Upcoming Challenges
67. In addition to the "snapshot" of the current state of New Zealand's infrastructure stock, the PwC report also considered whether or not existing infrastructure arrangements are sufficiently resilient to meet New Zealand's sustainable development objectives in the future.
68. Several potential future "soft spots" were identified. Officials have also identified a number of areas that could have a negative impact on sustainable development.
69. This paper proposes arrangements to help ensure that these and other future emerging issues can be identified and addressed in a timely manner.
70. The "soft spots" identified are covered in the next section.
Energy
Gas Security
- Gas exploration and field development may be insufficient and may have negative impacts on electricity generation and other gas-using investment. Unless more gas is found, greater use of other electricity generation fuels such as coal may be required. Upward pressure on electricity and gas prices is expected.
The Minister of Energy is reviewing policy settings in relation to gas exploration and development that would strengthen incentives for increased levels of gas exploration in the near term.
Transport
Wall of Wood
- PwC notes that the maturation, harvesting and transportation of the projected "wall of wood" will put pressure on existing road and rail transport networks and ports. In many cases, the rail infrastructure is inadequate. Use of roads to transport the "wall of wood" can be expected to significantly impact on ongoing road maintenance requirements.
Coal
- Solid Energy plans to double the amount of coal taken out of the West Coast. PwC reports that rail upgrades and maintenance is required to support existing volumes, and that a number of grades need to be eased to allow an increase in rail tonnages.
Auckland International Airport
- PwC reports that passenger processing capacity at Auckland International Airport (AIAL) is under pressure. The capacity of passenger processing areas is at times insufficient to accommodate the volume of passengers that currently pass through the airport, and is likely to be further stretched as passenger numbers increase. AIAL is planning major extensions in the next couple of years and work is being done to identify how much space will be required by border agencies.
Water
Irrigation
- In some cases, the large scale of irrigation projects and uncertainties over access to water mean that financial institutions are unwilling to fund scheme development. Concerns have also arisen over the environmental impacts of irrigated farming (this issue is being addressed under the "water quality - managing land use" work in the SDPoA). The Minister of Agriculture has asked MAF to examine whether there is a role for greater central government assistance in funding community irrigation infrastructure.
Sewage and Stormwater Discharges
- PwC has noted that there are semi-regular occurrences of stormwater and sewage overflows in cities and towns, particularly during heavy rain, which can cause human health issues and environmental degradation. Due to lack of adequate benchmarking the extent of overflow discharges and their impact is at present relatively unknown.10
Telecommunications
ICT
- Officials note that ICT has an important role to play in improving New Zealand's productivity. Barriers to realising productivity gains include prices of some telecommunications services, low uptake of broadband, lack of adequate infrastructure for some users (e.g. lack of an Advanced Network), and low user capability.
International Broadband
- Officials note that ICT connectivity is critical for New Zealand to engage in data-rich activities in a global setting, particularly universities and other research institutions that collaborate with overseas institutions. The Ministry of Research, Science and Technology is currently developing a business case for an Advanced Network which will facilitate such international collaboration. At present, sufficient international bandwidth is available for this and other foreseeable purposes, but price is an issue for some users. MED monitors prices on an ongoing basis and reports results and recommendations to the Minister of Communications.
Resource Management Act
71. The PwC report noted that "there is a general consensus across industry that the Resource Management Act is conceptually good legislation" but that it requires a "time consuming and expensive process due to the level of consultation required". Similarly, the 2003 GIAB report, Generating Growth: Infrastructure, found that, of a sample of 50 major businesses and business organisations, 18 per cent identified the Resource Management Act as one of the main constraints on their growth.
72. Other problems noted in the PwC report were:
- processes are focused at local or regional needs and do not contain incentives to balance local and national benefits and costs;
- with little guidance on how to allocate resources, the default approach of "first come - first served" applies which may not result in the most beneficial resource use;
- the inconsistency of decision making around the country is said to affect the competitiveness of infrastructure providers and their ability to respond to changing demands; and
- the process can be undermined by small interest groups who hold out and force large costs on others.
73. These problems constrain the ability for rapid responses to infrastructural needs, although PwC notes that the constraints are not generally seen as insurmountable.
74. Given the breadth of Government responsibility, not all legislation can or should contribute exclusively to economic objectives. The RMA is focused on sustainable management and avoiding or mitigating adverse environmental effects, taking into account social and cultural concerns.11 Legislation such as the RMA plays an important role in balancing environmental or community and industry needs.
75. The extensive community-based approaches inherent in the RMA may be costly in terms of time and money. A better balance needs to be found between securing infrastructure providers' and users' confidence, and sustainability.
76. The Associate Minister for the Environment has proposed a work programme to provide a package of improvements for delivery to Cabinet Policy Committee by 28 July 2004. Work on the issues described above has been underway for some time, and will be taken forward in this review. The objective of the review will be to improve the quality of decisions and processes, without compromising good environmental outcomes or sacrificing public participation. At its meeting on 5 May 2004, POL endorsed the proposed work programme and the review objective.
77. The following broad categories are to be considered as part of the review:
- achieving the right balance of national and local interests;
- improved design and process of local policy formulation;
- improved consent decision-making process;
- allocation of natural resources (including water); and
- support measures for building capacity and promoting best practice and implementation.
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