Infrastructure Reference Group Support NZ’s Economy

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Infrastructure Investment Group NZ to create jobs, kick-start COVID rebuild

A new package of infrastructure investments will help kick-start the post-COVID rebuild by creating more than 20,000 jobs and unlocking more than $5 billion of projects up and down New Zealand.

Finance Minister Grant Robertson and Infrastructure Minister Shane Jones today outlined how the $3 billion infrastructure fund in the COVID Response and Recovery Fund will be allocated across regions, following extensive engagement with local councils and businesses.

The Ministers also announced a range of projects that are receiving funding to highlight the broad range of infrastructure being invested in across our communities.

The investment package includes about $210 million for climate resilience and flood protection projects, $155 million for transformative energy projects, about $180 million for large-scale construction projects and $50 million for enhanced regional digital connectivity.

“This is about creating jobs as we recover and rebuild from the recession caused by the global COVID-19 pandemic. Because we went hard and early with our health response, we’ve been able to open up the economy quicker than other countries and get a head start on our recovery,” Finance Minister Grant Robertson said.

“The overall package is expected to deliver more than 20,000 jobs across New Zealand and unlock investment with a project value of more than $5 billion. Building infrastructure is a key component of our economic recovery plan. It creates jobs and provides much-needed economic stimulus.”

Earlier this year, Ministers established the Infrastructure Reference Group (IRG) to work with local councils and businesses to identify a pipeline of projects to support the economy during the COVID-19 rebuild.

The IRG received a total of 1924 submissions across approximately 40 sectors of the economy. Those submissions were scrutinised under criteria set by the Government and a short list of 802 projects presented to Ministers.

Cabinet has now made initial decisions about key sectors it would like to support and general regional distribution of funds, with more than 150 projects worth $2.6 billion being approved in principal. Officials are now undertaking final due diligence to ensure projects are viable and offer the benefits stated by applicants.

“We have focused on key sectors that are central to the Government’s economic plan – housing and urban development, climate resilience, energy and community development,” Grant Robertson said.

“This package will provide Kiwis with confidence that the Government is backing them in this challenging economic environment by creating new jobs and opportunities in communities around the country.”

The COVID Response and Recovery Fund (CRRF) set out in Budget 2020 earmarked $3 billion for infrastructure projects. Cabinet’s initial decisions on this allocation include:

  • Housing and urban development: $464m
  • Environmental: $460m
  • Community and social development: $670m
  • Transport (cycleways, walkways, ports and roads): $708m

The projects are in addition to the $12 billion New Zealand Upgrade Programme and existing Provincial Growth Fund investments.

Infrastructure Minister Shane Jones said the pipeline of projects would create immediate economic activity in the metropolitan centres as well as the regions.

“Both are critical to our economic and social recovery from the COVID-19 crisis,” Shane Jones said.

“Not only has this massive undertaking provided us with the largest stocktake of infrastructure projects we’ve ever had but it’s enabled us to partner with central and local government, the private sector and community groups to deliver projects for all Kiwis.

“The specific projects we’re announcing today are examples of the sort of projects we’re supporting – from nationwide investments in flood protection and better digital connectivity to civic facilities that we know form the bedrock of our communities.

“I am extremely proud of the depth and breadth of this unprecedented piece of work,” Shane Jones said.

Notes to editors:

All approvals are in principle and subject to contract negotiations. Investment values are also subject to change.

Further announcements on project details will be made over coming weeks. Approximate regional funding is detailed below:

Auckland region                      $500 million

Bay of Plenty Region              $170 million

Canterbury                              $300 million

East Coast                              $106 million

Hawke’s Bay                           $130 million

Manawatu/Whanganui            $140 million

Northland                                $150 million

Otago                                      $260 million

Southland                                $90 million

Taranaki                                  $85 million

Top of the South                     $85 million

Waikato                                   $150 million

Wellington region                    $185 million

West Coast                             $90 million

About $400 million has been set aside as a contingency as the Government takes a responsible approach to managing spending on behalf of taxpayers. Funds not required in the contingency will be put towards further infrastructure projects, providing an incentive for local councils to deliver the approved projects on time and on budget, as this would unlock a further potential $400 million of investment.

Please find attached a list of projects being announced today. This provide examples of the projects Cabinet seeks to support through the CRRF funding.

IRG projects announced today:

All approvals are in principle and subject to further due diligence and contract negotiations. The amount the Crown invests may be subject to change.

Auckland: Auckland City Mission

Approx. $22m IRG investment, approx. 200 jobs during construction and 150 once completed

The Auckland City Mission HomeGround will provide housing, health and social services. The significant project includes 80 apartments, a home for over 2000 people over the next 25 years, direct from the social housing register. It will also include 25 detox beds, a dental clinic, pharmacy, retail and community spaces as well as a conference and events facilities for all Aucklanders.

An average of 80 workers will be on site during construction over the next 12 months with over 150 offsite personnel for the remainder of 2020 and into next year. Once complete, the HomeGround facility will employ approximately 150 people.

This project is already under way but timelines and costs have been affected by COVID-19 and the resulting lockdown. This funding will ensure this important project can continue.

Bay of Plenty: Unlocking urban land development (Wharenui Road and SH30) (Rotorua Lakes District Council and NZTA)

Approx: $55m IRG investment, approx. 300 FTE

This project is a partnership between Rotorua Lakes District Council and local iwi Ngāti Whakaue, and also involves NZTA. This will help facilitate the development of Māori land, provide housing and generate short and long-term employment.

The project comprises building roading and storm water infrastructure to enable housing development for up to 1,100 sections, as well as state highway upgrades and stormwater works.

State Highway 30 upgrades will include the Wharenui Rd intersection (traffic lights), Ohwhata Rd intersection (traffic lights), Brent Rd intersection (banned right turn and traffic calming / crossings), Wharenui to Brent link (public transport, walking and cycle facilities), Baisley intersection (traffic lights), Iles to Baisley link (four laning, public transport, walking and cycle facilities) and some local road treatments (Traffic calming, public transport, walking and cycle facilities).

Groundworks are currently being progressed on the site. Design work and consenting would proceed with pace for the remaining 900 sections of zoned land and contractors would continue on to the next stage of development. Rotorua Lakes Council are currently working on master-planning and storm water design (concept designs have been completed).

Canterbury: Final section of the Coastal Pathway (Christchurch Coastal Pathway Group and Christchurch City Council)

Approx. $15m IRG investment, approx. 100 people over 12 month period

The Christchurch Coastal Pathway, a post-earthquake project, is now 80 per cent complete. The final major stage of the project is to complete the remaining section between Redcliffs and Shag Rock (i.e. around Moncks Bay).

The Coastal Pathway is a four-metre wide, 6.5km long shared pathway, which runs from Ferrymead Bridge along the south side of the Estuary and past the Sumner beaches to Scarborough, with native-planted swales alongside where feasible.

The fifth and final stage is required to complete the Pathway route and to close the gap between Redcliffs and Shag Rock.

It is estimated that on completion, the Coastal Pathway will attract more than 1 million user visits per year, making it the second most used facility in Christchurch City after the Museum and Arts Centre. It is already exceeding usage expectations on the parts that have been completed.

Construction is expected to be able to begin within six months.

East Coast: Rugby Park Grandstand (Poverty Bay Rugby Football Union)

Approx. $8m IRG investment

The Rugby Park grandstand is not safe and requires replacement. The project involves the demolition and rebuild of a fit for purpose grandstand and facilities for Poverty Bay Rugby Football Union (PBRFU) and the community of Gisborne.

The historic Rugby Park grandstand has been closed since May 2019 due to its condition, primarily its seismic strength. The building has had an initial seismic assessment undertaken which found it to be only 15 per cent of New Building Standards. The roof also needs replacing, and there is an area of degrading asbestos panel that needs removing. The PBRFU board considered the facility was too high risk to continue using.

Estimates have found it is more economical to remove the entire grandstand and replace it with a fit-for-purpose facility for not only Poverty Bay Rugby but the wider community.

Construction is expected to begin by January 2021, employing around 30 people.

Hawke’s Bay: Whakatu Inland Port (Port of Napier Ltd), approx. $20m IRG investment

The Whakatu Inland Port project will involve the construction of a 12 hectare offsite port between Napier and Hastings, with direct rail and road connections to Napier Port.

This will provide for the growth of the port, in the face of limited space at the port itself, and relieve the pressure on its facilities from Hawke’s Bay’s growing primary sector exports, including horticulture and forestry.

The Crown support for the Whakatu Inland Port will bring the development forward by 5 years. Stage one of the project will now be able to start immediately with clearing of the 12ha site at Whakatu and will provide the equivalent of 46.5 jobs over the two-year development, and 28 permanent jobs once completed.

The project will also contribute towards improved supply chain efficiencies in the region and the wider lower North Island, environmental benefits through greater use of rail, and enablement of wider growth through connections to other freight infrastructure.

Northland: Whangarei Rejuvenation (Whangarei District Council and others)

Approx. $20m IRG investment, approx. 200 jobs

The Whangarei Rejuvenation is an investment in the social and community infrastructure of Whangarei, covering a group of projects identified as priorities for the area including a cultural centre, new shared paths infrastructure, and sporting and trades training facilities.

This is the day to day infrastructure that helps Whangarei residents move around their city and access work, education, and recreation. The Whangarei Rejuvenation also includes the construction of spaces for learning and sporting activities.

The Rejuvenation is predicted to create over 200 jobs in the area. The Government is partnering with a number of organisations to deliver the Rejuvenation, including Whangarei District Council, Whangarei Boys High School, Hihiaua Cultural Centre Trust, Northland Rugby, Bike Northland Incorporated and Ruakaka Recreation Centre.

Taranaki: Thermal Drying Facility Replacement (New Plymouth District Council)

Approx. $37m IRG investment, approx. 77 jobs during construction

The Thermal Drying Facility (TDF) at the New Plymouth Wastewater Treatment Plant processes the bio-solids from the district’s sewage, turning it into a household fertiliser which is sold in bulk and in retail outlets.

The TDF diverts the district’s wastewater bio-solids away from landfill and provides a beneficial reuse for what would otherwise be a waste.

The existing TDF is at the end of its serviceable life and needs to be replaced. The existing TDF is fuelled by natural gas and produces about 2000 tonnes of CO2 per year. Its replacement has been designed in collaboration with Hiringa Energy to be fuelled by a blend of natural gas and green hydrogen.

It is expected that will initially reduce the amount of natural gas consumed by up to 25 per cent, in turn reducing the carbon footprint of the facility by about 500 tonnes per year.

Once operational, the percentage of hydrogen blend will be increased, further reducing its carbon footprint.

Future opportunities created by this project include upgrading the facility to generate hydrogen on site. Not only could this fuel the TDF but any excess could be put to other use.

Top of the South: Blenheim Art Gallery and Library (Marlborough District Council)

Approx. $11m IRG investment, approx. 30 direct jobs

The proposed development is a 3,600 square metre combined Library and Art Gallery located in Blenheim’s CBD. The two-level building has 75 per cent of its area allocated to the Library with the remaining area for Art Gallery activities.

The new facility is a critical part of community and social infrastructure and will serve a regional population of close to 50,000 and a town population of approximately 32,000. It will be spacious, accessible and designed for people providing an active, engaging and friendly hub and a new social heart for the Marlborough community.

Modern day libraries are used by a range of community people and are also very popular with visitors. The Art Gallery will also attract people from outside the region through its programme of exhibitions.

It is estimated that the project will generate $13.2m of value added GDP over the two year construction period and the day-to-day Library and Art Gallery operation will generate approximately $2m into the local community from wages alone.

Construction was on track for September 2020 pre COVID-19 and officials will work to get the project under way as soon as possible.

Southland: Invercargill Inner City Development (Invercargill City Limited)

$10m IRG investment, approx. 350 jobs

This project will give new life to the Invercargill CBD, which currently poses a considerable seismic risk, has low levels of foot traffic, struggles to retain businesses and lacks the soul and presence expected of a modern CBD.

In its place, a modern city centre will be created with a range of dining offerings, retail space for large anchor retailers and smaller boutique stores, a covered, multi-storey car park with 625 parking spaces, open air internal laneways and outdoor dining spaces within the precinct, and additional office space and apartments which will see an additional 1500 people in the CBD every day.

The project will balance developing a contemporary, functional centre that provides an engaging customer experience while preserving the historical character of the area. Three heritage building facades will be preserved and worked into the new development, including that of the former Southland Times building, Bonsai Restaurant and Cambridge Arcade.

The development will occupy the rectangular block of buildings between Esk St and Tay St, bordered by Dee St and Kelvin St.

Waikato: Taupo Town Centre (Taupo District Council)

Approx. $20m IRG investment, approx. 92 FTE

The foundation of the town centre transformation is a reorientation of the street network. The streets and lanes that connect the town centre provide the places where people meet to do business and enjoy the social atmosphere. Turning them into quality places is a critical part of attracting people to spend time in the town centre with the associated social and economic benefits. Once the street network is transformed the other parts of Council’s strategic planning can fall into place.

This project will shift local through traffic from Lake Terrace and Tongariro St and instead utilise Titiraupenga St and Spa Rd. To achieve this, upgrades are required along Spa Rd, Paroa Hapi St, and Titiraupenga St. These upgrades would include five intersections and associated works to allow for the flow of traffic while encouraging pedestrian and cyclists to access the town centre. The project also provides for the revitalisation of the existing intersections along Ruapehu St with the focus on addressing pedestrian and driver safety issues to complete and enhance the sense of place unique to Taupo CBD.

Along with the reorganization of traffic flows this project will turn Tuwharetoa St into an “eat street” destination attracting people and providing alfresco dining opportunities that are safe, inviting and commercially viable. It will create an opportunity for public/private investment and cooperation. This project will deliver on the community’s aspirations for an attractive town centre with shared streets focused on the needs of pedestrians and cyclists.

Construction activity could be under way by August.

 Wellington: Wellington District Court Refurbishment (Ministry of Justice)

Approx. $14m IRG investment, approx. 300 jobs

The refurbishment of Wellington District Court addresses a range of issues that will allow for enhanced delivery of court services.

The project will include upgrading the public spaces, court rooms and modernising security systems. New spaces will be designed that improve the District Court for victims. This refurbishment project aligns with existing work to the building exterior.

Improving the building will provide a welcoming service experience while improving facilities for the public, staff, and the judiciary.

The planning, design and construction of the Wellington District Court refurbishment is estimated to create between 300 and 350 jobs directly and indirectly during the design and construction period.

Design work will being immediately with initial construction expected to begin early in the New Year.

West Coast: Ports Package (Buller, Grey and Westland District Councils)

Approx.  $7m IRG investment, approx. 35 jobs

A package of wharf and port infrastructure investments at Greymouth, Westport and Jackson Bay will significantly improve the region’s ability to service regional fishing and bulk industries.

In addition to 35 jobs in construction, the projects provide downstream permanent jobs in the region and builds on the earlier $2.6m PGF investments in the Coast’s ports that are now completed and have stimulated new commercial proposals.

At Greymouth, an upgraded post slipway will enable the Grey District, and wider region, to develop a boat repair and maintenance hub for the South Island.

The creation of a “bulk precinct” at Westport will enable a commercial deal with a significant exporter to be concluded, creating a secure and class-leading fishing precinct and bringing forward the expansion of current fish processing facilities with an additional 30+ processing jobs.  Wharf repairs and gravel removal will provide security for current and new infrastructure. They will also capitalise on the opportunities of the fishing and bulk industries by ensuring that wharf infrastructure is fit for purpose and can provide for the future growth in these sectors.

The replacement of wharf piles and supports at Jacksons Bay will rejuvenate an important local asset for the commercial fishermen. They would otherwise have no suitable wharf and unloading structure, with the nearest facilities at Milford Sound to the south and Greymouth to the north. These works will significantly extend the life of the Jackson Bay Wharf and improve the viability of local fishing operations.

These projects will start within two months and provide local jobs now and into the future. They revitalise and support fishing, coastal and port operations through a significant length of the South Island’s West Coast providing infrastructure for commercial operations and growth.

NB: Minister Jones will be making announcements in Manawatu-Whanganui on Thursday and Otago will receive additional good news following the $85 million announced by the Prime Minister last week in coming weeks.

Media Release – 1st July 2020

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