Appendix 2 GPS guidance on land transport planning and evaluation

Introduction

This appendix is an extract from the Government Policy Statement on Land Transport Funding (GPS) issued in May 2009.

Considerations for planning and evaluation

Guidance on land transport planning and evaluation is one of the key means through which the GPS contributes to achieving the short and medium-term impacts.

Developing a land transport system that will achieve the short to medium-term impacts set out in this GPS will require planning and evaluation processes that take account of the following factors:

• the government's priority to support national economic growth and productivity, which includes the national roading priorities set out in the list of Roads of National Significance
• considering networks from a national perspective
• achieving value for money
• encouraging integrated planning
• making best use of existing networks and infrastructure
• implementing and fostering a co-ordinated approach
• considering the impact of volatile fuel prices.

These factors need to apply to the planning undertaken by local government and the NZTA, as well as to the evaluation of strategies, programmes packages and activities by the NZTA. Many of these factors are already being applied in developing land transport strategies and packages of activities.

Supporting national economic growth and productivity

To achieve national economic growth and productivity, Regional Transport Committees and the NZTA should give priority to transport initiatives that:

• improve the provision of infrastructure and services that enhance transport efficiency and lower the cost of transportation to New Zealanders through
  • improvements to journey time reliability
  • easing severe congestion
  • more efficient freight supply chains
• provide better access to markets, employment and areas that contribute to economic growth.

In preparing land transport programmes, Regional Transport Committees and the NZTA should ensure that investment in nationally important infrastructure and corridors is given priority because of its particular contribution to national economic growth and productivity. This should encompass networks that support national economic growth and productivity, as well as contributing to regional outcomes.

In particular, consideration should be given to how projects funded through the National Land Transport Programme can support the delivery of the Roads of National Significance and the National Infrastructure Plan, and how the National Land Transport Fund can contribute to these.

While focusing on economic growth and productivity, improvements to the transport system should also seek to minimise any external costs associated with transport such as traffic accidents, noise and environmental impacts.

Considering networks from a national perspective

As part of developing regional priorities, Regional Transport Committees should consider the national aspect of some networks. In preparing the National Land Transport Programme, the NZTA should ensure proposed activities will not compromise the functioning of the national State highway and national rail networks.

Proposed improvements on inter-regional links will be coordinated across regional boundaries,and activities elsewhere on the transport network will not compromise the functioning of the nationally important networks.

Achieving value for money

Making best use of resources by achieving value for money in the land transport sector is a key objective. To achieve value for money, three main concepts will need to guide the NZTA, local government and the sector when planning, assessing, and implementing strategies and activities. The three main concepts are effectiveness, economic efficiency and economy.

Effectiveness means selecting activities which together make the greatest contribution to the government's medium / long-term priorities, as well as the more immediate impacts sought in this GPS. Economic efficiency is about maximising the value of what is produced with the resources available. Economy means ensuring that quality inputs are purchased at the lowest price over the whole life of the asset or intervention.

There will be an increased focus on economic efficiency. The NZTA's evaluation processes will be adjusted to give projects with high benefit cost ratios (BCR) higher funding and programming priority and to give projects with low BCRs more scrutiny (high BCR is greater than four; low BCR is less than two). This change will place the onus on the organisations seeking funding from the NZTA to give priority to higher BCR projects unless there is good reason to do otherwise.

The use of BCR will need to be complemented by other evaluation factors. The government expects the NZTA to consider the broader benefits and costs of proposed investments that cannot easily be captured in a benefit cost analysis, especially as they relate to economic activity.

In addition, the government considers that value for money can also be achieved through simplifying the process for allocating the National Land Transport Fund. The current process for allocating funds is highly complex and demanding on resources. The Ministry of Transport and the NZTA will consider options for simplifying this process that will generate savings and make the process for allocating funds more transparent.

Ensuring integrated planning

Integrated planning is important to ensure that decisions made in relation to land use, transport and urban design collectively contribute to the efficient use of public funds and achieve the government's objectives for transport and New Zealand. To achieve integration, transport strategies and packages of activities should be developed alongside, and be clearly connected to, land use strategies and implementation plans.

The government is particularly concerned to see that better integration of land use, transport planning and urban design activity contribute to national economic growth and productivity. In particular, land use and transport planning processes should ensure that:

• the transport needs of future growth are considered in planning and developing the transport system
• future transport corridors are safeguarded from other development
• the long term sustainability of land transport funding is secured through ensuring that urban growth meets the costs of the infrastructural impact that such growth generates for the wider transport network
• opportunities are created for better integration within and between transport modes.

Making best use of existing networks and infrastructure

Regional Transport Committees and the NZTA should ensure that cost-effective measures to improve the efficiency of existing networks are considered as well as investment in new infrastructure.

However, careful consideration should also be given to the sequencing of development so that small iterative investments in existing infrastructure do not take place when more significant investment in redeveloping the same infrastructure is shortly planned to commence.

Implementing and fostering a co-ordinated approach

Most transport problems require the involvement of many government agencies and private sector stakeholders to develop solutions. For instance, improvements in road safety can require coordination between road controlling authorities, regional councils, the Police, the Accident Compensation Corporation, the Ministry of Health, district health boards, community groups and transport funders. All transport entities are expected to participate in a collaborative way with other agencies to reach coordinated solutions.

Considering the impact of volatile fuel prices

Recent experience has emphasised the volatility of oil prices, and the effects this can have on transport users. In times of high oil prices, the availability of transport choice, such as public transport, helps to mitigate the effects on households, and public transport use tends to increase.

It is expected that the NZTA and local government will take these factors into account when developing strategies and evaluating proposed activities.

Planning, programming and funding manual, first edition, amendment 1, effective from 1 July 2009.

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