INFRA P&B October–December 2016 by Media Solutions

The award-winning Isaac Theatre restoration project WATER WOES The Havelock North water crisis

CLEANER, GREENER ENERGY? An alternative look at future fuel

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CROWNING GLORY

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NOVEMBER/DECEMBER OCTOBER–DECEMBER 2016 • VOLUME 6 NO 5

Time to replace the RMA and planning system

OCTOBER–DECEMBER 2016

is described by the Productivity Commission as complex, unresponsive, procedurally driven, philosophically challenged, excessively restrictive and creating excess cost. The result has been a lack of developable land, poor infrastructure provision, NIMBYism and, ultimately, a lack of housing supply leading to “extreme” housing

tunnel resulted in “no significant reduction in effects.”

Pressures persist The critical East-West Link, also in Auckland, is succumbing to the same sort of pressures. Carrying effects for a coastal environment, the East-West Link is especially vulnerable to consent failure, something which is top of mind for the New Zealand Transport Agency following the cancellation of its application for the Basin Reserve flyover in Wellington. The agency has consequently spent half a decade revising and re-revising this muchneeded project in order to meet contrasting objectives. The 5.5 km connection between SH1 and SH20 is now costed at $1.5 billion and is still being fine-tuned for the EPA process. It’s not just infrastructure which has struggled with the RMA and the wider disintegrated planning system (comprised of the RMA and other planning acts, the Land Transport Management Act and Local Government Act). Urban development is equally frustrated by a system which

“…the RMA is not successfully protecting the environment at the same time as it is not supporting social and economic development…” unaffordability. Auckland’s house price-to-income ratio has just exceeded a multiple of ten, having sat at a multiple of less than three when the RMA was introduced. Five years after the Productivity Commission was first asked to investigate house price increases

and found lack of supply to be the key issue, and a year after their second report placed a stressed and constrained planning system at the core, Auckland is building less than half the number of houses required each year.

Construction vs total economy multifactor productivity Clearly, the RMA is not working for infrastructure or for urban areas more generally. One might imagine then that its other primary objective, to preserve the environment, is being more than satisfactorily achieved. Yet even this most fundamental of priorities has been substantively let down by the RMA. In its recent Evaluating the Environmental Outcomes of the RMA report for the New Zealand Council for Infrastructure Development, Employers and Manufacturers Association and Property Council of New Zealand, the Environmental Defence Society (EDS) evaluated the performance of the RMA as environmental protection statute. It found that the environmental outcomes of the RMA have not

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For decades, major infrastructure projects delivering essential services for the economy and communities have been held up in consenting processes and expanded or curtailed to meet regulatory, not service, requirements. Before the establishment of the Environmental Protection Authority and the streamlined call-in process in 2011, it was virtually impossible to consent a major infrastructure project within five years. Nine years were needed to sign off Auckland’s critical Northern Gateway motorway project, for example, and an incredible six years for Contact Energy just to re-consent three nationally significant hydro dams. Auckland’s transformational Waterview Connection, meanwhile, struggled to get consent at all. Transport authorities battled for a decade and a half before the 2011 reforms. But although streamlined processes have since helped with the slow speed of project consenting, they have had little impact on consent costs. To be clear, the real cost of consenting is not the charge incurred from meeting every step of the RMA’s effects-based, litigation-heavy procedures, which even under the streamlined process can be imposing. The real cost is the amendments required to projects to avoid protracted and risky legal challenges. Going back to the Northern Gateway, its original cost blew out from $82 million to $340 million in the course of its nine-year consent ordeal. One sizeable chunk of that added cost was a $65 million enhancement just to avoid an objection from a single local interest group. Another project consented pre-2011, Auckland’s Victoria Park Tunnel, duplicated a viaduct which had been in place for half a century. Opposition from local residents necessitated a tunnel, again doubling the cost of the then $165 million project, despite a review later determining that the

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FIRST WORD

It won’t come as much of a surprise to anyone who works in the infrastructure sector to hear that the Resource Management Act 1991 (RMA) and its litany of district, city and regional plans and policy statements can be costly, slow and inefficient to deal with

met expectations. Of almost 50 RMA practitioners across the public and private sectors surveyed through the study, just one felt that the RMA had achieved its environmental goals. Four out of five of the experts questioned said the quality of the environment had declined, including one third who thought it had declined “significantly”.

EDS conclude that RMA implementation has been weak and institutional performance variable, if not poor. The multiplicity of reforms applied over the twoand-a-half-decade life of the RMA have sometimes proceeded with limited evidential support and reduced the overall coherence of the system. The Productivity Commission has also found the RMA to have had a disappointing impact on the environment. Performance against some air and freshwater quality measures has improved, but fallen against others. Carbon emissions, nitrate infusion into freshwater systems and other cumulative effects have not been well-managed by the RMA. The picture which emerges is that the RMA is not successfully protecting the environment at the same time as it is not supporting social and economic development. The effects-based approach central to the RMA has not worked and has undermined urban activities without protecting critical ecosystems. The act is, in short, a failure. The environmental protection component of the RMA should be separated from its planning component. This would give direct weight to environmental protection, facilitate clear environmental bottom lines and avoid the ‘overall balance’ approach which has characterised implementation. A streamlined and dedicated planning act could then focus on aligning the plans of central and local government, urban planning and transport, infrastructure funding and delivery, governance and investment. That’s what New Zealand so badly needs, but it can only happen with a substantive review of each of the three key planning acts as well as the funding and governance arrangements they empower. Hamish Glenn is Senior Policy Advisor at the New Zealand Council for Infrastructure Development (NZCID)

Mobile platforms trump scaffolding SCIRT’s Fletcher delivery team devised an innovative solution to the risk of flooding on the complex heritage project of repairing and strengthening the 130-year-old Gloucester Street bridge. Initially, traditional scaffolding with a boarded and sealed deck was to be used for access and environmental protection under the bridge while the team went about its work. Protecting the environment was important as the paint on the original cast iron bridge girders contained lead which had to be removed before repainting. Early in the construction a risk assessment identified an increased chance of the Avon flooding from debris carried in the river flow which could become trapped around the legs of the scaffolding deck. This could restrict the water flow and lead to flooding of public areas around the bridge.

Work on wheels The team decided to substitute most of the scaffolding with four mobile work platforms running on rails placed on top of the minimal remaining scaffolding. The mobile platforms did not require supporting legs into the river and so allowed the river to flow freely underneath. The mobile platforms span from one side of the river to the other and move on the rails back and forward across the width of the bridge. They have built-in kick boards and safety rails around the edges and can be efficiently and safely removed in about 20 minutes if there is a flood risk. The team won the Bill Perry Safety Award in July for their approach to working in this challenging situation.

INNOVATIONS

Poor performance

MOVABLE MAGIC: Site Manager Scott Brown inspects the mobile platform

Importantly, the mobile platforms have been designed to collect any environmental contamination and prevent it from entering the river. For the removal of the lead paint and repainting of the cast iron girders, the bridge was wrapped in plastic which prevented air dispersion of the lead, kept the area warm and moisture out. The platforms move freely under the bridge and within this “tent”. The debris left by the garnet blasting of the girders was removed by vacuum suction and manual sweeping.

New hidden steel beams take the load Originally built around 1886 and extended in 1936, the heritage bridge is being strengthened to take heavy vehicles to support the redevelopment of the central city. To increase the bridge’s carrying capacity, provide resilience in an earthquake and protect the heritage fabric, SCIRT has removed the original deck, is installing eight new steel beams alongside the quite fragile cast iron girders and will install a new precast concrete deck. The steel beams, which will be the new support structure, will not be visible. They will be hidden by the existing structure and new bridge deck. The old cast iron structure, essential to the heritage character, will be purely decorative. “The bridge will look the same but it is in no way the same”, says SCIRT designer Steve Procter. “Most importantly we want to keep the heritage character of the bridge.” SCIRT is now more than halfway through the project, and is scheduled to finish in December this year.

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OCTOBER–DECEMBER 2016

CONTENTS

Corrosion Management pg16

Cover Story

Construction

Events

Standing ovation for a Issac theatre renovation after Christchurch earthquakes 33

Mobile platforms trump scaffolding 3

Auckland mobility dominates Building Nations 8

FIRST WORD Time to replace the RMA – Hamish Glenn, Infrastructure NZ 2 RMA no longer fit for purpose for property and infrastructure – Connal Townsend, Property Council 32

Sales Manager Angie Duberly 021 222 8223 angie@infrastructurebuild.com

OCTOBER–DECEMBER 2016

Australasian Fleet Safety Awards 10

Energy

Cities

Editor Geoff Picken 021 2 507 559 geoff@infrastructurebuild.com

Iplex pipelines in heavy traffic areas 15

Associate Editor Steve Best 027 510 0241 Art Director Lewis Hurst lewis@hcreative.co.nz 021 14 66 404 Web development Neo Chen neosync@icloud.com INFRASTRUCTUREBUILD.COM

Cleaner, cheaper smarter future – Gareth Hughes Green Party

Oil and gas Block Offers underway

Environment

Life memberships at Local Government Conference in Dunedin – Leigh Auton, Commissioner 43

Health & Safety Pro-active safety for lone workers

Corrosion management an economic and physical threat 16

Managing partner Phil Pilbrow 027 564 7778, 09 489 8663 phil@infrastructurebuild.com

Printed by Crucial Colour 24 Fairfax Avenue, Penrose, Auckland +64 9 589 1550

Publisher Mike Bishara 027 564 7779 mike@infrastructurebuild.com

Published by Media Solutions Ltd 3c, 12 Tamariki Ave, Orewa 0931 PO Box 503, Whangaparoa 0943 09 444 5140, 09 489 8663

Subscriptions Digital editions free to qualified readers. Annual subscription print edition $39 Overseas rates – see online www.infrastructurebuild.com www.propertyandbuild.com

CONTENTS

COVER STORY: Isaac Theatre pg33

Management

Property

Water

Category management the procurement buzzword

Z finds the right location for bio diesel production – PFI 29

Acceptable risks for public water supply – John Pfahlert , Water NZ 20

Jobs the number one stressor in employees’ lives

World’s largest flexible workspace provider expands in NZ – Regus 30

Drinking water quality a shared responsibility – Malcolm Alexander, LGNZ 21

Partnerships Housing supply chain needs alignment to progress smoothly – Ross Pennington 38

The rise of tech precincts, clusters, innovation hubs – JLL 40

Security

Historic lessons not learned in Havelock North – Hugh Ritchie, Irrigation NZ

Challenges for infrastructure insurers – Karl Deutschle , PWC 24

Hastings Council questions Hugh Ritchie motives

Supporters AkzoNobel ��17

Iplex ��15

Plan A ��23

Suzuki ��11

Chapman Tripp ��27

NZ Red Cross ��44

Quest ��13

Telogis ��10

Get Home Safe �� 9

People Centric ��30

Regus �� 30-31

Thrifty Car Rental ��11

Infrastructure NZ �� 8

PFI ��29

Southeys ��14

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OCTOBER–DECEMBER 2016

ENERGY

BIG PICTURE: New Zealand could be a leader in clean energy and empowering distributed generation sources, pioneering smart solutions in electricity demand and storage, Green Party Energy and Resources spokesperson Gareth Hughes believes

A cleaner, cheaper and smarter future? The government may have just released its latest oil and gas block offer but Gareth Hughes has a totally different vision for New Zealand’ Energy drives our economy and powers our homes. For the sector, it is a time of tremendous change with new technologies like electric vehicles, solar, and batteries all emerging. We also face climate change, the greatest environmental challenge of our time, and an urgent need to reduce greenhouse gas emissions. Something everyone is interested in is electricity bills. New Zealand has seen the fifth highest increases in domestic bills in the developed world since the Bradford reforms in the 1990s. Some 25 per cent of Kiwis are estimated to be in energy poverty. For some consumers, particularly in Auckland and Northland, their bills are set to rise again because of the controversial Transmission Pricing Methodology (TPM) changes that relate to how we pay for the grid. A proven way to help reduce 6

OCTOBER–DECEMBER 2016

household power bills is to support families to use electricity more efficiently. With Labour, the Green Party helped establish the Energy Efficiency and Conservation Authority. In the first two terms of the current National government, we worked to insulate 235,000 homes. In government, we would substantially increase insulation investment, which helps consumers and benefits health and well-being. As a country we are rightfully proud that around 80 per cent of our electricity generation is renewable, but what’s often forgotten is that this is a lower percentage than it was in 1980, and our total energy usage is only 40 per cent renewable. Perversely, the Huntly power station recommitted to burning coal this year and the latest electricity generation resource consent application is for Nova

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“As a country we are rightfully proud that around 80 per cent of our electricity generation is renewable, but what’s often forgotten is that this is a lower percentage than it was in 1980” Energy’s 360 MW gas-burning power plant in south Waikato. Some of that gas will likely be from fracking, and burning it will contribute to climate change. It’s estimated to release between 425,000 tonnes of carbon dioxide a year, if it runs at the same level as a similar existing plant in Stratford. To give a sense of the size, it would take 16,989

hectares of new forest planted to offset that over the 20-year life of the plant.

Tempting target The Green Party believes we can and must increase the current 90 per cent renewable generation target to 100 per cent in average hydrological years. We have a wealth of solutions available to meet this ambitious target. There are almost 4000 MW of consented renewable projects that could be built tomorrow, for example the Castle Hill wind farm. Our Energy Efficiency and Conservation Authority (EECA) estimates we could save 20 per cent of the $18 billion New Zealanders spend on electricity every year. With smarter pricing and demand-side initiatives to reduce consumption at constrained times, we could avoid the need for fossil fuel generation. Likewise, we have a tremendous opportunity to reduce pollution by electrifying our transport fleet. The Green Party has a plan to reduce the cost of purchasing an electric vehicle (EV), which includes dropping the fringe benefit tax on business fleet purchases of EVs. Because most new cars are bought by businesses and then sold to families after three or four years, incentivising businesses to buy EVs would create a super-

charged second-hand market in a few years’ time. If we can get the clean economy settings right, we could be leaders in exporting solutions internationally. Globally, more money now is invested in clean energy than fossil fuels for electricity. According to the International Energy Agency, the world’s growing need for energy will require more than $48 trillion in investment over the period to 2035. My vision for New Zealand is to be a leader in the clean energy space, exporting services, software, and intellectual property. International data shows three to four times more jobs are created in clean energy and efficiency than fossil fuels, so we should be focusing on this area of strength to help keep Kiwis in work. Despite all the exciting global innovations, we aren’t on track to meet our climate goals or renewables target and consumer energy prices continue to rise, especially the lines charges. I believe what is lacking is strategic direction and effective policies around renewables, energy poverty, and new technologies like solar, batteries, and electric vehicles.

Tame talk I characterise the current Energy

Minister Simon Bridges as the energy minister who has talked the most and delivered the least. He announced a target to increase EV sales that was actually less than the Ministry of Transport’s business-as-usual predictions. And in fact, he announced this on eight separate occasions. Bridges has continued the tens of millions of dollars in subsidies and tax breaks to the oil industry. And while previous revenue ministers have been able to quantify the subsidies – $36 million in 2012 – now the government says it has lost count. He sat on his hands when Genesis reversed its decision to stop burning coal at Huntly. He allowed the electricity industry to discourage solar and bring in new unfair, arbitrary, and discriminatory solar charges. He let the Electricity Authority run amok with its TPM proposals, which will cost some households hundreds of dollars while the Tiwai Point smelter saves $20 million and can apply for further discounts. And he’s ignoring proposed distributed generation changes that put much of our current small-scale renewable generation at risk. Bridges has run down the successful insulation programme

to its lowest level in years, despite the fact 15 children die every year and there are 42,000 annual child hospitalisations because of illnesses from cold, damp, mouldy housing. Bridges recently announced in Block Offer 2017 a proposal to open more than 500,000 square kilometres to onshore and offshore drilling and mining – that’s an area bigger than Spain. It’s fair to say the government has been a big supporter of oil and gas exploration and production. I contend that strategy has been a failure, with oil majors leaving New Zealand, no exploration rigs presently in New Zealand, and royalty revenue down significantly. Yet our current government seems intent on encouraging investment in yesterday’s fuels.

Climate controls Importantly from a climate perspective, scientists warn we can’t afford to burn over 70 per cent of proven oil reserves if we want to avoid a two-degree temperature rise, let alone try to find more we can’t afford to burn deep off our coasts.

PHASED OUT: the Green Party wouldn’t allow any new drilling in deep water if it became government

The Green Party would refocus current subsidies and tax breaks towards clean energy and would work with the oil industry and communities to develop a transition plan away from oil and gas over time. It’s a common misconception that the Green Party wants to close down all coal mines and oil fields. That’s not the case. Our policy is not to open any new coal mines and let the current mines run until they wind up naturally. And we wouldn’t allow any new oil drilling in deep water, but we know it’s unrealistic to suddenly turn off the oil tap completely until alternatives are in place. The world is turning to renewables, distributed generation, smart buildings and grids, and significantly supporting EVs. New Zealand, on the other hand, is recommitting to coal, looking at burning more gas, proposing negative regulatory changes to distributed generation, rolling out ‘dumb’ smart meters according to the Parliamentary Commissioner for the Environment, placing new charges on solar, developing ineffective EV policies, and very possibly de-electrifying our main trunk rail line. New Zealand could be a leader in clean energy and empowering distributed generation sources, we could be pioneering smart solutions in electricity demand and storage and selling the ideas, and we could electrify our transport fleet, reducing carbon and saving commuters money. The Green Party’s policies are very much rooted in international best practise and follow global trends. Our positive vision is for growing jobs and exports, delivering cleaner, cheaper, smarter energy for New Zealand. Gareth Hughes is the Green Party spokesperson for Energy and Resources

Oil and gas block offer gathers steam The Block Offer 2017 process for awarding oil and gas exploration permits has begun with consultation with iwi and local authorities in the areas being proposed for onshore and offshore exploration. “Feedback from iwi and local authorities ensures that any areas of sensitivity are identified and carefully considered before the tender round is finalised,” says Energy

and Resources Minister Simon Bridges. Consultation will take place on four proposed offshore areas, one proposed offshore/onshore area, and two proposed onshore areas, covering a total area of around 508,691 square kilometres. The exploration areas include the Taranaki, Southland, Northland-Reinga, Pegasus and East Coast North Island and Canterbury-

Great South Basins. The consultation period for Block Offer 2017 runs until 18 November 2016, with the final tender area due to be announced in March next year. Schedule 4 areas (including national parks and marine reserves) and World Heritage sites are excluded from the Block Offer process.

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OCTOBER–DECEMBER 2016

ENERGY

POSITIVE CHARGE: electric buses would become a common sight on New Zealand streets if a clean energy policy was implemented

Autonomous vehicles sooner than you think

BUILDING NATIONS

There is a sea change ahead in how we use our roads whether we like it or not. A sharing boost and road pricing are the first move towards the political acceptance and introduction of autonomous vehicles to save lives and solve congestion The Infrastructure New Zealand –INZ (formerly NZ Council for Infrastructure Development) Building Nations Symposium in late October is the key gathering of Who’s Who in infrastructure. The speakers’ line-up this year attracted the usual legions of senior politicians and civil servants. Their contributions were overshadowed by the near-term practical solutions to Auckland’s transport and mobility issues by those a lot nearer the coal face. And from innovative presentations from Dave Fergusson and Jose Viegas. Fergusson is president of Nuro and was previously principal engineer for Google’s Self-Driving cars which have clocked up more than 3 million kilometres of autonomous operation with only a minor scrape to show for it. “Within two years, we will be seeing real tests in cities, probably the US first but Singapore, China and Sweden are also interested. Not private vehicles but more Uber style taxis first.” Viegas is the Secretary General of the International Transport Forum, OECD, and gave details of tests and research into solving global transport issues, which matched Auckland woes. INZ chief executive Stephen Selwood wanted the talking to

end and pushed for immediate trialling of some of the road pricing options on offer. ANZ bank’s John Vetter introduced opening speaker Minister of Transport Simon Bridges and set the scene for the presentations which were to follow. He said that while many observers would like Auckland to “get over itself” the city did provide about a third of the country’s GDP and basically Auckland’s problems were New Zealand’s problems. Speaker after speaker had fulsome praise for the Auckland Transport Alignment Project - a joint effort involving Auckland Council, the Ministry of Transport, Auckland Transport, the NZ Transport Agency, the Treasury and the State Services Commission. The project identified a “preferred” approach for developing Auckland’s transport system over the next 30 years and laid an acceptable foundation to heal the battle wounds of central Government and the Auckland Council and allow the internecine dispute to finally be laid to rest. Bridges said the ATAP report showed that “we need to be a lot smarter – we can’t build our way out of the issues” and he confirmed that “the government was open to new funding options.” The life-saving aspects of

peakers Jose Veigas and Dave Fergusson with WSP Parsons Brinckerhoff manager S Sustainable Transportation Lauren Issac. Regulatory control and political acceptance are major hurdles. Google went for new technology as being easier than trying to convince the government to cooperate and get involved in AVs

Speakers lineup Commercial

Political, Civil, Acadaemia

Auckland Airport Adrian Littlewood Aurecon Will Hackney, Chris Choa Chorus Mark Ratcliffe Datacom Greg Davidson, Vernon Kay Internet NZ Andrew Cushen Kiwirail Peter Reidy Land Information, Andrea MacDonald Nuro, Dave Fergusson NEC Tim Packer Ports of Auckland Tony Gibson Transpower Alison Andrew, TUANZ, Craig Young WSP Lauren Issac, Henry Okraglik Vector Simon McKenzie

ATAP Barry Mein AA Barry Irvine British High Commission Jonathan Sinclair Climate-Kic Ian Short * INZ Stephen Selwood ITF at OECD Jose Viegas * Massey University Tim Bentley * Ministry of Transport Peter Mersi * MP Andrew Little * MP Bill English * MP Simon Bridges * NZTA Fergus Gammie Stockholm City Jonas Eliasson *

autonomous vehicles (AVs) proved irresistible in their own right, with 94 per cent of NZ road fatalities due to driver error – at its best modelling shows that AVs would

* To read the full presentations of these speakers, go to www.infrastructure.org.nz

reduce our road toll from 330 to 31. “If it were medicine, it would be hailed as a major breakthrough,” said Fergusson.

FORMALLY KNOWN AS

INFRASTRUCTURE.ORG.NZ

Pro-active safety for lone workers on the move Get Home Safe is the perfect system for journey management and lone worker safety. It is a fail-safe system to alert management if something is not right -- an orange flag that something needs attention with enough information to make an informed and measured decision about what to do. A safety app allows staff to log task or travel plans on the go, supported by a web portal for real time situational awareness, reviewing tracking logs, account management, acknowledging alerts and downloading data. When staff travel there is always an element of risk that if something unforeseen happens they could be in a situation where they cannot call for help themselves. “With a fail safe, pro-active alerting system, GPS tracking and check-in prompts, journey management has quickly become one of the most popular uses of Get Home Safe – Corporate,” says director and founder Boyd Peacock. “All that is needed for implementation is an easy way for staff to log their travel plans. That includes a pro-active and robust system to alert supervisors if a journey has not been safely completed and enough information to make informed, measured and quick decisions about what to do.” Staff use the app to log their journey management plans before they leave: intended destination, ETA, road conditions, job number. Even vehicle details (perfect for rental cars) can all be easily recorded. A “favourites” feature enables

regular journeys to be saved for a quick start. Once tracking is started, journey management plans are displayed in real time on the team leader’s dashboards for reference. GPS location, remaining battery, check-in notes and remaining time are updated from the app to the

If someone walked into your office right now and asked: “Where is your entire team and are they all OK?” Would you have the answer at your fingertips? dashboard every two minutes. In an area with no coverage the app will store GPS tracking and update the server when coverage is regained. As the journey nears completion and an ETA approaches the driver is automatically reminded to check-in up to five times via a notification on their phone. Simply check-in as home safe or extend the timer to give yourself more time. If a user fails to check-in and acknowledge the safe completion of the journey before their timer expires, the Get Home Safe fail safe alerting system kicks in and team leaders are alerted by email and SMS. A team leader is required to follow up the alert via their dashboard within 30 minutes or

it is escalated within the parent organisation. For journeys over two hours, it is better to set a regular check-in interval -- this requires staff to check-in at a maximum of every two hours (or whatever set interval) during their trip rather than waiting until the end of the trip. Using a recurring safety timer allows for an alert to be raised much earlier rather than waiting for the entire ETA of the journey, it also encourages staff to take a regular break and avoid fatigue. Get Home Safe also is a pro-active self-monitoring solution for knowing lone workers are OK on the job. Staff simply pull their phone out of their pocket, set themselves a check-in time via the safety app and off they go. It is all shared in real time back to a dashboard, including GPS location and task details. Once staff have safely completed their task or reached their next check-in time, they simply get their phone back out and check-in. If a staffer misses their check-in time, they are reminded multiple times. If they don’t check-in as planned, a fail-safe alerting system kicks in, even if their phone is out of coverage or battery. Team leaders are alerted about the situation via email and SMS, with enough information to make an informed and measured decision about the next course of action. "We take great pride in being an incredibly affordable safety solution," Mr Peacock says. “You will find it also drastically reduces

administration costs of running your own lone-worker monitoring system and frees admin staff up to focus on their core roles." “With the automated system handling all the boring bits of staff checking in and out your admin staff are free to focus on their core roles, not chasing up where staff are.” “You can invite anybody you wish to join your account and to share what they are doing with your company - staff, contractors, sub-contractors, volunteers, site visitors or even clients,” says Mr Peacock.

If your staff travel and/or work alone they could find themselves in a situation where they need assistance and cannot call for help themselves. Get Home Safe is a robust and fail-safe system which: • Will proactively alert you if one of your lone workers is potentially in need of assistance • Has enough information on hand to make a quick, informed and measured decision about what steps to take next • Will hold both team leaders and staff accountable • Has minimal risk of human error • Respects users’ privacy and security of personal information • Is simple, quick and easy for everybody to use • Needs to be affordable.

At Get Home Safe we don’t just sell software, we are about getting people home safely and we know your lone worker policy is an important part of that.

The best place to start is to see for yourself with a free trial. Visit the website or call for more information

Boyd Peacock +64 27 632 8522 www.gethomesafe.com INFRASTRUCTUREBUILD.COM

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SAFETY

The corporate version of Get Home Safe is a cloud based safety solution designed for monitoring the safety of staff working alone or while travelling

Saving lives the big winner at Brake Awards

AWARDS

New Zealand based companies and individuals took out four of the five key awards at the Australasian Fleet Safety Awards for 2016 The annual awards are presented by Brake, a humanitarian charity with a vision of zero road deaths and injuries. The General Manager of National Transport & Logistics at Fonterra Barry McColl won the Suzuki sponsored Road Risk Manager of the Year Award. The company also earned a “highly commended award in the Company Driver Safety Award won by the Council of the City of Sydney. The award recognises Mr McColl’s role in maintaining the safety of more than 1600 drivers in 500 tankers travelling more than 90 million kilometres a year. Fonterra has one of the largest transport fleets on the road and during the season from August to May tankers work around the clock, seven days a week. “Barry leads a team who are continually working to make sure everyone gets home safe every day – not just our 1600 drivers, but also all the other people on our roads, says Fonterra Director New Zealand Manufacturing Mark Leslie. “Every step of the way safety is front of mind. From the tankers we purchase, to the training and assessment of our drivers, to the world class technology that helps us to keep track of how both the vehicle and our drivers are performing. Barry has been instrumental in the implementation

BACK ROW FROM LEFT: Gordon Brown (Sureplan), Jono Morgan(Telogis), Blake Richardson (Fleetcoach), Hamish Corbett (AAA Concrete Pumping Services) Matt Roberts, Darrin Rhodes and Barry McColl (Fonterra), Steve West (Suzuki) and Brake’s Kris Gledhill. FRONT ROW FROM LEFT: Len Woodman (Council of the City of Sydney) Saphia Verdiglione from highly commended MiX Telematics, Jeff Howells (Fleetcoach) and Donna Thomas from Thrifty Car Rental.

of all of this and it’s great to see recognition of this,” says Mr Leslie. Dr Robert Isler also featured twice – once as the winner of the Outstanding Commitment to Road Safety Award and then as research director for Fleetcoach which won the Fleet Safety Product Award. Dr Isler has over 25 years’ experience in road safety research. He pioneered work on a head-mounted eye-tracker, which showed that eye movements control to a large

degree how drivers move their steering wheel. It also showed that effective eye-scanning behaviour and hazard perception skills can be trained in both laboratory and real driving situations. He used these research findings to develop several interactive multimedia training programs. Following that he founded eDrive in 2010, an online driver training program that focuses on visual

YOU CAN EASILY

Route work orders, track job completions and store electronic signatures using mobile devices

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Pharmacy 446 Lone Pine Road

For more information call +64 212 445 666 or visit www.telogis.co.nz

search, hazard perception and risk management driving skills for learner drivers. Winner of the Fleet Safety Product Award, Fleetcoach, was created through an identified need for a similar training program, but focused on at-work drivers. Dr Isler’s research, and his knowledge of other research worldwide, is used to develop the programs and ensure they use the latest behavioural interventions.

t work in the Queen Charlotte Sounds A and (right) AAA Concrete Pumping’s Hamish Corbett with award sponsor Jono Morgan of Telogis.

Fleetcoach is an interactive, online driver training programme. It coaches drivers through multimedia modules in skills such as hazard perception and situation awareness. There is also a risk assessment element, so that managers can identify the risk profile of their drivers. There are also specific training modules on various topics such as fatigue, speed and distractions. The Telogis sponsored Safe Vehicles Award went to AAA Concrete Pumping Services Ltd which provides, concrete pumping, pump and place, concrete spraying and line pumping services. Its Manitou Telehandler is rough terrain, 4 wheel drive with a reach of 18 metres. The company says it operates the best equipment the industry has to offer throughout New Zealand 24 hours a day, seven days a week. That includes top brand 36, 32 and 28 Putzmeisters which are constantly maintained to the highest standard to cope with the diverse demands of its clients, the company says. Jono Morgan, NZ Business Development Manager at sponsors Telogis, itself a highly commended Product category entry for Telogis

Coach, says the company is globally committed to safety and therefore delighted to support the Fleet Safety Awards. “Telogis is dedicated to enhancing the value of its customers’ businesses through intelligent integration of location technology and road/driver safety is never neglected. Telogis Coach monitors driver behaviour and provides drivers with real-time in-cab feedback on a range of metrics like speed, harsh braking and acceleration, fuel economy and seat belt use. It also provides data on driver behaviour to managers, and ranks each driver against performance across the company, so drivers can see how they compare to the company average and the top scoring drivers. It encourages drivers to improve their performance by keeping within speed limits, reducing harsh braking and improving fuel economy. The better their performance, the higher up the rankings they are.

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AWARDS

onterra’s Barry McColl with Steve F Westfrom sponsors Suzuki.

Brake is an international road safety charity. Its New Zealand division promotes road safety and campaigns against the carnage on New Zealand roads. It is also fundraising to improve support for families bereaved and injured in road crashes. To support Brake, go to www.brake.org.nz. Support books for children and adults bereaved in road crashes are available for free to families by contacting Brake on brakecharity@gmail.com or 021 407 953.

Value for money is about how we buy - not just what we buy! Category management seems to be the procurement buzzword of the day in order to fully leverage their procurement decisions. Category management is, of course, an essential component of effective procurement. By understanding what you intend to buy (whether it’s a

MANAGEMENT

It’s defined as “a strategic approach which organises procurement resources to focus on specific areas of expenditure”. It enables procurement managers to focus their time, analyse the market in depth

OCTOBER–DECEMBER 2016

INFRASTRUCTUREBUILD.COM

“In tendering, as with most things, you generally get what you pay for”

large-scale infrastructure project, ongoing maintenance services, or materials to support your operations), you can work out the optimal volume, priority, and timeline for procuring significant projects.

or [worse] “that’s what our bosses told us to do – they want to keep spending down.” Yet this leads to the most expensive process (because you have to evaluate all the attributes first); and it delivers the cheapest supplier, more than 95 per cent of the time. There are far, far more cost-efficient ways to find the cheapest supplier – if that’s what you really want! But do you? In tendering, as with most things, you generally get what you pay for. Small wonder that the results of evaluations like this end up with false economies, time-consuming and expensive quality issues, and premature obsolescence or breakdown of our infrastructure assets. Governments everywhere are increasingly aware of the need to consider long-term sustainability of their assets, not just shortterm costs and benefits. To do this effectively, the lead-in has to be in identifying the right projects to procure. But the most effective driver of value has to be the skill of carrying through the intelligence of that strategic market analysis to design effective, fit-for-purpose procurement tools that deliver enduring cost-effective asset solutions for generations to come. Procurement is not just about deciding the best asset to buy right now. It’s also about determining what factors will make that asset the best investment; and then using those factors to design procurement tools that deliver the right long-term decision. Caroline Boot is the managing partner of Clever Buying, an organisation dedicated to providing practical procurement training including Government Rules of Sourcing, NZQA assessment and expert procurement support for tender evaluators. For more information, see www.cleverbuying.com

Consider this: you’re finding that (now that your daughter and her young family has moved back home), your house is getting too crowded. Under the Unitary Plan, you have some new options available to intensify housing in your area. Your options could include building two more rooms on your existing house, helping your daughter and her family find somewhere else, or looking for a bigger house for you all. So you talk to your family about what they want, you work out what you and they can afford, you discuss the benefits of all the options, you picture the long-term future of the housing market. Based on all those factors you decide that it will be best for everyone if you build two more rooms onto your existing house. Having made that decision, your job of category management is done. But your real responsibility, to get the best value for what you'll invest, is only just beginning. You’ll seek help from an architect or designer to work out the best place to build onto your house. You’ll select them based on their skill level (after all, you can’t afford to have lengthy delays and extra costs if consents aren’t granted). You’ll select your builder largely on their skill level (who wants a leaky building?!); and their price will need to be within your budget. They’ll need to have experience building your kind of house. You’ll check out their reputation for quality and timely completion, too. You’re pretty unlikely to recycle the design or the build of your neighbour, or the last house you renovated. And it’s equally unlikely that you’d have the same selection criteria that you did last time, when you fixed up a kitchen on a different house, in a different location. While you want value, you’re not going to use a dodgy cheap contractor because you know they’ll cost you more in the end. Put simply, making the decision on how to solve your crowding issue did not, in itself, get you value for money. Only by analysing your priorities and risks for your specific project – then using those to design good decision tools – will you get what you want, at a reliable and predictable investment.

FEEL AT HOME AT QUEST At Quest, we’ve built a nationwide network of apartment hotels to provide spacious and comfortable accommodation where you need to be. Being in business for over 25 years has taught us the value of a familiar face and a warm welcome. That’s why when you stay at Quest, you can expect superior business accommodation with the service and facilities you need to make it feel like home.

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MANAGEMENT

Procurement management doesn’t stop once those decisions are made however. In fact, we could argue that effective procurement is only just starting when a procurement programme and budget has been determined. In Australasia we’re seeing major focus on strategic procurement decision-making. But effective follow through to sound procurement tools, weights and effective scoring systems is still in its infancy. Yet, use of effective procurement tools is the single most important factor leading to value-for-money decisions! Our brightest and best procurement managers are justifiably proud of the increase in clarity that they can provide their suppliers on the pipeline of work in each industry. Government organisations increasingly see the benefits gained by providing information that enables their suppliers to gear up with the skills, plant and resources that they’ll need to cope with upcoming projects. But as long as procurement processes are stacked with inappropriate weightings, irrelevant generic questions and unclear, inefficient decision tools, we cannot be sure that the right decisions are being made to select the best-value supplier. Time and time again, we hear councils complaining that their suppliers are cutting corners; that quality is not up to scratch, and that assets are being built without effective future-proofing – ultimately costing far more than a quality provider should have cost in the first place. It cannot be a surprise that 99 times out of 100, this is a direct result of poor procurement tools. When we ask tender evaluators why, for example, they put a 70 per cent weighting on tender box price, the answer almost invariably is “that’s what we’ve always done”

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Laser guided boring ideal for heavy traffic sites Stronger Christchurch Infrastructure Rebuild Team (SCIRT) partner Downer Construction, approached Iplex Pipelines for help with two particularly challenging deep connecting sewers in one of the highest volume traffic sites in Christchurch City – under Carlton Mill Rd near the Bealey Ave/Harper Ave intersection – one of the highest volume traffic sites in Christchurch City. Following extremely severe earthquake damage to nearby pipes in 2010 and 2011, two new 24 metre length DN450 gravity sewer pipes, some four metres underground were urgently needed to create alternative gravity sewer service for the surrounding residential area. The new sewer pipe alignment grade was extremely “flat” (0.14 percent). Other factors at the site including a high water table, working space constraints, public disruption, soft ground and pipe depth needs, all combined to render as impractical, pipe replacement by conventional open cut or horizontal directional drilling methods. SCIRT preferred a PVC pipe solution for durability and compatibility with other PVC sewers in successful service. Downer’s install technology partner Foot and Brown of Melbourne, a specialist trenchless technology contractor, chose laser guided auger boring technology. This installation method required a segmented-pipe-system allowing

jointing to be completed at depth within the drive pit. Iplex’s solution was to supply DN450 LaserboreTM rebate in-wall flush jointed pipe utilising PVC-M Series 1 PN 12 Rhino pressure pipe, which became Downers preferred choice. The pipes were manufactured in one metre effective lengths to fit over the equipment outer casings and augers. The joints were assembled by standard PVC solvent cement jointing techniques within the drive pit, allowing minimum (20 minutes) cure time on each pipe-joint before applying drive forces. Iplex engineers developed the LaserboreTM flush joint in association with manufacturing partner Strata Precision Plastics. Trial assembly and physical joint testing was completed at the Iplex IANZ accredited laboratory in Palmerston North prior to production. Iplex technicians were on site for the first drive and provided technical support to SCIRT and Downer. They completed hands-on training for Foot and Brown specialists on pipe handling, jointing and preparation of solvent cement joints at depth prior to installation. Iplex Pipelines NZ Ltd Technical Services: Iain McNaught 027 243 3000, Frank O’Callaghan 027 495 4523, Todd Randell 027 211 4838

LaserboreTM PVC pipe ready for installation in the heavy traffic construction site

olvent cement S jointing being completed on LaserboreTM PVC pipe within the drive pit

L aserboreTM PVC pipe with auger boring casings and augers

ENVIRONMENT

Corrosion management in a challenging economy The nature of today’s working environment is changing as budgets become more constrained and the political landscape transforms around the world Whatever the economy or politics of a country, corrosion will be an economic threat to industry and the wider community, as well as a physical threat to infrastructure and personal safety. While there are news reports of oil pipeline ruptures, sewer explosions or sinkholes appearing after a burst water main, the effects of corrosion usually take many years to appear. Effective management or prevention of this insidious threat is essential to minimise its impact. A report released this year by NACE International highlights the massive cost to industry but also indicates the savings that can be made through effective implementation and utilisation of available corrosion prevention technologies and processes. It has been estimated that, globally, more than three per cent of GDP each year is spent on corrosion mitigation and repair. For Australia, this equated to many billions of dollars in 2013 alone. There are many unseen costs that result from unmanaged 16

OCTOBER–DECEMBER 2016

corrosion, the most common being the loss of production resulting from an unplanned shutdown. Less obvious costs are unbudgeted capital expenditure to replace machinery and equipment or the damage to a company’s reputation following a pipeline rupture or similar safety issue. In response to budget constraints and the rising cost implications of corrosion across all industries, asset owners and managers look to achieve a good return on their investment. However, the changing dynamics of the economy mean that companies offering corrosion management services have to convince their customers of their value. “Asset owners expect a better ROI on the money they spend on maintenance,” says Dean Ferguson, senior vice president of the Victorian Branch of the Australasian Corrosion Association (ACA) and a materials engineer with Infracorr Consulting, a leading engineering consultancy specialising in rehabilitation and durability solutions for concrete

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It has been estimated that, globally, more than three per cent of GD each year is spent on corrosion mitigation and repair and masonry infrastructure. The Australasian Corrosion Association (ACA) works with industry and academia to research all aspects of corrosion in order to provide an extensive knowledge base that supports best practice in corrosion management, thereby ensuring all impacts of corrosion are responsibly managed, the environment is protected, public safety enhanced and economies improved.

Bigger budgets “Budgets for asset maintenance are never large enough to cover requirements. Coatings are seen as passive, so structures are

often left to fend for themselves until corrosion damage is severe,” says Aaron Davey, director of New Zealand’s Bastion Ltd. “When coupled with the wrong coating, subsequent costs can appear far sooner than otherwise expected.” Bastion has been providing innovative leadership to engineering, construction and maintenance projects throughout NZ for nearly 10 years, primarily with public infrastructure organisations and manufacturing industries. “In the past, short-term, low-cost solutions were what owners and operators were looking for,” says Sean Ryder, senior engineering consultant with Phoenix Solutions in New Zealand. “Today we are able to discuss the benefits of looking at the ‘whole of life’ asset costs.” This holistic approach takes account of the construction and projected maintenance costs of a project. If it is possible to incorporate materials and processes into a design that results in reapplying surface coatings every 15 years instead of 10, there are savings to be gained.

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ENVIRONMENT

CLEVER COATINGS: many companies, including Mattioli, have a reputation in the industry as protective coating innovators

Owners of high-value assets must understand the cost implications of ignoring the effects of corrosion. There are many advantages of planning for corrosion control and mitigation, two of which are that the life of an asset can be extended and maintenance time and costs reduced. According to Ferguson, there is often inadequate time given over to the design phase. “Companies often rush this and find errors later that could have been avoided,” he adds. “Durability is often viewed as an afterthought rather than a value add.” “We understand that money can be tight, but it is better to consider how to look after an asset when it is designed and built,” says Gianni Mattioli, director of his family-owned surface coatings business that has been providing a complete coating service to a diverse client base across Australia for more than 40 years. Monitoring the impact of corrosion on any type of structure is a critical aspect of ensuring asset integrity. A key way of minimising corrosion is to employ appropriate protection technologies. “Proactively testing and inspecting gives a clearer 18

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understanding of where to spend limited resources on maintenance of assets,” notes Rob Francis, of R A Francis Consulting Services, who has more than 40 years’ experience in metals, materials and corrosion, especially regarding protective coatings. “Asset owners often prefer to put off maintenance until it is too late,” Ferguson claims. “Everyone knows that it is cost-effective but rarely have the budget to implement integrated design and servicing program.”

Planning priority However, practitioners have noticed a gradual trend toward asset owners recognising the benefits of maintenance planning. “Since starting in the industry on the 1990s, I have seen a shift in attitude by asset owners,” Davey observes. “More are appreciating the wisdom of doing it right the first time.” Ryder supports this opinion, stating that he had “noticed quite a significant increase of the awareness of asset owners as to the benefits of designing for durability; they are more and more taking a long-term view of asset protection.”

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It is usually government bodies and larger companies that take a lead role when new business concepts are implemented, but it can still take some time for there to be a ‘groundswell’ of acceptance. “Once larger government agencies start doing it, the uptake flows down through other bodies and commercial companies,” Ryder adds. Best practices for construction and servicing operations have been changed and adapted to reflect the latest health and safety legislation and regulations. These have also flowed through into the quality control of a project. Asset owners have been forced to consider how things will be maintained

There are many advantages of planning for corrosion control and mitigation, two of which are that the life of an asset can be extended and maintenance time and costs reduced

in order to keep workers safe while carrying out repairs or applying a protective coating. The changes in OHS legislation are also being incorporated into asset management plans. The safety aspect of designs is being viewed as part of the overall maintenance strategy. “If it is difficult to get up to an area of a structure to re-apply a protective coating, it would have been better to design it with easier access,” Ryder maintains. If, when it is built, there are few constraints on the access to a structure or the equipment to be maintained, it is possible to reduce the frequency of servicing. “We have been on some projects where a building may look nice and do its job, but there may be overhangs and lips,” Mattioli explains. “We as contractors have to access these to do our job but there has usually been little thought of how to get into these areas. It is even worse if the job is 20 storeys above ground.” As an illustration, working on the structural cross members of an offshore platform or transmission tower in a remote location requires a unique combination of skills, but also additional safety precautions.

TIMELY DECISIONS: time and money savings can be achieved if decisions about maintenance are made during a structure’s design-and-build phases

HEADY JOB: working 20 storeys above the ground adds to the challenges of protecting structures from corrosion

ENVIRONMENT

GOOD SPORTS: applying a protective coating to the roof of a sports complex

Technicians need to have both the appropriate corrosion qualifications and abseiling experience.

Understanding essential In order to effectively and comprehensively explain the benefits of incorporating maintenance planning into the design process, companies and practitioners in the industry must ensure they understand all the latest products, technologies, processes and legislation. “We devote lots of time to staff training and education,” Mattioli says. “We feel it is important for all members of our team to continue to learn about the new materials, new techniques and new training methods.” Advances in technology and the spread of the Internet means that the amount of information that is readily available to designers, builders and contractors is vast. Companies are finding their staff are willing to research best practices and how to use new materials. “There is a new generation coming through with a focus and interest in doing a job well using the best technology and materials,” Davey notes. “With the amount

of data and the ease of access to it via online sources, it is easy to achieve excellence these days.” As the manufacturing industry restructures, some companies are taking advantage of workforce

An added benefit of planning for sustainability and designing projects to require minimal maintenance is a reduced impact on the environment changes. “There are challenges to the economy and some sectors are hurting more than others,” Mattioli states. Some manufacturing workers have a certain mindset in terms of precision and understanding the planning and steps that need to be taken to successfully apply a protective coating. “It has been surprising that we have had great success retraining auto mechanics as applicators,” he adds. An added benefit of planning for sustainability and designing

projects to require minimal maintenance is a reduced impact on the environment. “If you can maintain it effectively you do not need to replace an asset as often, which therefore has an environmental benefit,” Ryder adds. One area where Phoenix Solutions is expanding its work is reusing materials onsite, especially for remote communities and island nations in the Pacific region. One scheme the company is associated with involves taking polymer waste and incorporating it into a standard concrete matrix. The polymer provides additional durability for assets that require lower structure strength such as footpaths and buried septic tanks. “A major consideration is ensuring that a successful mixture is repeatable,” Ryder explains. “We have to be careful to ensure that there is consistency in the treatment of the polymer waste.” This recycling of waste polymer provides strength and durability to tourism infrastructure and reduces the cost of the works because the amount of steel rebar that has to be shipped to remote locations is reduced. There is an additional benefit in that it

minimises the amount of waste material that is shipped from the location or burnt. “Explaining the financial drivers is usually simpler as the results are easily measured now,” Ryder states. “However, as time goes on, there will be more and more measurable results of the environmental benefits which will encourage clients to do more design for durability.”

A not-for-profit, industry association established in 1955 to service the needs of Australian and New Zealand companies, organisations and individuals involved in the fight against corrosion, the ACA’s vision is to reduce the impact of corrosion

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OCTOBER–DECEMBER 2016

A suitable case for treatment

WATER

The crisis in Havelock North has put the spotlight on the risks of untreated water and a national discussion on acceptable risks for public water supply is required, John Pfahlert insists With over 4,000 people – or a third of the town – affected by water-borne campylobacter illness this rates as the worst case of illness caused by pollution from a public water supply in our history. In summary, the outbreak has been caused by infection of an untreated town water supply at an, as yet, unknown location. There is much speculation as to the cause and source of the infection, but this is rather unhelpful. The inquiry announced by the government is not only going to look into what went wrong at Havelock North, but will examine whether there are systemic issues in the way we regulate application of the drinking water standards. It was always going to be a case of when – not if – a community in New Zealand would be struck down with campylobacter. Supplying a whole community with untreated water has always been a calculated risk. In many cases the probability of infection occurring is not huge, but as we have seen, the consequences can be severe when the trade-off between risk and consequence doesn’t pay off. Campylobacter infection is not a rare occurrence. While the number of notified cases has almost halved since new drinking water standards were introduced in 2005, there were 6837 cases in 2013 - though many of these won’t be associated with public water supplies. Likewise, the decision by the Hastings District Council to leave Havelock North’s water untreated is not an unusual one. For instance, Lower Hutt City, which serves around 70,000 residents, does not treat its deep bore water supply – nor does Christchurch with 300,000 residents. It’s likely that around a quarter of our national population is drinking untreated tap water. Even that figure is a bit of a guess. Councils have many different reasons for adopting this approach. We’ve come to expect our water in New Zealand to be pure, and coming from underground aquifers, as in the case of Havelock North, there’s an extremely minor risk of contamination from source. 20

OCTOBER–DECEMBER 2016

MALIGNANT MICROBE: a scanning electron microscope image showing the characteristic spiral, or corkscrew, shape of Campylobacter jejuni cells and related structures

There is also a strong and vociferous opposition in some quarters to putting chemical barriers such as chlorine into public water supplies. Sometimes this opposition is philosophical, sometimes an objection to taste and odour. But this is a public health issue and one that needs an independent inquiry about the role the government needs to play in the supply of safe drinking water.

“Access to clean safe drinking water is one of the expectations of living in a First World nation” Subsidy shortage Back in 2005 when the government introduced the Drinking Water Standards it set up a subsidy scheme in order to help offset the financial burden on smaller councils. But, capped at a lamentably low $10m a year, many councils missed out. Last year both Water New Zealand and Local Government New Zealand asked the government to reinstate this subsidy, but this time backed by a much more

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realistic financial backing. We’ve suggested around $20 million a year is required on an ongoing basis. It’s time to ask again. Drinking water quality is an issue of national significance and one that the government cannot kick down the road for local authorities to pick up without adequate support and backing. Access to clean safe drinking water is one of the expectations of living in a First World nation. It should not be left as a burden to be carried by local authorities alone, and particularly, it should not be an unfair burden for smaller communities. I look forward to the arms-length examination of the existing drinking water standards, as well as their regulation through the Ministry of Health, District Health Boards and councils. As the organisation that represents the water industry, Water New Zealand is looking forward to this independent inquiry as an opportunity to identify ways of improving sector performance. Unfortunately, the inquiry is also likely to bring everyone out of the woodwork with an axe to grind on every water-related issue imaginable. The array of “experts” being paraded by the media is astonishing. Already we’ve had people saying that dirty dairying is responsible – even though there

is very limited dairy farming in Hawkes Bay. Others, including some Hastings councillors themselves, are bickering about who knew what and when. I say let’s leave that to the inquiry. It will determine whether the council response was appropriate and make recommendations about whether improvements should be made. Make no mistake however – the fallout from this inquiry will reverberate for years in the New Zealand water industry. Changes will undoubtedly be recommended to the drinking water standards, their administration and related matters. It’s up to the water industry to seize this opportunity to improve sector performance – despite the seriousness of the circumstances being experienced by residents in Havelock North. John Pfahlert is chief executive of Water New Zealand, a national not-for-profit sector organisation comprising approximately 1500 corporate and individual members in New Zealand and overseas that focuses on the sustainable management and promotion of the water environment encompassing the 3 waters – fresh, waste and storm water

LOCAL GOVERNMENT

Water issues top of agenda for local government Water is a perennial topic of interest in New Zealand As a country we pride ourselves on the natural beauty around us and our close relationship with the natural world. Water, especially freshwater, is a matter of national identity. The recent contamination of the drinking water supply in Havelock North has added impetus to the discussions around water and water management that are already underway in New Zealand. The situation has brought into even sharper relief the vital importance of our water. It has illustrated just how crucial quality water is to us, how potentially susceptible it is to contamination and other risks, and the impact on a community when things go wrong. It also gives us an opportunity to discuss again in depth some of the other water issues New Zealand faces. For the local government sector water is a major part of what we do. For territorial authorities, along with roading, the management of the “3 waters” – drinking, waste and storm – makes up a significant portion of council business. Councils own and manage the bulk of the country’s water and waste water infrastructure. For regional councils management of freshwater and catchments is core business. The quality of our drinking

water supply is a shared responsibility across many parties. Regional councils are responsible for water catchment areas and have a specific responsibility under a National Environmental Standard (NES) to protect the source of human drinking water. Territorial authorities reticulate and monitor drinking water quality. District Health Boards are responsible for health effects of water quality. The Ministry of Health sets quality standards. The Ministry for the Environment has a responsibility to monitor the effectiveness of the National Environmental Standard.

Water works Local Government New Zealand recently completed a major piece of work looking at the big water issues and decisions that need to be made to solve them. The 3 Waters project is the result of two years’ work to better understand the state of drinking, waste and storm water infrastructure in New Zealand, the challenges that lie ahead and options for delivering best practice water infrastructure. It brought together representatives from local and central government and the water industry, and has substantially improved the level of data around the sector. The project highlighted a

“The quality of our drinking water supply is a shared responsibility across many parties” number of major trends that will need addressing over the next 20 years. These include the cost ramifications of ever-increasing demand for higher levels of reliability, quality and resilience in drinking water supply, the impacts of climate change on storm water management, and the growing need for the renewal of infrastructure as assets reach the ends of their useable lives. There is also a range of complex environmental, social and economic factors that pose difficult questions. Put simply, we face a time of change and as a country we are in the middle of important discussions about how we meet these changing needs. How will a small rural community that is losing population fund the infrastructure it needs? How will a city with a growing population fund the future infrastructure for its residents and businesses? What impact will climate change have on the water systems we use? How can the primary sector

grow while shrinking its environmental footprint? The 3 Waters project concluded that an effective water regulation system for New Zealand should assist water asset owners and operators to: • understand customer needs and expectations • effectively manage and invest in physical assets • effectively recover costs • promote efficient usage • continue to learn and grow. This model is being discussed with the government with a view to delivering the type of sustainable service New Zealanders want to see into the future. Watch this space.

Expectations of an efficient and sustainable three waters sector Water management is a complex business with many different stakeholders, costs and outcomes to balances. For further information visit www.lgnz.co.nz/home/ourwork/our-policy-priorities/4.infrastructure/3-watersprogramme/ Malcolm Alexander is chief executive of Local Government New Zealand, which represents the interests of 78 local authorities in New Zealand

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OCTOBER–DECEMBER 2016

Lifting the lid on Havelock North’s water supply

WATER

The water supply contamination that recently plagued Havelock North clearly shows our towns have work to do to ensure domestic water supply is safe, Hugh Ritchie claims While a public inquiry investigates what caused the campylobacter contamination, what we can be certain of is that it was not the result of intensive agriculture. What we do know is that this isn’t the first time Havelock North’s water supply has been contaminated. A 1998 report details an earlier contamination of the same Brookvale Road wells and concludes that contamination was very likely due to the poor design of the water supply bore and insecure wellhead. The head of the well is below ground level and is not adequately protected – it allows contaminated water to flow into it during flood events. The concern is we’re now 18 years on and the same incident has once again occurred, this time with far greater consequences. Evidence that will be presented to the government inquiry shows the bore is now badly corroded and there are cracks in the casing. It seems Havelock North has been caught in a perfect ‘storm’. Water infrastructure that is at the end of its serviceable life (common in many New Zealand towns and cities); a dramatic

weather event that has resulted in surface flooding directly into the bore - contaminating the water in the well around the pump (not the aquifer); and an extended power outage meaning the pump - meant to remove dirty flood water around the bore - failed. This example shows we have a long way to go to ensure drinking water supply is well-managed in New Zealand. The question is how many more Havelock Norths are out there? There have been misleading and alarmist claims by the anti-farming lobby that the aquifer itself has been contaminated by intensive agriculture. This is completely untrue. Surrounding bores that draw from the same aquifer have been tested and show no contamination – the aquifer is not polluted.

Livestock lacking Any Hawke’s Bay resident will tell you there is no intensive livestock agriculture in the area – in fact the closest dairy farm is more than 40km away. There were, however, spring lambs grazing in the paddock opposite the bores. Stock walking around a paddock doesn’t cause this sort of

HUGH RITCHIE

contamination. Campylobacter from livestock does not move down through the soil to contaminate aquifers – the soil provides a natural filter. This contamination is the result of surface water directly entering the well because of inadequate infrastructure. Quality asset management for public water supplies, waste water and storm water infrastructure is a huge challenge for New Zealand’s towns and cities which are already facing significant cost increases. Council’s only source of significant income is from rates. While the question must be asked as to why Havelock North’s water supply bores were not adequately designed and maintained for the type of event they have

recently experienced, we need to acknowledge that our district councils are struggling to fund infrastructure upgrades as more pressure results from tourism and general population growth. Rural land users are also being challenged with significant and costly changes to the way we are able to farm. These new farm practices are aimed at limiting nutrient leaching and runoff. Regional councils up and down the country are putting in place limits and community expectations for managing water quality in their catchments. Irrigated farmers are in the spotlight and tough requirements are in place; inevitably there will be more to come. Farmers are getting on and planning for this and so too must our towns and cities because we all have a role to play. Water quality is an emotive issue but we all want the same thing – healthy rivers and streams, safe water to drink and thriving regions. Hugh Ritchie is a board member of Irrigation NZ and the Foundation for Arable Research and a cropping farmer who maintains three private irrigation bores on his Hawke’s Bay farm

COSTLY CORROSION: Evidence that will be presented to the government inquiry shows the bore is now badly corroded and there are cracks in the casing

OCTOBER–DECEMBER 2016

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Hastings District Council has refuted Irrigation NZ board member Hugh Ritchie’s claims, expressing its strong disappointment at his “irresponsible and misleading” media release. “It is concerning that someone connected with a pro-irrigation lobby group appears to be trying to use the calamity of the Havelock North water contamination event to defend and promote intensive agriculture,” says Mayor Lawrence Yule. “It is even more concerning that Mr Ritchie claims to have seen investigation evidence that Hastings District Council itself is not aware of as a party to the joint investigation being carried out by council, the Hawke’s Bay District Health Board and the Hawke’s Bay Regional Council”. Hastings District Council Chief Executive Ross McLeod says Ritchie’s comments don’t align with the results of testing on the

bores to date. “Testing to date shows that while some of the gland seals in the bores are not in the condition expected given independent inspection of the bores earlier in the year, the backup safety systems (sump pumps and flood alarms) are all working as designed when put under a worst case flood event,” he claims. McLeod adds that in particular the flood alarms functioned on battery power even when the power was off. "This suggests that if water had got near the seals in the August storm event the flood alarms would have gone off,” he believes. “Our analysis so far indicates no alarms were activated during that storm event.” McLeod maintains it’s “far too early” in the investigation to be drawing the conclusions Ritchie has reached. “While further testing may reveal problems with the bores, there is still 2-3 more months of testing to do on

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the bores, the aquifer and the surrounding catchment. “However, the testing completed to date shows no clear evidence that water entered the bores through the bore heads. There is also no evidence as yet of any cracks in the bore casings despite Mr Ritchie’s claims.” The council also claims: • the water infrastructure in Havelock North is not at the end of its serviceable life – council has a fully funded infrastructure strategy to provide for all required infrastructure investment • the flood alarms in the chamber around the bore head and the telemetry worked as designed when floodtested with the power off • contrary to Ritchie’s statement, the council understands that there is documented evidence of contamination in other bores in the area at times • there are numerous hoggets

grazing in the catchment surrounding the bores • scientific testing indicates that the campylobacter strain found in human samples in August is highly likely to have come from sheep • Ritchie’s illustration of the Havelock North bore is highly inaccurate • there are a number of possible pathways around the bores through which contaminated surface water could enter the aquifer. “These are all being investigated, and once they were made aware of the situation, the Hawke’s Bay Regional Council has been concerned enough to cap and make safe many of them already,” McLeod adds. The council adds that investigations failed to definitively link the increased level of campylobacter cases to faults in the Brookvale bores in the 1998 water contamination event. While the water supply was chlorinated at the time, suspicion also fell on the aquifer. Hastings District Council was required to undertake additional water testing for a year to re-establish secure status for the aquifer supply.

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WATER

Hastings hits back in fight over Havelock North water supply

Insurance risks slowly changing locally and internationally

SECURITY SLUG

PwC Insurance Sector Leader Karl Deutschle assesses the challenges and uncertainties facing New Zealand organisations and insurers

NEW WORKS: more than 1,000 buildings were demolished following the Canterbury earthquakes

OCTOBERâ&#x20AC;&#x201C;DECEMBER 2016

INFRASTRUCTUREBUILD.COM

SECURITY WORRYING WARNING: personally, I think cyber-risks will soon be the top risk for insurers in New Zealand, which is in line with what we are seeing overseas, says PwC Insurance Sector Leader Karl Deutschle

Have the key challenges for infrastructure insurance changed since PwC’s Exploring the insurance industry's top risks: A New Zealand perspective report in 2015? Overall, I don’t think there have been any major changes in the challenges since the PwC Insurance Banana Skins study last year. The survey obviously covered all aspects of insurance and didn’t just focus on infrastructure insurance. Where I think there will have been movement is in the area of political uncertainty and macro-economic performance. This is something that New Zealand respondents typically report as less of a concern than their global counterparts. The fact that capital availability dropped eight places in the risk rankings between 2013 and 2015 does suggest a sector that is very comfortable with its financial position. There are good reasons for that as well, as New Zealand enjoys a stable political and economic environment currently. However, I think the international political uncertainty, particularly the shudders we have seen following the ‘Brexit’ vote, will

have an impact on insurers locally, especially those that might have been overly optimistic about how insulated New Zealand is from global instability. Of course, there’s no guarantee that these ripples internationally will translate into long-term challenges for the sector, but it’s certainly an area where I think we have seen movement in the last 12 months.

Overall, how does New Zealand infrastructure insurance compare with overseas - e.g. is there a greater awareness of the need for insurance locally? The Canterbury earthquakes were certainly a wake-up call and organisations saw how disruptive a natural catastrophe could be across their entire operations. It also demonstrated the need for comprehensive insurance policies. For local councils in particular, the earthquakes highlighted the breadth of damage that a natural disaster can inflict on a city. There isn’t a single aspect of Christchurch’s infrastructure that hasn’t been affected in some way by the earthquakes, not to mention the subsequent challenge of building and rebuilding infrastruc-

ture during a period of heightened seismic activity. Whether the earthquakes make the local market more aware than overseas is another question though. Certainly we have seen plenty of comparable ‘wake-up calls’ in other major insurance markets in recent years – from the tsunami in Japan to the 2010 Chilean earthquake and bushfires in Australia and the US. While it’s true that awareness has increased, I think that’s happened right around the world – it

There isn’t a single aspect of Christchurch’s infrastructure that hasn’t been affected in some way by the earthquakes, not to mention the subsequent challenge of building and rebuilding infrastructure during a period of heightened seismic activity

isn’t a phenomenon that’s unique to New Zealand necessarily.

Natural catastrophes and/or climate change are perceived as higher risks locally than in the rest of the world – why? Obviously the Canterbury earthquakes have had a huge impact on the insurance space. The quakes revealed just how exposed the central government is to natural catastrophes thanks to its role in EQC. Beyond the Canterbury earthquakes, it’s also worth noting that the risks affecting local insurers are often quite different to those globally. In our PwC CEO Survey this year, 66 per cent of global insurance CEOs identified over-regulation as a concern for their growth prospects, but we aren’t seeing those same levels of concern locally. So, in some ways, what we are seeing is that the stability of New Zealand’s regulatory, political and economic environment means that other risks, like natural catastrophes, become more important for insurers. Finally, New Zealand is a very mature insurance market with high levels of cover compared to overseas, which might also help to explain the difference in risk assessments.

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OCTOBER–DECEMBER 2016

SECURITY

Do you think New Zealand organisations are paying enough attention to the potential dangers of natural catastrophes or is the level of awareness and general preparedness satisfactory? The awareness is certainly there. Natural disasters are right at the top of the list of concerns for local insurers and I think that reflects a broader awareness across New Zealand organisations that natural disasters are a real risk. What’s interesting here though is the question of whether or not this awareness is translating into action. Preparing for natural catastrophes is a complex process, with a lot of stakeholders for New Zealand organisations to manage. From my perspective, I can’t say for sure that the awareness we are seeing has translated into action, or whether that action is enough to minimise the damage from future catastrophes.

Do you think natural catastrophes/climate change will still be perceived as key risks in future? I think they certainly will be yes. So far, global supply chains been able to stay one step ahead of natural disasters, which are still highly localised. In fact, this is the main reason why global insurers aren’t as concerned about natural disasters – because they are highly localised, which can make them easier to manage. To go back to the Christchurch earthquake example, the city’s ability to rebuild has depended on a global supply chain of construction materials, along with a truly global workforce, drawn from countries that aren’t recovering from a disaster. What’s different about climate change is that it crosses that local/global line, which is something we’ve never seen before. Instead of an earthquake, imagine Christchurch had to respond to rapid coastal erosion caused by climate change. Now imagine that same erosion was affecting every city bordering the Pacific Ocean. Suddenly the global supply chain and talent pool that has supported the earthquake rebuild can’t respond in the same way. Of course, we are yet to see exactly what a ‘global’ disaster might look like and what impact that would have on the local market. However, if climate change does cross that line, I think natural 26

OCTOBER–DECEMBER 2016

Changing that perception will take time, but I think organisations are certainly on the right track. As cyberattacks gain more publicity locally, I think we will see a lot more urgency here disasters will remain as key risks well into the future.

Cyber-risk is another major challenge - do you think it is given enough emphasis by local organisations? If not, why not and what can be done to change this perception? Cyber-risk is certainly the new kid on the block for insurers, and yearon-year the awareness of this risk is growing. We saw this last year when

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cyber-risk first appeared in our survey on the insurance industry’s top risks and it’s only going to increase from there. The real question here then is whether or not that perception of the risk is in line with the actual risk. When we find that cyber-risk sits behind change management and natural catastrophes, we have to ask whether that’s a fair reflection of reality, or whether there is a gap between the two that still needs to close. Personally, I think cyber-risks will soon be the top risk for insurers in New Zealand, which is in line with what we are seeing overseas. The rate of growth in data creation, and the value that represents for businesses and society, has no parallel in any of the other risks that we track. For that reason alone, I think we still need to put more emphasis on this area. Changing that perception will take time, but I think organisations

are certainly on the right track. As cyber-attacks gain more publicity locally, I think we will see a lot more urgency here.

Pollution/contamination doesn’t seem to rate particularly highly in terms of risk - why not? Interestingly, New Zealand stands ahead of our global results when it comes to awareness of the risks of pollution, even though it was one of the lowest-ranked issues in the 2015 research. The main reason here is one of scale. Pollution and contamination are relatively localised, compared to the other risks we surveyed. When we look at disasters like the Rena, it was one of the country’s worst environmental contaminations, but it was still limited to the Taranaki coast and offshore islands and the clean-up was well-organised enough to control the environmental damage and the risk to people.

Should local organisations be more aware of the potential risks involved in pollution/contamination? Not necessarily. I think many will already be aware of the risks they are facing. As I mention above, there are also only a few areas like chronic medical conditions that will have long-term consequences. Beyond health, I think the major risk here is reputational, and that’s one that I think local organisations might be underestimating. When you are a local organisation, reputational risk from pollution or contamination, even if it is completely unrelated to your immediate area, can be incredibly damaging. Take Fukushima for example. When we hear that word, most of us think of the nuclear catastrophe at the Fukushima Daiichi nuclear power plant.

highly publicised) events can have far-reaching consequences for the reputations of local organisations.

Top risks: New Zealand and abroad Risk

Aus

World

Natural catastrophes

Change management

Distribution channels

Cyber risk

Reputation

Human talent

Product development

Long tail liabilities

Quality of risk management

Social change

But Fukushima is also the third-largest prefecture in Japan and is home to almost 2 million people. The fact that the prefecture’s name is synonymous with nuclear disaster is a huge reputa-

tional risk for local organisations, one that extends well beyond the immediate risks the contamination posed. It’s an extreme example, but it illustrates how isolated (but

Any other risks that should perhaps be given higher priority in the local context or might arise in the coming two years? One area we haven’t discussed is the question of talent. Interestingly, New Zealand insurers were more concerned about human talent than their global counterparts in our PwC 2015 Insurance Banana Skins report; however they are less concerned when it comes to managerial talent in particular. This is an interesting difference, and I wouldn’t be surprised if demand for management talent heated up in coming years. More broadly though, I think human talent should be a concern for any organisation looking to manage its risk profile. While we’ve seen a huge increase in the number of digital tools within the risk management space, it still fundamentally relies on a large pool of talented workers. Locally, I think this demand will remain high, while demand for quality management will also increase.

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SECURITY

That being said, there is a real unknown factor in terms of the long-tail liability issues that can arise if pollution or contamination lead to chronic health conditions. Obviously this is more of a concern for health insurers, but it’s certainly an issue that arises when we are talking about pollution.

OCTOBER–DECEMBER 2016 • VOLUME 6 NO 5

CROWNING GLORY

Flexible office space

pg 33 LAND

BULK INFRASTRUCTURE

pg 30

Building for future cities

Rural Urban Urban Urban

ZONING/PLAN CHANGES

LOCAL INFRASTRUCTURE

pg 32

DEVELOPER FUNDING

Housing supply chain

SOCIAL INFRASTRUCTURE MASSEY UNIVERSITY

WAIRAU

BUILDING MATERIALS

“PRIVATE ” INFRASTRUCTURE

SMALES FARM

DEMAND (I.E. BUYERS)

GRIDAKL

PARNELL GRAFTON

CHAPMAN TRIPP 2016

CONSTRUCTION SECTOR CAPACITY

K’ROAD

DEVELOPER INCENTIVES MT EDEN

NEWMARKET

ONEHUNGA NEW LYNN

MANUKAU

pg 38

Tech hubs on the rise pg 40

Solving the puzzle for Z for vehicles. What’s more, Z didn’t want to own the property; they preferred to lease. All of which explains why they partnered with Property for Industry Limited (PFI). PFI specialise in industrial property. They are, they say, “out the back, where the work gets done.” That means they know their way around those parts of Auckland (and New Zealand’s other cities) where you find manufacturing plants like the one Z wanted to build and – in particular – it means they understand industrial tenants. “Industrial tenants are looking for three things,” says PFI General Manager, Simon Woodhams. “Location, obviously. Z had some specific requirements, such as being close to the oil terminal, but things like transport links are always critical, because every one of our partners is part of a supply chain. The right location saves them time and money. “Next, they are looking for a property that enables their business process. For Z, that involves housing some complex technology, but all tenants need

LOCATION, LOCATION: PFI provided Z Energy with the right property in the right location for their purpose-built biodiesel plant.

a building that’s the right height and the right size, with the right ratio of office space, with room for trucks to come and go. The right premises enable their businesses to operate at peak efficiency. “Thirdly,” says Woodhams, “there’s the business relationship. “For Z, that meant being willing to go on their journey with them: they were building New Zealand’s first commercial-scale biodiesel production plant and so they had a host of other problems to solve. We brought our expertise to the table alongside their other business partners. By presenting and developing the right property and

structuring a deal to meet their needs, short and long-term, we helped them achieve their goal.” Z are now ready to start producing a more sustainable transport fuel for their customers looking to do their bit for a lower carbon future when they fill up. And PFI has played its part in solving that puzzle by helping Z find the right property, in the right location, on the right terms. As Simon Woodhams puts it, “Having PFI on the team frees up capital, adds value to your operations and allows you to focus on the problems only you can solve. PFI puts industrial property to work.”

PROPERTY

“The solution of one problem,” said Martin Luther King, “brings us face to face with another problem.” Having decided to manufacture biodiesel and so be part of the climate change solution, Z Energy ran straight into another problem: where to build the plant. Biodiesel reduces carbon emissions: Z reckon the annual environmental benefit of their new fuel will be the equivalent of removing almost 17,000 medium-sized diesel cars from the road. But making the stuff is a complex industrial process, which means it can’t be done just anywhere. However, there was more to this property puzzle than zoning. The ideal location for the new plant was somewhere in industrial South Auckland, close to transport links – to streamline raw materials delivery – and close to the Wiri oil terminal for finished product distribution. The site itself would need to be large enough to accommodate the manufacturing plant, distillation tower and storage tanks, with ample room

Flexibility, global connectivity driving new office leasing solutions

PROPERTY

As the sharing economy continues to transform every aspect of life, Kiwi businesses are seeking alternatives to one of the last bastions of business tradition: the fixed office environment To meet growing demand for more flexible working arrangements, Regus, the world’s largest flexible workspace provider, is opening its seventh New Zealand location — its third in Wellington located on level 6, 1 Willis Street. The new prime CBD workspace features private offices, shared spaces and carefully designed drop-in areas available for an hour, a week, a month or longer. It’s all about maximizing productivity and comfort, and minimizing the limitations that fixed space can present.

“Businesses need faster and more flexible options for all sorts of reasons: short term projects, new branch offices, expanding into new markets, better use of working capital, growing teams and more,” explains Regus New Zealand Country Manager, Pierre Ferrandon. “Many now choose to work this way on a permanent basis because it makes sense and is more efficient for their business and people. In the on-demand, shared economy, there really isn’t any reason to have money, energy

and time tied up in assets that are often in use for shorter and shorter periods of time.” Past solutions for many have included makeshift meeting spaces and spare rooms. “Coffee shops and home offices are no longer enough. The next wave is about having anywhere, anytime flexibility, with the security, discretion, professionalism and comfort of a permanent base. It’s not just about mobility any more, it’s about quality mobility,” says Mr. Ferrandon.

LEFT: Spaces Richmond in Melbourne BELOW: Executive office at Regus ANZ Tower, Auckland BOTTOM: Views from Wellington Regus Plimmer Tower

PROPERTY

A fully-furnished and equipped workspace, simply turn up, plug in and get straight down to business.

part of the appeal for many of our customers,” says Mr. Ferrandon. “While Regus clients will often come from diverse backgrounds, sectors and parts of the world, the space and network provides common ground for those who want to work in quality space, surrounded by other successful businesses.” Regus’ commitment to helping New Zealand businesses thrive and grow in new ways extends to its sponsorship of the New Zealand Innovation Council - a homegrown membership organization with the goal of developing and growing great companies. As part of its commitment to support Kiwi innovation, Regus has developed a dedicated offer for the finalists in the council’s Innovation Awards at the newly opened Wellington workspace.

The new Wellington Regus workspace will provide fresh, purpose-built premises for local, out-of-town and overseas business travelers. It also offers crucial global connections for its Wellington-based tenants, with access to new networks and more than 3,000 Regus offices around the world.

“The global aspect is especially important to New Zealand businesses, given the distance from many key markets. They need to have their networks well formed already if they are going offshore, and be ready to hit the ground running. With 3000 locations in 107 countries, Regus can help provide the bridge for that.”

Regus’ customers range from sole-practitioner consultants, professionals and knowledge workers through to medium-sized organizations looking to test a new market, and multinational corporations building a New Zealand presence. “The variety of nationalities, people, business types and sizes you’ll find in a Regus office is very much

* Some terms and conditions apply, see the Regus website www.regus.co.nz for further information.

PROPERTYANDBUILD.COM

OCTOBER–DECEMBER 2016

Building for future cities, what do we need?

CITIES

Looking at the current state of play for New Zealand cities there is much to contemplate First we need to start at the beginning by casting a sharp eye on a 25-year-old, heavily amended Resource Management Act (RMA) Introduced in 1991, the RMA greatly reformed the Town and Country Planning Act which was hugely prescriptive. Instead, the RMA placed the focus firmly on use and management of the natural environment. The difficulty with focusing too squarely on the natural environment is that the RMA hasn’t sufficiently provided for the needs of growing New Zealand cities. Nor has it adequately protected the natural environment, as envisaged. Evidence to support this argument was released this month via an Environmental Defence Society (EDS) report, which was jointly commissioned by the EMA, New Zealand Council for Infrastructure Development and Property Council New Zealand. The ground-breaking EDS report found that the RMA has not met the environmental outcomes expected of it and that management of the nation’s resources has been suboptimal. The research, conducted by EDS Senior Policy Analyst Dr Marie Brown, shows that 81 per cent of respondents believed the environment had declined since 1991. The business side of the argument was well developed. Businesses have strongly advocated that the current system was a handbrake on development and productivity. However, what has been missing from the conversation is an empirical element relating to the environmental impact.

Key question What does this mean for the future of our cities and what can be done? I can tell you now it will not be governed by a RMA or district plans under the RMA. The issue we have is no clear national direction as to what our cities should look like and how to balance the needs of both development and the environment. It is only in the last year, in the face of a serious housing crisis, that central government decided 32

OCTOBER–DECEMBER 2016

hief Executive of the C Property Council NZ, Connal Townsend

we needed a national policy statement on the built environment. The nature of what the national policy statement will contain hinges on the capacity for growth, and on utilising some hard metrics to calculate how fast a population is going to grow and the drivers of that population growth.

Plan, is that in many instances town planning seems to occur in isolation. There is often the belief that if the land is zoned as residential, development will magically happen overnight. In fact, for this ‘magic’ to happen you need a willing buyer and a willing seller.

Liaison lacking

“Legislation, planning and funding must be geared towards supporting and implementing infrastructure to encourage worldclass, property development” A key factor in the capacity for growth is the amount of land zoned for the development of housing and for ancillary parts of a city, such as offices and cafes’. One lesson that we have learnt in the commercial property world, especially in regards to the Christchurch Replacement District Plan and the Auckland Unitary

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Developers understand this and spend much time considering factors like proximity to public transport and the surrounding infrastructure to determine if a project is worth doing. Often we find however, a lack of collaboration between developers and town planners when it comes to looking at the infrastructure requirements needed to support both current and future population growth. The best result for cities is to take a long-term view and for governments and councils to work with developers in building communities and cities that are well supported by infrastructure. The main challenge will always be that infrastructure is expensive and very time-consuming. Rail, roads, water supply and sewage infrastructure all come

with a large amount of cost and disruption, however they are all inherently important factors when facilitating future growth. Therefore legislation, planning and funding must be geared towards supporting and implementing infrastructure to encourage world-class, property development. Lessons from the past, the Auckland housing crisis and the current government Housing Accords and Special Housing Areas Act (HASHA) strongly indicates for this to happen we must integrate legislation better. The answer may even be a reframe of the situation and investigation into the fundamental question, do we need proper city legislation to deal with the development of cities? Either way, for our cities to grow and prosper we must start to take a holistic, integrated view towards future growth and development. 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

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One of Christchurch’s most beloved heritage buildings deservedly scooped several major awards following an extensive restoration programme

A standing ovation for a theatre renovation

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OCTOBER–DECEMBER 2016

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The elegant Isaac Theatre Royal had stood proud, tall and strong in central Christchurch for more than 100 years – until those fateful days in 2010 and 2011. The Canterbury earthquakes did immense damage to a superb Edwardian-style theatre rightfully recognised as one of New Zealand’s premier venues for the performing arts. The back of house and stage house that had been newly built in 2004/05 suffered only moderate damage and were repaired, but the 1908 auditorium and 1928 foyer spaces were beyond salvaging due to their dangerous original unreinforced masonry walls. Extensive earthquake strengthening work undertaken in 1998/99 saved the “grand old lady of the performing arts’ from complete collapse, although some significant deconstruction was required to secure and protect the key interior and exterior heritage elements. Brickwork had been severely damaged, there was a gap between the proscenium arch and the auditorium and the dress circle had slumped, while the theatre itself was flooded with cracked plasterwork, broken joinery and glass. An August 2011 engineering report showed the main structural damage appeared to be confined to the auditorium, the adjoining poster room and office spaces, with liquefaction under the office area that hadn’t been previously strengthened. Two significant aftershocks on June 13 and December 23, 2011 exacerbated the existing structural problems as floor slabs in the foyer moved on construction joints and the floor of the main auditorium sloped towards the eastern and western sides of the building. As if that wasn’t bad enough, foundation beams running from the rear of the auditorium towards the stage were lifting at the edges, the auditorium’s walls had sunk noticeably and the western wall was about 10 to 20 millimetres lower than the east. Consulting architects Warren and Mahoney were engaged to design and draw the plans for earthquake repairs, which included deciding whether to rebuild completely or restore the building back to its former glory. “It started out as a $7 million repair project following the September 2010 quakes but after the 2011 quakes the damage to the structure progressively worsened 34

OCTOBER–DECEMBER 2016

to the point where we had to consider a total rebuild,” Warren and Mahoney Principal Architect Vanessa Carswell explains. “A decision had to be made as to whether we would try and rescue and incorporate as much of the heritage as we could or rebuild to a new design.” That decision was, however, relatively easy. “By that point we had managed to save so much of the more important aspects of the heritage of the building,” Carswell recalls. “Everyone involved in the project, and in particular the trust that owned the theatre, saw the value of retaining a well-loved building that was part of the city’s fabric – it became even more important to rescue it when other heritage buildings were being demolished.” The project team had two warehouses full of “a jigsaw puzzle of pieces” of salvaged elements of the building, plus several shipping containers on site, which also helped the decision-making process. “The main heritage elements of the building are the central dome in the auditorium, which is quite large – about 10m in diameter – the main foyer marble staircase and the facade.” Earthquake strengthening completed in early 2000 helped the building hold together through the quakes – with a little bit of help from temporary propping – so the heritage elements were relatively secure. There were also a lot of other elements such as architraves, ceilings, doors and plaster mouldings that had been taken out and rescued piece by piece while the 2011 aftershocks were occurring. “We could foresee a good strategy to rebuild and retain the stair and facade in situ and also developed a methodology to remove and reinstate the dome,” Carswell adds.

Rebuilt and restored The Isaac Theatre Royal board accordingly decided the edifice had too much history to lose forever, so the existing theatre would be deconstructed before being rebuilt and restored to exceed the building code’s earthquake resistance requirements. The auditorium’s brick walls would be replaced by strengthened steel and concrete walls and a lightweight reinforced steel beam roof installed beneath reinstated plaster work. A hydraulic pit lift would provide an extendable stage while

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adjusting the pitch of the roof would enable a new foyer space to be built in the upper-level gallery, which had previously had no foyer and was only accessible by a 96step staircase. Finally, a multipurpose performance and function space would also be constructed adjoining the dress circle foyer, along with new ticketing sales facilities and relocated office space. Fittingly the daunting task of renovating, restoring and rebuilding the city’s leading arts venue fell to Naylor Love, itself an equally

established 100-year-old firm that began operations in Dunedin in 1910. Naylor Love was very familiar with the building and its idiosyncrasies and challenges, having given the theatre a mainly backof-house refurbishment in 2004-5 that had won several awards at the 2006 Canterbury RMB Commercial Project Awards. Naylor Love in turn commissioned leading engineering and design consultancy Harrison Grierson to monitor the building for any movement in the building

PARTNERSHIPS

level or heritage façade during the restoration works. “We were also charged with determining the relationship between existing legal boundaries and the existing building and setting out gridlines for the restoration works,” recalls Harrison Grierson Senior Surveyor Rita Clark. Similar to the Christchurch Town Hall restoration project in which the firm also participated, the Isaac Theatre project boasted several special features. “There were significant heritage elements

that had to be protected,” Clark explains. “The survey control and monitoring marks had to be carefully selected and constructed, including temporary marks, to avoid or minimise the potential for damage to any heritage elements.” Foremost among the building’s numerous heritage elements was the magnificent 10m-diameter dome, which soared above the three seating levels and was crowned with an Italianate painting of scenes from A Midsummer Night’s Dream, by G.C. Post of

the Carrara Ceiling Company of Wellington. Made up of eight separate canvases, four large and four small installed in an overlapping configuration, the painting presents a selection of images from what is arguably Shakespeare’s most whimsical comedy. However, the project was significantly more elaborate in design and complexity of construction than originally estimated with the theatre being rebuilt from façade to proscenium arch. “As the aftershocks continued,

the scope of works changed into a complete rebuild of the foyer and auditorium, including the addition of several upgrades such as an extendable stage, a new performance space and upper-level foyer and a lift,” Naylor Love General Manager Pete Lockhart explains. One of the key drivers for the project was to allow patrons to return to the theatre without noticing the difference, with the decorative plaster and other heritage features installed over the new strengthened steel and concrete walls and a lightweight

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OCTOBER–DECEMBER 2016

PARTNERSHIPS

reinforced steel beam roof. “We used 3D scanning of the building to allow the design team to detail the reinstatement to its pre-earthquake condition, with features that could not be preserved faithfully, replicated.” The design team quickly came to the realisation that they had go through a process of designing and redesigning while the building was being demolished. “Once a structure like that starts to unzip and effectively demolish itself it needs to be rebuilt as quickly as possible otherwise the weather will quickly degrade it,” Carswell notes. The design was therefore split into 17 different consent packages and progressively submitted both for consent and to the contractor in order to fast track the project. “Alongside that we had three floods, one fire and were having to work in the red zone, which had no infrastructure and no electricity.” As if that wasn’t enough, there were also archaeological issues. “We had to apply for an archaeological resource consent that we had to respect when we dug the foundations,” Carswell says. Dewatering and the numerous legislative changes that occurred 36

OCTOBER–DECEMBER 2016

as a result of the earthquakes also had to be factored into the rebuild process. “It was quite an unusual design and shape, so we had to undergo BRANZ testing on various aspects of the design for both structure and fire safety.”

Faithful features Other problems surfaced when it came to preservation of the historic features, which included the dome, the restoration of the brick and Oamaru stone façade, marble staircase and an intricately painted auditorium, not to mention the early 20th-century decorative plasterwork. Unfortunately, recovering most of the plaster decoration wasn’t practical as the horsehair and vegetable-fibre reinforced ornamentation hadn’t survived the earthquakes in great shape, and would have been unsafe to reinstall. It was therefore decided to take moulds of each section of the existing plasterwork to ascertain how new sections could be grafted onto the older details to create a seamless effect indiscernible to the naked eye. Protecting the dome in the unstable building was another major challenge, Lockhart notes.

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“We worked closely with the engineer and stabilised the building from the outside, allowing access to the dome.” The dome was a timber structure that was integrated into the timber trusses of the roof, but while the side walls of the auditorium were solid brick they were progressively pulling themselves apart and bowing outwards by almost a metre. “The whole structure was becoming unsafe and the trusses were effectively tying the whole building together across the top,” Carswell explains. “The structural engineer and the main contractor managed to work up a very clever methodology to cut the trusses and remove the connection between the dome and the trusses.” A cradle was devised so the dome could be lowered down inside the building, then pulled through the proscenium arch and secured safely on the stage while the deconstruction work was carried out around it. “As soon as we cut the trusses in two the whole building was at risk of collapse, so it was all done within an hour and the auditorium was immediately and progressively demolished after that,” Carswell observes.

The canvas was then removed in pieces into one of the rooms within the theatre, which needed to be kept dust-free and at a constant temperature for the intricate conservation work. A further challenge was the need to keep the marble staircase in the main foyer in place throughout the whole rebuild. “They were extensively propped and had to be protected,” Lockhart explains. Work continued apace throughout 2013 with reconstruction and strengthening of the walls followed by the delicate process of lifting the two main sections of the new roof into place, including the roof trusses and secondary steel supports. An added complication resulting from the earthquakes was the reconfiguration of the land under the theatre that exacerbated the threat of flooding, a problem solved by drilling a permanent borehole in the theatre’s loading alley. This provides a dewatering system that keeps the rising water table at bay courtesy of an automatic trigger 15 metres underground that begins dewatering when the water level rises above the switch.

PARTNERSHIPS

Extra safeguards have been built into the system with two pumps strategically located below the new hydraulic stage extension that ensure the auditorium remains dry despite outside weather conditions. The rebuild and restoration faced significant challenges throughout, making it one of the most intricate building projects in the earthquake-damaged Christchurch CBD with an overall rebuild cost of NZ$40 million. The superbly restored and revitalised theatre finally reopened on 17 November 2014 with many of its original Edwardian features intact, having achieved 100 per cent of the new earthquake building code. “This incredible project has returned the Grand Old Lady of Christchurch theatre to her original Edwardian interior splendour, as well as significantly upgrading the theatre’s public spaces and technically enhancing and future-proofing the venue for many generations to come,” Isaac Theatre Royal Chief Executive Neil Cox says. “It was a significant effort from start to finish with a very talented and dedicated team of design

consultants, all of whom became as passionate and excited about the rebuild and restoration as ourselves.” Carswell is equally proud of the project. “We managed to bring it up to the standard of a modern theatre – we’ve brought it up to speed in terms of its technical capabilities by adding a stage lift, 400 square metres of front of house foyer space, cinema capability and an additional event space that is linked to one of the foyers, as well as rearranging the office and administrative space and upgrading the HVAC system, data and other technological aspects,” she explains. “It was a great achievement to see this theatre brought back to life in a way that frankly wouldn’t have happened if the earthquakes hadn’t happened – we’ve managed to give it another 100 years or more of life that it really needed before the earthquakes.” The Isaac Theatre Royal restoration fittingly won top prizes in the 2015 Property Council New Zealand and Rider Levett Bucknall Awards – gold in the Hawkins Heritage and Adaptive Reuses and merit in the Coffey Education and Arts Property categories.

The annual awards celebrate excellence in property development based on economic and financial factors, project vision and innovation (including degree of difficulty), design and construction, owner and user satisfaction, and sustainability and efficiency of operation. The Isaac Theatre Royal was also recognised in the Property Council of New Zealand Southern Excellence Awards 2015, the Best Project Team Award deservedly falling to the Isaac Theatre Royal, Warren and Mahoney, RCP, Naylor Love and team. As if that wasn’t impressive enough, the theatre won a Canterbury Heritage Award in the Public Realm Saved & Restored category in May, as well as the Retail/Hospitality Small Enterprise Award and The Press Champion Supreme Small Enterprise Award in September’s Champion Canterbury 2016 Awards. However, these prestigious accolades matter little to the people of Christchurch, who rightly regard the Isaac Theatre Royal as an inspirational example of hope – not only for themselves but for all Cantabrians.

The Isaac Theatre Royal team Project managers: RCP, Holmes Consulting Group Building contractors: Naylor Love Geotechnical engineers: Tonkin and Taylor Hydraulic and mechanical engineers: Powell Fenwick Architects: Warren and Mahoney Structural engineer: Holmes Consulting Group Fire engineer: Holmes Fire and Safety Surveyors: Harrison Grierson Electrical engineer: Neil Pritchard Isaac Theatre Royal technical contractor: Andre Goldsmith Designated heritage architect: Tony Ussher

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OCTOBER–DECEMBER 2016

The money link in the housing supply chain

PARTNERSHIPS

The housing supply chain is like a garden hose – it won’t deliver if there is a kink anywhere along its length

And, as our diagram illustrates, a lot of different factors need to be in alignment if progress is to flow smoothly. This tends to frustrate attempts at elegant ‘silver bullet’ solutions. Take Special Housing Areas (SHAs). They were effective at unblocking the zoning pinch point but they cannot deliver actual houses unless all of the other pinch points are also cleared – most notably, delivering trunk infrastructure to SHA developments and incentivising developers to get on with the job. As Auckland’s housing deficit is exacerbated each day by Auckland’s population growth and the Auckland ‘halo effect’ spreads to the rest of the country, it becomes progressively more important that all of the possible blockages are addressed, and with some urgency.

“The challenge posed by the New Zealand housing market is large and requires a multi-faceted, finely integrated response, but there are reasons for optimism”

A cause for optimism The challenge posed by the New Zealand housing market is large and requires a multi-faceted, finely integrated response, but there are reasons for optimism. • Never waste a good crisis: The supply and affordability problems have been a long time in the making and some are deeply ingrained. But the fact they have now come to a head has focused attention and represents an opportunity to make changes that could yield enduring benefits. • Fiscal headroom: In a rare act of unanimity, economists are agreed that governments (at least those without unsustainable deficits or debt) should apply fiscal stimulus, particularly by boosting investment in infrastructure. New Zealand is in that fortunate position. 38

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• Capital markets opportunity: In the current interest rate environment, there is a natural demand for long-term tenor infrastructure bonds because – among other things – of the need for insurance companies and other institutional investors to better match their assets to their long-term liabilities. And indeed a lot of initiatives dealing with each step in the consenting, construction, connection and purchase process are in train, although there is a valid debate around whether they are proportionate to the problem. The focus of this article is on financing and funding. Financing means getting the money upfront that is required for the capital expenditure. Funding is how you pay that back through time. The government’s first moves

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on the financing front were primarily focused at the retail end, in the form of its various programmes to give first-home buyers a leg up (the Welcome Home Loan and the KiwiSaver HomeStart and first-home withdrawal schemes). At the wholesale end (that is, to connect stalled greenfield developments to transport and ‘three waters’ networks), it has established a $1 billion contestable Housing Infrastructure Fund available to councils in high-growth urban areas. But the fund, although useful, is just a first push – a fact acknowledged in the government’s announcement. Addressing the accumulated ‘infrastructure deficit’ and ensuring that housing supply is efficient and future-proofed will require engaging the private capital markets.

DE DEVEL

Systemic solutions More systemic and therefore more enduring solutions in this regard are explored in the Productivity Commission’s Better urban planning draft report, released in August, and Local Government New Zealand’s Local government funding review. The reform direction will necessarily be toward more userpays, but the implementation mechanism will depend upon the nature of the service. In transport, it might be congestion charging, tolls or petrol taxes. These mechanisms are all well-understood, even if not at this stage widely implemented due largely to reluctance at central government level. Early signs are that this attitude may be softening. Less well developed in New Zealand are alternative

DEMAND (I.E. BUYERS) DEMAND (I.E. BUYERS)

methods of funding for utility infrastructure such as the ‘three waters’. Currently these connection costs are incurred by the developer and are paid by the house buyer in the initial purchase price, creating a substantial price “bump” which is contributing to our housing affordability issues. At the same time, the absence of efficient funding tools to

LAND

BULK INFRASTRUCTURE

Rural

Urban Urban Urban

LOCAL INFRASTRUCTURE

PARTNERSHIPS

ZONING/PLAN CHANGES

EVELOPER FUNDING

SOCIAL INFRASTRUCTURE

BUILDING MATERIALS

“PRIVATE ” INFRASTRUCTURE

)

CONSTRUCTION SECTOR CAPACITY spread costs over at least some of the (very long) lives of these assets is restricting the pace at which infrastructure can be delivered by fiscally-constrained councils. This diminishes new housing supply, which has its own impact on price. These costs could be flattened out over time through greater use of targeted rates and long term

bonds or borrowings backed by those rates, as recommended by the Productivity Commission. This would have the dual effect of creating an incentive to developers to accelerate their subdivisions and penalising land banking. For assets such as transport with more pronounced ‘public good’ characteristics, a broader conversation is needed about

DEVELOPER INCENTIVES

value capture and fair allocation of cost. Any notion of a new “user pays” regime may be more perception than reality as some of the Productivity Commission’s proposals would involve spreading costs that are already borne by home buyers, but in smaller increments through time. In others, the ‘deficit’ cost

is more intangible – as the aggregate productivity losses suffered through the personal inconvenience of being stuck in traffic are suffered across the wider economy. Ross Pennington is a partner at Chapman Tripp specialising in capital markets, banking and structured finance

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OCTOBER–DECEMBER 2016

Long-term future in start-ups The rise of tech precincts, clusters, innovation hubs and innovation districts in recent years is potentially the most significant change to real estate markets in the post-GFC environment, according to a report released by JLL Research and Consulting Pic 1.pdf

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SECONDARY SPACE PROXIMITY TO INFRASTRUCTURE NATURAL ADVANTAGES

Proximity to industry + clients Govt. assistance

PROXIMITY TO INDUSTRY AND CLIENTS ACCESS TO TALENT GOVERNMENT AND AGENCY ASSISTANCE

PROPERTY

Secondary space

PHYSICAL ENVIRONMENT

The mushroom-like growth of tech and innovation hubs (Hubs) has generated considerable discussion as to how their long-term growth and evolution is likely to drive a significant share of new tenant demand into the next property cycle and beyond. The report says that evolving technology has been a catalyst for the growth and that the corporate real estate market needs to adapt and stay relevant. Landlords need to remain flexible and agile. Adaptable commercial

space will be an integral part of the real estate sector moving forward and owners and investors can gain a competitive advantage through their own innovation and adaptability. There is no one dedicated area where hubs are likely to be located but, with nearly 26 per cent growth in GDP in the last five years for the Auckland tech sector, it is no surprise that they are popping up all over the country’s biggest city. Growth predictions, skilled immigration numbers and the

Fast facts • GridAKL is made up of 55 individual companies and over 150 BizDojo residents based at the Lysaght Building in Wynyard Quarter. BizDojo is the co-working and collaboration network which manages residents on ATEED’s behalf. • Businesses include companies working in application programming interface (A.P.I) and blockchain through to agri-tech, data visualisation and point of sale. • Auckland’s ICT and hi-tech manufacturing sector is worth $7.8 billion and

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accounts for 47,000 jobs (reference Digital Nation New Zealand: from Tech Sector to Digital Nation published in June 2016) • Grow North is an initiative by Massey University, ATEED and BNZ which is considering how to develop a smart innovation district in Auckland North. • Earlier this year, Auckland was named for the first time in the top 20 of JLL’s City Momentum Index (CMI). The index tracks the speed of change of a city’s economy and commercial real estate market.

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Proximity to infrastructure

SUCCESSFUL TECH HUB Natural advantage

Access to talent

INSTITUTIONAL AND ECONOMIC SUPPORT

evolution of generation Z will contribute to the advent of more tech and innovation hubs. Hubs are popular because they provide an affordable environment where co-located companies can collaborate and share ideas – they help provide a platform while a start-up develops. Successful tech or innovation hubs rely on a number of factors to be successful, including access to talent and access to infrastructure and clients. They evolve on the back of an area being reinvented or a new precinct being developed. Office space with particular characteristics is sought after by start-ups to ensure they have the right environment to incubate and grow without too much strain on the company’s turnover. There appears to be a gap in that market, especially in Auckland. Sustaining momentum: The role of property in the tech hub puzzle considers what start-up companies require once they outgrow co-working environments and need to find their own space. Once a start-up has grown enough to become a corporate occupier, character space offering a funky environment is generally preferred to a typical office setting. They will often seek space in the general vicinity of the tech hub from which it originated from, the report says,

SEVERAL FACTORS: there is no ideal recipe which assures the success of a tech or innovation hub – after study of locations around the world there are however a number of key ingredients in successful locations and clusters

as this enables them to retain their relationships and links to infrastructure and potential clients. Innovation hubs have emerged across the city including significant concentrations of activity in the CBD, Parnell and across the North Shore. The report identifies Albany, Takapuna, the CBD fringe, Onehunga, Glen Innes and Manukau as locations that have the right characteristics to appeal to new tech companies. In the Wynyard Quarter, the rapid emergence of the GridAKL innovation precinct has set the benchmark but new spaces are also emerging at Eden Terrace and Smales Farm. JLL Managing Director Nick Hargreaves says the ongoing redevelopment of GridAKLand Auckland’s dynamic tech sector, along with projects like the City Rail Link, are driving significant demand for commercial real estate here and putting Auckland on the global map. “The evolution of innovation precincts, tech hubs and clusters is potentially the most significant change to real estate markets post the Global Financial Crisis, and they

LEFT: Potential areas for expansion of tech and innovation hubs in Auckland. Source: JLL Research and Consulting. BELOW: The start-up lifecycle: there is little in the way of “affordable character space offering a funky environment” for start-ups once they graduate to the next stage of the growth cycle

MASSEY UNIVERSITY

Pic 3.pdf

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Talent and capital requirements

SMALES FARM

2nd Stage Growth

1st Stage Growth

3rd Stage Growth

+ business improvement

Becoming a corporate occupier

Incubation and collaboration

GRIDAKL

PARNELL

Venture Capital + funding agencies

GRAFTON Idea generators + process improver

K’ROAD MT EDEN

Seed funding

Initial Development

BREAKTHROUGH

2nd stage investment funding

NEWMARKET Pitch idea to investors

Initial innovators

ONEHUNGA

Property needs

Idea

NEW LYNN

MANUKAU AUCKLAND AIRPORT

are likely to drive a significant share of new tenant demand as we head into the next property cycle and beyond,” he says. Auckland Mayor Len Brown says Auckland’s innovation ecosystem has developed rapidly in recent years with GridAKL showcasing the innovation . . . and is essential in “enabling us to compete globally for investment and talent.” Auckland Tourism, Events and Economic Development (ATEED) is responsible for facilitating the strategic development of GridAKL on behalf of Auckland Council. Chief Executive Brett O’Riley says GridAKL is expanding with two Precinct Properties buildings coming online; one new building under construction, and an exisiting building being refurbished. Both buildings will house a mixture of start-ups, small and mediumsized businesses and corporates, and are scheduled to open in April and July 2017 respectively. The buildings will be part of GridAKL alongside the existing Lysaght Building, which opened in December 2015 with ATEED taking the head lease in one and leasing space in the other. “GridAKL is about creating a community, place and services that businesses can tap into so that they can grow faster, employ more people and further stimulate

Auckland’s economic growth,” says O’Riley.

Sound advice for the tech age Hubs and their growth are often counter cyclical to the rest of the economy and their appetite for space is driven by technological advancement rather than economic sentiment. The tech giants of today, and more importantly the tech and media giants of tomorrow, need a different kind of space than the structured leases and set-and-forget approach of the institutional property sector. Meeting the space needs for start-ups and tech innovators is going to require a step change for providers of real estate in the Auckland market. In a recent ULI paper (Technology, Real Estate and the Innovation Economy) Prof Greg Clarke and Dr Tim Moonen pointed to four key ways the real estate industry needs to adapt to the new wave of occupiers. 1 Real estate needs to become a service industry rather than an asset industry. If it is to generate returns in future, real estate operators have to offer a range of other services including funding, coaching, networking, and supplies. If they don’t start doing so, others will and many already do. Adopt a ‘service provider’ mindset

Character space

Innovation hub / tech hub

High rise buildings

PROPERTY

Your garage

The third industrial revolution In terms of its impact on real estate the first Industrial Revolution three centuries ago required large-scale industrial and factory spaces. The second in the early 1900s gave birth to the increasing need for office space as service industries took up a larger share of economic activity. This third industrial revolution – technology – has resulted in the need for a more flexible real estate that blurs the lines between traditional work places, public space and the urban environment in which they are located. Be prepared for continuous adaptation, feedback and complexity. 2 Real estate providers need to design careful tailor-made solutions when it comes to access, location, workplace, building layout and rental terms. A new business model is essential. Align interests and build transparency between owners and occupiers. Landlords might work with their tenants to build a compelling story around a development, or even become a venture capital partner with a direct stake in the success of their businesses. 3 Real estate must become a collaborating partner. This means not only managing relationships between big companies and start-ups, but also exploring opportunities

It is the widespread integration of technological advancements driven largely by the mass adoption of the Internet and a refocusing of technology on the more efficient use of the world’s resources. These spaces matter because, for small economies like New Zealand, innovation is not just a ‘nice to have’ it is an imperative if we are to make our way in an increasingly competitive international environment. In the post-GFC environment in major cities like London the tech sector leased three times more space than all other sectors combined. to provide accommodation or social infrastructure. It also means engaging with the innovation ecosystem to address gaps: be they skills, capital, affordability or density. 4 Real estate must actively help grow its tenants. Provide hands on stewardship to address the broader framework for innovation This paper was prepared by JLL New Zealand Research and Consulting. For more information: Senior consultants Chris McCashin 04 474 1614 and Adam Vodanovich 09 363 0260; Economist Angela Webster 09 363 0290. To read the full report go to www.jll.nz/new-zealand/ en-gb/research/387/whitepapertechhub-2016-september

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OCTOBER–DECEMBER 2016

Resilience key to enjoying jobs – and life

MANAGEMENT

A quarter of all employees view their jobs as the number one stressor in their lives

Many of us now work in constantly connected, always-on, highly demanding work cultures where stress and the risk of burnout are widespread. Since the pace and intensity of contemporary work culture are not likely to change, it’s more important than ever to build resilience skills to effectively navigate your life. What is this ‘resilience’? The original meaning of the English word is ‘to bounce or spring back’. Basically, resilience is not about avoiding stress or being free from the impact of highly challenging events. Resilience is the ability of individuals to positively adjust to adversity, and to recover when life has thrown a curveball at them. Research has shown that resilience can be increased by building personal strengths in five key areas: • fostering positive and nurturing professional relationships and networks • becoming more reflective • developing a growth mindset • getting to know your emotions • achieving life balance and spirituality. A study published by PwC (2014) demonstrated that initiatives and programmes fostering a resilient and mentally healthy workplace returned US$2.30 for every dollar spent — with the return coming in the form of higher productivity, lower absenteeism and decreased turnover.

A broad set of skills and behaviours that enable resilience in the workplace are a good return on investment. 42

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Fostering positive and nurturing professional relationships and networks Everyone needs to be nurtured sometimes, and it is important to foster these relationships. In practical terms that means actively seeking mutually beneficial, supportive relationships at work, such as mentors or buddies. For some it may mean to use a combination of social media and ‘coffee meetings’ to proactively network. For others it may mean to go and spend quality time with that person at work who can have your back when things get a bit frantic.

Becoming more reflective Reflection is a way of developing insights and an understanding of what is going on. Reflection helps us to develop knowledge and learn from past mistakes as well as from successes. Reflection often serves as a catalyst for thinking and growing. Writing about an experience is known to be a useful reflection tool, be it in the form of project notes, post-incident analyses, formal reports or informal personal journals. Talking through an experience with a trusted friend, partner, coach or mentor who encourages reflection through his or her enquiring questions is another approach to gaining insights and understanding.

Developing a growth mindset People with a growth mindset see challenges as something that they can take on and overcome over time with effort, new strategies, learning, help from others and patience. People with a fixed mindset, on the other hand, see challenges as something that is done to them, resent the idea that they may need to change, or at times even lack the realisation that can actively shape their experiences. It pays not to buy into the idea that ‘old dogs can’t learn new tricks’!

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The most resilient individuals and teams aren’t the ones that don’t fail, but rather the ones that fail, learn and thrive because of it. Being challenged — sometimes severely — is part of what activates resilience as a skill set. Our brains and minds can engage in lifelong learning, and developing a growth mindset can be learned by: • acknowledging and embracing imperfections – hiding from your weaknesses means you’ll never overcome them • trying different learning and problem-solving tactics – there is no one-size-fits-all model for learning and what works for one person may not work for you • stopping assuming that ‘room for improvement’ feedback translates into ‘failure’ • no longer trying to save face all the time, and just admitting to having goofed up now and then – it will make it easier to take risks in the future • learning fast isn’t the same as learning well, and learning well sometimes requires allowing time for mistakes.

Getting to know your emotions Resilient people are able to see positive aspects and potential benefits in a situation, rather than being continually negative

or cynical. Positive emotions and laughter have benefits most of us are familiar with. In the process of rushing from one commitment to the next, meeting deadlines, and responding to external demands, many of us lose touch with our emotions. When we do this, we’re far more likely to act unconsciously and miss out on the valuable information that our emotions contain. Becoming more reflective will increase the ability to understand one’s own emotional needs and reactions and those of others. Having insight into the emotional needs of others in the workplace can help spawn ideas for different ways of working with each other to reduce adversity.

Achieving life balance and spirituality The ability to positively adjust to adversity and recover from life’s curveballs is strong in people who have a sense of connectedness, achieve life balance and have an ‘anchoring force’ in their life. Spirituality may enhance health

Innovative leaders still showing the way This year’s Local Government Conference in Dunedin saw several long-standing local government practitioners receive life membership of Local Government New Zealand

and well-being by enabling people to access beliefs and practices designed to bring comfort and strength in the midst of stressful events. Similarly, a sense of meaning and purpose can actually be critical for surviving and thriving in the face of stress and adversity. Regardless of spiritual beliefs, it is important to strive for life balance by participating in a range of healthy activities outside one’s professional life: • physical activities – move your body differently than you may do at work • making sure that you regularly do something that nourishes you emotionally and spiritually. It pays to remember: • things will go wrong • life will not always be a bed of roses • mistakes will be made • people will annoy people • stuff happens. Embracing the ‘warm and fuzzy’ side of working and living with people is likely to be more effective than wishing things would be different, or ignoring the fact that people may need active support to improve their resilience. Dr Andrea Polzer-Debruyne is senior consultant at PeopleCentric, a group of psychologists that work with organisations in a variety of industries towards increasing individual and organisational capabilities and well-being

Big ideas Sir Barry brought big picture strategic thinking with an ability to deliver on the ground, so infrastructure to enable growth was provided. Transport corridors such as Puhinui Road to the Auckland Airport, Te Irirangi

Drive and Highbrook interchange and arterial route and the water pipeline from the Waikato River to serve Auckland were but some of his achievements. The Growth Strategy for Auckland of the 1970s era was developed when Sir Barry was chair of the ARA Planning Committee. Colin Dale provided the community ‘glue’. A proud community development practitioner prior to becoming city manager, Dale understood the need for communities to be empowered, with the council being a facilitator, supporter, funder and servant to

“The key to the success of the Manukau model was that civic leaders were prepared to look at models that bridged the best of the public and private sectors” the diverse peoples that came to make up the city. Every community was provided with the physical and social infrastructure to support its needs and aspirations. Neither was afraid to step outside the box of conventional norms. So council was the active developer of land and town centres, utilising public-private partnerships long before they became popular, building community facilities through shared responsibility schemes, walking alongside iwi and hapu to regain land that had been lost through confiscation, assisting in the re-establishment of marae, and building extensive infrastructure as an enabler to growth.

Manukau magic When Manukau City Council was amalgamated, the organisation had well over a dozen Council

Controlled Organisations (CCO). It had developed, including under my watch as CEO, a CCO for water (Manukau Water), a leisure company (Manukau Leisure), a property company (Tomorrow’s Manukau: Manukau Apopo), an investment company (Manukau Investments), and a building consent company (Manukau Building Consultants) which traded as a CCTO (Council Controlled Trading Organisation) as a taxable entity competing with two private providers. This networked model is reflected in the organisational arrangement in today’s Auckland Council. While the model has its critics, in my opinion it provides the city with enormous strength for managing its growth. Critically the model allows for innovation, within a governance context that allows the right incentives for making the correct decisions. The key to the success of the Manukau model was that civic leaders were prepared to look at models that bridged the best of the public and private sectors. While this model may not fit everywhere, as each community and region needs to work out arrangements that suit their ability to shape place, I do think that leaders in public life need to challenge whether the status quo is always the best. CCOs are not the bogey that some may make of them. They are a tool that can be utilised in the armoury of local government. I am proud to have worked under and alongside great local government servants Sir Barry Curtis and Colin Dale. They have played a huge part in contributing to the well-being of a city, region and nation.

LAST WORD

Two of the three recipients served the bulk of their careers with Manukau City Council – namely Sir Barry Curtis, Colin Dale and Sir Bob Harvey. Sir Barry Curtis was a 24-year mayor who devoted 39 years to the city, Colin Dale spent 21 years as city manager and over four decades with Manukau and Sir Bob Harvey was a veteran mayor of Waitakere City in the west of Auckland. I worked with and alongside Sir Barry and Colin Dale for over three decades and believe their stories are relevant to local government today, and profoundly into the future. Sir Barry and Colin Dale embraced innovation, were unafraid of change and recognised that the norms of local government of their day would not necessarily deliver the outcomes for the growth and community demands of southern Auckland. When the Auckland Council came into being in 2010, with the amalgamation of eight councils, Manukau City Council had one of the strongest balance sheets in local government throughout Auckland and New Zealand. It had the lowest average residential and business rates across the region, the lowest water and waste water tariffs, robust asset management plans fully funded and a modest net debt position. It moved to an Annual Value Rating system in 2007 in alignment with the Auckland City Council. In its 48-year history, the council had established large industrial and employment zones, and accommodated very significant population growth over many decades.

Leigh Auton is a Local Government Commissioner and a director of Auton & Associates with 35 years’ local government experience, a chairman/director/ trustee on several boards and provides consulting advice to public and private sector companies

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OCTOBER–DECEMBER 2016