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Additional Spending for Rail Just Tip of Iceberg

Additional Spending for Rail Track Just the Tip of a Multi $Billion Infrastructure Iceberg

Media release, 16 June, 2005

“Revelations that New Zealand’s railway tracks are in an even worse state than initially thought is just the tip of an infrastructure iceberg,” NZCID Chief Executive Stephen Selwood said today.

“It’s pleasing to see Government turning its attention to New Zealand’s growing infrastructure deficit. It has recently increased funds for transport and water treatment upgrades and has draft amendments to the Resource Management Act in the pipeline.

“But you don’t have to look far to see there’s a huge bow-wave of infrastructure demands looming.

“The Electricity Commission has projected that the level of capital expenditure needed to secure New Zealand’s future electricity supply will be somewhere between $3.5 billion and $7 billion over the next 20 years.[1]

“On top of all that, a few $billion or more will be required to bring the nation’s water pipes, drains, treatment plants, and flood protection systems up to standard. (Watercare have estimated Auckland’s much needed storm water upgrade will cost in excess of $1.5 billion alone.[2])

“The Auckland Regional Council draft ten year transport strategy released yesterday notes that even with the $10.7 billion expenditure planned for Auckland’s transport woes, it will not be possible to fully fund all of the roading projects.[3]

“Add in normal project cost escalation and an extra $6 billion to fund the major projects not included in the ARC plan (like completion of the Western Ring Route, the Eastern Transport Corridor or an additional Harbour crossing), and there won’t be much change out of $20 billion for Auckland over 20 years.

“And then there’s the other major roading projects outside of Auckland not included in Transit NZ 10 year plan like fixing SH1 north of Wellington, estimated at between $1 to $2 billion[4], the Waikato Expressway ($700m), the Maramarua Expressway ($300m)[5] and completing the Tauranga Strategic Roading Network ($700m).[6]

“NZCID projects the national state highway funding deficit will be in excess of $5 billion over the next 20 years, over and above the increased funding already announced by Government.

“The New Zealand Council for Infrastructure Development is looking to work collaboratively with Government to identify how best the nation’s electricity water and transport needs can be met.

There is one thing for certain - we do need to act with urgency. As the experience with rail has highlighted once again, the longer you defer a problem of this magnitude, the more it costs to fix, Mr Selwood said.

ENDS

[1] http://www.electricitycommission.govt.nz/pdfs/opdev/transmis/soo/pdfssoo/SOO-May-9.pdf p108

[2] http://www.watercare.co.nz/assets/Publications/asset_management_plan/ProjectsandFinancialForecast.pdf p70

[3] Moving Forward Draft Auckland Regional Land Transport Strategy 2005 p52

[4] http://www.gw.govt.nz/story_images/1833_Summaryofdraftte_s3492.pdf p10

[5] Auckland Regional Land Transport Strategy – Key Project Monitoring pp 31-35

[6] http://www.ebop.govt.nz/media/pdf/Strategy_Regionallandtransportstrategy.pdf p7

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