8 Apr 2026
Disruption to our fuel supply could force some tough choices, but we must not lose sight of a strategic and consistent approach to the country’s infrastructure pipeline, Engineering New Zealand says.
The Reserve Bank has warned today that in the near term; inflation is expected to increase and economic recovery to weaken.
Engineering New Zealand Chief Executive Dr Richard Templer says this shows the biggest challenge is yet to come.
“Even if the Strait of Hormuz opens tomorrow, disruption to global supply chains will still be felt for many months.
"Beyond reacting to the events of today, governments and institutions must assess the impacts of their decisions on the future. This means not cutting or halting construction work that is underway”, Templer says.
“Evidence indicates that project costs don’t decrease over time, regardless of shocks to markets. The costs of stopping and starting projects are well documented. Overcoming inertia is costly.”
The recent release of the National Infrastructure Plan is timely.
It shows smaller projects worth less than $100 million each make up 98% of all projects in New Zealand’s $275 billion infrastructure pipeline. These projects account for just under a quarter of the total value of the pipeline, while a handful of unfunded megaprojects account for a large share.
“Funding decisions ultimately sit with central government, and we support a bipartisan approach”, Templer says.
“However, in tight fiscal conditions it’s critical that smaller, deliverable packages of work are not overlooked. We need strategic prioritisation across the pipeline to support consistent investment and jobs.”
Templer says the immediate impact of higher fuel costs are already being felt across the engineering sector, particularly by those working in regions still recovering from severe weather events.
“Many roads remain cut off from heavy rainfall and slips earlier this year, meaning engineers are having to take long detours to reach sites.
“One firm told us site visits that would usually take half an hour to get to are now taking two hours. That creates a significant additional cost, particularly for firms operating fleets of diesel vehicles.
“The firm said they have previously looked at switching to electric vehicles but could not find an option capable of carrying the weight of the testing equipment required on site.”
We are also hearing it’s increasingly challenging to price future projects due to supply chain volatility, Templer says.
“Engineers are conscious of being transparent with clients and clearly identifying risks where future costs cannot be reliably predicted.”
Engineers are thinking about what lessons will be learned from the disruption to fuel supply and how we can better insulate the country from future shocks.
Templer says the situation has highlighted the transport system’s heavy reliance on fossil fuels, for example, and the limited alternatives available to many New Zealanders.
“We need the planning and design of our cities and towns to better integrate a range of transport modes, so people have genuine choices about how they move. Too often, longer term risks such as energy security and climate change have not been adequately factored in.”
