Gas

310. Contact Energy has one project under way – a gas storage project. The project is costing approximately $250 million. Through a combination of new gas, compression and new wells, the Ahuroa reservoir will be re-pressured and able to store gas until it is economic to use it.

311. Further details are being sought on the level of private sector investment.

Urban Water Infrastructure

Drinking water

312. Councils appear to be making substantial investment in water network assets. Analysis of 2009-19 Long-Term Council Community Plans (LTCCPs) indicates that capital expenditure on drinking water systems for the next 10 years is forecast at approximately $2.8 billion (this includes both renewals and new assets). This forward expenditure is split fairly evenly between metropolitan (48 per cent) and provincial (41 per cent) councils, with the remaining $310 million associated with rural council capital spending.

313. A preliminary estimate from the 2009-19 LTCCPs suggests that up to $230 million of capital funding will be required over the next 10 years for councils to meet water quality standards, although it is often difficult to separate the cost of compliance from planned renewal and upgrade work.

Waste water

314. The estimated replacement cost of (territorial authority-managed) wastewater infrastructure is $12.7 billion. Analysis of 2009-19 LTCCPs indicates that capital expenditure on wastewater systems for the next 10 years is forecast at approximately $3.7 billion (including renewals and new assets). In contrast to drinking water, the majority of this forward expenditure is linked to metropolitan councils (64 per cent), compared to provincial (27 per cent) and rural (8 per cent) councils.

315. Major wastewater projects are planned for the next few years in Gisborne, Nelson/Tasman (joint project), Marlborough and Rotorua.

Rural Water Infrastructure

316. In 2008, MAF was aware of 22 prospective irrigation schemes, both storage and non-storage-based, in Canterbury, Otago, Tasman, Marlborough, Hawke’s Bay and the Bay of Plenty.

317. More details on planned investment is being sought.

Telecommunications

318. Development in the telecommunications sector reflects the pace of technological change and is fast-moving and dynamic. It is currently undergoing a fundamental shift from an analogue to a higher-speed digital infrastructure. As such, telecommunications, IT and broadcasting are no longer separate but converging digital industries delivering voice, video and high-speed data.

319. Vodafone’s major upgrade plans will see its ‘Third Generation’ mobile network rolled out to 97 per cent of the population by 2010. This will deliver speeds of 10-20 megabits per second (Mbps) and may directly benefit some rural customers who will miss out on Telecom’s broadband upgrades.

320. As part of the regulated Undertakings agreed through the separation of Telecom, Telecom’s network arm Chorus has committed to upgrade its network (through cabinetisation) to ensure that all towns with a population of 500 or more will receive broadband speeds of between 3-7 Mbps by 2011.

321. NZ Communications is spending around $200 million in the first stage of its network build and currently has RMA approval for 395 cell sites.[88] It has built networks in the three main centres and is using Vodafone's network elsewhere for roaming.

322. There is likely to be strong private investment in the telecommunications sector over the next five years:

• Telecom will invest $1.4 billion in its cabinetisation upgrades and a further $300 million in Third Generation mobile upgrades;
• Vodafone will invest $500 million in the expansion of its Third Generation mobile network; and
• New Zealand Communications will spend at least $150 million in support of its launch in the mobile market.

323. In 2008, the government announced that it would invest $1.5 billion in Fibre to the Home. The government's goal for broadband investment is to accelerate the roll-out of ultra-fast broadband to 75 per cent of New Zealanders, concentrating in the first six years on priority broadband users such as businesses, schools and health services, plus green field developments and certain tranches of residential areas. The government investment will be alongside additional private sector investment, and be directed at open-access infrastructure.

324. The Minister for Communications and Information Technology and Ministry of Economic Development officials are currently considering submissions made on the government's draft proposal for implementing its broadband initiative. Ministers intend to make decisions on the approach within the coming months.