePPPs. That’s because a second ment process. Strategic tool strategic motivation for introProjects are outcome-focused It would be fair to say the ducing PPPs overseas was to and significant efforts are takabove summary of PPPs has get around heavily unionised en to avoid input specification. evolved over time and that the industries in order to realise la- The Wiri prison PPP provides original drivers for injecting pri- bour efficiency gains. an outstanding case in point. vate finance, in particular, into By choosing PPP over tradi- The purpose of the Wiri prispublic project procurement are tional procurement, and includ- on was never a fixed number more interesting. ing long-term maintenance and, of cells of a certain size. It was, In PPP pioneering countries, where possible, operations into a and is, to keep a given number including the UK, Australia and contract, authorities were able to of inmates inside; to keep them Canada, PPPs were first used to avoid some of the more prescrip- safe; and to reduce their reofshift public debt onto private tive requirements to use specific fending when they are released. balance sheets in order to get labour resources and grant spe- The entire project is structured around various financial and po- cific working conditions. to ensure these three principal litical obstacles. New Zealand largely avoided outcomes. 37

The South Auckland Correction Facility (aka Wiri Prison) is one of only two PPPs to date to become operational in New Zealand, the other being the Hobsonville schools agreement, while Mount Eden Remand Prison is an operations outsourcing agreement

Performance payments are based on these metrics and penalties are imposed when targets are not met. That means all aspects of the deal are measured, monitored and benchmarked to constantly gauge performance. Under traditional procurement, this type of approach is technically not impossible, but rarely if ever occurs. Design tends to be specified, construction is subject to cost minimisation and operation gets handed over to public monopoly providers who are poorly monitored and inadequately benchmarked. As a result, the same patterns of crime, incarceration, release and re-incarceration are reproduced infinitely, giving New Zealand one of the highest rates of recidivism in the developed world. A defined objective of New Zealand authorities from the introduction of PPPs is to tap the expertise and learning of the private sector. As public services tend to be monopolies and “inward-looking”, opportunities for innovation and new ways of doing things are limited. By introducing a private sector partner into the provision

of otherwise public services, authorities can gain learning over service provision which can be extended across the sector. In fact, this has been one of the principal benefits not only of the Wiri prison deal, but also from Transmission Gully, where New Zealand’s most experienced and proficient procurer of public services – the New Zealand Transport Agency – has identified wider benefits that it can now apply across its full procurement programme. The future To date, only two PPPs have become operational: the Wiri Prison and Hobsonville schools agreement. Another two have been awarded but are not yet operational (Transmission Gully motorway and a second bundle of schools) and one is under tender – the Puhoi motorway. In addition, the Skypath walk and cycleway across the Auckland Harbour Bridge and the Christchurch Convention Centre are currently being developed as PPPs and parties are working through project details. No decisions have been made, but PPP has been mooted as a potential option for light

rail in Auckland, the additional Waitemata Harbour Crossing and it is likely that the health sector could see a PPP at some stage. There have been no PPPs in health to this point. This is unusual as this is the sector with generally the widest use of PPP overseas. Given a developing need for capital investment in New Zealand hospitals and the presence of extensive hospital PPP experience across parties currently participating in the New Zealand market, health could be the ‘next cab off the rank’ for private investment. Exactly how the sector develops will depend heavily on the monitored performance of PPPs already underway. With the exception of the isolated pre-1999 initiated Kaipara District Council-managed wastewater project, New Zealand PPPs are yet to suffer a significant issue, either in terms of private partner performance failure or public sector procurement fault. However, risks remain that issues in other parts of the sector will impact public perceptions. Leading these concerns is the outcome of a review underway at Mt Eden Remand Prison.

There, an operations outsourcing agreement has been reviewed following evidence of contract breaches. While quite distinct from a PPP, the contract was nevertheless leased to a private partner, allowing some degree of confusion to emerge publicly. In practice, a PPP at Mt Eden would have tied service provider Serco to a longer term agreement with other private parties, including equity investors. The added rigour provided by investor exposure over a longer term contract can help sustain higher levels of performance in accordance with the contract. A final sector which may emerge as a priority for PPPs, conventional or otherwise, is the development sector. New Zealand is yet to promote a PPP in housing, but the level of demand combined with the dominance of the private sector in property development suggests significant potential. The advantage with an integrated development PPP would be the public sector being able to prescribe some bottom lines in terms of affordable housing while transferring some development risk to the private sector. The opportunity for real value uplift would be if the public client was able to tie in social support services and performance metrics into the agreement. This type of arrangement remains a possibility in Tamaki in Auckland, and elements could still be adopted in the Christchurch CBD rebuild. Hamish Glenn is Senior Policy Advisor at the New Zealand Council for Infrastructure Development

38 August/September 2015

FOCUS >> Public Private Partnerships

A blessing – or a curse?

Do public-private partnerships really deliver value for money? Green Party Transport spokesperson Julie Anne Genter has her doubts

any governments are under pressure to keep taxes low while still investing substantially in infrastructure. In the past few decades, public-private partnerships (PPPs) have been mooted as a win-win model that will enable better projects to be delivered sooner, for less public money. However, there is conflicting evidence about their effectiveness. Particularly in the case of transportation infrastructure, there are many reasons to believe that private finance cannot offer significant advantages. Investment partnerships between governments and the private sector are not new. The private sector has been contracted to design, construct and maintain infrastructure in most western countries for a very long time. But in recent decades PPPs have become a preferred financing model for infrastructure projects in many Asia-Pacific countries. From a simple cost-of-capital perspective, it’s not clear why PPPs are a good idea. Using private rather than public borrowing can increase the overall cost of new infrastructure. Governments can generally borrow for infrastructure investment at lower interest rates than those faced by the private sector. The New Zealand Treasury explicitly acknowledges this in its analysis of the Transmission Gully motorway PPP. But for ideological and political reasons, public funding often seems to be off the table. In theory, by using private finance, PPPs harness the profit motive of the private sector to ensure the projects are completed efficiently. The other side of the same coin is that the private sector also carries the August/September 2015

financial risk. This frees up the government to provide the vision and leadership needed for transformational projects – drumming up public support for the disruption that’s inevitable as a new transport corridor is carved out, for example. The reality is often very different from the theory. The purported fiscal discipline of the private sector has not lived up to the expectation that only economically beneficial projects will get built. Taxpayers have still ended up shouldering significant costs when projects have gone wrong. Part of the difficulty is that there are many market distortions and indirect pricing in the transportation sector. This

after six months. With patronage failing to rise, a three week, toll-free period was implemented, which saw patronage rise to 57,000 a day, only to fall back to 27,000 when the toll was reinstated. Tolls were temporarily halved in early 2006, raising patronage to 33,000 a day. Two years after it opened, only 35,000 cars a day were using the tunnel. The Sydney Airport rail line is an example of a good project being undermined by commercial imperatives, and taxpayers being left to foot the bill. A PPP was used to reduce public costs of construction – the New South Wales government paid $700 million to construct the tunnel and line while private entity Airport Link paid $200 million to construct the stations and got the right to operate the line. Although an airport rail service is desirable for a city like Sydney, and technically it functions well, it didn’t achieve the patronage forecast by Airport Link because the private operator needed to set fares at a

“The purported fiscal discipline of the private sector has not lived up to the expectation that only economically beneficial projects will get built” means that a project that delivers significant transport and economic benefits, like additional public transport services, may not be commercially viable. On the other hand, new motorway capacity, which has very high marginal costs, won’t be commercially viable simply because it doesn’t make economic sense. Project pitfalls The Cross City tunnel in Sydney is a good example of a project that didn’t make economic sense, being built by private investors with wildly over-optimistic expectations of how many people would be willing to pay to use it. Initial uptake was expected to be 35,000 cars a day but was just 20,000. Patronage was expected to rise to 85,000 a day

price that many were unwilling to pay. In 2005, the line was carrying 14,000 passengers per day compared to a forecast of 48,000. Airport Link went into receivership blaming low patronage. The state government was bound by contract to make up shortfalls in Airport Link’s revenue below forecast levels. When the patronage failed to materialise, the government had to spend $800 million in extracting itself from those contractual obligations. I suspect governments often know that the original business cases for their PPPs don’t stack up, and that’s why they withhold key information and modelling from the public. The WestConnex motorway project has been described as the biggest transport project in

Julie Anne Genter: “The rate of high-profile PPP failures is a cause for concern” Sydney since the famous harbour bridge. After months of asking to see the WestConnex business case and being turned down, New South Wales politician Mehreen Faruqi built her own model. This showed that for the project to break even, the toll would need to be set at three times the level the government had promised. Traffic forecasts for PPP motorways have been systematically overblown. A 2012 analysis showed that in Brisbane the airport link road had seen only 39 percent of the forecast traffic and the Clem7 tunnel only 26 percent. The Eastlink Melbourne toll road had only seen 65 percent of the originally forecast traffic. Sydney’s Cross City and Lane Cove tunnel projects had only experienced 38 percent and 50 percent of forecast traffic respectively. When the business cases rest on toll revenue predictions based on vastly inflated traffic forecasts it’s no wonder these projects often fail. The Cross City tunnel has been in receivership twice in eight years. The Lane Cove tunnel was put into liquidation shortly after its completion and then sold off about $1 billion below cost. Litigation arising from the Lane Cove project ended up in the NSW Supreme Court. The court heard that traffic forecasters essentially made up traffic predictions to retrofit the project’s commercial goals, focussing only on peak periods. 39

Transmission Gully Route Map CANNONS CREEK BRIDGE

JAMES COOK INTERCHANGE

STATE HIGHWAY 58 INTERCHANGE

LINDEN

WAITANGIRUA

KENEPURU INTERCHANGE

WHITBY PORIRUA PAUATAHANUI INLET BATTLE HILL FOREST FARM PARK

WAINUI SADDLE MACKAYS CROSSING INTERCHANGE

N PAEKAKARIKI

Transmission Gully Project

Wellington Gateway Partnership

The Transmission Gully PPP requires the government to pay nothing upfront or during the five-year private sector build These Australian experiences back up a 2008 French study that found winning PPP bidders generally over-forecast traffic volumes by an average of 25 percent. Irresistible incentives PPP bidders have incentives to overestimate traffic volume and bid accordingly. Governments often prefer to bail out failing PPPs rather than re-tender, because re-tendering can be more expensive and cause long delays. Private sector participants know this and can structure their finances in ways that mean as soon as future profits are threatened by changing conditions, they can start making the case for government bail outs. Inflated traffic forecasts can play a key role in this type of dubious business planning. Even when traffic forecasts are not contentious, PPPs can lock the forecasts in as self-fulfilling prophecies. If a company has a PPP contract that relies on 50,000 vehicle movements, for example, a government can be constrained around new poli-

cies that might decrease overall vehicle movements for the sake of something like reducing carbon emissions. Some commentators suggest that PPPs can be improved by setting a guaranteed return on investment in dollar terms, rather than a period of time during which a toll can be levied. But this doesn’t fully solve the issue. Rather, it may just lead to higher tolls being charged for longer, with the effect that people continue to avoid the road. A version of this is the “availability model” being used to fund the Transmission Gully motorway project in Wellington. This road, which provides an alternative route out of New Zealand’s earthquake-prone capital city, will sit on top of a major fault line. Privately, government officials have admitted that with all the incremental improvements made to the main motorway over the past few decades, the case to build the Transmission Gully road is probably defunct. But publicly, the government refers to it as an “eagerly awaited and well supported… monu-

mental milestone”. Under the Transmission Gully PPP, the government pays nothing upfront or during the five-year private sector build. As long as the road is available for use in five years’ time, the government will begin making annual payments to the contractor, which will continue for 25 years at a total cost of $3 billion. It doesn’t matter how many people actually drive on the road. The government will presumably raise this money by some combination of borrowing, tolling the road itself, or raising taxes such as petrol taxes. The major risk – that traffic volumes won’t increase – is borne by the government. It’s a very real risk: traffic volumes have been falling along the route that Transmission Gully duplicates. The private road builders face no use-related risk. As long as they get the job done on time, they’ll get paid. Today’s government faces a low level of risk too; it may not be around when the first payment is due. It is future governments that are locked into

these PPP contracts that demand billions of dollars to be paid out at some future date. Today’s government gets the credit for turning the first sod on the project, but by the time the bills start piling up they’ll be someone else’s problem. The current model of private profits and public risk completely defeats the point of PPPs, which is to use the market to manage the risk. There are other ways to make the projects cheaper – such as using public borrowing. The rate of high-profile PPP failures is a cause for concern. When politicians or investors say PPPs are a new innovative way to get critical infrastructure built – better quality for less money – we should be very suspicious. Those investors will do very well out of a risk-free investment with guaranteed returns for 25 years – but only at taxpayers’ expense. Julie Anne Genter is a Green Party list MP based in Auckland and the party’s spokesperson for finance, transport and youth

40 August/September 2015

COMMENT >> Local Government

Delivering stronger local communities and economies Lawrence Yule President, Local Government New Zealand LGNZ’s Local Government Funding Review 10-point plan: incentivising economic growth and strong local communities is the culmination of LGNZ’s year-long review of local government funding

roviding an environment that supports local government’s ability to partner with others to efficiently achieve shared goals, and offering incentives for all parties to encourage local economic growth, are vital parts of the conversation and a key aim of the 10-point plan. We launched this plan on 21 July at our annual conference in Rotorua because local government is facing unprecedented economic and demographic change and increasing community and government expectations. To respond to this change, a broader approach is required, which involves: • increasing public understanding of local government services • seeking a strong community mandate • efficient and effective performance of services • and strong partnerships with local volunteer organisations, local businesses and central government. The plan focuses on key actions and policy decisions needed to provide greater funding flexibility for councils and describes the next steps for local government and its sector partners. We need to put ourselves and our communities in the best possible position to manage significant issues such as regional economic development, demographic shifts, climate change and rapid technological advancement. LGNZ reinforces that the review is not about increasing the tax burden nor is it about a quantum funding uplift. This is about leading a principled discussion with our key partners around more fit-for-purpose funding options. The document is a principles-based manifesto designed to inspire conversation and action about options for an effective local government funding regime. It is led by four guiding principles: • an effective partnership between local August/September 2015

and central government around shared goals and strategies, pragmatic testing of new ideas, and strong incentives for both arms of government to perform • recognition of the value of the private sector and community by recalibrating relationships with those sectors to incentivise partnerships and the achievement of shared goals • a local government which is open to innovation in service delivery, funding and financing within an environment of strong fiscal discipline • and a diverse set of funding tools for New Zealand communities to respond to the different challenges they face, with property rates as a cornerstone supplemented by revenue sources that equip local communities to meet current and future opportunities. Rates remain LGNZ emphasises that property rates should remain a cornerstone but that local government needs a wider set of funding sources at its disposal. This includes a strong incentives-based regime, to lead to better performance of both arms of government to meet the needs of communities. Incentives such as a share in value uplift arising from additional economic activity can improve outcomes for local communities. We see a strong opportunity to test these ideas through Special Economic Zones. The right incentives can create greater innovation in service provision, and provide a more diverse range of available funding tools. LGNZ is advocating for the following key proposals: • an agreed priority and action plan to advance “special zones” for growth to test new ideas and drive economic prosperity • when new centrally imposed costs are considered (and particularly where na-

Local Government tional benefit applies) a cost-benefit analysis and agreed cost sharing with central government should be mandatory • mandatory rating exemptions should be removed • the application and administration process of the rates rebate scheme should be simplified to increase uptake • better guidance is needed to assist councils to make decisions on trade-offs about whether to fund services from prices (user charges) or taxes • road-user charges, targeted levies and fuel taxes should be allowed where it is economically efficient • councils should be able to retain a share of any value uplift arising from additional economic activity related to local intervention and investment • local authorities should receive a proportion of any mineral royalties attributed to local activities • allow councils to levy specific charges and taxes on visitors where economically efficient • reconsider the decision to limit the range of community amenities funded through development contributions. LGNZ acknowledges that local government needs to play its role. Achieving excellence is not just a case of ensuring councils possess funding mechanisms that correspond appropriately to their functions. It’s important local government should be open to innovation in service delivery, funding and financing, and we should operate to the highest standards of fiscal discipline. This is a core focus of LGNZ’s recently announced Performance Uplift Programme. We need to lead New Zealand’s communities through this change, but we need strong collaboration with government and private sector partners. LGNZ anticipates a productive and constructive discussion between local and central government, business and communities, to address the proposals and to implement the solutions communities need. LGNZ’s full 10-point plan: incentivising economic growth and strong local communities is available at www.lgnz.co.nz. Lawrence Yule is President of Local Government New Zealand, which represents the interests of 78 local authorities in New Zealand 41

LOCAL GOVERNMENT

Mobilising the regions to drive economic growth Local Government New Zealand (LGNZ) President Lawrence Yule highlighted the important need to ensure a shared national approach to regional development and growth across New Zealand and the critical role transport infrastructure plays at the 2015 LGNZ conference in Rotorua

GNZ’s new transport study, Mobilising the Regions, highlights the economic and social impact of strategic transport decisions nationally and in our regions and the direct link between regional development, national prosperity, social well-being and cohesiveness. LGNZ President Lawrence Yule says that decisions affecting New Zealand should be made with full consideration of their regional impact. “Nearly 40 per cent of New Zealand’s total GDP is located in our regions. This means that if New Zealand’s regions are doing well, so is New Zealand,” says Mr Yule. “Quite simply, local, regional and national objectives should be shared and linked.” Local government, like central

government, has a huge role to play achieve strong regions throughout New Zealand. “One of LGNZ’s major strategic policy priorities is for a shared national approach to regional development and growth across New Zealand,” Mr Yule says. “This is critical to lift economic growth over the next decade. And that means investment in all our regions and all our communities.” He says the report has important implications for New Zealand’s economic outcomes and social connectivity. “The study will provide the foundation for a better understanding of the importance all modes of our transport network and the impact on regional economic development,” Mr Yule believes. “We see that an ‘all of New Zealand’ approach is needed to strengthen both our communi-

ties and our economic potential as a country.” The study’s earlier findings show: • a fit-for-purpose transport network is essential for regional economic growth - and social cohesion. A regular, reliable transport service requires good road linkages, a suitable rail network, an airline that services regional hubs, and ports that connect local communities and producers to markets in other locations. • regional transport decision-making should be linked to consistent criteria across regions and across transport modes. Different modes of transport have different policy drivers. For example, commercial decisions for air, central and local government

Local Government

policy for roads and combined commercial and government policy for ports. • these decisions should be joined-up to national and regional economic and social objectives. LGNZ says the study is critical given the recent changes in regional air travel and discussion on the future of rail, and this raises important questions about the resilience of the transport links that connect our regional populations and economies. “We need an integrated transport policy that supports economic growth and social connectivity for the people in New Zealand’s regions,” Mr Yule maintains. “Local input into national transport policy decisions is imperative to the success of our regional economies.”

Taking the pulse Economic growth and job creation are the biggest challenges for local government leaders according to a report by a leading commercial law firm

he Taking the pulse of local government in New Zealand 2015 presentation at the LGNZ conference provided an intriguing snapshot of the way mayors and chairs viewed several major issues Commissioned by Simpson Grierson and Local Government New Zealand, the report identifies what Mayors and Chairs of local authorities think are the major issues facing their communities and organisations. The report is based on a survey carried out in May/June 2015 which received responses from Mayors and Chairs of 60 rural, provincial, metropolitan and regional councils throughout New Zealand – a response rate of

nearly 80 percent. Key findings include: • investment (either external investment into a district/region, iwi investment or local business growth and investment) is seen as the top opportunity for communities • 68 percent of respondents said economic growth and job creation are the biggest challenges for Mayors and Chairs • 66 percent said funding and affordability issues are the major impediments Mayors and Chairs face for successful community outcomes. Local authority leaders were asked for their views on several key initiatives includ-

ing the Long Term Plan process, RMA reforms and local government reorganisation. The responses were mixed; the Long Term Plan process having many challenges and the RMA reforms complications while reorganisation is seen as less of an issue this year. The survey produced 10 key findings: • investment provides the greatest opportunities • economic growth and jobs are the greatest challenges • funding and affordability issues are still major • impediments • the consultation document has improved

• engagement with communities • opinion is divided on the RMA decision-making • framework • there is strong support for restricting third party • participation • there is conditional support for central government • direction • there is strong support for rating regime reform • and increasing the mix of funding options • reorganisation is considered less of an issue • the NZ Transport Agency is still making the most • effective central government contribution.

42 August/September 2015

LOCAL GOVERNMENT

Change necessary for good growth Local government must face the need for change the minister responsible told the recent Local Government New Zealand conference in Rotorua

ocal government developed in a pretty ad-hoc fashion without any strategic thinking about what it should do, Local Government Minister Paula Bennett claims. The proof, Ms Bennett says, is that by 1912 there was one elected representative for every 15 adult men in the country, and we had 3,877 local authorities serving a population of about 1 million people. Councils owned and operated businesses ranging from abattoirs to zoos, one built a hydroelectric dam, and another owned a fishing fleet. “We need to call time on what has been a relentless focus on how many mayors we have, or for bureaucrats to decide what your local democracy should look like,” Ms Bennett insists. “Now, more than ever, New Zealanders expect you to rededicate yourselves to focusing on the issues that matter to your people, your communities.” This means more jobs, sustained growth, and sensible spending on reliable infrastructure. “I want local government to do more work in this space,” she says. Ms Bennett admits that there are areas where it makes sense for local authorities to work together, but now is the time to take a mature look at the structure that is needed to lock in change. “I imagine there are some who

think that because the commission has decided to take large reorganisation off the table for greater Wellington and Northland, and because I have clearly stated I will not legislate for large amalgamation that you can all continue as you have well you can’t.” It is not in the best interests of the people of New Zealand, Ms Bennett believes. “We simply have to look at growth across a region, and your current struc-

unwanted change. “But you know that our regions are not as cohesive as they need to be to support our challenges and our future growth.” The government is aware of the cost pressures many councils face, and the Funding Review document shows local government is thinking about different mechanisms to manage growth. “Structural change should be one of them.” First and foremost local gov-

“Our regions are not as cohesive as they need to be to support our challenges and our future growth: ture does not strategically or cohesively support that,” she maintains. The Local Government Commission is therefore going to work alongside communities to ensure that the country have the right structure, legally, financially, and with the right accountabilities to ensure sustainable growth in its towns and cities. The commission will be “working up various structure options’ for each region to look at and decide what works best for them, and then where necessary the government will legislate to either set up a new council-controlled organisation across a region – or even to take something away. Ms Bennett stresses that she has “zero interest” in imposing

ernment needs to demonstrate that it can live within its means. “Ratepayers are not willing to pay more for services while they see waste.” Year ending March 2015, local government wages and salaries increased 2.3 per cent, the highest since 2012, and significantly above CPI, the central government, and private sectors. And the recently released LGNZ Survey identified that local government was rated poorly on trust to make good spending decisions, value for rate dollars spent, and managing finances. “I expect you to look closely at your costs and have free and frank conversations about what is driving your expenditure and whether that discretionary spend is assisting your council

Local Government

Local Government Minister Paula Bennett: “Ratepayers are not willing to pay more for services while they see waste” to achieve its strategic goal,” Ms Bennett advises. “This is exactly what the government has been doing, with our Better Public Service targets driving a more integrated delivery of services in a way that gets results and saves taxpayers’ money.” Recent discussions at the Central-Local Government Forum produced a strong set of shared priorities that will underpin this work over the next few years. These are: • creating strong regional economies • resilient local infrastructure • ensuring strong resilient communities across New Zealand. “Each are focused enough to stand on their own, but together, they’re a bold statement of our collective commitment to seeing all corners of the country thrive,” Ms Bennett concludes.

new zealand council for infrastructure development Advancing best practice in the development of world class infrastructure for the benefit of all New Zealanders. www.nzcid.org.nz August/September 2015

LOCAL GOVERNMENT

Ten steps to success Local Government New Zealand’s Local Government Funding Review 10-point plan: incentivising economic growth and strong local communities was launched at the 2015 LGNZ conference in Rotorua

he manifesto is the culmination of Local Government New Zealand’s (LGNZ) year-long review of local government funding and follows its discussion paper released in February 2015. It focuses on key actions and policy decisions needed to provide greater funding flexibility for councils and describes the next steps for local government and its sector partners. The manifesto is led by four guiding principles: • an effective partnership between local and central government around shared goals and strategies, pragmatic testing of new ideas, and strong incentives for both arms of government to perform • recognition of the value of the private sector and community by recalibrating relationships with those sectors to incentivise partnerships and the achievement of shared goals • a local government which is open to innovation in service delivery, funding and financing; (within a environment of strong fiscal discipline) • and a diverse set of funding tools for New Zealand communities to respond to the different challenges they face, with property rates as a cornerstone supplemented by revenue sources that equip local communities to meet current and future opportunities. The principles-based document is designed to stimulate conversation and action about options for an effective local government funding regime. LGNZ President Lawrence Yule says providing an environment that supports local government’s ability to partner with others to efficiently achieve shared goals, and the incentives

for all parties to encourage local economic growth, are vital parts of the conversation and a key aim of the 10-point plan. “We are launching this plan because local government is facing unprecedented economic and demographic change and increasing community and government expectations,” says Mr Yule. “We need to put ourselves and our communities in the best possible position to manage significant issues such as regional economic development, demographic shifts, climate change and rapid technological advancement. “We need to lead New Zealand’s communities through this change, but we need strong collaboration with government and private sector partners.” LGNZ reinforced that the review is not about increasing the tax burden nor is it about a quantum funding uplift. “This is about leading a principled discussion with our key partners around more fit-for-purpose funding options,” says Mr Yule. Property rates should remain a cornerstone but local government needs a wider set of funding sources at its disposal, including a strong incentives-based regime to lead to better performance of both arms of government to meet the needs of communities. “Incentives such as a share in value uplift arising from additional economic activity can improve outcomes for local communities,” Mr Yule believes. “We see a strong opportunity to test these ideas through Special Economic Zones. “The right incentives can create greater innovation in service provision, and provide a more diverse range of available funding tools,” says Mr Yule. LGNZ acknowledges that local government needs to play

its role. “It’s important local government should be open to innovation in service delivery, funding and financing, and we should operate to the highest standards of fiscal discipline,” Mr Yule maintains. “This is a core focus of LGNZ’s recently announced Performance Uplift Programme.” LGNZ anticipates a productive and constructive discussion between local and central government, business and communities, to address the proposals and to implement the solutions communities need, he adds. The 10 proposals are: • an agreed priority and action plan to advance “special zones” for growth to test new ideas and drive economic prosperity • when new centrally imposed costs are considered (and particularly where national benefit applies) a cost benefit analysis and agreed cost sharing with central government should be mandatory • mandatory rating exemptions

Local Government should be removed • the application and administration process of the rates rebate scheme should be simplified to increase uptake • better guidance is needed to assist councils make decisions on trade-offs about whether to fund services from prices (user charges) or taxes • road user charges, targeted levies and fuel taxes should be allowed where it is economically efficient • councils should be able to retain a share of any value uplift arising from additional economic activity related to local intervention and investment • local authorities should receive a proportion of any mineral royalties attributed to local activities • allow councils to levy specific charges and taxes on visitors where economically efficient • reconsider the decision to limit the range of community amenities funded through development contributions.

Former Lord Mayor shares insights

ormer Lord Mayor of Adelaide Stephen Yarwood proved a stirring opening speaker at Local Government New Zealand (LGNZ) annual conference in Rotorua, exhorting delegates to generate stronger performance and create better outcomes for cities, towns and regions. “As Lord Mayor of Adelaide my vision was to make a shift from a ‘big government – small community’ to a ‘small government – big community,’ says Mr Yarwood. “It is important to motivate communities to create great things and great places.”

44 August/September 2015

COMMENT >> Management

The importance of being assertive Moira Howson Senior Consultant, PeopleCentric Why do so many behavioural assessments include a measure on effective communication?

ore specifically, why do they address the ability and willingness of people to communicate assertively with others? The reason is that organisations that enable and encourage people to communicate assertively have stronger safety cultures than others. If people can confidently state their views as in “I am not comfortable doing it that way, there is a safer way of doing it” then it is clear that less incidents may occur. Why assertive communication is important The importance of assertiveness isn’t new. An aviation disaster in the late 1970s focused attention on the inability of the flight crew to effectively communicate with their captain when two Boeing 747s from Pan Am and KLM collided on take-off at Tenerife airport in 1979. Amongst the various causes for the crash was one that could have clearly led to a different outcome; on the Pan Am flight, the first officer’s inability to assertively tell the captain to abort the take-off ultimately led to the death of 583 people. As a result, training with particular emphasis on the merits of assertiveness training for cockpit crew members was recommended. The need for assertiveness skills has also long been recognised in medicine: for nurses, the ability to deliver an appropriately assertive response to a potentially harmful situation is a critical, and potentially life-saving, skill. There are evident issues of hierarchy at play in the aviation and medical industries, but the ability to communicate assertively is important across industries and power structures. In New Zealand it is often not the fear of asserting your views against the boss’s, but a dislike of being seen to be different, a “tall poppy”, “too big for your boots”, or “rocking the boat”. What assertiveness is and isn’t Assertiveness is not rocking the boat! It is August/September 2015

Positive “pushback” Doing it well can be thought of as “positive pushback” – the ability to deliver an appropriately assertive response to a potentially negative or harmful situation. A positive pushback is executed by looking someone straight in the eye, and saying with an even, non-stressed tone what is wanted or needed. If you want to be really assertive include the word “I,” such as “I really think we should stop and review our approach now. ...” Assertiveness training

Assertiveness training teaches people the difference between assertive, aggressive and passive communication. It helps people identify their own barriers to assertiveness and apply techniques to remove them. By increasing awareness of the reasons why people avoid communicating assertively they can recognise and change them. Some people may have low self-esteem and believe they are not worthy of having their needs met. They are passive. Some people find it so difficult express their wants it comes “Assertive people state rushing out in anger, or they are so self important they believe their needs should be their opinions while still regardless. They are aggressive. being respectful of others, met Training increases the awareness of these and aggressive people emotions and how to respond to them. It addresses the language of assertiveness, attack or ignore others’ strong “I” statements and appropriopinions in favour of their using ate non-threatening non-verbal language. own” This increases the ability to tailor your comof self and acknowledging that you deserve munication style to the preferred one of to get what you want and operate in a safe others. Scripting statements and role-playmanner in a safe environment. ing enable participants to practice the art People who don’t state their views or of assertive communications. stand up for themselves are passive. It may be that they want to be liked and thought The benefits of as ‘nice’ or ‘easy to get along with’, so Like most training, there are ancillary they often keep their opinions to them- benefits beyond its targeted objective. For selves – especially if they are shy or those example, if employees are comfortable asopinions conflict with others. sertively communicating their needs, conMany people are concerned that if they flict in the workplace will be more quickly assert themselves others will think of their surfaced and resolved. behaviour as aggressive, but there is a People will be able to state their needs difference between being assertive and confidently rather than passively or aggresaggressive. Assertive people state their sively, or even less desirable, a combinaopinions while still being respectful of oth- tion of both. Imagine a workplace where ers, and aggressive people attack or ignore everyone could express their needs calmly others’ opinions in favour of their own. and confidently, and people heard them. Aggression is based on winning. When It would make not only for a safe place to you are aggressive you take what you want work, but also a healthy one! regardless, and you don’t usually ask. Assertive people are forthright about their Moira Howson is a Senior Consultant wants and needs while still considering the at PeopleCentric, a team of industrial rights, needs and wants of others. and organisational psychologists who Plus, contrary to popular belief, people work with a variety of organisations can communicate their concerns and needs to maximise employee potential and without permanently damaging important promote the value of psychology in working relationships if it is done well. driving business performance verbal and non-verbal behaviours that enable individuals to maintain respect for self and others, satisfy their needs and defend their rights in a manner that does not dominate, manipulate, abuse or impose. It is being able to stand up for yourself – even in the most difficult situations – making sure your opinions and feelings are considered and not letting people always get their way. It requires a healthy sense

LAST WORD >> Local government

Come back stamp duty – all is forgiven

Evans Young, Director Hopper Developments It’s been interesting sitting on the sidelines watching all the toing and froing as councils around the country have undertaken their long-term plan hearings, capital works and funding deliberations – all leading to the annual striking of rates

gain Auckland has managed to steal the limelight with its poorly managed late introduction of a fixed charge transport levy to kick-start Mayor Len’s inner city train set. That the public response was predictable is a given, that the political reaction was farcical is becoming the accepted norm. The public posturing and finger-pointing was embarrassing to observe, with no winners and as usual the poor ratepayers were the losers. 2015 was the perfect storm for council. Auckland produced QV revaluations throughout the district, the managed transition from individual legacy council rating regimes to a single city-wide rating policy ended and equalisation of the previously inequitable skewing of the commercial/residential funding ratio was introduced. Add in the rampant Auckland property market and you got wild extremes in property values depending on location, significant adjustments (up and down) to average rate movements, depending on which legacy council area a property is located, and an extraordinary adjustment (up) to the residential percentage of rate take. It’s no wonder commentators, critics and general naysayers had a field day. But to add an extra fixed charge at the last minute (exacerbated by quoting it would be no more than $99/residential rate account, but omitting to point out it was GST exclusive and the final impact would be +$114), and then have a very public mini revolt in the council chamber (where everyone knew the eventual outcome, even if the participants pontificated to anyone who would quote them on how outraged and offended they were that things had deteriorated to such an extent) was made even more farcical by council spending some $90K on telemarketers to phone and advise those most affected ratepayers of the impending surprise due in the mail anytime soon.

I can just imagine the conversation:

This lack of judgement and performance must surely cause concern at the prospect and acceptance of more amalgamations nationwide. Rates relative

Hello?

Good evening sir, am I speaking to the bill-payer in the household?

This is a courtesy call to let you know your council cares, and would like you to know your 2015-16 rates are increasing by over $1,000 from last year. What, you interrupted my evening to tell me that?!

Yes sir, your council cares and wants you to be informed. Then why have my rates increased by so much?? I can’t say sir, I’m not privy to such information. Enjoy the rest of your evening, good bye.

An interesting comparison was made after the event as to the comparable rates paid by similarly valued properties in Auckland, Wellington and Christchurch. With an approximate $750K-valued property, Auckland is significantly lower in rates paid – and it doesn’t allow that in Wellington and Christchurch there are additional regional council rates to factor in. While this is not necessarily a valid comparison given the wide-ranging average and median property values in those centres, it does show that in general Auckland appears to getting (demanding??) more attention than it deserves and the rest of the country is suffering as a result. Now we have the Phil Twyford/Andrew Little Tweedle Dee/Tweedle Dum act, taking 1 and 1 and getting 11 to prove the old adage ‘there’s lies, damn lies and statistics’ in accounting for offshore purchasers of a particular ethnicity driving the Auckland property boom. Do we really need all this c#*p?? I don’t. I’m glad I sold up two years ago and moved well out of the reach of Auckland. I might not agree with all the decisions my elected politicians make on my behalf at my new abode, but I can disagree with them in private without the rest of New Zealand wading in and passing ill-informed comment about topics which don’t impact on much less concern them and giving Mayor Len and his assorted sideshow of clowns the semblance of relevance in the affairs of New Zealand Inc. If we really want to address Auckland’s housing crisis, and associated funding conundrum, why can’t we simply re-introduce stamp duty on property sales, with all rev-

46 August/September 2015

“If we really want to address Auckland’s housing crisis, and associated funding conundrum, why can’t we simply re-introduce stamp duty on property sales, with all revenues going to the area in which the sale takes place?” enues going to the area in which the sale takes place? This would certainly silence those local politicians who wring their hands at the thought of unbridled development, growth and rapidly escalating property values if they were to siphon off two or three percent of the sale price. Central government could set differing

August/September 2015

levels or exemptions for first-home buyers, principal residences and investment, commercial and industrial properties, so as to target particular classes of purchaser. In all it seems to be a simple way to address a complex problem in a uniform, consistent manner across the country, rather than looking at isolated temporary occurrences and responding in a kneejerk, populist manner.

Evans Young is Business Development Director for Hopper Developments and INFRA-SOL. Tel: 09 477 0015 Email: evans@hoppers.co.nz www.hoppers.co.nz

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