What’s on the investment wish-list

Thursday, 13 March 2025

A dry dock, an expressway, a hospital, three courthouses, and a prison.

At the Infrastructure Investment Summit in Auckland representatives of international development companies were invited to bid to be partners in the first of the major infrastructure projects the Government wants to see completed.

Prime Minister Christopher Luxon said there was “massive interest” from the 14 companies at the summit in entering public private partnerships (PPPs) with the government.

A PPP is a deal between a government and a private company to finance, build and manage an infrastructure asset.

The dry dock

Regional Development Minister Shane Jones announced the opening of a tender process for investors in a dry dock and surrounding marine maintenance facilities at Northland’s Marsden Point.

It would be a nationally significant asset as the only dry dock in the country large enough to service Royal Navy ships and commercial vessels like Cook Strait ferries, Jones said.

“New Zealand is open for business,” he said.

“This project will be a significant investment to upgrade and modernise infrastructure to support New Zealand’s maritime industry, create jobs and enhance the country’s self-sufficiency in vessel maintenance and repair.”

The road

Infrastructure Minister Chris Bishop said in March that he would use the summit to formally open registrations of interest for the first stage of the Northland Expressway, a long overdue project to help the neglected north of New Zealand to develop.

Bishop has likened the Northland “road of national interest“ to the Waikato Expressway, which was built under a previous National-led government, and which he said was a game-changer for the region.

Bishop used the summit to signal that “user pays” will be a feature of many of the PPPs the Government intended to use to get infrastructure built.

That looks likely to mean the Northern Expressway will be a toll road like the existing Northern Gateway Toll Road between Silverdale and Puhoi.

“We are also determined to attract more private capital, capacity, and capability into our infrastructure system,” Bishop said.

The hospital

Newly minted Health Minister Simeon Brown said procurement work would begin soon on the $759 million Whangārei Hospital project.

Brown said the country could not build hospital capacity fast enough for the growing population.

The Government was looking at doing things differently, and was open to PPPs in which private companies built and maintained hospitals through which public healthcare was delivered.

“Patients though are not focused on who owns the hospital where they will receive their surgery. What they want and rightfully expect to receive is the is the care and a quality fit for purpose building,” Brown said.

“We simply cannot afford to continue doing what we have always done,“ he said.

The Government would work to create a panel of private infrastructure partners to design, build and maintain health infrastructure.

“Adopting a panel is a shift from traditional transactional procurement models and towards creating collaborative enterprise-based partnerships,” Brown said.

“These relationships will align incentives, facilitate efficient transfer of design responsibilities and risk allocation, and promote innovation to deliver better outcomes for patients and communities and allow for direct conversations regarding different risk sharing arrangements to build, design, operationalise, and maintain this infrastructure.”

And, he said: “Over the next 24 months, projects and opportunities just under $1 billion will hit the market, and we are open to a range of funding and financing tools to deliver this infrastructure, including PPPs and long-term contracts to services.”

The three courthouses

Courts Minister Nicole McKee said the Government intended to use PPP to design, build, finance and maintain three new courthouses: a new District Court in Waitakere, a combined High and District Court in Rotorua, and a new Māori Land Court, also based in Rotorua.

“This is a project of real significance, based in two of New Zealand’s important communities,” she said.

“Subject to future funding decisions, we expect the procurement process will start this year, with a preferred bidder emerging in early 2026 and contract signature in mid to late 2026,” she said.

Both the Rotorua High and District Court and the Waitakere District Court are expected to be between 11,000 and 13,000sqm each, and the Rotorua Māori Land Court is expected to be around 1900sqm.”

She said: “PPPs have a proven track record in New Zealand, with success in the education, corrections and transport sectors.

“Eight PPP projects have been developed since 2011, including three correctional facilities, two Roads of National Significance state highways, and three bundles of primary and secondary schools.”

Justice Minister Paul Goldsmith said the Government was taking a new approach to building and redeveloping courthouses, which would be based around not spending up big to create architecture award-winning buildings, but value-for-money, fit-for-purpose standardised buildings.

The Government had a 30-year pipeline of justice property development and redevelopment, including its courthouses, he said.

“Historically, the rate of investment in New Zealand’s courthouses has not necessarily reflected the importance of these institutions,” he said.

The prison

The Government will soon seek expressions of interest for a PPP for an expansion of Christchurch Men’s Prison.

Funding would be allocated for the PPP in Budget 2025 to deliver 240 new high security beds at Christchurch Men’s Prison, along with a new health centre and intervention and support unit containing 52 beds, Corrections Minister Mark Mitchell announced at the summit.

“We’re investing in our prisons to meet the growing demand for capacity, keep frontline staff, prisoners and the public safe, and provide the best possible environment to rehabilitate prisoners to reduce the risk of re-offending,” Mitchell said.

The indicative capital cost for construction of the facilities in phase one of the redevelopment was $700m to $800m, he said.

“This investment will help ensure we have enough fit-for-purpose beds to manage high security prisoners, and that Corrections has sufficient capacity to meet the growing prison population,” Mitchell said.