Draft National Infrastructure Plan

6.3. Get projects ready for investment | Ka whakarite i ngā kaupapa kia haumitia

6.3.1. Context

Projects in the planning stages should go through a rigorous stage-gate process before funding decisions. This ensures they are ready to deliver and represent good value for money. The Treasury’s business case guidance, discussed in Section 5, outlines what’s needed for central government projects. However, transparency over projects in planning is currently limited, and some proposals seek funding before they are ready.

The Infrastructure Priorities Programme (IPP) provides structured independent review of infrastructure proposals’ readiness for investment. It is designed for unfunded, nationally important infrastructure projects, or initiatives that avoid the need for infrastructure. It undertakes a more detailed review of important planning documents that are submitted to the Commission at several points in the planning process.

We assess the strategic alignment, value for money, and deliverability of proposed projects. Projects are reviewed against a standard assessment framework, with an internal review process to ensure consistency in assessments. Assessment results indicate whether projects are ready for investment, and the next steps that can be taken to progress projects that need more work.

The first IPP round closed in December 2024. We received 48 submissions from central and local government, the private sector, and other entities. The Commission endorsed 17 proposals across a range of sectors, including transport, water and wastewater, telecommunications, prisons, and the defence estate. Ten proposals cover seven of New Zealand’s sixteen regions. Seven proposals would benefit multiple regions. There are several reasons why a proposal may not proceed to endorsement, including because it had insufficient information, was not infrastructure of national significance, was withdrawn, or was assessed but not endorsed. As a result, not progressing to endorsement does not necessarily mean that a proposal does not have merit. Proposals that were not included can reapply in the future if they have additional information that would help them meet the assessment criteria.

The IPP will be updated as we receive and review more project proposals. To date, we have only assessed a subset of all potentially nationally important proposals in the planning stages. As a result, the IPP should not be considered as a prioritised list. We received over 70 proposals in the second IPP round, which closed in April 2025, and are in the process of triaging and assessing them.  

The draft Plan includes the December 2024 IPP round. Table 7 lists proposals that have been reviewed and endorsed to date. The final National Infrastructure Plan will incorporate projects from the April 2025 round. After publishing the final Plan, we will continue reviewing proposals, tracking them as they progress through planning, and publishing updated assessments.

A current list of projects reviewed by the IPP can be found here (Table 7)

6.3.2. Strategic directions

Projects are funded after adequate planning is completed

Large infrastructure projects require a multi-stage planning approach to ensure they are adequately developed before a funding decision. For public infrastructure projects, this involves a sequence of planning documents that define problems or opportunities, examine a broad set of options for addressing them, and develop a preferred option to the point where it can be funded for delivery.

Decision-makers and the public should understand what stage projects are at and the next steps that can be taken. The IPP process is designed to provide this transparency. Projects can be endorsed at three stages, depending upon what planning they have done and how robustly they have addressed the requirements of each stage (Table 6). At each stage, our assessments identify next steps that can be taken to progress and strengthen these projects for successful delivery.

A step-by-step process is needed to get projects ready to fund

Many current proposals need more work before they are investment ready. Most of the proposals we assessed in the first round of IPP assessments identify important problems and opportunities that could be solved through new investment. However, most of these proposals need further work before they are ready to fund. Two-thirds of proposals were endorsed at Stage 1, highlighting the need for further investigation before a funding decision.

Project proponents identify clear problems and choose cost-effective solutions

Infrastructure providers need to do more than just prepare business case documents. Through these documents, they need to demonstrate they have taken the right steps to identify high-quality projects. Our IPP assessment framework outlines what good project planning looks like at each stage in planning.

Good projects start with a clear understanding of the ‘size of the prize’. New investment is aimed at addressing problems with existing infrastructure or pursuing opportunities to improve services. Project proponents should define the problems or opportunities they are seeking to address. They should also have a clear idea about how large they are, so they can focus on solutions that are proportional to the problem they are addressing.

Project proponents should consider a wide range of options, including low-cost and non-built solutions. This is essential for guarding value for money and affordability of infrastructure investment. Planning that focuses on a narrow set of costly options is less likely to find high-value solutions. A better approach is to identify a long list of options, narrow it down to a short-list that includes low-cost options, and identify a preferred option that maximises value for money and cost-effectiveness.

Cost-effective projects are important for ensuring we can address all our infrastructure challenges. We need to meet many requirements within our overall fiscal and affordability constraints. When individual projects are more expensive than they need to be to solve a problem, then it limits our ability to solve other problems. We can recognise these constraints and trade-offs by looking across our entire investment portfolio, but solving them requires us to lift project quality,

Projects set themselves up for delivery success

Infrastructure providers need to focus on what’s required for timely delivery. Planning for delivery should start at the early stages of project planning, although it is most important to get right at the point at which projects are seeking funding. Our IPP assessment framework outlines what good looks like at each stage in planning, focusing on the main factors that can support or hinder certainty about cost, scope, and timeframes during the build phase.

Infrastructure projects need clear project governance arrangements and appropriate project leadership capability. Successfully planning and delivering a large or complex infrastructure project requires agencies to navigate many competing expectations and priorities. As outlined in Section 3, project leadership capability can help with this. Another important factor is establishing the right governance structures for projects to ensure decisions are timely, clear, and rigorous. Our previous project reviews show that unclear governance can flow through to problems in the delivery phase.

Cost and scope risks need to be identified and managed in the planning phase. Uncertainty will always exist about what projects will actually cost, but project proponents should take steps to identify all major risks, understand their potential impact on costs and timeframes, and identify how to mitigate them through the design and delivery phases. Risk analysis should be informed by experience on past projects.

Agencies should understand how to engage the market before they go to procurement. This means understanding potential suppliers, workforce capacity constraints, and the impacts of scope, design and timing choices on the feasibility of cost-effective procurement.

Lift the bar on project quality to get beyond fiscal constraints

Good project planning, supported by an operating environment that is enabling of investment, can help push out our fiscal constraints. If we want to deliver more infrastructure projects, we need those projects to be cheaper to build or we need to raise more money to pay for investment.

Identifying and choosing high-quality projects is essential. Projects that provide high benefits to many users, at an affordable and certain cost, are more likely to be able to generate new revenues to help pay for investment. For example, new toll roads can pay for themselves in some situations but not others (Figure 37). The bar is high for projects to be fully self-funding.

The IPP can help. Our assessment framework is designed to help decision-makers prioritise high-quality projects that are ready for investment, reducing funding pressures and increasing revenue opportunities.

Revenue tools are more effective when project quality is high

Broader factors also matter for delivering projects cost effectively and maximising use and revenues. Section 4 outlines how we need to improve the operating environment for infrastructure providers. Consistent implementation of these recommendations will improve the financial position for new and existing infrastructure. Recommendations are aimed at pricing infrastructure to enable projects to generate revenues, ensuring a stable and efficient regulatory environment, and integrating land use and infrastructure to maximise the number of people who use new and existing infrastructure.

6.3.3. Recommendations

The Infrastructure Priorities Programme provides an independent and transparent view of project readiness for investment.