Full steam ahead – additional compensation on the table for landowners for critical infrastructure projects under the Public Works Act.
The Government recently introduced changes to the Public Works Act 1981 which provide for additional compensation for landowners who have their land acquired by agreement for certain projects. These projects are generally roading projects, based on those listed in the Fast-track Approvals Act 2024 or are identified as Roads of National Significance.
This will be of particular interest to local landowners who have land that will be used by NZTA for the Takitumu Northern Link – Stage 2 as this project is subject to the new compensation provisions and negotiations are already underway with landowners.
The Public Works (Critical Infrastructure) Amendment Act 2025 was passed on 26 August 2025 and is designed to speed up the land acquisition process for critical projects where a designation is in place or applied, or a resource consent is obtained. The new provisions involve:
- Additional compensation as an incentive for landowners to reach agreement on land acquisition, being:
- Recognition payment: 5% of total land value up to a maximum of $92,000 to recognise the land is being taken for critical infrastructure;
- Incentive payment: 15% of the total value up to a maximum of $150,000 if the landowner reaches an agreement before the Minister or local authority serves a s 23 PWA notice (being the process to compulsorily acquire the land).
- The landowner must give vacant possession in order to receive the additional compensation. The vacant possession date is by agreement, or within one month of the Minister or local authority giving notice that vacant possession is required.
- Removal of the right of objection to the Environment Court for land that is taken for projects designated as critical infrastructure. Instead, a submission process is available where a landowner can make a submission to the Minister or local authority, with an opportunity to make a second submission following the Minister or local authority’s comments. The ability to object to the valuation tribunal for compensation remains.
These provision also apply for critical infrastructure projects where negotiations are already underway. There are exceptions for Māori land and an ability for agencies to opt-out of the above process and use the standard PWA process.
The key benefit of these changes is that landowners who are willing parties to land acquisition are able to obtain additional compensation (up to $242,000 depending on land value) if they reach early agreement with the Minister or local authority before it issues a s 23 PWA notice for compulsory acquisition.
It is therefore important to approach negotiations for land acquisition for such projects with these timeframes in mind to avoid inadvertently missing out on increased compensation.
There are further reforms expected to the PWA this year, including the requirement for compulsory mediation for compensation disputes, but these are not yet in force.
If you have any questions on the Public Works Act 1981 or this article, please contact our public works specialists: Bridget Bailey, Natasha van der Wal and Hilary Anderson.
Natasha van der Wal
Rotorua
Tauranga
Hilary Anderson
Tauranga
Bridget Bailey
Tauranga
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