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A Year of Change for Roading By Chris Olsen 1/2/2009



  


  





  
A Year of Change for Roading By Chris Olsen  1/2/2009

  
  

    Thu, 02/04/2009 - 12:59pm  

  
Sitting back and looking at 2008 you cannot help but think that we have just been through one of the biggest set of changes ever experienced by the sector. There is no doubt in my mind that these changes will have a profound impact on New Zealand’s future transport outcomes and that there are more changes to come.


While these changes should be good for the country there is a huge risk at present of road construction and maintenance programmes slowing down while the sector moves into the “new way” of doing things. With this slow down occurring at the same time as the recession things do not look good for the contracting sector. The damage to the sector from this double whammy could be costly and take years to repair. It may also compromise any ability to accelerate any future roading programmes. It's therefore important that all levels of Local Government understand this risk and help to negate it.


Looking more closely at the changes, take firstly the elections. We have a new Government, a new direction and a new Minister of Transport, the Honourable Steven Joyce. We now have a Minister for Infrastructure, the Honourable Bill English, as well. Initial indications point to a big increase in infrastructure spending to kick start the economy. This could mean a reverting back to economic efficiency as a driver of construction programmes compared to the previous Government's focus on sustainability. I believe we will also see a review of the New Zealand Transport Strategy (NZTS), the Government Policy Statement (GPS) and the resulting construction programmes.


during the year we have also seen the continued development of the Ministry of Transport’s leadership role with the passing of the Land Transport Management Amendment Act and more recently a new Chief Executive, Martin Mathews. This Act followed the Minister's “Next Steps Review” and has made substantial changes to the way the transport sector operates.


 


Firstly, Transit and Land Transport New Zealand were combined and a new Chief Executive, Geoff Dangerfield appointed. Geoff has outlined his priorities at a number of conferences. These can be summarized as


    

  • modal shift: roading to passenger transport and shipping
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  • safer travel
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  • streamlining funding applications
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  • value for money
    • 

  • 

    building relationships 


Needless to say these priorities are secondary to his setting up of the New Zealand Transport Agency (NZTA) which he intends to have completed by early next year. This is incredible progress when compared to the recent restructuring of other smaller government departments. However, there is a risk that this restructuring will distract people from the day to day business of developing work programmes. 


One of the other big impacts of the Land Transport Management Amendment Act is the requirement for regional programmes. Individual local authorities and the State Highway division of NZ Transport Agency no longer have their own programmes. Instead the regions are required to develop regional programmes according to the NZTS and GPS and submit them to NZTA for funding. Introducing this additional layer of decision making is very likely to impact negatively on the contracting sector by creating delays in bringing construction programmes to the market.


So what about the contracting sector itself? What’s being happening there over 2008?


Well I think it's fair to say that the industry has further consolidated. There have been a number of purchases of medium and smaller contractors and I think that given the current recession there could be even more buy-outs. There has also been a growth of those Australian contractors working in New Zealand (and of New Zealand contractors working in Australia).


Looking at procurement the number of collaborative procurement contracts continues to grow providing benefits to local authorities while the NZTA has developed its draft Procurement Procedures and its now piloting them.


Technical innovation continues with the best example for 2008, in my view, being the stick down chipseal squares, similar to stick down carpet tiles.


Finally from Roading New Zealand's perspective, we have begun building our regional structure by setting up our Regional Executive Groups and we have had some very productive engagement with local authorities looking to improve their outcomes. We will be continuing with this during 2009.