NZ Public Sector Project Pipeline Continues to Grow

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Wednesday, October 5th, 2016
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As the boom in New Zealand’s construction sector rolls on, the list of major projects being undertaken by the government continues to expand.

Unveiling the latest version of its Major Projects Performance Report, the Treasury Department indicated that the government now had 55 major capital works projects which it was currently working on worth a combined total of NZ$36 billion.

This compares to only 38 projects worth just NZ$20.5 billion as recently as June of last year.

Transport projects lead the way, with $16.8 billion worth of projects being delivered ahead of defence ($10.4 billion) and service transformation ($2.6 billion).

Major transport projects include the Roads of national Significance project, the Auckland Acceleration Package and the City Rail Link project in Auckland.

Driving all of this is the Roads of Significance program being run by the New Zealand Transport Agency – a long-term program worth approximately $11 billion which includes work on a range or new road projects around the country.

Developments include the $2.5 billion Wellington to Northern Corridor, the Waikato Expressway and the Western Ring Route.

A further $2.635 billion is being spent on the Auckland Acceleration Package to improve inter-trip reliability and support population growth within the country’s biggest city, including through upgrades to the northern and southern corridors as well as through an East-West Connection and a $157 million project to upgrade the SH20A route to Auckland Airport.

Finally, the government is also building the $2.5 billion City Rail Link project involving the construction of two 3.4-kilometre underground rail tunnels to extend the existing rail line through Britomart to join the western line at Eden Terrace in Auckland.

An agreement with regard to funding for that project was signed by the Central government and Auckland Council in September.

The latest report comes amid an ongoing boom throughout the construction sector in New Zealand driven by the Christchurch rebuild and strong demand in Auckland.

In the June quarter, the dollar value of building work put in place came in at record highs of almost $NZ5 billion, almost double its level three years earlier.

Momentum continues to grow. In housing alone, almost 30,000 new building consents were issued in the year to August – more than at any other time since 2005.

Whilst the list of public sector projects continues to grow, so too does confidence in delivering the goods.

Out of the 54 projects whose performance to date has been assessed (one had not been assessed at the time of the report), the treasury has given a ranking of ‘green’ or ‘amber green’ to 31 of these, indicating that successful delivery against the project time, budget, scope and benefits appears to be probable.

As at June last year, this was said of only 16 out of 38 projects.

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