Transfund Presentation

1

• Transfund Presentation
• RCA Forum
• 29th August 2003

2

• Presentation Outline
• The National Land Transport ProgrammeThe 10 Year
  Forecast
• The Land Transport Management Bill
• The New Zealand Transport Strategy The Funding
  Allocation Framework Review
• The Financial Assistance Rate Review

3
NLTP 2003/2004

• A land transport programme
• Roading dominates
• Maintenance a high priority
• Urban focus for new construction

4
NLTP 2003/2004

• Opportunity window for new city roads closing
• Some vital links to complete
• Rural NZ not neglected
• Programme expenditure - 1.19 billion
• Anticipated benefits - 4.5 billion

5
RESULTS 1998 Maintenance per km Maintenance
per Vkm Smooth ride Skid resistance
2002
level
falling
rising
rising
6
National Land Transport Programme2003/2004 NLTP
NLTP up 90 million up 8
7
NLTP 2003/2004

• Northland, Tairawhiti regional development
• Walking and cycling
• Passenger Transport patronage growth
• Passenger rail development
• 10 year plan transparency raising debate
• Reflects what we know now

8
10 Year Forecast

• The deficit is hypothetical
• Forecast reflects a push to deliver
• Forecast is a result of todays process
• Includes a lot of provisional allocations
• Forecast assisted 03/04 NLTP

9
Land Transport Management Bill

• Expecting enactment later this year
• Expected to reinforce the NZ Transport Strategy
• Transfund will be required to achieve broad
  objectives
• Effectiveness of investment will be our focus
• Effectiveness includes economic rigour
• Future programmes will be strategy driven

10
The Funding Allocation Framework

• Transfunds main task is to prepare and operate a
  National Land Transport Programme
• Our primary methodology is the Funding Allocation
  Framework
• This is under review now
• It will be different from the current one
• We have a busy time ahead to make it useful to
  you for your 2004/2005 budgeting

11
Transfunds Funding Allocation Framework - Past
Area andFunction Strategies
Delivery
National LandTransport Programme
BCR 4
Projects
12
Transfunds Funding Allocation Framework - Present
FundingAllocationFramework (1)
Government Priorities
Area andFunction Strategies
National LandTransport Programme
Delivery
BCR 4Past
Projects
13
Transfunds Funding Allocation Framework - Future
FundingAllocation Framework (2)
NZ StrategiesNZTS
Area andFunction Strategies
Government Priorities
National LandTransport Programme
Delivery
BCR 4Past
Projects
14
New Zealand Transport Strategy

• Objectives
• Assisting economic development
• Assisting safety and personal security
• Improving access and mobility
• Protecting and promoting public health
• Ensuring environmental sustainability

15
Transfund New Zealand

• Objectives like these suggest
• your LTCCPs will have to address them
• Transfund will need to use your processes to meet
  its requirements
• project evaluation still important
• but building a programme requires longer term
  strategic overview

16
Financial Assistance Review

• Process
• Scoping study of financial assistance policy
• Emphasis on maintenance and construction of local
  roads
• Board approved terms of reference November 2002
• Discussions at staff level with 32 RCAs
• Recommendations considered by Board August 2003

17
FAR

• Views from Discussions
• Mixed views on current FAR methodology
• Urban authorities relatively happy
• Rural authorities relatively unhappy
• Basic maintenance being sustained
• But at cost of increasing rate burden
• Necessary improvements not affordable for some

18
FAR
Repeatedly raised issues

• Rating increases - infrastructure
  investment - environmental requirements
• Rising property values - FAR goes
  down - pressure on limited resources
• Urban fringe - infrastructure investment - reside
  ntial and commercial development
• Arterial roads - heavy through traffic - higher
  maintenance costs- same FAR
• Rural roads - width and strength
  below requirements - logging harvest

19
FAR

• Preliminary Assessment
• Network has been improving over time
• No evidence national network is being under
  maintained
• Not clear whether necessary construction
  investment is in decline
• More work needed on improvement trends (looking
  forward)

20
FAR

• Preliminary Assessment
• Fair funding balance difficult to quantify
• No perfectly fair formula
• International research shows no superior system
• NZ formula does take into account relevant
  factors
• large networks with high costs attract higher FAR
• sudden changes in land value damped

21
FAR

• Boards direction
• Adjusting the formula to increase the range
• Lifting the overall contribution
• Increase FAR for construction