Infrastructure at scale: tackling New Zealand’s Water Challenge
After decades of underinvestment in water systems, the New Zealand water sector is gearing up to transform water services with an NZD$120-185 billion programme of works over the next 30 years. With resource scarcity and a pressured supply chain, Alan Mackintosh, Programme Management Director for Water at AECOM Australia and New Zealand, says that leveraging global experience and adopting a programme management approach will unlock efficiencies and establish consistent best practices across water services.
In this article, we delve into where we can learn from global experience and why a programme management approach will help achieve the nation’s vision.
Understanding New Zealand’s water challenge
At the core of New Zealand’s water reform is providing safe, high-quality drinking water to the entire population. In 2020, 40,000 New Zealanders had to boil their tap water to make it drinkable, and every year, 35,000 New Zealanders get sick from water that doesn’t meet international standards for clean drinking water1.
Two key challenges in achieving this are affordability for customers and how we approach consistent charging while delivering expensive, and large-scale water infrastructure. This goes hand in hand with defining and progressively improving what those customer service standards will look like.
To add complexity, recent climate events across New Zealand have also highlighted the need for assets designed to be resilient to severe climate events.
Programme management: a longer-term vision
New Zealand faces a significant challenge to increase capital investment from around $1.5 billion dollars a year to between NZD$4 and $6 billion to maintain or improve current service levels. Such investment and the move to consolidate assets into ten entities creates an opportunity to take a programmatic, longer-term perspective approach to delivery.
Programme management involves overseeing related projects to enhance overall performance. It considers an outcome-driven investment approach, seeking opportunities for knowledge sharing, applying innovation at scale, removing carbon from the asset lifecycle, improving data integrity and performance transparency, and building capability.
Driven by a longer-term approach, programme management for capital investment provides more stability and far-reaching benefits across the wider industry and supply chain. Ultimately, integrated programme management will enable the country to ‘do more with less’ and meet the need for customer value embedded within the reforms.
Strengthening the supply chain
With a long-term focus, programme management for capital delivery offers greater stability and benefits for the wider industry and supply chain. By fostering trusting long-term relationships with the extended supply chain, we ensure a steady pipeline of work and encourage investment and innovation within their businesses. This stability over time helps strengthen the industry’s resource base, capability, and capacity. A programme management approach can also attract new talent to the industry, providing opportunities for growth and development. A longer-term view means programmes can embed meaningful initiatives to improve social outcomes, such as diversity programmes, and internships and encourage spend in local businesses.
Cultivating innovation
The water industry must undertake a cultural transformation to deliver the vast infrastructure investment required for the water reforms. Programme management prioritises an outcome-driven approach across many projects and cultivates a culture of innovation. It encourages us to think differently about possibilities and innovative ways to do more with less money.
We need to consider one of the key pillars of the reforms: affordability. To deliver the infrastructure needed at such a scale is one challenge, and to do so affordably is another. Innovation will be key to finding efficiencies across the programme and affordably delivering projects and improvements for the population. After all, project overspending will ultimately be borne by the customer.
Knowledge sharing
Knowledge sharing across infrastructure projects helps unlock efficiencies across the programme by leveraging lessons learned and creating consistent data sets across projects.
A programme management approach, which encourages collaboration and knowledge-sharing, safeguards against repeating past mistakes and enhances the decision-making process with improved data integrity, allowing us to assess projects based on high-quality data sets. It also facilitates skills transfer across industry partners and Government organisations.
A path walked before: Scottish Water
In 2002, Scotland, like New Zealand, faced decades of underinvestment in infrastructure and unprecedented levels of capital investment to bring services up to the required standard. There were three main drivers for investment:
1) Renewals programme to improve service levels.
2) Quality improvements to meet new international standards.
3) Enabling growth for developers.
Previous entities before Scottish Water did not have the capacity and capability to deliver a programme with a capital value of around GBP£2 billion. They recognised that traditional delivery arrangements were no longer fit for purpose to deliver a large capital programme.
Instead, Scottish Water formed a new programme-based delivery partnership that increased the capability of Scottish Water by bringing partners in to help lead the capital programme and provide the industry capability to deliver a programme of that scale. Over time, the partnership increased Scottish Water’s capability, and they recruited leaders from diverse industries to embed the necessary skills, capability, and culture required for delivering large, complex capital programmes.
Working on this programme for eight years brought career-defining lessons about part partnering and how strong and trusting relationships within the partnering ecosystem help navigate a tremendously challenging reform.
By taking a broader programme management approach and focusing on collaboration, Scotland achieved its reform goals, setting the foundation for Scottish Water to become the internationally respected water company it is today.
Alan Mackintosh has over 30 years of experience in major project and programme leadership in Europe, South America, and Asia Pacific. His experience spans major reform programmes at leading organisations such as Scottish Water, South Australian Water, and Yarra Valley Water.
Alan has provided leadership and strategic advice across six asset investment transformations, where he helped clients develop effective operating models, and build deeper integration and effectiveness across the asset delivery cycle.
1https://www.lgnz.co.nz/reforms/three-waters/