New Zealand’s infrastructure spend is giving us lower value for money than almost every other country in the OECD according to Ross Copland, former Chief Executive of the NZ Infrastructure Commission Te Waihanga(Copland, 2024), and this needs to change.

NZ Transport Agency Waka Kotahi (NZTA), recognising that it had a gap in the monitoring and evaluation of its investment costs, recently commissioned Resolve Group to examine whether the variability of costs for common transport investments could be quantified, and what might be done to mitigate any differences.

Assessing a sample of 21 similar intersection improvement projects (typically highway roundabouts or local road intersection improvements) delivered across New Zealand from 2016, the research, led by Dr Carron Blom and Jamie MacDuff, found that despite the physical similarities in many of these projects, there was a very high level of variability in the indexed costs of these projects on a unit area basis, even when outliers were excluded. The research could not find any correlation between out-turn cost per sealed area and the nett effect of key project cost factors (such as pavement type, level of traffic management etc.) or other factors that could be influenced by the NZTA.

Our experience at Resolve Group is that a ‘whole-of-system’ approach is necessary for New Zealand to collectively meet its current and future infrastructure needs and indeed, the research revealed the need for system-level mitigations to be able to effectively monitor and evaluate actual investment costs.

To enable NZTA to establish a benchmark for cost variability, and to support changes within its operating practices (such as the recently developed standard methods of measurement (SMoM) and improved definitions for cost elements ), Resolve Group has proposed a range of interventions that aim to reduce variability in cost measurement and reporting that are embedded and/or created within organisational policies and procedures, and to enable infrastructure costs to be more comprehensively recorded, understood, and used to help manage, monitor and  forecast future investment costs, and so improve value-for-money infrastructure delivery.