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Speaker 1: Kioa. I'm Chelsea Daniels and this is the Front Page,

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Speaker 1: a daily podcast presented by the New Zealand Herald. The

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Speaker 1: government's being warned it must invest in New Zealand's aging infrastructure.

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Speaker 1: It comes after a week of infrastructure woes, with the

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Speaker 1: Defense Force plane breaking down, a track fault canceling all

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Speaker 1: trains in Auckland, and an inter island a ferry running aground.

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Speaker 1: These are all areas that have been issued before. So

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Speaker 1: what stopped us from fixing these problems before they become

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Speaker 1: a catastrophe. We'll discuss the latter with the Infrastructure and

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Speaker 1: Z's Policy Director Michelle McCormick. But first on the Front

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Speaker 1: Page ends at Herald, Wellington reporter Georgina Campbell explains what

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Speaker 1: went wrong with the inter island a ferry. Georgina, can

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Speaker 1: you tell me what happened on Friday night with the

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Speaker 1: inter islander?

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Speaker 2: Yes? So the other terry, which is Kerry Rowl's only

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Speaker 2: rail enabled fairy, departed Picton at about nine forty five

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Speaker 2: pm on Friday. It then swiftly suffered what has been

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Speaker 2: described as a steering failure and ran aground shortly after.

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Speaker 2: Now it's worth noting that other terry had recently had

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Speaker 2: an upgrade to its steering system. Thankfully, it ran into

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Speaker 2: sand and mud rather than big rocks, so the hull

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Speaker 2: remained watertight. I think it's fair to say it could

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Speaker 2: have been a lot worse. It was a freight only sailing,

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Speaker 2: so there were forty seven people on board. Of those,

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Speaker 2: eight were commercial vehicle drivers and thirty nine were crew.

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Speaker 2: No one was injured. They did have to spend the

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Speaker 2: night on the ship before being safely escorted off, and

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Speaker 2: it was first thought that the ferry could be refloated

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Speaker 2: the morning that's the Saturday morning, but authorities decided to

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Speaker 2: wait until later that night at about nine pm for

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Speaker 2: high tide. The effort to refloat the ship was successful.

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Speaker 2: It then spent the night anchored in the harbor before

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Speaker 2: returning to Picton Wharf. The fairy is now detained and

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Speaker 2: there are several investigations underway, including by Maritime New Zealand

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Speaker 2: and the Transport Accident Investigation Commission.

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Speaker 1: Is this the same fairy that previously lost power in

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Speaker 1: February last year?

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Speaker 2: It is the same fairy, and in a sort of

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Speaker 2: incredible twist of fate, I received a summary of Maritime

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Speaker 2: New Zealand's investigation into exactly that incident earlier last week

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Speaker 2: under the Official Information Act. I've been chasing it for

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Speaker 2: months and it just happened to land in my inbox

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Speaker 2: the same week that that faery ran the ground. So

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Speaker 2: just to take you back to February last year, this time,

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Speaker 2: Aditteri was approaching the entrance to the Tory Channel at

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Speaker 2: six pm with five hundred and thirty eight people on

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Speaker 2: board when it experienced what this Maritime New Zealand summary

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Speaker 2: has called a power blackout. The summary said this blackout

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Speaker 2: only lasted a few seconds before the emergency generator kicked in. However,

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Speaker 2: the vessel was without propulsion and drifting. It was about

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Speaker 2: three point four to two nautical miles from the nearest

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Speaker 2: point of land. Full propulsion was restored about twenty minutes later.

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Speaker 2: But the really interesting thing with this is the subsequent

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Speaker 2: investigation and what went wrong. So it found the power

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Speaker 2: outage was caused by the failure of a part in

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Speaker 2: the diesel generator called an actuator. Some spy reflex tape,

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Speaker 2: which is tape used to hold wires and the hydraulic

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Speaker 2: hose in place, had been used inside this actuator, and

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Speaker 2: the report said that over time this tape had degraded,

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Speaker 2: causing debris to mix with the oil inside the actuator

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Speaker 2: and the presence of this contaminated oil had caused the

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Speaker 2: actuator to seize and that's what led to this power blackout.

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Speaker 2: Now inter Islander has acknowledged this tape should not be

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Speaker 2: used in oil immersed systems and it has since really

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Speaker 2: upped the anti on its maintenance protocols.

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Speaker 1: You've written a lot about how the previous government ordered

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Speaker 1: new Mega Fairies to replace this aging fleet and the

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Speaker 1: current government canceled the project once they got into overt

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Speaker 1: My message to KiwiRail has been the Ferrari is not

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Speaker 1: the only car in the garage.

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Speaker 3: I think it's time we had a lot.

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Speaker 1: Can see if there's a Toyota Corolla or maybe some

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Speaker 1: secondhand tesselas well.

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Speaker 3: The fact of the matter is that we don't even

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Speaker 3: have a Susuki Swift sized replacement model on the government's radar,

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Speaker 3: and Keywis deserve better.

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Speaker 1: How far along were those new Fairies when Nichola Willis

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Speaker 1: pulled the plug on them?

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Speaker 2: Yeah, So there are two parts to so this part

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Speaker 2: of the story, which is the mega ferries themselves and

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Speaker 2: the port side infrastructure needed to support them, So Nicola

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Speaker 2: Willis effectively canceled the project after Kiwi Raw asked for

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Speaker 2: an extra one point five billion dollars, and that cost

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Speaker 2: escalation was primarily due to the port side infrastructure, which

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Speaker 2: clearly was not sorted out at that point. Considering Kii

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Speaker 2: Raw was asking for such a large amount of money,

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Speaker 2: the mega ferries themselves were reasonably far along, so a

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Speaker 2: contract had been signed with Hyundai Mipo Dockyard based in

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Speaker 2: South Korea back in twenty twenty one. But just noting

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Speaker 2: that Kei Row signed this contract to build the mega

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Speaker 2: ferries without having sorted out the port side infrastructure needed

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Speaker 2: to accommodate them now. Earlier this month, I reported that

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Speaker 2: you know this, the mega ferries were so far along

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Speaker 2: that engine parts for them had been built and tested

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Speaker 2: before the contract was canceled. The safety management and control

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Speaker 2: system for both ships have been tested and accepted. The

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Speaker 2: dockyard also blasted and primed some metal for later stages

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Speaker 2: and produced five plates, so basically it felt like it

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Speaker 2: was now or never in terms of that window for

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Speaker 2: Nikola Willis to cancel the Fairies before they started doing

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Speaker 2: serious steel cutting.

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Speaker 1: And the government last week criticized Kiwi Row for how

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Speaker 1: they're maintaining their fleet.

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Speaker 4: We also have to get the right ships for the job,

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Speaker 4: and ki Row must maintain its existing ships to the

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Speaker 4: safe standard required.

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Speaker 1: What's the latest you've seen on what the new plan

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Speaker 1: is to actually replace them?

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Speaker 2: While following the grounding of Arditari, ministers have revealed that,

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Speaker 2: you know, they've received the final report from a Ministerial

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Speaker 2: advisory Group that was tasked with looking at the future

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Speaker 2: of keey Row's cookstrait service. Nikola Willis and Paul Goldsmith,

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Speaker 2: who are the shareholding ministers for Kiwi Row, announced this

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Speaker 2: group after they effectively canceled the Mega Fury project. So

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Speaker 2: the Ministerial Advisory Group have provided ministers with options to

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Speaker 2: replace the fairies, and Transport Minister to them, Brown said,

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Speaker 2: you know that that work is progressing with urgency and

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Speaker 2: ministers would take recommendations to cabinets. So I would be

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Speaker 2: expecting to see some clarity on what the government's plan

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Speaker 2: be as in the coming weeks.

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Speaker 1: And Georgina, you probably know more about these fairies than

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Speaker 1: anyone outside of government. What's your hot take? And how

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Speaker 1: do we go about actually fixing this problem.

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Speaker 2: There's only one way to fix this problem, and that's

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Speaker 2: replacing the inter Island A fleet. The mega ferries were

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Speaker 2: not due to arrive until twenty twenty six, so the

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Speaker 2: auditory grounding would not have been prevented if the Mega

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Speaker 2: fair project was still going ahead. But the aging and

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Speaker 2: increasingly unreliable Interland A Fairies have been running on borrow

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Speaker 2: time and it has felt like a serious incident like

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Speaker 2: this grounding has almost been inevitable. You know, as I've said,

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Speaker 2: Nikola Willis announced the government's decision to cancel the project

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Speaker 2: without a plan B, and there's some political risk in that.

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Speaker 2: You know, the risk is that a major incident could

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Speaker 2: happen on cook straight before the government got a new

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Speaker 2: plan sought it. And we're sort of seeing that risk

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Speaker 2: play out to some degree following the auditory grounding. You know,

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Speaker 2: it's worth noting this grounding isn't quite the government's worst

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Speaker 2: in to island a nightmare, but I think it would

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Speaker 2: still have ministers waking up in a cold sweat. The

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Speaker 2: government's worst nightmare, it would be something more like last

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Speaker 2: year's Kaentucky incident. If that Fairy had not narrowly avoided disaster,

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Speaker 2: so that's when there were eight hundred and sixty four

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Speaker 2: people on board. The ship lost power and cook straight

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Speaker 2: and started drifting towards Wellington's rocky south coast and issued

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Speaker 2: a may day call. Thankfully, power was restored and the

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Speaker 2: ferry linked back to Wellington. It could have been one

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Speaker 2: of New Zealand's worst maritime disasters, though we know that

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Speaker 2: Wellington Hospital was put on standby for me casualties and

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Speaker 2: preparation for the worst. So public confidence in the Fairies

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Speaker 2: has been shaken. Between that Kentucky mayday call, now the

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Speaker 2: uditary running aground, and all the other mechanical faults in

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Speaker 2: between those incidents, I think the interra island of Fleet

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Speaker 2: cannot hang on much longer, and no one wants to

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Speaker 2: find out what a third serious incident might look like.

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Speaker 1: Thanks for joining us, Georgina. It's not just ferries having issues, planes, trains,

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Speaker 1: powered pylons, They've all had issues.

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Speaker 4: In the last week, the New Zealand Defense Force Boeing

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Speaker 4: seven five seven was stopped in Port Moresby when a

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Speaker 4: fuse issue was identified. The Prime Minister was forced to

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Speaker 4: go the rest of the way commercially to Japan.

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Speaker 1: Northland's power crisis was caused by contractors removing too many

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Speaker 1: nuts from the base plates of the power pylon that toppled.

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Speaker 1: On Thursday, Train services on Auckland's eastern line are suspended

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Speaker 1: due to a track vault at Middlemore.

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Speaker 3: To discuss what.

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Speaker 1: Needs to be done, we're joined now by policy director

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Speaker 1: at Infrastructure and Z Michelle McCormack. A dud Defense Force

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Speaker 1: aircraft aging pylons toppling over and cutting power to an

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Speaker 1: entire region are now an inter islander ferry crashing into

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Speaker 1: the coastline.

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Speaker 3: Is this good enough? No, it's not. It's pretty poor

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Speaker 3: actually for a country there thinks we're world class. Yeah,

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Speaker 3: we're definitely failing across a lot of fronts and infrastructure.

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Speaker 1: New Zealand has underinvested in core infrastructure for years now,

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Speaker 1: well below the average OECD spend. ASB estimates it's going

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Speaker 1: to cost one trillion dollars to fix infrastructure and bring

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Speaker 1: it up to standard.

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Speaker 3: Does that sound about right to you? It's an awful big number,

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Speaker 3: isn't it. I think there's other things that can be

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Speaker 3: done too. I mean that was a piece of work

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Speaker 3: that edited up all the missing infrastructure we have at

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Speaker 3: the moment, but there's actually other ways to address things.

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Speaker 3: We could be using our existing infrastructure a lot smarter.

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Speaker 3: There has been talk of congestion charging and looking at

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Speaker 3: how we use particularly the roading network, so we're not

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Speaker 3: just having to build to meet those capacity and peak times.

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Speaker 3: But yeah, it is a big number. We definitely have

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Speaker 3: a huge deficit. The Infrastructure Commission is putting it at

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Speaker 3: over two hundred billion dollars. But you know, we know

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Speaker 3: right across the board, from our water systems, our road systems,

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Speaker 3: the Fairies, the Air Force and Defense Force, and our electricity,

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Speaker 3: we're just not set up for the future a leat

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Speaker 3: alone actually dealing with our needs at the current time.

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Speaker 1: Well, our new Fairies got canceled because they were getting

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Speaker 1: a bit too expensive. Defense Minister Judith Collins said it

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Speaker 1: would cost millions to buy new planes for the Defense Force.

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Speaker 3: And now the christ.

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Speaker 1: Church Cathedral I've seen in the news has downgraded the

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Speaker 1: seismic strength of its rebuild project after the cathedral was

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Speaker 1: damaged in the twenty eleven earthquake.

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Speaker 3: Are we just a bit cheap? What's going on here?

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Speaker 3: I think it's partly because we don't have a agreed

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Speaker 3: pipeline and plan of work. We've just been with a

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Speaker 3: delegation over in Denmark and they have a much more

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Speaker 3: varied coalition government, but their infrastructure is not something they

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Speaker 3: actually have a political debate on. All the parties in

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Speaker 3: government get to decide and are involved in the development

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Speaker 3: of the projects right from the beginning, so they have

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Speaker 3: buy in about what Denmark needs, and then as these

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Speaker 3: up to seventy year plans are put into place, there's

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Speaker 3: political agreement in support right across the wall, from the

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Speaker 3: planning right into the development and implementation. And I think

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Speaker 3: that's what we're missing at the moment. We might have

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Speaker 3: a good idea or a solution at hand, but often

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Speaker 3: we're not looking at all the moving parts. For instance,

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Speaker 3: the theories were a great buy. We had a really

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Speaker 3: good deal, but we also needed to look at the

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Speaker 3: terminal and what was required there, and I think there

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Speaker 3: came as a bit of a surprise, particularly the rail

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Speaker 3: requirements that was much more signalivocant, the larger theories, the

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Speaker 3: biggest stabling areas that was needed, and I think you know,

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Speaker 3: the surprise of adding all that in as well. Yeah,

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Speaker 3: it was a bit of a shock defense force. Yeah,

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Speaker 3: poor defense force has always been struggling and actually deciding

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Speaker 3: what we need and getting agreement on that going forward.

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Speaker 3: Is you know something that we haven't faced up to.

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Speaker 1: Is it really time for infrastructure not to be a

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Speaker 1: political football, but really having, like you said, like Denmark,

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Speaker 1: having cross party plans that are decades in the making.

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Speaker 3: Absolutely, infrastructure is a long term investment. What we have

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Speaker 3: around at the moment, you know, it's more than fifty

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Speaker 3: years old and it's doing its job, but you know

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Speaker 3: it's going to need renewing and we need to have

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Speaker 3: good support, political support right across the spectrum to buy in.

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Speaker 3: What are the priorities, What are we going to support,

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Speaker 3: what's our vision for the country. How many people are

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Speaker 3: we actually looking to have in New Zealand? You know,

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Speaker 3: how do we provide all the services and infrastructure that

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Speaker 3: they are going to need, right from education, health, the

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Speaker 3: roading network right across the board. We don't actually have

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Speaker 3: a really good picture of that and then planning over

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Speaker 3: multiple decades and multiple governments of how that's going to

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Speaker 3: be implemented.

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Speaker 1: How can we prioritize projects when all of these things

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Speaker 1: can be classed as critical.

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Speaker 3: Yeah, it's a hard one, isn't it, And money's not

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Speaker 3: always there to match. I think some crucial ones. I mean,

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Speaker 3: you know, our cookstrap theories are our State Highway one.

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Speaker 3: You know, if we had a massive pothole on State

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Speaker 3: Highway one, you know, we do something about it and

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Speaker 3: focus on it. And I think we're getting to the

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Speaker 3: stage where we really do need to, you know, start

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Speaker 3: looking at priorities. These are strategic investments. It's not just

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Speaker 3: the immediate costs and benefits you know, that we're looking at.

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Speaker 3: They're actually strategically important for our economy and for our

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Speaker 3: social and economic well being.

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Speaker 1: And in terms of the economy, I guess the cost

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Speaker 1: of doing nothing would increase the risk to New Zealand's

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Speaker 1: economic well being. And of course, with increasing risks associated

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Speaker 1: with climate change, how underprepared are we for another natural

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Speaker 1: disaster and how does our ancient infrastruction play into it.

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Speaker 3: We definitely are under prepared. We do know that extreme

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Speaker 3: weather events are going to be happening more regularly. It

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Speaker 3: was good to see with the Regional Infrastructure Fund that

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Speaker 3: has just been announced that two hundred million has been

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Speaker 3: air marked already for flood protection works. So that's starting

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Speaker 3: to address some of those known issues across our network,

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Speaker 3: particularly on the roading side. We know some areas that

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Speaker 3: you know are very prone to slips to flooding, and

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Speaker 3: there is a plan to work through those. Kwei Rail

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Speaker 3: has just also had some work looking at parts of

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Speaker 3: their network. So it's a slow burn. It's not going

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Speaker 3: to be addressed overnight. But I think as we go

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Speaker 3: in and renew and undertake maintenance, are there things that

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Speaker 3: we can do to build more resilience back into our

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Speaker 3: infrastructure and make sure that we are looking to the future,

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Speaker 3: that we're are preparing for the climate that's actually already

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Speaker 3: with us with extreme events.

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Speaker 1: New Zealand publicly funded cost blowouts include terminals to need

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Speaker 1: in hospital state, hiwe Wan, Northland, Auckland, like Rail, christ

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Speaker 1: Church Cathedral, police computers is not I mean, I could

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Speaker 1: go on. Is it time to look more towards privatization

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Speaker 1: of our infrastructure?

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Speaker 3: Do you think maybe taking some of the discipline from

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Speaker 3: the private sector and suddenly we're they're looking to be

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Speaker 3: public private partnerships. I think there is more focus on

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Speaker 3: the whole of life costs of infrastructure and the services

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Speaker 3: that we make sure that we have an enduring piece

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Speaker 3: of infrastructure to start with, but also that the maintenance

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Speaker 3: and ongoing renewal costs aren't prohibitive as well. I think

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Speaker 3: that's a really important part that the private sector can

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Speaker 3: show us. I think often we're not really clear about

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Speaker 3: what the issue is, what the problem is, do we

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Speaker 3: have agreement on that, and then are we really clear

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Speaker 3: on the solutions and the options available in making sure

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Speaker 3: that they had some feature proofing to them, but they're

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Speaker 3: well coordinated with the existing infrastructure and networks, and so

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Speaker 3: that we really know what product we're actually by the start,

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Speaker 3: and we don't start changing the scope, because I think

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Speaker 3: there is the biggest issue. It's a changing of scope,

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Speaker 3: introducing new things, adding on as we go through, and

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Speaker 3: that's where we start to blow out the costs. I

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Speaker 3: think we've had quite a few really tough years with

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Speaker 3: the unexpectedness of COVID and lockdown's international importation costs and

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Speaker 3: construction material inflation has been extraordinary, and I think we're

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Speaker 3: coming up to the other side of that. I think

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Speaker 3: that's some explanation of what's happened over the last sort

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Speaker 3: of four years. But I think going forward, we really

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Speaker 3: need to get a grip on what we are undertaking

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Speaker 3: and what we're committing to and you know, can we

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Speaker 3: do things smarter, can things be produced locally?

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Speaker 1: Can you touched on this before? But a lot has

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Speaker 1: been floated in terms of new funding models. We've got tolls,

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Speaker 1: congestion charges, PPPs, the consensus on the best way for

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Speaker 1: do you think, well, do you think it's an amalgamation

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Speaker 1: of all of them.

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Speaker 3: I think it's horses for courses. Absolutely not every project

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Speaker 3: would align itself to having private funding, and we need

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Speaker 3: to really make sure that we've got the right projects

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Speaker 3: that will attract investment. But also it's really important that

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Speaker 3: these projects also have a revenue stream and it's a

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Speaker 3: good opportunity to bring both the construction sector in as

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Speaker 3: well as the organization that will be operating, for instance,

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Speaker 3: a toll road. I think on the congestion pricing, I

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Speaker 3: think that has its place around city centers, and we've

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Speaker 3: got to be really clear what we're setting out to

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Speaker 3: achieve there. There has to be alternative transport for people,

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Speaker 3: so there is a choice. People can either travel at

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Speaker 3: those peak times and pay, or there is alternative transport

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Speaker 3: or this flexibility and lower cost of traveling at off peak,

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Speaker 3: but it's definitely not just one solution for all, and

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Speaker 3: I think we've just got to be really clear where

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Speaker 3: we are looking to bring improved PPP models into play,

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Speaker 3: and really clear about the projects, and also to build

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Speaker 3: back our expertise. We haven't undertaken full public private partnerships

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Speaker 3: for quite a few years and we need to actually ensure,

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Speaker 3: particularly on the government side, that we have the capability

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Speaker 3: and capacity to actually manage those properly too.

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Speaker 1: Does New Zealand even have the workforce and expertise and

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Speaker 1: resources to fix our infrastructure needs we do.

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Speaker 3: I think we need to be really smart around the phasing,

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Speaker 3: and I think it's really important why there's a bit

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Speaker 3: of a downturn in both central government work and local

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Speaker 3: government at the moment, as we're getting new annual plans,

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Speaker 3: long term plans in place and the government budgets kicking

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Speaker 3: in with the actual projects flowing through from the National

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Speaker 3: and Transport program, I think it's really important that there's

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Speaker 3: enough activity, that we keep our workforce here, that we

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Speaker 3: have some minimal level of activity, and that people can

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Speaker 3: see the pipeline we've got some certainty around that so

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Speaker 3: they continue to invest in training and education.

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Speaker 5: We don't have an continuity of work, so to get

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Speaker 5: the skilled people we need, we have to pay a

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Speaker 5: premium and then when they finish the job, they go

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Speaker 5: back overseas. They can't roll on to the next one

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Speaker 5: and the next one and the next one.

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Speaker 3: And actually probably a bit of a task on everyone

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Speaker 3: involved in infrastructure and construction is actually demonstrating what a

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Speaker 3: fabulous career opportunity there is here and by opportunity to

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Speaker 3: build skills and to apply them to some pretty awesome

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Speaker 3: projects like for instance, the City Rail Link has been

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Speaker 3: amazing and it has had a Rangataki project to train

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Speaker 3: and encourage young people into construction as a career and

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Speaker 3: to provide wrap around pastoral care and to encourage them

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Speaker 3: to build their skills in training and knowledge.

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Speaker 1: And just lastly, Michelle, in terms of infrastructure and the

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Speaker 1: priorities we now face and the massive bill that we're

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Speaker 1: looking towards it, you know, trillion dollars, billions dollars, what's

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Speaker 1: the best way forward?

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Speaker 3: I think the work that the Infrastructure Commission has been

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Speaker 3: working on both with the infrastructure pipeline and quantifying that,

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Speaker 3: I think they've got one hundred and twenty seven billion

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Speaker 3: dollars committed at the moment and identified and committed funding,

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Speaker 3: and then the next lot of projects that are sitting

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Speaker 3: behind that priority projects and making sure that they have

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Speaker 3: some certainty for the sector that they do know what

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Speaker 3: is coming, where they're located, what sort of skills of

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Speaker 3: the workforce is needed to go forward, and getting some

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Speaker 3: political certainty so we don't have the on off cycle

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Speaker 3: that we have seen over recent years. That you know,

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Speaker 3: we need infrastructure, we need roads, we need public transport,

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Speaker 3: we need electricity, energy investment, we need those theories. Sure,

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Speaker 3: we just need to get an agreement to actually go

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Speaker 3: forward in a steady state manner that we're not stopping

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Speaker 3: and starting continuously.

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Speaker 1: Yeah, because what's the point in this government signing a

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Speaker 1: billion dollar deal for a new ferry, for instance, in

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Speaker 1: the next one come and then scrapping it.

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Speaker 3: Yeah, a lot of wasted time and effort goes into that,

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Speaker 3: and we'd like to see where we are committing to something.

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Speaker 3: You know, the time and investment, it's worthwhile, and then

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Speaker 3: we are actually getting something out at the end.

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Speaker 1: Thanks for joining us, Michelle. That's it for this episode

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Speaker 1: of the Front Page. You can read more about today's

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Speaker 1: stories and extensive news coverage at enzet Herald dot co

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Speaker 1: dot nz. The Front Page is produced by Ethan Siles

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Speaker 1: with sound engineer Patty Fox. I'm Chelsea Daniels. Subscribe to

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Speaker 1: the Front Page on iHeartRadio or wherever you get your podcasts,

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Speaker 1: and tune in tomorrow for another look behind the headlines.