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3. Problems with Infrastructure Project Development

3.1 Introduction

The Government’s objectives for social and economic infrastructure are outlined in chapter 1.

One of the key challenges for resource management in New Zealand is ensuring that the right infrastructure is in the right place at the right time, and that approvals processes support the delivery of projects in ways that maximise the value of investment while sufficiently avoiding, remedying or mitigating environmental effects.

The potential problems identified for urban planning in the previous chapter are also relevant to infrastructure investment, planning and project delivery. In particular, the current planning system does not adequately provide for effective longer-term or integrated infrastructure planning. Inconsistencies in decision-making also fail to provide certainty for investment by infrastructure providers and other investors.

Five potential problems have been identified in how the RMA planning system affects infrastructure projects, both in urban and rural areas and throughout different regions:

  • lack of clarity and consistency of national objectives and standards
  • mixed access to designations
  • complex and inflexible approval processes
  • need for robust and integrated decision-making
  • efficiency and adequacy of the land acquisition process.

Each problem is discussed, along with the relative scope and magnitude of its contributing factors. To provide a quick background to key terms and concepts, Box 3 provides a summary of processes available for infrastructure approval – in particular, the designation of land for infrastructure. Appendix 5 provides a more detailed explanation.

What do you think?

Your response to these questions is welcomed:

  • Do you agree/disagree with the list of potential infrastructure problems identified in this chapter?
  • Can you provide any evidence that supports or questions the assessment of these problems?
  • Are there any other problems that you think need to be considered?

Box 3: Processes for infrastructure approval – a summary


The RMA allows for areas of land to be designated for use by network utilities, Ministers of the Crown or local authorities.


Land may only be designated by ‘requiring authorities’, meaning either:

  • a Minister of the Crown
  • a local authority
  • a network utility operator (ie, certain types of infrastructure providers) approved by the Minister for the Environment.

Effect of a designation

A designation is like a ‘spot zoning’ in a district or city plan that:

  • allows a project to go ahead without land-use consent from the relevant council
  • places restrictions on landowners against doing anything that would prevent or hinder the work to which the designation relates.


In order to obtain a designation, a requiring authority must provide a ‘notice of requirement’ that it wants to designate land and follow one of the following processes:

  • a local council may make a recommendation to the requiring authority who then decides whether to confirm or withdraw the notice of requirement
  • a notice of requirement may be lodged with the Environmental Protection Agency (EPA) and referred to a Board of Inquiry or the Environment Court if it is part of a matter of national significance
  • a notice of requirement may be referred directly to the Environment Court for a decision.

Resource consents

In addition to a designation, a requiring authority may be required to obtain resource consents from a regional council or approvals under other legislation.

Other processes for infrastructure approval

Instead of using the designation system, there are two alternative processes for infrastructure approval:

  • an infrastructure provider can apply to a local authority or authorities for resource consent
  • an infrastructure provider can seek a plan change to amend the controls and standards that apply to a particular site.

Public Works Act 1981

A network utility operator that is approved as a requiring authority can apply to the Minister of Lands to have land required for a project compulsorily acquired under the Public Works Act 1981 (PWA). An actual designation is not required for such an application.

3.2 Examples of the use of designations

Considering applications for all types of development (not just infrastructure), designations are in the minority when compared to resource consents. Over the past five years, 43 councils received 2778 notices of requirements for designations. In comparison, those same 43 councils received 27,947 resource consent applications between 1 July 2007 and 30 June 2008 alone. 51 Most existing and new designations are brought forward by public bodies, with the Ministry of Education, New Zealand Transport Agency (NZTA), and local authorities the greatest users of notices of requirement under designations (see figure 2).

Figure 2: Requiring authorities who provided Notices of Requirement under s168 RMA (2005–2010)

The graph shows the proportion of total notices of requirement under section 168 of the RMA from different requiring authorities.  Council makes up 40% of notices of requirement; Energy transmission and distribution 14%; Ministry of Education 9%; and Other (including NZTA, KiwiRail; Watercare and the Minister of Police) 37%.

Source: Phase II Reform of the RMA, Notices of Requirements and Outline Plans – Analysis, GHD report to MfE, June 2010 (sample size of 185 notices to 43 councils).

Survey evidence from interviews with a small number of requiring authorities in 2006 suggests that requiring authorities opt to use designations rather than resource consents or plan changes for different reasons, including: 52

  • long-term certainty of the ability to construct and continue to operate the work, which is not subject to change to the same extent as district plan rules or zoning (10 out of 10 respondents)
  • to overcome unsupportive district plan rules or issues of competing land use (three out of 10 respondents)
  • to let the public know what is proposed or where a designation is already in place and may continue to impact on the use and enjoyment of their property, in order to put the public ‘on notice’. This can help with reverse sensitivity 53 (three out of 10 respondents)
  • to provide national and cross-boundary consistency, such as, avoiding variations in rules across regions (three out of 10 respondents)
  • to provide for an efficient and fast process for changes in operations in the future by using the outline plan process 54 rather than resource consent process (two out of 10 respondents)
  • access to compulsory acquisition powers under the PWA (two out of 10 respondents)
  • decision-making is retained by the requiring authority (one out of 10 respondents).

Infrastructure problem 1: Lack of clarity and consistency of national objectives and standards

Under the RMA, decision-making in many areas has been devolved to local councils. This is because local government has the best knowledge and understanding of development impacts on its local area, and can best reflect its community’s views.

However, infrastructure projects often cross regional and local boundaries, or provide services more widely than the local area in which they are physically located. Infrastructure providers themselves often operate in more than one region.

This leads to difficulty for decision-makers in balancing national and regional infrastructure needs against social, environmental and community interests. Clear national direction is important to reduce the uncertainty and risks for infrastructure providers that can arise from this balancing process.

Two potential problems have been identified with the current system:

a. Lack of clarity about national objectives and standards

The RMA is able to provide national direction to infrastructure providers and decision-makers, through Part 2 of the Act, which sets out the Act’s purpose and principles. Part 2 lists a number of ‘matters of national importance’ (section 6) and ‘other matters’ (section 7) to be considered in RMA decision-making.

However, insufficient central government direction about priorities for economic, social and environmental resource management leads to uncertainty for decision-makers and local government planning, and may mean government outcomes for infrastructure are not achieved.

Lack of clarity reduces the ability of local government and private sector infrastructure providers to integrate their investment with central government investment. Complementary private sector investment may also be delayed or reduced in its effectiveness.

Scope and magnitude:

There is no empirical evidence to suggest that the lack of express recognition of infrastructure in sections 6 and 7 of the RMA is frustrating infrastructure development. Given the significance of changes to Part 2, the Government has undertaken further research into the extent of the problem and whether changes to Part 2 provide the best means to achieve the outcomes sought. 55 This further research indicates that:

  • The overall success rate of a sample of infrastructure projects seeking approval would suggest that Part 2 as a whole allows infrastructure projects a better than even chance of obtaining approval.
  • National policy statements have the potential, if framed with sufficient directive clarity, to assist with consenting infrastructure projects, especially by helping how the Courts and boards of inquiry approach trade-offs on competing community benefit and protection issues under Part 2.
  • The timetable for plan reviews and analysis of long-term planning and RMA issues is driven primarily by the pressing issues of the district/region, industry and community pressure, rather than legislative changes to sections 6 and 7. However, although legislative amendments are not generally the initial trigger to carry out policy work on certain resource management issues, amendments provide the incentive and justification to elevate related policy work over other policy areas.
  • There was disagreement among infrastructure providers, decision-makers and stakeholders as to the value or need to include reference to infrastructure in sections 6 or 7.
  • There was general agreement among infrastructure providers, decision-makers and stakeholders that any amendment to sections 6 or 7 should be supported by additional guidance to ensure the Government’s intention is clear and adopted consistently by practitioners and decision-makers.

A lack of clear national priorities regarding the importance of infrastructure, or clear communication of these priorities, impacts on all infrastructure providers, including the Crown, local authorities, and private bodies, and regardless of whether the infrastructure is located in urban or rural areas.

b. Lack of coordination in the development of national instruments and inconsistent implementation of national objectives

The RMA provides the Government with the ability to develop resource management tools that can articulate national priorities, provide national direction and facilitate consistency and certainty in the way resource management issues will be addressed. Key tools include NPSs and NESs (see Appendix three for more information on both). The Minister for the Environment is also able to intervene in a matter of national significance, and direct the preparation of a plan, plan change or variation to a plan.

Insufficient central government direction on priorities for economic, social and environmental resource management makes it difficult to address ad hoc requests to develop NPSs/NESs. It also leads to uncertainty for local government, sectors and decision-makers, and may mean key Government outcomes for infrastructure are not being achieved in resource management.

RMA plans across New Zealand incorporate NPSs in different ways. This increases compliance costs and investment risk for infrastructure providers who provide networks and services across territorial boundaries.

Under the RMA, a rule in a plan or resource consent cannot be more lenient than an NES. However, NESs are not always incorporated into plans. There are also inefficiencies in the process for incorporating NESs. The lack of incorporation of NESs means that it is often necessary to refer to both a plan and an NES, as the provisions of a plan may be misleading when read in isolation.

Scope and magnitude:

Some discussion on the scope and magnitude of this problem is provided under ‘Urban problem 4’ in chapter 2 of this paper.

After the 2005 RMA Amendments, a list of priority NPSs and NESs was created, which formed the basis for most of the Government’s work programme over the last four years. New and emerging issues are added to the list, but the list is not actively re-prioritised across government portfolios. Matters that are most critical to economic development and environmental performance can therefore be on the list but not progressed. Further, the general approach to national instrument development since 1991 has been inconsistent and lacks transparency. There also continues to be regular requests from sectors for national instruments to be tailored to their specific activities, which risks a sector-based approach to national intervention in resource management issues. The development of NPSs can stall, particularly if they signal priorities to certain sectors, which makes them contentious. It also leads to uncertainty about time frames for investors and local government who implement national instruments.

Table 1 sets out the status of national instruments that are either in force or have been under development:

Table 1: Status of national instruments
National instrument Year work commenced Current status
New Zealand Coastal Policy Statement (1994) 1991 In force since 1994
Proposed NPS on Indigenous Biodiversity 2000 Under development
NPS on Electricity Transmission 2004 In force since 2008
Proposed New Zealand Coastal Policy Statement (2008) 2004 Under development
Proposed NPS for Renewable Electricity Generation 2005 Under development
Proposed NPS for Freshwater Management 2006 Under development
Proposed NPS on Flood Risk Management 2007 On hold
Proposed NPS on Urban Design 2008 On hold
Air quality 2003 In force since 2005
Sources of human drinking water 2005 In force since 2007
Telecommunication facilities 2005 In force since 2007
Electricity transmission 2005 In force since 2010
Water measuring devices (section 360 regulations) 2005 Takes effect in November 2010
Contaminated sites 2006 Under development
On-site wastewater 2007 Withdrawn
Sea level rise 2008 On hold

Inconsistent implementation of national objectives is likely to be a problem that is more significant for infrastructure providers who cross territorial boundaries (eg, linear designations, such as state highways) or locate in more than one territorial authority area (eg, spot designations, such as schools). It is therefore not a universal problem and would not be an issue, for example, for city or district councils who are also infrastructure providers. As councils are a significant user of designations (see figures 3 to 5), this problem has a limited extent.

Infrastructure problem 2: Mixed access to designations

The existing designation system described in Box 3 provides a specific process with outcomes intended to enable and encourage the provision of infrastructure. For example, a future roading corridor can be identified on a district plan map a number of years before the road is developed, and a restriction placed on other development within that corridor to preserve the ability to build the future road, even if the land is not owned by the roading provider.

Access to the system can therefore be seen as a benefit to infrastructure providers who are eligible, as well as something to be assigned carefully given the potential constraint on private property rights.

Existing provisions of the RMA restrict access to the designation system to infrastructure providers who satisfy the definition of requiring authorities (see Box 3: Eligibility). This approach reflects the history of designations.


Before the RMA, similar provisions had existed in earlier versions of legislation, including the Public Works Act 1981 (PWA), and the Town and Country Planning Act 1977. Designations were available for a wide range of central and local government development, including airports, ports, hospital authorities and fire services, as well as schools and local government development. Public utilities were provided for as permitted activities.

During the 1980s and early 1990s previously publicly owned and operated infrastructure was privatised through reforms in the organisation of New Zealand’s public sector. Sectors included the telecommunications, electricity and aviation sector.

The introduction of the RMA in 1991 introduced an effects-based regime, while also carrying over the established designation processes. The RMA changed who was eligible to be a requiring authority to reflect changes in central and local government responsibilities and the increased role of the private sector in providing and maintaining economic infrastructure. The concept of network utility operators was introduced, and some types of infrastructure were excluded from using designations, such as health authorities and universities.

Further reforms to the RMA have since made changes to designations, but no substantive review of eligibility has been undertaken. Eligibility therefore still reflects the context in which it was first drafted, with an emphasis on government infrastructure provision, and a consistent set of rights and responsibilities granted regardless of the scale of a project or whether the requiring authority is publicly or privately owned (with some small variations).


Two potential problems have been identified with current access rights to the designations process:

a) definition of ‘requiring authority’ is inconsistent

b) definition of ‘requiring authority’ may not reflect future infrastructure needs.

a. Definition of ‘requiring authority’ is inconsistent

The definition does not capture all infrastructure projects that could deliver similar economic and social benefits and where the nature of development could benefit from the powers given under designation process. There are a number of examples of this:

  • airports are eligible but ports are not, even though New Zealand’s ports are essential to our economy, accounting for more than 99 per cent of merchandise exports and imports by volume 56
  • electricity generators are not eligible, although the production of electricity is essential to our every-day life and the growth of our cities and economy
  • a publicly-funded school is eligible but a private school is not, although both provide educational services
  • universities and health authorities are not eligible, although they deliver key public services.

These infrastructure providers are being excluded from the designation system, in some instances without apparent justification. Having to go through a resource consent process, rather than a designation process, and not being allowed access to any of the outcomes of designations (eg, long-term protection of land, access to the PWA, ability to use the non-notified outline plan process to progress development), may act as a disincentive to developing infrastructure, or may mean missed opportunities to encourage the development of infrastructure.

In addition, some currently eligible infrastructure development may be using the designation process when the range of powers (particularly restrictions on private property rights) is not necessary or proportionate to the development proposed, and an alternative RMA process, or access to weaker powers, may be more appropriate.

Scope and magnitude:

A survey of a small sample of requiring authorities and councils in the first half of 2010 looked at their use of designation processes during the last five years. 57 The survey data gives an indication of the types of infrastructure and requiring authorities that make use of the current designations route. The sample sizes were relatively small and provide a snapshot of the status quo.

Figures 2 to 4 show that both public and private sector infrastructure providers make use of the designation route. Figure 2, above, shows the range of parties providing notices of requirements for designations. Territorial authorities and energy transmission or distribution providers are the two largest sectors to use this process.

Figure 3 shows the range of parties using the process to alter existing designations, with territorial authorities and the NZTA being the two largest groups using this process.

Figure 3: Alterations to existing designations

The graph shows the proportion of total alterations to existing designations from different requiring authorities.  NZTA makes up 38% of alterations to existing designations; Council 34%; Airports 10%; Ministry of Education 8%; KiwiRail 5%; Central Government 3%; Telecommunications 1%; and Transmission 1%.

Figure 4 shows the range of parties submitting outline plans for works undertaken within designations, with the Ministry of Education being the largest user in the sample group.

Figure 4: The range of parties submitting outline plans for works undertaken within designations (section 174)

The graph shows the proportion of total outline plans submitted for work undertaken with designations from different requiring authorities.  The Ministry of Education makes up 65% of outline plans submitted for work undertaken with designations; Council 12%; Telecommunications 10%; Transmission and distribution 9%; and NZTA 4%.

In total, the Minister for the Environment has approved 98 network utility operators as requiring authorities. Of these 40 are in the energy sector, 12 in the communications sector, 18 in the water and wastewater sector and 22 in the transport sector. Of the 98 network utility operators, 88 are privately owned companies. 58

Research to date has focused on parties that use the designations system. It is more difficult to assess the implications of granting access to infrastructure providers currently excluded (for example power generators), or on the impact to private property rights that could result from wider access to designations given the uncertainty about the nature and location of future projects. On the face of it, it appears that a long-term planning tool to set aside land for the development of a wind farm, for example, would provide greater certainty to the wind farm developer than the current resource consent process is able to do, and would therefore act to encourage infrastructure development. The conclusion is that the exclusion of these infrastructure providers from the current system is an issue, which this review presents an opportunity to consider.

The impacts of this problem are limited to infrastructure providers currently excluded from the designation system. These will be non-government providers, and may provide infrastructure in urban or rural locations throughout the country. It is difficult to assess the scope of this issue, as future demand to access powers under the designations system cannot be accurately projected.

b. Definition of ‘requiring authority’ may not reflect future infrastructure needs

In the future, there is likely to be an increased desire by central and local government to develop and operate infrastructure by using innovative financing vehicles, such as public-private partnerships and private financing initiatives, and alternative procurement methods, such as ‘design and build’. 59 As signalled in the National Infrastructure Plan: 60

The Government also intends to improve its procurement processes and evaluation of procurement options. For appropriate projects, it is anticipated that performance will be improved by accessing the skills and expertise available in the private sector. This initiative may entail contracting out, public private partnerships, alliancing or other procurement methods where they will provide value for the taxpayer.

It remains untested whether traditionally publicly-funded infrastructure, such as roads and prisons, delivered through private financing arrangements would satisfy the condition of a Minister having ‘financial responsibility for a public work’.

Delivery models for social services are also likely to continue to evolve (eg, integrated services, such as co-location of health, education and social services; Māori-Government joint service providers; cooperative arrangements between voluntary and community providers; and private sector service delivery). Some of these approaches would not be entitled to access the designations system as those involved do not meet the current model’s definition of a ‘requiring authority’, and this may act as a barrier to efficient infrastructure development by forcing the provider down an alternative approval route.

Scope and magnitude:

The use of public-private partnerships in New Zealand is in its infancy, so it is not known whether they can rely on section 167 of the RMA. Anecdotal evidence suggests that requiring authorities have tried to avoid potential issues by seeking the designation powers before the public-private partnership was finalised. This may be an appropriate work-around for some types of financing and delivery models, but may, in practice, restrict the extent to which other models which aim for greater risk sharing with the private sector can be used. If used extensively, it may also raise concerns about transparency.

Infrastructure problem 3: Complex and inflexible approval processes

Planning systems in all countries, including New Zealand, attempt to balance certainty and clear and transparent approval processes that minimise risk and cost for investors, with processes that are flexible enough to support innovation and changes to the external environment and provide appropriate opportunity for public participation. If this balance is not achieved, processes can impose unnecessary costs on investors, infrastructure providers and local communities, as well as delaying or discouraging investment.

Box 4 provides an example of a complex infrastructure project which illustrates the difficulty in achieving this balance.

Box 4: Case study: Complex processes and long time frames for infrastructure projects – inner city bypass, Wellington

This project was a highly complex central city roading improvement in Wellington. The proposal’s stated key benefits were to provide a less congested, safer and more efficient route between the Terrace Tunnel and the Basin Reserve. The project aimed to separate cross-city and central business district traffic, and provide a safe route for pedestrians and cyclists. It had a benefit cost ratio of 3.8:1 (ie, for every $1 spent, the project was estimated to deliver $3.80 of benefit).

The project attracted significant public opposition. The primary local concerns were focused on heritage values, urban form, noise, traffic, access and air quality. Opposition also expressed concerns about greenhouse gas emissions, induced traffic, car promotion and the proposal’s overall sustainability.

The planning approval process took 10 years. Construction took two years.

  • 1994 to 1996: Investigations.
  • 1996 to 1999: Designation and resource consent process, including public council hearing. Submissions on the resource consent applications totalled 1500. Designation was approved. An appeal to the Environment Court was made and the designation was confirmed.
  • 1999 to 2001: Detailed design and ancillary consents applied for.
  • 2001 to 2004: Historic Places Act 1993 (HPA) approval process, including public hearing. Authorisations granted. Judicial review application to High Court on the Historical Places Trust’s (HPT) decision. HPT decision upheld. A community group sought to appeal HPT authorisations to the Environment Court. The Environment
  • Court struck out the appeal due to the group not being directly affected. High Court appeal on Environment Court decision struck out the decision. The High Court heard judicial review and appeal from strike out together. Environment Court’s decision was upheld.
  • 2004: Contract awarded following funding approval process under LTMA.

Four potential problems have been identified with the existing approval processes for infrastructure:

a) level of detail required for new designations

b) time frames for validity of approvals for construction and ongoing operation of infrastructure

c) duplication and inconsistency of processes

d) multiple approval processes and appeal routes.

a. Level of detail required for new designations

When a notice of requirement is submitted, the RMA includes provision for the consideration of environmental impacts that are broadly similar to those required for resource consents. However, if the notice is being given before the details of the project are known, the high-level, non-design-specific nature of the notice of requirement means consideration of environmental effects cannot be as specific as for a resource consent application for an equivalent project.

However, an increasing trend to require high levels of detailed information about the potential effects of a proposal at the notice of requirement stage has emerged. 61 This frustrates the purpose of providing a notice of requirement in advance of detailed design work, and the ability of designations to act as long-term planning tools. It can force infrastructure providers to make a significant upfront investment in detailed design at an earlier stage of the project, or force infrastructure providers to wait until later in the project to lodge a notice of requirement. It may also increase the costs and reduce flexibility for innovative financing arrangements which allow for ‘design and build’ contracts with subcontractors.

Scope and magnitude:

Both requiring authorities and territorial authorities have identified the trend for territorial authorities to require detailed information about potential effects at the notice of requirement stage. 62 Territorial authorities have indicated that they wish to see as much information as possible, similar to what would be expected for a resource consent application for a project of similar scale. One particular requiring authority surveyed was quite clear that a greater level of information is being required at the notice of requirement stage than five to 10 years ago. 63

Data from a detailed survey of nine territorial authorities gives some indication of the types of issues that arise and how these are dealt with under the current processes. 64 During the past five years, the nine authorities processed 91 notices of requirement for new designations under section 168 or section 168A of the RMA, along with 905 outline plan submissions. Most applications for notices of requirement were recommended for approval subject to modification or conditions. 65

In 20 per cent of applications for notices of requirement, territorial authorities sought further information, such as more detailed assessment of environmental effects or information about engagement with affected parties.

Types of conditions recommended included those relating to typical local environmental concerns, such as height, lighting, noise or health and safety and hazardous substances. Territorial authorities can also recommend management plans for issues such as construction, traffic and earthworks. Often, these reflect the conditions proposed by the requiring authority in the notices of requirement and assessment of environmental effects.

Survey feedback from the territorial authorities suggests that further information is sought for a variety of reasons, including:

  • increasing the degree of certainty for the council and public about what is to be built on a site or route, and the potential effects of that development
  • trying to overcome the limits on council’s ability to influence the requiring authority’s plans at the outline plan stage. As the council cannot decline a proposal or add additional conditions at this stage, the outline plan is seen as ‘nothing more than a consultative exercise’
  • increased public scrutiny of development
  • a lack of public understanding about the notice of requirement process, and how it differs from zonings or resource consents, leads to greater expectations of information provision than is perhaps anticipated within the current designations process.

The trend for requesting more information, and the reasons councils gave for changing their approaches, suggests dissatisfaction with how the current designations approach caters for public participation and consideration of environmental impacts. In practice, requiring authorities appear to be generally cooperative in providing further information on request, although this is likely to be imposing additional compliance costs and delays on some proposals.

This problem potentially impacts on all users of the designation system and all aspects of the approval process, from notices of requirements to outline plans.

b. Time frames for validity of approvals for construction and ongoing operation of infrastructure

Lapse period for designations

The usefulness of designations as a long-term planning tool can be undermined by the relatively short default period before they lapse – five years. 66 Although a requiring authority can apply for a longer period, there is a potential that the default period does not sufficiently recognise the benefits of long-term strategic planning or the lead time needed to develop and fund nationally significant infrastructure.

The ‘short’ default lapse period may cause requiring authorities to defer obtaining notices of requirement until later in the process. If this is the case, it introduces the risk that the land could be lost to another, possibly lower-value, development and/or that the infrastructure is constrained by incompatible development.

The Ministry is seeking feedback to better understand the potential impacts resulting from the short-term nature of designations, namely to what extent and whether:

  • designations are not routinely sought for long-term route protection due to higher risk of litigation (ie, beyond a 10-year horizon). This can present problems for highly strategic urban and peri-urban routes (eg, a 20-year lapse period was sought by the NZTA for the Hamilton bypass, but on appeal the Environment Court confirmed the designation but restricted the lapse period to 10 years)
  • arguing for a lapse period beyond five years introduces additional cost, uncertainty and risk (eg, a 20-year lapse period was sought for Kiwi Rail’s Marsden Point line. Although this time frame was initially supported by the territorial authority it subsequently recommended that the period be reduced to 10 years. Following further consideration of the arguments by a panel of independent commissioners, a 20-year period was recommended)
  • a change in funding priorities may mean that a project that was originally intended to be constructed within the lapse period is delayed, with the consequent loss of the designation.
Scope and magnitude:

The extent to which the five-year lapse period is a major problem needs to be carefully considered. A survey of a limited number of local authorities and requiring authorities indicates that lapse periods do not cause problems for requiring authorities. 67 It appears therefore that the potential issue of a short default lapse period may not be a significant problem in practice.

A recent random sample survey of 30 district plans indicates that where lapse periods are included in the schedule of designations, their median duration is 10 years. There were, however, several instances where lapse periods of 15 or more years were recorded (eg, 15 years for the air noise boundary associated with Queenstown airport; 20 years for the NZTA’s proposed northern and eastern arterials in Tauranga City; 30 years for the upgrade and widening of a local road in Manukau City). These figures suggest that it is not uncommon for lapse periods longer than the default five years to be obtained.

Currently requiring authorities are the decision-makers on both notices of requirement and designations that are rolled over into district plans. Consequently, they have the ability to include extended time frames for projects or works as part of these processes and to make a determination on these based on the recommendations received by the territorial authority.

Further, it is only when an extension to an existing designation is sought under section 184 of the RMA that a territorial authority exercises a decision-making role. In these cases, the territorial authority needs to determine whether continuing substantial progress has been made towards giving effect to the designation. If a territorial authority determines not to approve an extension, the requiring authority can seek redress by lodging an objection under section 357. 68

The NZTA has expressed an opinion that the current five-year default lapse period somewhat restricts long-term strategic planning. 69 This suggests that the impact of this potential problem may be limited to users of designations who seek a long lead time between approval and construction.


Designations only provide land-use approval for an infrastructure project and much infrastructure also requires resource consents for its operation. For example, hydropower stations and irrigation schemes require consents for water use and discharges. The RMA specifies a 35-year maximum term for consents, except most land-use consents and subdivision consents. New resource consents have to be applied for at the expiry of the term. This reflects the view that the right to use public resources, such as water or air, should be not privatised or given for an unlimited period. There also is no consent renewal process under the RMA – unless the plan provides otherwise. Once a consent has expired a new consent is required to continue the same activity. In 2005, the RMA was amended to require consideration of the value of existing investment when a new consent application is made to continue an existing activity.

Much infrastructure is designed and built to operate for longer than 35 years. This means that it is common for infrastructure providers to need to apply for new consents during the life of their facility.

However, some uncertainty exists about the process when consents expire. The need to ‘re-consent’ activities creates risks for investment in long-term infrastructure. The following list of issues has been collated from informal feedback from infrastructure providers.

  • High costs are associated with applying for a new consent for an existing activity, with a potential re-litigation of issues that arose in the original decisions. There is also a lack of clarity on what information is required for the new consent.
  • For current consent holders, there is a risk that a new consent may not be granted, and the activity has to cease. This makes it difficult to plan and make effective investment decisions and can potentially act as a deterrent to investment.
  • Investment certainty is a particular issue for sectors seeking consents for long-term infrastructure development. Some sectors consider the RMA should be amended to provide for longer maximum consent terms to reflect their level of investment.
  • There are particular problems where there is a disjunct between unlimited duration of land-use consents and limited duration of associated consents. For example, ports rely on land-based activities for storing containers and other goods, and for buildings, and they also rely on water space for wharves where ships berth and load and unload. Consent duration can be unlimited for land-based activities, but it is limited to 35 years for coastal permits. If a port company is undertaking a multi-million dollar development, it can be argued it is undermined by the element of uncertainty around the development that requires water space.

It is not clear how widespread or significant these concerns are.

Scope and magnitude:

It is difficult to assess the size of the re-consenting problem because the context of each consent application varies widely – the experience and outcome depends on the conduct of the applicant and council, the circumstances of the proposal and plan, and the level of support or opposition from other parties. Decisions on resource consents are made by considering a wide range of factors, including provisions of the RMA, relevant policies and plans. It is therefore hard to determine what weighting and effect particular factors have in decision-making.

The 2005 amendments to the RMA were intended to address the issue of consent security in favour of the consent holder over other possible applicants. They were also intended to remove the need for a specific consent renewal category. A key change was through new sections 124A–124C, which set up a process to give existing consent holders priority over new applications. For example, section 124B includes additional factors that must be considered by a consent authority:

  • the efficiency of the existing consent holder’s use of the resource
  • the use of industry good practice by that person
  • whether the existing consent holder has been served with an enforcement order that has not later been cancelled, or convicted of an RMA offence
  • having regard to the value of existing investment (under section 104) when determining applications under section 124 (for new consents to replace existing consents).

Research has not been undertaken on the effectiveness of these new provisions. Some anecdotal feedback has been that additional security is provided, but it does not go far enough for long-term infrastructure. The Ministry is seeking feedback on how these provisions are being implemented and their effect on re-consenting processes.

It is important to note that activity status rules in plans also have a significant effect when a new consent is sought to continue an existing activity. For example, if an existing activity is specified in the plan as a permitted or controlled activity, then a consent is either not required, or cannot be declined so long as it meets defined conditions in the plan.

The impact of this problem is confined to infrastructure projects that also require regional council resource consents. Regional council consents are likely to be triggered if the project involves large-scale earthworks, water takes or discharges to water, discharges to air, or if the infrastructure is located in the coastal marine area. It is therefore likely that this problem would impact on a reasonable proportion of larger-scale infrastructure projects.

c. Duplication and inconsistency of processes

Two-step process

The current designation system requires a two-step process by which approval is required for a notice of requirement, followed by an assessment of the detailed design contained in an outline plan of the work. Outline plans are also generally required for minor developments and upgrades. Sometimes the need for an outline plan may be waived, but this still requires formal correspondence with the local authority. The need for the outline plan step may add unnecessary compliance costs and delays for maintenance and minor upgrade activities.

Scope and magnitude:

Figure 5, compiled from a recent survey of a sample of local authorities, 70 shows that of the three main designation ‘approval’ processes, outline plans are by far the most frequently used. While the information gathered did not inquire into the type of developments covered by outline plans, anecdotal evidence suggests that many are small developments, minor changes to existing development that are still within the scope of the designation, or maintenance.

Figure 5: Types of applications under Part 8 of the RMA

The graph shows the number of each type of application under Part 8 of the RMA.  There were 185 notices of requirement under section 168; 274 alterations under section 181; and approximately 2400 outline plans under section 176A.

Figure 3, above showed the range of parties using the process to alter existing designations, with territorial authorities and the NZTA being the two largest groups using this process. Figure 4 showed the range of parties submitting outline plans for works undertaken within designations, with the Ministry of Education being the largest user in the sample group.

Figure 4 suggests that outline plans are used by a range of requiring authorities. Ministry of Education was a high user of outline plans (submitting 65 per cent of all outline plans to nine councils, total number of 588), compared to submitting 9 per cent of notices of requirements to 43 councils (see figure 2). This suggests that, in the case of the Ministry of Education at least, a large number of developments and upgrades are undertaken through outline plans, on designations that have been in place for some time. A similar trend applies to the other users of outline plans surveyed.

The outline plan stage appears to add a level of compliance cost to minor upgrade and maintenance activities. However, further information is needed to understand the significance of this issue.

Inconsistent process

An outline plan is not subject to public participation. In many cases the lack of public input is consistent with other RMA processes, such as a non-notified resource consent process where no parties are considered to be affected by the proposed works. However, in some cases, significant development is brought forward under an outline plan. This can occur in the case of historical designations, such as for defence purposes or local authority works, that have been specified at a general level and may have no conditions attached to them. In such cases, lack of public input is inconsistent with what would occur if the designation was not in place, and a resource consent process was followed instead.

By not providing for public consultation, an opportunity for improved outcomes, for both the infrastructure provider and the community, can be lost.

Scope and magnitude:

While situations of significant development being brought forward under an outline plan may be the exception rather than the norm, the divergence from the expected opportunity for public input and consideration of effects can be significant, particularly in situations where effects on neighbours from the development are substantial. This issue applies to holders of designations that have been in place for some time, particularly those that have general purposes or no conditions, and those where ongoing development or upgrades occur often. This issue is much less prevalent for more recent designations.

There is limited evidence that the outline plan process, when used for significant developments, compromises environmental integrity. Interviews undertaken with eight territorial authorities 71 revealed some concerns with the lack of public consultation required for outline plans, and over outline plans for designations with very general purposes and no conditions. Detailed evidence on what types of development are currently being considered through outline plans is not available.

d. Multiple approval processes and appeal routes

The complex nature of infrastructure developments means that it is common for a proposal to require a range of approvals under separate regimes – eg, designations, land-use approvals, regional resource consents, authorisation to access acquisition or taking powers under the PWA, and approvals under other statutes, such as the Conservation Act 1987 or Historic Places Act 1993 (HPA). There are also often multiple appeal routes available because of the range of legislative approvals required. The need to engage in multiple processes increases the complexity for obtaining necessary approvals, extends overall time frames and increases risks and uncertainty for the infrastructure provider and affected communities.

Scope and magnitude:

There is limited evidence on how often infrastructure developments have to go through multiple approval processes and then face multiple appeal routes, or the impact this has on costs or the efficient delivery of infrastructure. This is likely to be an issue faced particularly by larger scale or more complex projects. However, officials do not have detailed information on the percentage of large-scale projects that use designations.

Regional council consents are likely to be triggered if the project involves large-scale earthworks, water takes or discharges to water, discharges to air, or if the infrastructure is located in the coastal marine area. However, how often these require a notified process is unknown.

The requirement for approvals under other Acts, such as the HPA, will occur less frequently.

The requirement to go through two or more processes for one project, particularly if the processes go through public hearings, is costly and time consuming.

Infrastructure problem 4: Need for robust and integrated decision-making

Legitimate and fair decision-making processes are crucial to ensure public acceptance and confidence in the decision-making system and its consequences. Different decision-making processes exist for designations and resource consents (explained in Box 3), and are not always perceived as fair.

For example, decisions on most designations are made by the requiring authority, who is often also the infrastructure provider. Essentially, that means it is the applicant who decides whether to accept or reject the relevant territorial authorities’ recommendations in part or in full – which means these are not independent decisions. This role applies whether the requiring authority is a public or private body. The exception is where nationally significant projects are referred to a board of inquiry or the Environment Court. In contrast, decisions on resource consent and plan processes are independent of the infrastructure provider; they are made by the relevant territorial authority, a board of inquiry or the Environment Court.

Requiring authority status provides additional powers and protections from development compared to those available through a resource consent, as well as access to significant powers under the PWA.. 72 These PWA powers can be used to compulsorily remove private property rights from individuals, in exchange for compensation, to allow the requiring authority to acquire the land.

Two potential problems are:

  • perceptions of legitimacy and fairness
  • barriers to integrated decision-making.

a. Legitimacy and fairness

While a requiring authority submits a notice of requirement or an outline plan to the territorial authority, it makes its own decision on whether to accept or reject any of the authority’s recommendations. This means the decision is not independent in these circumstances. Some balance is provided through a right of appeal to the Environment Court by the territorial authority or a submitter, but the cost of appeals is likely to act as a barrier. Non-independent decision-making and inadequate checks on this has the potential to compromise environmental integrity.

This issue is particularly pertinent in the case for non-government requiring authorities, of which there are currently more than 100. As the requiring authority is an investor as well as the decision-maker for designation processes, there is a legitimate question about how a private sector infrastructure provider balances delivering the sustainable management objectives of the RMA with its statutory duties to its shareholders or its statutory obligations under its establishing legislation.

The RMA attempts to overcome the issue of a requiring authority (who is not the Crown or a local authority) also being a decision-maker by requiring the Minister, when approving requiring authority status, to be satisfied that the applicant is likely to give proper regard to the interests of those affected and to the interests of the environment (section 167 of the RMA). These are essentially matters of public policy. However, in practice this can be difficult to assess or establish with confidence. It also creates potential difficulties in areas where the private sector is the infrastructure provider, often in historically publicly provided areas (eg, telecommunications, airports, etc) where they have their own obligations and statutory duties to their shareholders. Where the private sector is unable to demonstrate it can satisfy the requirements of section 167, it will be ineligible to use the designations process. This may impact on the efficient delivery of infrastructure by private firms.

Scope and magnitude:

The general consensus from nine councils recently surveyed 73 is that requiring authorities seldom reject or significantly alter the council’s recommended conditions. However, small alterations are relatively frequent and are usually carried out with open discussions between the council and requiring authority. The survey also identified examples where conditions or recommendations to withdraw the notice of requirement were rejected in whole, or in part, by the requiring authority.

Both requiring authorities and territorial authorities have noted the importance of a good working relationship to ensure the system works well. This is seen to be especially important by councils, as they are aware that the decision-making power resides with the requiring authority.

Specific examples have been identified by individual authorities where they felt unable to achieve all the mitigation measures and alterations considered appropriate, sometimes because of the lack of public consultation at outline plan stage. 74 Examples include:

  • An outline plan being used to establish secure parking facilities adjacent to a listed building, where the site had a high profile within the district and there was public concern about the development.
  • Where there is little or no detail in the original designation. This is particularly the case where some designations have been ‘rolled over’ at the stage of renewal of district plans. In some circumstances, designations can be as broad as “rail purposes” or “defence purposes” and it is possible for the requiring authority to argue that any number of activities can be carried out within this scope.
  • Requiring authority decisions on whether to accept the recommendations of the territorial authority on a notice of requirement or outline plan are subject to appeal to the Environment Court. While this can act as a check on the legitimacy of the decision-making process, a number of councils recently surveyed identified ‘a big gap’ between not agreeing with a requiring authority’s decision and actually lodging an appeal. 75 As a consequence, only a relatively small number of appeals are pursued by councils.

Changes to the RMA were made in 2009 that introduced independent decision-making for projects of national significance. The RMA now also provides for people to request an independent commissioner for hearings, and the requiring authority can directly refer the decision on a notice of requirement to the Environment Court. These provisions reduce the magnitude of the problem around the decision-making process, particularly for nationally significant projects, although there is limited evidence about how often they are being used, given the provisions were only recently introduced.

b. Barriers to integrated decision-making

Decision-making on infrastructure development is, to an extent, separated from other planning decisions. Designations form a parallel system to plan development and resource consent processes. Having a number of different decision-makers across different processes can create a barrier for coordinated and integrated planning (it requires greater effort to achieve). If a designation is in place first, the current system allows planning to take place around the identified route or site. However, it does not facilitate coordinated planning or decision-making.

The requirement for spatial planning in Auckland, and its potential application throughout the rest of the country (discussed in chapter 2), presents the opportunity to maximise the value of investing in costly, long-lived, infrastructure, including leveraging greater productivity gains by coordinating investment decisions, where appropriate. However, the current designations process may not necessarily support effective spatial planning as requiring authorities can seek designations in areas of their choosing, irrespective of any commitments made in a spatial plan. This maximises flexibility for requiring authorities’ investment priorities but would not necessarily reflect the regional priorities.

Anecdotal evidence from infrastructure providers also suggests that reverse sensitivity is a real concern, especially around ports and airports. A potential lack of integration between designations and spatial planning, should spatial planning be implemented throughout the country, could cause further problems with reverse sensitivity, or miss an opportunity to better manage any issues arising.

The designation system does not promote an ethic of cooperation between infrastructure providers. Once a designation is approved, the requiring authority has rights of protection against encroachment within the space of the designation. This includes an ability to limit other infrastructure providers making use of the same corridor or spot designations, even where the uses could be complementary or compatible. The existing system therefore does not encourage infrastructure providers to work together to find least-cost, least-disruption solutions, such as creating integrated infrastructure corridors, or to coordinate plans for upgrading existing infrastructure to minimise disruption.

Scope and magnitude:

Little information has been gathered on problems arising from the limited ability to integrate designation planning processes with other RMA planning processes. It is not yet possible to gather actual data on problems caused by a lack of integration of designation planning with spatial planning as the latter is an emerging trend and the system has not yet been tested.

A 2010 survey of a sample of requiring authorities 76 identified that co-location of infrastructure is occurring on an as-required basis. None of the requiring authorities surveyed identified that they had encountered any problems when wishing to co-locate. It appears, therefore, that this may not be a significant problem with the current designations process. There may, however, be an opportunity to better encourage and facilitate co-location of infrastructure, particularly with the advent of spatial planning.

Infrastructure problem 5: Efficiency and adequacy of the land acquisition process

Anecdotal evidence suggests that some delays in acquiring land for public works projects arise because landowners consider that the overall amount of compensation is not sufficiently generous to recognise their property rights or incentivise an early agreement.

Under the PWA, the term ‘compensation’ is used rather than ‘purchase price’. This is because a landowner is being compensated for a loss arising from the sale of their land to an acquiring authority. The current primary principle of compensation is that the landowner is put in a financial position as close as possible to what they would have been in had the land acquisition not taken place. This ‘no better or worse off’ principle is applied in most developed economies (including Australian states, the United Kingdom and the United States of America).

There are several elements to compensation under the PWA. The main elements include payments:

  • based on the market value of land acquired at a specified date
  • where a principal residence is acquired and a solatium 77 paid
  • for landowner expenses (including legal, valuation, lost business and moving costs).

Potential problems have been identified with the adequacy of compensation and the efficiency of processes. The current compensation provisions could be viewed as being outdated and inadequate in some ways, because:

  • they do not recognise how long a person has owned a property, or the emotional consequence of losing a property regardless of whether it contains a dwelling
  • they fail to provide incentives for early agreement and settlement, extending the time required for infrastructure projects
  • current valuation practices within New Zealand, which are used to determine ‘fair market value’, may not form a suitably objective and reliable basis for ‘willing purchaser, willing seller’ price discussions
  • affected landowners may not understand their rights under the land acquisition process.

As a specific example, the current level of solatium has been in place for nearly 30 years (since 1982) as a flat payment of NZ$2000 and does not reflect increases in the consumer price index.

Scope and magnitude:

It is noted that not all infrastructure projects use PWA processes to acquire land. Crown agencies and local authorities have access to these processes, while private infrastructure providers generally acquire land through standard commercial processes. Figures 3 to 5 suggest that somewhere between half and three-quarters of designation users are Crown agencies or local authorities. LINZ officials do not have statistics on the proportion of Crown agency and local authority projects that use PWA processes. In the last 10 years, there have been only two applications by network utility operators to access powers under the PWA. However, even if network utility operators do not use powers under the PWA, the potential to access them is likely to be a significant factor in negotiating with landowners.

Discussions with acquiring authorities and research of international practices 78 suggest that the level of compensation is only occasionally a large factor in delays in the land acquisitions process. Delays are more often caused by the very fact that land is being taken and by landowners being uncertain around the land acquisitions process. Notable delays only occur for around 5 per cent of PWA land acquisitions. Only around 1 per cent of public works land takings are objected to the Environment Court.

Compulsory acquisition powers are used rarely. Between 1 July 1998 and 30 June 2009, the Crown acquired approximately 4000 properties under the PWA. Of these, 40 (or 1 per cent) required the taking of land by compulsory acquisition.

However, given that access to land is essential for the development of infrastructure, delays caused in the acquisition of even one property could hold up an entire development.

There is currently insufficient evidence to assess the significance of current valuation practices used to determine ‘fair market value’.

51  GHD. 2010. Phase II Reform of the RMA, Notices of Requirements and Outline Plans – Analysis. Report to the Ministry for the Environment, Wellington.

52 GHD. 2006. Research into the use of designations. Report to the Ministry for the Environment, Wellington.

53  Reverse sensitivity arises where a new, incompatible activity establishes near an existing, lawfully established activity, and the new activity objects to the effects generated by the existing activity, thereby threatening the continued operation of the existing activity. For example, an airport may generate noise that is not appropriate for residential amenity, and may therefore initially locate in an area with no or low-density residential development. More intense residential development around the existing airport has the potential to create a reverse sensitivity effect on the airport, if the new residential development generates amenity expectations that are incompatible with the noise generated by the existing airport.

54  An outline plan of work is provided to a local authority by a requiring authority. It gives details about the scale, location and shape of a particular work or project covered by a designation. Outline plans are not publicly notified.

55  Hill Young Cooper Ltd and Enfocus. 2010. Providing National Guidance on Infrastructure Through the RMA. Report to Ministry of Economic Development and Ministry for the Environment. Available on the MED website:

56  Treasury, 2010. National Infrastructure Plan. New Zealand Government. Wellington. p 88.

57  GHD. 2010. Phase II Reform of the RMA, Notices of Requirements and Outline Plans – Analysis. Report to the Ministry for the Environment, Wellington.

58  The term ‘private’ is used loosely in respect to electricity distribution companies. Twenty-four of the 88 “private” network utilities are electricity supply companies some of whom are owned, or partly owned by community trusts (being entities established to manage the assets of former power boards). Similarly, 16 approved network utilities are airport companies, of which a number of partially or wholly owned by territorial authorities.

59  ‘Design and build’ is an approach where both designing and building the project are combined into a single contract, allowing single tender and contracts processes.

60  National Infrastructure Unit. 2010. National Infrastructure Plan. Wellington: New Zealand Government.

61  GHD. 2010. Phase II Reform of the RMA, Notices of Requirements and Outline Plans – Analysis. Report to the Ministry for the Environment, Wellington.

63  Palmerston North City Council. See GHD. 2010. Phase II Reform of the RMA, Notices of Requirements and Outline Plans – Analysis. Report to the Ministry for the Environment. Wellington.

64  GHD. 2010. Phase II Reform of the RMA, Notices of Requirements and Outline Plans – Analysis. Report to the Ministry for the Environment, Wellington.

65  Information regarding the council’s recommendation was provided for 48 of the 91 applications for notices of requirement processed. Of these, 34 were recommended for approval subject to modification or conditions being imposed; two were confirmed without a request for modification or conditions; one was recommended to be withdrawn. In 11 other instances, the application was approved but no detail is available about whether modifications or conditions were recommended.

66  A designation will ‘lapse’, that is, expire and no longer be valid, if it has not been given effect to within the specified period.

67  GHD. 2010. Phase II Reform of the RMA, Notices of Requirements and Outline Plans – Analysis. Report to the Ministry for the Environment, Wellington.

68  Section 358 also offers requiring authorities a further right of appeal to the Environment Court against any decision on an objection.

69  GHD. 2010. Phase II Reform of the RMA, Notices of Requirements and Outline Plans – Analysis. Report to the Ministry for the Environment, Wellington. p 22.

70  GHD. 2010. Phase II Reform of the RMA, Notices of Requirements and Outline Plans – Analysis. Report to the Ministry for the Environment, Wellington.

71  GHD. 2010. Phase II Reform of the RMA, Notices of Requirements and Outline Plans – Analysis. Report to the Ministry for the Environment, Wellington.

72  Note that it is requiring authority status that is required, not an actual designation. Also note that the Crown and local authorities have direct access to the Public Works Act.

73  GHD. 2010. Phase II Reform of the RMA, Notices of Requirements and Outline Plans – Analysis. Report to the Ministry for the Environment, Wellington.

74  GHD. 2010. Phase II Reform of the RMA, Notices of Requirements and Outline Plans – Analysis. Report to MfE. Wellington

76  GHD. 2010. Phase II Reform of the RMA, Notices of Requirements and Outline Plans – Analysis. Report to the Ministry for the Environment, Wellington.

77  A solatium is a legal expression meaning compensation for grief or stress over and above actual loss, and applies when a residence is purchased.

78  In 2009, LINZ officials researched how public works compensation is paid in other developed countries: Australia, UK, USA (California), Canada (British Columbia) and France. Officials also held discussions with counterparts from Victoria and New South Wales, as well as with local authorities, Local Government New Zealand, and the New Zealand Transport Agency (NZTA).