Infrastructure

150 projects for $3b shovel-ready fund

The first chunk of projects set to get money from the Government's shovel-ready fund has been announced

Auckland, Canterbury and Otago will get the largest chunks of the Government's $3b shovel-ready fund. 

The Government announced it had approved over 150 projects in principle - adding up to $2.6b - with further due diligence work required to confirm them. 

Auckland will get $500 million from the fund, Canterbury $300m, Otago $260m, Wellington $185m, Bay of Plenty $170m, Waikato $150m, Northland $150m, Manawatū/Whanganui $140m, Hawkes Bay $130m, Southland $90m, West Coast $90m, East Coast $106m, Taranaki $85m, and Top of the South $85m.

After the call went out for shovel-ready projects the Infrastructure Reference Group (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.

No Public-Private Partnerships were on the list of more than 150 projects approved by Cabinet.

Some purely private projects had made it on and would be financed either through a grant or concessionary loan (loans given on more generous terms than market loans). 

Finance Minister Grant Robertson said "this is about that certainty that we constantly hear from the construction senior they want".

However, only a dozen projects were announced today with the full list to be gradually rolled out over the next few weeks. Some, by ministerial visit:

"I wouldn't want to break a habit," Infrastructure Minister Shane Jones said.

The largest project announced today was a 'grey' infrastructure one in Rotorua profiled by Newsroom in May. Government has allocated $55m to this project.

Jones said the list was a representation of the type of projects the Government was willing to fund and batted away queries from reporters about why the full list hadn't been released to give greater certainty to the construction sector.

"They're not purely with local Government they are with other commercial players...it would be absolutely right that we're not announcing things and unwittingly [sharing] information which at this stage has to remain private between the Crown and the applicants."

The shovel-ready aspect referred to projects that would be ready to go within six to 12 months. 

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

Cabinet had also made broad decisions on the types of projects it wanted to fund with its $3b shovel-ready fund. That included spending $464 on housing and urban development, $460m on environmental projects, $670 on community and social development, and $708m on transport projects.

Jones said the process had effectively created the largest stocktake of infrastructure projects ever conducted. 

“I am extremely proud of the depth and breadth of this unprecedented piece of work"

Rotorua's $55m project

Rotorua's Wharenui Rd and State Highway 30 development will allow for the construction of 1100 sections and the development of iwi land.

Jones told Newsroom earlier that the Government had been lobbied by former Labour MP turned Rotorua Mayor Steve Chadwick to fund the development which would fix a shortage of industrial land and address a housing shortfall of nearly 1700 homes. 

Rotorua Chamber of Commerce President Kiri Tahana said SH30 was currently heavily congested and a major impediment to the development of land in that area.

"Our infrastructure is not fit for purpose for the current population.

"So it's not just about future-proofing it's also about ensuring the current population has the infrastructure to support current activities."

Jones said at the time that the extra construction work from this project would revive employment and enable more development by freeing up land for residential and industrial construction. 

"I fully expect that we'll hear more apocryphal accounts from the green lobby as to the danger of 'grey' infrastructure and the virtues of green infrastructure.

"It's a false dichotomy. We need both."

At Wednesday's announcement, Jones highlighted that a large chunk of the $3b fund would be spent on environmental and climate resilience projects too.

"This is to dispel the misapprehension that as the Infrastructure Minister I'm infatuated with 'grey' infrastructure and have less than kind thoughts for 'green' infrastructure."

Individual projects set to receive funding:

  • Auckland City Mission ($22m) - 200 jobs during construction and 150 once completed.
  • Bay of Plenty - Wharenui Road and SH30 with Rotorua Lakes District Council and NZTA ($55m) - 300 jobs.
  • Canterbury: Final section of the Coastal Pathway with Christchurch Coastal Pathway Group and Christchurch City Council ($15m) - 100 jobs over a year.
  • East Coast: Rugby Park Grandstand with Poverty Bay Rugby Football Union ($8m) - 30 jobs
  • Hawke’s Bay: Whakatu Inland Port with Port of Napier Ltd ($20m) - 46 full-time jobs over two-years then 28 jobs once completed.
  • Northland: Whangarei Rejuvenation with Whangarei District Council, Whangarei Boys High School, Hihiaua Cultural Centre Trust, Northland Rugby, Bike Northland Incorporated and Ruakaka Recreation Centre ($20m) - 200 jobs.
  • Taranaki: Thermal Drying Facility Replacement with New Plymouth District Council ($37m) - 77 jobs during construction.
  • Top of the South: Blenheim Art Gallery and Library with Marlborough District Council ($11m) - 30 direct jobs.
  • Southland: Invercargill Inner City Development with Invercargill City Limited ($10m) - 350 jobs
  • Waikato: Taupo Town Centre with Taupo District Council ($20m) - 92 jobs

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