Following a brief press release in early February, Minister for Land Information New Zealand Chris Penk has released another statement concerning the Public Works Act (PWA) reform. It appears the government has rebranded the “short and sharp” review, with Penk now describing the reform as an “overhaul” in today’s press release, although we note that there is still no indication that the Government has any appetite to include the “offer back” (disposal) provisions as part of the review.

In what will be the PWA’s most significant reform in its nearly fifty-year history, Penk states that the government is hoping the overhaul will “help unleash an infrastructure boom”. The review is a major part of the Government’s “economic growth agenda” and is intended to fast-track the development of much-needed affordable housing, create jobs through new projects, and provide critical infrastructure to better support public services.

Penk describes the current PWA as no longer fit for purpose, noting that “complex regulations and inefficient processes are slowing down development, resulting in blown out budgets and added costs for taxpayer”. He states that it takes on average up to one year for standard PWA acquisitions, and two years, or more, for compulsory acquisitions, which New Zealand cannot afford “in the face of a productivity crisis and critical infrastructure deficit”. The Government’s intention is that a modernised PWA will “set the foundation for better building”.

The first tranche of reform

But how will the Government deliver on these promises? In what appears to be part of a series of targeted releases of policy changes Penk has revealed the PWA reform will achieve the government’s desired outcomes by targeting the following six areas:

1. Delegation of land acquisition responsibilities: This reform will allow government agencies who frequently use the PWA (eg the New Zealand Transport Agency (NZTA)) to enter into acquisition agreements with landowners. However, the Minister for Land Information New Zealand will retain responsibility for all compulsory acquisitions. Currently, while NZTA and its advisors lead negotiations with landowners, agreements are entered into with the Crown (via Land Information New Zealand).
2. Enhance inter-agency collaboration: The reform seeks to encourage government agencies to work together under the PWA. One means of achieving this is by encouraging them to act in a co-ordinated manner to acquire land together, rather than separately.
3. Enable infrastructure relocation: The reform will include provisions that allow both central and local government to acquire land to move existing infrastructure that is currently blocking future public works.
4. Refining the Environment Court’s role: The Government wants to clarify the Environment Court’s scope of review in assessing objections to acquisitions under the PWA. The Court’s approach under the PWA will have a “renewed focus” on individual property rights and removing duplications between the PWA and the Resource Management Act 1991 (RMA).
5. Compulsory mediation: Parties in compensation disputes will be required to undergo mediation or alternative dispute resolution prior to taking their case to the Land Valuation Tribunal in the hope that this will reduce the volume of lengthy court proceedings in this area.
6. Transpower allowed to bypass standard processes: Transpower (the state-owned enterprise responsible for managing New Zealand’s power grid) will be empowered to acquire land by agreement under the PWA rather than being required to apply to the Minister for Land Information to acquire land on its behalf under the RMA. This is intended to streamline Transpower’s ability to efficiently build energy infrastructure.

Penk also reaffirmed the Government’s commitment to addressing the PWA’s tendency to undervalue Māori land. To read more about this aspect of the reform, refer to our previous article “PWA Reform Update - Short and Sharp or Sweeping? Māori land acquisition added to the scope of review”.

Our thoughts?

As signalled at the inception of the PWA’s review, the Government wants to target changes that will lead to administrative efficiencies. Given that NZTA and Transpower are two high volume users of the PWA with large scale future infrastructure projects required, their proposed ability to enter into contracts directly with landowners in an effort to streamline and speed up acquisitions is unsurprising. However, without the benefit of the details at this stage, it is unclear how this will work in practice. For example, in roading projects it will be interesting to see if there will be an initial transfer of land to NZTA, with the land subsequently being declared to be road and put into Crown ownership after the project’s completion, or whether the land will immediately vest into the Crown’s name. Also, it will be important to understand how registered interests will be dealt with, and whether NZTA will have the ability to extinguish lesser interests and property rights such as easements, covenants and encumbrances.

We had expected that there would be changes to remove overlap with the RMA, which explains why the role of the Environment Court is being targeted and refined. We agree that this will likely assist with the Government’s objectives to make it faster for government entities to acquire land.

The collaboration and relocation points appear to be a direct response to the Supreme Court decision in Seaton v A-G^[1] where the Court found that land to be acquired under the PWA must be land required directly by the acquiring authority for its public work and not for the work of another party or entity. This change is likely to significantly streamline the ability of  both government agencies and local authorities to enable urban development and housing supply initiatives in tandem with and alongside roading and transport routes. We expect this added ability to collaborate will result in real efficiencies.

Compulsory mediation or alternative dispute resolution for compensation disputes could be useful tools to resolve compensation disputes at an early stage without the need for lengthy (and costly) court processes. However, in our experience mandatory mediation may be unproductive where there is not a genuine desire to settle in good faith - as the saying goes, you can lead a horse to water, but you can’t make it drink!

Where to from here?

Penk has confirmed there will be further releases of policy changes announced in the coming weeks. We will keep you updated on these changes, and our thoughts on them, as they are announced.  

Penk confirmed that the Bill is due for release in mid-2025, and the public will have its first opportunity to comment on the Bill at the select committee stage.

Further reading

Simpson Grierson has been following the PWA reform closely. If you would like to read our past commentary on the reform here –

The Public Works Act Review - What you need to know

PWA Reform Update - What we know and what we are waiting for

PWA Reform Update - Short and Sharp or Sweeping? Māori land acquisition added to the scope of review

Special thanks to Lucy Scottwood for her assistance in writing this article.