NLTP - National Land Transport Programme

2007/08 National Land Transport Programme

Road maintenance, operations and renewals

Maintenance allocations cover works required to ensure the preservation of the existing network and to deliver a consistent level of service, which includes safety and smooth travel for all road users.

Preventive maintenance

The preventive maintenance category provides for non-routine work required to protect the serviceability of the road network and to minimise the threat of road closure. Local authorities and Transit apply for financial assistance at monthly NLTP reviews, from an allocation set aside in the NLTP for this purpose each year. Apart from commitments for work already underway, no allocations have been made to specific projects within this activity.

There is an allocation of $10 million for 2007/08 comprising $5 million for local roads and $5 million for state highways.

Emergency work

Emergency work provides for the repair and restoration of the road asset following adverse events such as earthquakes and rainstorms. Local authorities and Transit make an application, as and when damage occurs, for financial assistance from an allocation set aside in the NLTP for this purpose each year. An enhanced financial assistance rate applies to territorial authorities to ease the financial burden of this unexpected expenditure demand.

Prior to 2003/04, annual expenditure was around $30 million. However, in the past few years, expenditure has been much higher as a result of floods in the lower North Island, the Bay of Plenty and Northland.

For 2007/08 there is an allocation of $85 million–$53 million for local roads and $32 million for state highways. This includes some residual work from events in previous years.

Routine maintenance, operations and renewals

Maintenance allocations have been approved for all road controlling authorities. Maintenance funding allocation provides for a mix of management and physical work activities. These allocations relate to operational traffic management (4 percent), routine asset maintenance (38 percent), network and asset management (10 percent) and asset renewal work (48 percent). Minor level of service improvements associated with some renewal work has also been funded.

Local road maintenance

The total allocation for local roads, including those roads designated as special purpose roads, (excluding preventive and emergency maintenance) is $362 million. This is a 7.7 percent increase from the 2006/07 allocation. The allocation represents the outcomes of negotiations between staff of approved organisations and Land Transport NZ, during which the relationship between asset management plan recommendations and submitted programmes was compared and discussed. This analysis resulted in some low priority and unjustified items not being supported for funding.

Future price increases

The most significant programme driver for 2007/08 has been cost escalation. Although cost escalation pressures have eased over the short-term, road controlling authorities still have to meet the cumulative effects of indexed price increases within long-term contracts. Land Transport NZ has made allowance for price increases in existing contracts and for expected increases in contracts being tendered during 2007/08. This allowance has been based on current forecast levels. A contingency allocation has been held to allow Land Transport NZ to respond to price movements at higher than budgeted inflation rates.

Asset base

The increase in allocations is also driven by an increase in the value of road assets, which causes an increase in the cost of renewal works. This has mainly been from a change to longer life pavement treatments, seal extensions and more extensive traffic management infrastructure. Also contributing is a 0.3 percent increase in total road length across the country. Regions with rapid development, such as the greater Auckland area, Bay of Plenty, Canterbury and Central Otago, have asset growth rates far higher than the national average.

Network demand

The national local road growth in vehicle traffic, as total vehicle distance travelled (in kilometres) has been a +3.1 percent average annual increase since 2000. If this were a uniform national increase there would be little direct impact on demand for corridor maintenance or the deterioration of roads, but some areas, such as the Auckland, Tauranga, Gisborne, and Central Otago areas are experiencing significant growth. This is impacting on the design criteria and quantity of renewal works.

Level of service

For 2007/08 there has been a strong focus in negotiations between Land Transport NZ and approved organisations on ensuring a balance is made between maintenance programme deliverables and network performance and condition trends. As the monitored asset performance measures show an improving national roading network, and therefore enhanced levels of service being delivered to road users, there is a need to match funding requirements against these targets.

State highway maintenance

For state highways, the allocation (including property management) is $390 million. This increase of 8.4 percent from the 2006/07 allocation is due to funding required for the Auckland Traffic Management Unit, costs associated with changing network demands, funding for additional renewal work focused on addressing urban pavement issues and a cost escalation adjustment.

Operational network management cost increases

Traffic management operational costs (traffic demand management, traveller information, network surveillance) increase ahead of other maintenance activities and will continue to do so as new and enhanced systems are implemented. An estimated $6.6 million has been added to the allocation in this area.

Network demand

Heavy vehicle traffic continues to grow at around 5 percent per year. Increased heavy vehicle traffic has a direct impact on pavement deterioration and therefore routine and renewal maintenance needs. This increase is not spread evenly across the country so tends to put funding pressures on particular network areas, such as port access and dairy tanker routes.

Network condition

The state highway network condition indicators show excellent performance in most areas. There is a difference in pavement condition between rural and urban sections of the network. Surface and pavement condition within urban areas, predominantly in the central North Island, has historically been tracking below average. By a combined refocus of the current state highway renewals programme and the additional funds approved within the 2007/08 maintenance programme, it is anticipated that this trend can be positively influenced in the short to medium-term.

Future cost escalation

As with local authorities, cost escalation has been a significant programme driver. Future cost escalation trends are difficult to predict. Although the maintenance and resurfacing cost escalation factors for the first three quarters of 2006/07 have slowed dramatically it is unlikely that the resulting indexing allowed within long-term contracts will continue to drop. The state highway maintenance allocation includes an allowance for price increases in existing contracts and expected increases in contracts being tendered during 2007/08.

Transit’s programme level request

The approved allocation is less than the amount sought by Transit. Transit’s maintenance programme was prepared prior to the turn-around in cost escalation. Therefore a higher than now forecasted level of cost escalation was included. Negotiations between Transit and Land Transport NZ staff also highlighted the need for an updated state highway asset management plan. This will provide more clarity around the relationship between longer term funding needs and targeted level of service.

 

Page created: 26 June 2007