Treasury wary of more major projects in November update

Thursday 19th January 2017

The Treasury has heightened concerns about more of the government's most challenging major projects, tagging five for special attention in its latest update.

Of the 53 major projects under the Treasury's watching brief, one has attracted a red ranking, meaning a successful delivery would need changes to the budget, schedule, scope or benefits, while four more needed urgent action to deal with major risks, with a red/amber rating. That accounts for 9.4 percent of all projects on the watchlist, within the 5-to-15 percent range the government agency says is normal.

The project under greatest scrutiny is a Defence Force ANZAC frigate systems upgrade with a whole-of-life cost of $523 million. About $259 million has been spent on the project so far, which has fallen behind schedule by eight months and faces further cost pressures.

The Treasury upgraded its watch on the $206.4 million Lincoln University/AgResearch building project, Te Puni Kokiri's proposed Maori land service, and the Department of Internal Affairs' $111.1 million service delivery programme to red/amber, while retaining the red/amber rating for the Ministry of Health's national bowel screening programme.

Finance Minister Steven Joyce said the 53 projects on the watchlist account for some $37 billion of spending.

"The government is in the middle of our biggest ever infrastructure spend," Joyce said in a statement. "These investments are instrumental for the provision of quality public services for our growing country, and it is important that they are delivered well."

The report was finalised before the Nov. 14 earthquake near Kaikoura, and various agencies are determining its impact on their projects.

BusinessDesk.co.nz

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