Moving Forward - Land Transport Changes 8/11

Mark Gosche Transport

New Sources Of Funding-Fact Sheet Four

To help fund land transport improvements, the government plans changes which
will ensure finance is more readily available. Legislation changes are planned
to allow public/private partnerships and to make it easier to use tolling for
certain projects.

Tolls

Tolling could help advance some projects more quickly and free up public
funds for other projects. Tolls could also be used to pay for additional
benefits that communities or road users want from a project, over and above
those funded by Transfund New Zealand. There are no plans to introduce tolls on
existing roads.

At present, individual toll roads require legislation before they can be
built. The government plans to introduce generic legislation to enable tolling,
subject to government approval, rather than requiring stand-alone legislation
for each tolling project.

The government will retain control over which tolling projects are approved.
In making a decision on a particular tolling scheme, issues the government will
consider include:

  • the overall benefits of the project
  • availability of alternative transport options and the impact of the project
    on such options
  • the use to which toll revenues are being put and the transparency of this
    use
  • the means of ensuring protection against over-charging
  • views of road users including affected communities, public transport users,
    pedestrians and cyclists
  • privacy safeguards.

The government will approve a project for tolling only if it helps achieve
the objectives of the government's New Zealand Transport Strategy and is
consistent with any relevant regional transport strategy.

Legislation is needed for these changes.

Public/private partnerships (PPPs)

Public/private partnerships could
allow Transit New Zealand and territorial local authorities to access private
sector finance to fund land transport projects. PPPs, like borrowing, spread the
cost of the project over its life, rather than just over the years of
construction. At present, future projects have to be paid for from funding which
comes from existing road users, even when many of the benefits arise years into
the future.

Legislation is needed to enable public/private partnerships to be
established. They could be agreed on a case-by-case basis, with conditions
including:

  • the partnership arrangement is of limited life
  • the project assists in achieving the objectives of the government's
    transport strategy
  • the assets are at all times operated under public supervision
  • the project does not involve the transfer of ownership of the asset into
    majority private ownership
  • all assets revert to full public ownership at the end of the partnership
    arrangement
  • all powers to acquire land under the Public Works Act 1981 remain with the
    public sector
  • the project has a high degree of support from affected communities.

Public/private partnerships could be used for both roading and other land
transport infrastructure projects.