Summary
- The 2025 edition of KPMG’s “Emerging trends in infrastructure and transport” document is titled “The Great Reset”.
- The international document identifies ten trends with each trend covered by different KPMG personnel.
- Trend one is titled “Funding: The Great Privatization” and focuses on institutional investors looking to buy “treasure trove of assets” off the governments around the world who are struggling with “unsustainable levels of public debt”.
- Trend two is titled “Supply chain: In search of standards” and focuses on supply chain pressures, “tariffs and counter-tariffs”, transparent carbon reporting, and new regulations.
- Trend three is titled “Sustainability: Fixing the missing middle” and focuses on sustainability and carbon footprints of materials.
- Trend four is titled “Digitization: Seeing value from digital twins” and focuses on using computer models, digital twin simulations, AI, automation, and IoT devices for making smart decisions.
- Trend five is titled “New asset classes: Smarter infrastructure requires smarter strategies” and focuses on “dynamic asset management strategy and execution” using drones, robots, IoT sensors, AI, digital twins, and data analysis.
- Trend six is titled “Construction: Innovation unlocked” and focuses data, project management software, and IT-related innovations to improve the efficiency and sustainability of construction companies.
- Trend seven is titled “Resilience: Complacency will likely lead to catastrophe” and focuses on critical infrastructure “being impacted due to age, condition, lack of investment, maintenance and possibly underlying design issues”.
- Trend eight is titled “Capacity: Delivering the pipeline” and focuses on both physical supply chain issues and shortages of talent/competence.
- Trend nine is titled “Energy transition: Prioritizing pragmatism” and focuses on achieving “the UN’s Sustainable Development Goals and facilitate energy transition” and attracting “philanthropic capital” .
- Trend ten is titled “Shipping: Has the party ended?” and focuses on issues impacting international shipping industry and their investment decisions.
- The New Zealand KPMG entity has published their perspectives on seven of the ten trends in the KPMG International publication. The following statement on “Funding” is relevant to local government.
“As demand for high-performing infrastructure is increasing, infrastructure is competing with other sectors for scarce funding. The Government is right to ‘sell’ New Zealand as an investment destination through the Global Investment Summit, but we need more than private capital. We also need to be able to pay back that capital, which requires new sources of funding. Initiatives such as the increased use of tolls and congestion charging and the recent announcement to improve local authority options to fund growth infrastructure (by replacing Development Contributions with levies) will help. However, other countries have and are increasingly looking for more flexibility around the use of the public sector balance sheet.
We see merit in New Zealand developing a more sophisticated understanding of whether the current assets held by central and local government are the best use of funds relative to the new infrastructure we need. That said, one of the lessons of asset recycling overseas is that the benefits are maximised when combined with strong consumer protections such as a sophisticated regulatory regime that can drive long term performance and asset quality.”
2025 Emerging trends in infrastructure and transport, KPMG New Zealand
Quotes from the publication
“We are in the midst of a Great Reset. Protection of national interests are at the top of the agenda. Economies are being reshaped. Alliances and supply chains are being rewired. The frequency and severity of weather events are increasing. And social expectations and norms are being revised.”
Foreword: Reset 2025, KPMG
“Governments are trying to balance a range of funding priorities and that is reducing their fiscal capacity for infrastructure. At the same time, demand for new and more resilient infrastructure is climbing, driven by economic, environmental, technical and social pressures. Closing the gap will be a key priority for governments around the world.
Frustratingly, the solution to closing this gap has been obvious for some time. Governments are sitting on a treasure trove of assets. Indeed, a study of 38 countries by the IMF found more than US$100 trillion worth of assets on government books, including key infrastructure such as bridges, roads and utilities. And institutional investors are sitting on a treasure trove of capital. The world’s top 500 asset managers collectively manage more than US$128 trillion. The alignment is obvious.
What’s more, many of the world’s leading institutional investors are extraordinarily good at managing and even improving infrastructure assets. As sources of patient capital, their investment strategies align nicely with infrastructure lifecycles. And as fiduciaries of their clients’ retirement savings, they are keenly focused on stability across the asset lifecycle.
Yet — with a few notable exceptions — most governments remain reluctant to transfer assets to the private sector. They know they have built up unsustainable levels of public debt. But many consider infrastructure to be the remit of the public sector. And they worry about the impact of privatization on service quality, access and affordability. Simply put, governments recognize the solution but are wary of pursuing it.”
Funding: The Great Privatization, KPMG
“In this environment, governments will need to start assessing their portfolios of assets to understand what can be brought to market, what assets require more support to become commercially viable and what assets must remain on the government books. And they will want to provide some guidance to investors around the types of assets they will bring to market and associated timelines. Messaging to citizens and to national pension funds and institutional investors will also be key.
For their part, institutional investors will need to become more proactive as a gradual increase of new assets comes to market, likely sector by sector. Given the complexity of the transactions and the quantum of investment required, institutional investors would be wise to start identifying targets and asset classes that align to their investment strategies and begin their due diligence, outreach and internal discussions as soon as possible.
The Great Privatization is coming. Preparation will be key.”
Funding: The Great Privatization, KPMG
“On the project and portfolio side, we also expect to see owners start to put much more focus on capturing and reporting the data required to demonstrate the expected social and environmental benefits of their projects. In part driven by companies eager to quantify their Scope 3 carbon emissions, we expect to see some standardization and improved technologies deliver an important step change in the way environmental impact is measured.
We also expect to see significant competition start to build as markets and investors vie to attract philanthropic capital and other concessional finance players like multilateral banks to their projects. Creating robust economic business cases supported by clear evidence of environmental benefits will likely be key.
We believe 2025 is the tipping point where, irrespective of populist governments and economic nationalism in some leading countries, the momentum may only increase for energy sector decarbonization. The energy transition is entering a new phase where environmental outcomes must be carefully balanced against economic pragmatism. And a new phase requires new thinking.”
Energy transition: Prioritizing pragmatism, KPMG
Publication Details
Title: The Great Reset: Emerging trends in infrastructure and transport, 2025 edition
Published on: February 2025
Published by: KPMG International Limited
Link: https://assets.kpmg.com/content/dam/kpmg/nz/pdf/2025/03/emerging-trends-2025.pdf
Archived Link:
Further reading on this issue:
Information Sheet: 20-Minute Cities and Smart Cities in New Zealand
