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$12 billion announced for infrastructure – Auckland clear winner

Home Insights $12 billion announced for infrastructure – Auckland clear winner

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Contributed by: Daniel Minhinnick and Patrick Senior

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Published on: January 29, 2020

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Today the Government has announced $12 billion in additional funding for infrastructure – much of this directed at Auckland's transport network. Tauranga, Wellington and Christchurch will also benefit from increased investment as key growth hubs.  

The Government has shown an intent to fund 'shovel-ready' projects that are already partly - or fully - planned. This approach means that the Government can get projects off the ground quickly, which could mean early wins ahead of the September 2020 election. This will also mean greater certainty for the construction industry and a boost for the economy.

The bulk of the funding announced today will go to transport industry. In Auckland, the following projects will benefit: 

  • The section of the Southern Motorway between Papakura and Drury will be expanded to three lanes and this work will start in late 2020;
  • The train line from Papakura to Pukekohe will be electrified with work starting in late 2020;
  • A third main heavy rail trunk line from Quay Street / Britomart Station to Wiri will be constructed and work will start in late 2020;
  • Penlink, designed to improve the connectivity between Auckland and the Whangaparoa Peninsula, will start late 2021;
  • Skypath and Seapath, now both adopted by NZTA and being taken forward to improve connectivity between the CBD and the North Shore, will be starting in late 2021;
  • Mill Road corridor improvements will start in late 2022; and
  • Two new train stations (Drury Central and Drury West) will improve connectivity to the Drury development hub with work starting on those stations in 2023.

This morning's announcements also promised significant transport investment in Waikato, Bay of Plenty, Wellington and Christchurch.

In Tauranga, this includes a four-lane Tauranga Northern Link and upgrades to State Highway 2 to Omokoroa, which are expected to improve safety and unlock land in Tauranga for future housing development.

Wellington will benefit from four-laning State Highway 1 from Otaki to North of Levin and the second stage of safety improvements to State Highway 58 in the Greater Wellington area.

Christchurch will benefit from accelerated public transport growth in the south-west of the city, safety improvements, and a more reliable route to the Lyttelton Port. This also coincides with a recent statement of expansion by Lyttelton Port Company.

In other infrastructure sectors:

  • Hospitals and health – this morning's announcement commits $300m across a variety of capital investments.
  • Schools – the 2019 Budget announced that schools were to receive $1.2 billion in funding over the next ten years. This morning's announcement confirms that the Government continues to support the maintenance of schools throughout New Zealand but did not make any specific commitments that mirror the work in the transport sector.

The Government has stated that these announcements will boost the economy and provide the construction industry with certainty. 

With tight timeframes and already a number of projects being promoted, the construction industry may struggle to meet this demand. This may signify further opportunities on New Zealand shores for overseas consortia.

Please contact one of our experts to discuss the potential implications for your business. 

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