Increased Compensation available under the Public Works Act

Increased Compensation available under the Public Works Act

Increased Compensation available under the Public Works Act

Monday 12 June, 2017

With the Government’s recent budget announcement of $32.5 billion infrastructure spending over the next four years, especially in transport and prisons, it is anticipated that the use of compulsory acquisition powers under Public Works Act 1981 (“PWA”) may be necessary to ensure that such projects can be completed.

The PWA allows the Government, councils and specified network utility operators (e.g. Auckland Airport, NZ Transport Agency, Transpower) to acquire land, including by compulsory acquisition, for public works such as roads, schools, prisons and power lines. 

Owners are entitled to full compensation under the PWA, which means that they are to be left in a no better or worse position than they were before the acquisition.

Recent changes to the PWA have been made with the intention to make land acquisition for public works fairer and more efficient.

The Resource Legislation Amendment Act became law on 18 April 2017 and includes amendments to the PWA that increase an owner’s entitlement to compensation for land acquired for public works.

The key compensation changes to the PWA are:

  • an increase in the payment made to an owner for the acquisition of their home (known as a solatium payment) from $2,500 to $35,000;
  • a new incentive payment of $10,000 if an agreement is reached with an owner within 6 months from the start of negotiations and such agreement specifies the date of vacant possession of the home;
  • a discretionary payment of $5,000 if warranted in the circumstances; and 
  • the ability to make a solatium payment where no home is acquired being equal to 10% of the value of the land acquired (up to a maximum of $25,000);

The recent amendments also make a number of administrative changes, including:

  • the ability to amend additional compensation through an Order in Council; 
  • the delegation of signing notices of desire under section 18 of the PWA; and 
  • the use of evidence already presented at a related resource management hearing in an objection to an acquisition under the PWA.

For further information regarding your rights and entitlements under the PWA and the acquisition process please contact our public works specialists at Tompkins Wake.