Shovel Ready Announcement Welcome, But Money Needs To Start Flowing
“Today’s announcement that the bulk of the $3 billion shovel ready infrastructure fund has been finalised is welcome, but to avoid major lay-offs in the engineering, design, consulting and construction sectors, projects must be urgently brought to market,” says Infrastructure New Zealand CEO Paul Blair.
“Ministers Robertson and Jones announced today that $2.6 billion of the $3 billion shovel ready fund has been allocated to 150 projects, with $400m still to be allocated.
“The spend is grouped into four main sectors, comprising $708m spent on transport, $670m on community and social development, $464m on housing and urban development, and $460m on environmental projects.
“Infrastructure market participants up and down the country will be pleased that the Government has announced this next step.
“However, for employers hurt by the sudden drop-off in local government and private sector investment, today’s announcement may not give them the certainty needed to retain underutilised staff.
“In the 6 weeks since the Infrastructure Reference Group provided their list of 800 projects, a significant gap has emerged in the infrastructure forward works programme.
“Civil Contractors NZ and the Association of Consulting Engineers NZ have estimated that engineering and construction job losses could hit 10,000 without money rapidly flowing into projects and programmes of deliverable work.
“The fundamental challenge still facing the industry is the lack of clearly defined projects and a timeline for when they will be brought to market.
“Just 12 projects were signalled today and details of when they would be tendered or how have not been released.
“A survey conducted by Infrastructure NZ in March showed that few employers can afford to wait 12 months on the basis of future spending promises.
“Will we use accelerated delivery models to rapidly move from announcements to money flowing into actual projects which put people to work?
“The industry strongly supports government infrastructure stimulus efforts, but urgently needs more detail on the projects and to proceed at pace,” says Blair.