NZ not measuring infrastructure outcomes well

Tuesday 17th August 2010

New Zealand's infrastructure project capability has fallen behind world best practice because of a prolonged period with relatively few major projects, the Centre for Advanced Engineering (CAENZ) says in a newly released 350 page report ‘Infrastructure Investment: Supporting Better Decisions'.

As a result, New Zealand is not well-equipped to evaluate the overall economic and social benefits and costs of implementing large projects such as new or improved roading or electricity networks.

"The report highlighted the need to have a more holistic approach than we've had in the past," New Zealand Council for Infrastructure Development chief executive, Stephen Selwood told BusinessDesk.

"Wider social and environmental benefits often haven't been measured, but can significantly affect business decisions."

An example is Auckland's Waterview motorway extension, which only considered the impact and advantages for the Waterview region. However, there's huge benefits in better connecting west Auckland to the Airport and Waikato to Auckland among others.

"When you have a more robust process that considers wider issues that are critical, it is a much better method," Selwood says.

Among 13 of the report's recommendations is a suggestion for a Benefits Realisation Process where, after a project has finished, there is an assessment of whether intended outcomes actually occurred - something almost never done in New Zealand.

Selwood says some of the recommendations created by multi-party discussions are already being picked up by central and local government agencies, led by the Treasury's National Infrastructure Unit.

"It isn't just the capital cost that's important, as the whole of life cost is the really big number," Selwood says, but whole of life evaluation has been rare.

"You might have competitive tendering, but that can forget that you've got to run a road for example, fill in its potholes. That ongoing part has never seriously been looked at."

Businesswire.co.nz

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