New Zealand’s habit of pausing, cancelling and delaying infrastructure projects has cost the country an estimated $11.8 billion over the past 25 years, according to a recent report.
The report, The cost of stopping: Assessing the “true cost” of delaying, deferring and cancelling infrastructure projects, was commissioned by Civil Contractors New Zealand, Infrastructure New Zealand and Water New Zealand. It concludes that inconsistent investment pipelines are driving up costs, eroding productivity and delaying critical public benefits.
The report is accompanied by a new interactive Cost of Stopping tool designed to help decision-makers assess the full impacts of pausing or cancelling projects, maintenance and renewals.
Report author Shamubeel Eaqub says the research challenges the assumption that stopping projects saves money.
“The surprising finding is how expensive pausing or cancelling projects really is. Delays create inflation costs, productivity losses and defer public benefits that compound over time. It’s clear that in many cases, stopping projects can cost more than continuing steadily.”
Civil Contractors New Zealand chief executive Alan Pollard says the report highlights underlying structural issues facing the sector.
“Infrastructure construction delivers public benefit. When looking at delaying or cancelling projects, we need to be careful we aren’t unnecessarily denying our communities access to these benefits. There is a real cost to this. Stop-start investment damages capability across the entire supply chain,” Pollard says.
The findings come as councils and central government grapple with major infrastructure reform and funding pressures, particularly due to conflict in the Middle East.
Infrastructure New Zealand chief executive Nick Leggett says tools such as the Cost of Stopping tool help improve long-term decision-making.
“Councils and infrastructure providers are facing significant change and difficult investment decisions. Tools like this help decision-makers understand the real long-term costs of delays and cancellations, and why a stable, funded pipeline matters,” says Leggett.
The report reinforces that maintaining and renewing infrastructure consistently is more cost-effective than delaying investment.
“When essential infrastructure is deferred, communities ultimately pay more through higher future costs, reduced resilience and delayed benefits,” Water New Zealand chief executive Gillian Blythe says.
The Cost of Stopping tool enables analysis of the cost implications of delaying or cancelling horizontal infrastructure projects, including factors such as sunk cost, resumption cost, workforce impacts, cost escalation and deferred public benefit.
The report documents how costs can increase through delay, deferral or cancellation, including fuel costs, materials and workforce pressures, factors often amplified when work pipelines become uncertain, such as during changes of government.
Recommendations include ring-fencing maintenance budgets, committing to a funded multi-year infrastructure pipeline and requiring formal assessment of the full costs before projects are paused or cancelled.
The online tool can be found at www.costofstopping.nz.