Alternative Infrastructure Funding and Delivery Think Tank

Property Council’s recent Infrastructure Think Tank in the Bay of Plenty proved to be a great success.

Property Council Bay of Plenty Branch held the joint event with the Western Bay of Plenty SmartGrowth Partnership, to explore alternative models for the provision and funding of the infrastructure needed to service growth in the region.

Under the status quo, developers contribute to infrastructure in two different ways. Firstly, by directly funding the construction of roads and water systems within their subdivisions before vesting the infrastructure in the local authority which owns and maintains it over time using rates.

Secondly, developers also pay development contributions to the local council at the time of subdivision towards the cost of providing the main trunk infrastructure that is needed to serve multiple developments such as in urban growth areas. These costs are ultimately passed on to the end purchasers and are reflected in section and building prices.

The problem arises if councils are unable to fund new trunk infrastructure when needed, especially in fast growing areas such Tauranga City and Western Bay of Plenty District.

The recent infrastructure think tank provided a forum for local people in the government and development sectors to share ideas with reference to overseas examples, on how infrastructure can be funded, constructed, owned and operated in alternative ways.

Property Council Bay of Plenty Branch supports further investigation into potential alternatives such as a regional infrastructure bank (with several variations of potential funding models to consider) and private infrastructure networks and operating concessions.

Branch president Andrew Collins says while there will always be a place for the traditional infrastructure funding and ownership model, continued reliance on just one model is unlikely to adequately address infrastructure funding problems in the future. There are alternative funding and ownership models that can and should be considered.

“Councils and the development sector need the ability to have a number of ‘tools in the toolbox’ when it comes to infrastructure funding and delivery models.

“Property Council is keen to work collaboratively with central and local government and the priovate sector to ensure that we are all pulling in the same direction and find solutions to our pressing infrastructure problems that minimise delays and frustrations while also not burdening our communities with excessive debt levels.”

The Think Tank was attended by more than 100 people representing the public and private sectors and included central and local government representatives from across the North Island.

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