1

The 2012 NLTP Investment Outlook

Geoff Dangerfield, Chief Executive, 10 February 2011

The Planning & Investment

System

National Land Transport FundNational Land

Transport Fund

State HighwaysState Highways

Local RoadsLocal Roads

Road PolicingRoad Policing

Public TransportPublic Transport

Community Programmes/SafetyCommunity Programmes/Safety

Rail and Sea FreightRail and Sea Freight

Walking & CyclingWalking & Cycling

Transport PlanningTransport Planning

1920

900

870

120

100

50

00

Mgmt – Funding AllocationMgmt – Funding Allocation100

Local Government Funding

Local Government Funding

1760

720

90

20

30

00

Crown Funding - RailCrown Funding - Rail

1170

Ministry of Tourism Ministry of Tourism 50

Land Transport Expenditure – 2009/12

Est. total: $13.5 billion

$m

4590

NLTF PLANNING & INVESTMENTRespective roles of the Minister, Local Government & NZTA

Land Transport Management Act

Government Policy Statement

Regional Land Transport

Programmes

National Land Transport

Programme

LTCCP’s & other local strategies

Regional Strategies & Plans

Investment and revenue strategy

- Minister/Ministry

- Local Government

- NZTA

Enhance transport efficiency and lower the cost of transportation through the following impacts:

improvements in journey time reliabilityeasing of severe congestionmore efficient freight supply chainsbetter use of existing transport capacity.better access to markets, employment and areas that contribute to economic growtha secure and resilient transport network.

2009 GOVERNMENT POLICY STATEMENTThe Investment ‘Brief’

$0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5

New and improved infrastructure for State highways

Road policing

Maintenance and operation of State highways

Maintenance and operation of local roads

Renewal of local roads

Renewal of State highways

Public transport services

New and improved infrastructure for local roads

Demand management and community programmes

Public transport infrastructure

Transport planning

Management of the funding allocation system

Walking and cycling facilities

.

Minimum

Expected

Maximum

Expected Expenditure on Transport Infrastructure - 2009/10 to 2011/12

(NZ$bn)

2009 GPS FUNDING RANGESThe Investment Parameters

Strategic fit

Alignment with the Government’s direction

Effectiveness

How well the project/package achieves the strategic outcomes

Economic efficiency

Benefit cost ratio or cost effectiveness

High, Medium or Low assessment for each

INVESTMENT DECISION-MAKINGThe decision criteria

STRATEGIC FITThe policy test

The current ‘top’ priorities

RONS and local roads critical to RONS

Key freight and tourism routes

Key urban arterials

Model urban walking and cycling communities

Public transport making significant contributions to easing severe congestion

Optimising existing capacity and levels of service on highly trafficked roads

Low Medium High

Minimum

Meets LTMA/NZTS objectives

Affordable

Considers appropriate alternatives and options

Considers adverse effects or impacts

Appropriate scale

Low criteria PLUS

Part of a strategy, package or plan

Optimised

Enduring benefits

Considers land use strategies and implementation plans

Low + Med PLUS

Integrated between transport modes

Integrated with land use and other infrastructure

Supports networks from national perspective

EFFECTIVENESSThe best practice test

EFFICIENCYThe value test

For improvements the primary measure of economic efficiency is benefit cost ratio

Low Medium High

BCR ≥ 1 and < 2

BCR ≥ 2 and < 4

BCR > 4

Towards the 2012 NLTP

12

STARTING POINTS (1) Delivery against the 2009 NLTP

STARTING POINTS (2)The forward commitments for 2012 and beyond

Most forecast revenue will be committed to maintaining and optimising what we’ve got and investing in planned improvements

0

500

1000

1500

2000

2500

3000

3500

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15

$mil

lio

ns

2009-12 & 2012-15 NLTPs - Total expected spend & commitments

Discretionary funding

Commitments (incl. Group allocations)

Actual spend 2009/10

Programme commitments

STARTING POINTS (3)Key drivers for the 2012 NLTP

• GPS 2012 • RLTS, RLTPs

• Safer Journeys (and Road Safety Action Plans)

• State highway classification • RONS programming • Auckland Spatial Plan • Public Transport – sector action

plan• Freight efficiency – sector action

plans

EMERGING THEMES (1)Sharpening our strategic intent

Clearer strategies and alignment of programmesFocus on all components of our land transport networksBetter links between programmes and strategy

Greater optimisation

extracting maximum value from past/current investment

the optimal balance between maintenance and improvements

Increased focus on user perspectives

Better definition of the desired levels of service e.g. KiwiRAP

Basis for understanding network access charging

EMERGING THEMES (2)Lifting the efficiency equation

Improved costing e.g. whole of life costing of programmes and projects

Sound land use and transport planning – assessing the need for future transport investment

EMERGING THEMES (3)Lifting the effectiveness of our investments

18

IN CONCLUSIONThe challenge for us all

• Maintaining and optimising what we’ve got

• Meeting our forward commitments

• Giving effect to Government and regional direction

• Meeting transport user and ratepayer expectations

• Optimising the above within flat-lined revenue