Rebalancing the infrastructure equation

Crumbling roads, decades-old water networks, and tired buildings are symptoms of a deeper issue — our financial model for sustaining our built environment is out of step with reality. WSP technical directors for asset management Elke Beca and Wayne Hatcher explain.

While flashy new builds dominate the headlines, the crucial task of maintaining what we already have is often overlooked. The challenge isn’t just about funding — it's about how we fund, finance and prioritise long-term infrastructure asset value.
The way forward starts with a mindset shift and a recommitment to the fundamentals of depreciation funding.

Depreciation represents the declining value, service potential or economic benefit of an asset over time, usually calculated in a straight line across its expected lifespan. It’s not just an accounting exercise — it’s a signal of the investment needed to sustain infrastructure for the people it serves. When infrastructure is built, depreciation maps out the financial pathway to maintain or eventually renew it.

The principle is simple: if we recognise an asset is devaluing by, for example, $100,000 each year, then we should be putting aside $100,000 a year to look after it – either now or for the future.

Asset depreciation funding

And yet, we’re not. In many cases, depreciation funding is collected — through rates or user charges — but not ring-fenced. That money is swept into general budgets and used for other priorities. The result is a growing mismatch between what’s being saved for infrastructure upkeep and what’s being invested. Over time, this erodes value, reduces service levels, and accelerates the need for costly renewals.

The solution is to continue with depreciation funding but ring-fence it. Make sure the money raised on the premise of sustaining infrastructure is used for that purpose. This one act of financial discipline would significantly improve the resilience and performance of our existing networks — delivering better value for users and future generations alike.

Investing in longevity

However, even with full ring-fencing, the reality is we’re already playing catch-up. Years of underinvestment mean that our current renewal needs outstrip the available funds. One option to bridge this gap is private financing mechanisms — such as Public Private Partnerships (PPPs), Special Purpose Vehicles (SPVs), or blended finance models. These bring capital to the table without borrowing on the public balance sheet; although they can come with trade-offs such as higher interest rates, profit margins for investors, and shared decision-making.

Elke Beca

Technical Director – Asset Management

New Zealand

Contact

Wayne Hatcher

Technical Director Asset Management

New Zealand

Asset lifecycle stewardship

These tools are vital because we don't (and should never) borrow for routine maintenance — that would lead to a financial spiral. But we can explore working with private partners to finance specific catch-up investments.

There’s also a need to shift funding policy. Too much current funding favours new builds, not existing assets. As noted in a recent Infrastructure Commission report, 60 percent of infrastructure investment should be going to maintenance and renewal. That rebalancing would help maximise the utility of what’s already built — and avoid the false economy of letting assets fail.

In the end, asset management is about stewardship. The public might not see a freshly relined pipe or reinforced bridge abutment, but they’ll notice when it fails. To truly serve society, we must look after what we’ve already got and finance it in a way that makes sense. Depreciation funding, properly protected and complemented by smart private finance, is a way towards securing the bedrock of that future.