Infrastructure strategy: Key to inclusive economic growth

New Zealand’s population and its priorities are changing fast, presenting a complex challenge for both private and public infrastructure delivery.

By 2050, 92% of New Zealand’s population will be based in urban centres. Auckland is growing much faster than the rest of the country and, by 2035, its population will increase to more than 2 million. In the same year, we will reach a milestone: one in every 4.5 New Zealanders will be aged over 65.

We also have growing challenges to face around sustainability and climate change, with technological disruption presenting a constantly moving target. Meanwhile, COVID-19 has changed the way we
connect with the world forever.

Amidst all this change, MinterEllisonRuddWatts spoke to Ross Copland of the New Zealand Infrastructure Commission Te Waihanga and Adrian Littlewood of Auckland Airport to explore how and why strategy setting plays a vital role in delivering the infrastructure we need.

It’s the outcome that counts

Whether it’s to get people on planes and sustain a profitable business, or to deliver world-class transport infrastructure in our cities, strategy setting needs to start with a specific outcome in mind, Copland says. “One of the most significant issues we face is that most of the problems we ask people to define start with a solution in mind. In the context of transport, we need to be interrogating the modes of transport objectively and, in the business case stage, we need to be slow to jump to solutions.”

“It’s about reframing the question and starting from the outcome and working backward – rather than starting from a solution and working forward.”

"It’s about reframing the question and starting from the outcome and working backward – rather than starting from a solution and working forward.” - Ross Copland, New Zealand Infrastructure Commission Te Waihanga

Three foundational outcomes

Te Waihanga aims to make changes at a system level, rather than recommending or consulting on individual projects, says Copland.

“We’re not here to recommend a second harbour crossing or light rail. Our goal is at the system level, thinking about the role of government, the role of regulators, the role of institutions that fund and finance infrastructure at that very high level and saying – what are the settings and needs that need to be met?”

As part of the strategy Copland says they’ve broken everything down to three outcomes to work towards.

“Number one is building a better future, and this is about infrastructure that’s resilient to stresses, shocks and prepared for change and the types of change we’re expecting. Those changes include climate change, transitioning to zero carbon future, technological disruption, demographics – in particular growing urban and shrinking rural populations – as well as the need to have a better partnership with Māori than we have historically.

“Number two is enabling the competitiveness of our cities through infrastructure, while number three focusses on the system – how we design, fund, plan and ultimately execute our infrastructure investments to help continue to deliver the first two outcomes in a changing environment.”

Adapt to change

Adrian Littlewood couldn’t have picked a tougher time to be the CEO of the country’s largest airport. But he says, when it comes to strategy setting, disruption and change has been the norm for the airport, not the exception. His story of the airport’s conception is proof of that, he says.

“When the airport was originally conceived there were 10 possible locations, including Browns Island. The reason being the technology of the time was flying boats.”

He says that the team eventually settled on Mangere for the airport site and came up with a runway and terminal plan consistent with current trends and demand in New Zealand – and all because a Ministry of Works’ engineer went to the United States to see what was happening with aircraft technology, and he managed to find his way into Boeing where he saw the 747.

“That changed everything. The plan had not allowed for a 747, so runway length, width, terminal size, passengers per plane et cetera had not been considered at all.”

The airport’s infrastructure plan had to change completely, as nobody could predict how fast this new technology would take off and it was near impossible to plan for the democratisation of travel that followed.

“Back then, we had 50,000 passengers in the first year, and in 2019 we had 21 million. When it comes to planning infrastructure, it’s easy to look back at that and assume it’s been accounted for and that there won’t be any more changes of that magnitude, but risk always comes back around.”

True to form, 64 years after the 747 changed air travel forever, COVID-19 came and transformed the industry again. Littlewood says the airline’s master plan stayed the same despite this major disruption.

“Having an overriding masterplan that you can adapt is at the core of good planning. In this past year, we’ve asked if our masterplan is still right, and it is. There has to be some adaptations because of post- Covid requirements so we have to allow for that – but the master plan stays true.”

Turning a strategy into a master plan

While Copland and Littlewood may have unique perspectives because of their positions in public and private organisations, they both agree that outcomes-focused planning for infrastructure is important.

Says Littlewood: “We have our guiding star, which is our responsibility to connect New Zealand to the rest of the world and to facilitate trade, travel and tourism. From that outcome, we create a master plan which has to take a 30-year view to express infrastructure strategy in a workable form.”

Done well, Littlewood says these plans have to take into account all foreseeable variables including everything from technological disruption and regulatory change to climate change.

"Anticipating disruptors is a key part of any plan, and so is leaving room for the disruptors and changes that you might not anticipate – whatever they may be.” - Adrian Littlewood, Auckland Airport

“Anticipating disruptors is a key part of any plan, and so is leaving room for the disruptors and changes that you might not anticipate – whatever they may be.”

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