Making roads safer and shifting more people onto public transport are big priorities in a $54b plan for the next decade that lets NZTA consider new ways to fund them, including value capture rates and public-private-partnerships, Dileepa Fonseka reports

Road charges and fuel taxes will go towards rail, public transport and coastal shipping in a bid to make roads safer and get more vehicles off them. 

There will be a greater push to get more people onto public transport in Auckland, Hamilton, Tauranga, Christchurch, Wellington and Queenstown and a new focus on the “blue highway” as an alternative to freight.

It’s all part of the Government’s new draft Government Policy Statement (GPS) document that was put out to consultation on Thursday. 

“It’s a record investment, $44b over the next 10 years and no tax increases.”

Included in that document is a requirement that alternative funding methods for major transport projects be considered before they’re funded through public funds. 

Those methods could include the “capture” of rising property values from new transport nodes and alternative financing arrangements like Public-Private Partnerships and Special Purpose Vehicles.

However, Transport Minister Phil Twyford told reporters on Wednesday the biggest priority in the strategy was road safety, which would take up $10 billion of transport investment planned over the next decade.

“It’s a record investment, $54b over the next 10 years and no tax increases,” Twyford said.

The draft government policy statement (GPS) 2021 on transport policy sets out spending priorities for the National Land Transport Fund (NLTF) over the next 10 years. 

Money for the NLTF is raised through fuel taxes and road user charges. 

More than $4.5b a year over the next decade would be raised through the NLTF according to the draft GPS 2021 document.

Twyford said the total transport spend over a decade would be a “record” $54b once an additional Crown top-up was taken into account.

$6.8b of Crown funding for transport projects was announced as part of the New Zealand Infrastructure programme last year. 

Alternative financing

The GPS has set a formal expectation that “all funding and financing approaches” be considered for long-term and large-scale projects. 

A set of principles and a “funding and financing toolkit” are being developed by the Government. Until then proposals for major projects over $100m are expected to consider value capture options and alternative financing arrangements. 

Value capture is where a major transport project, like a train station, covers its costs by “capturing” the rise in property values in the surrounding area. 

This can be done through targeted rates or by the Government simply buying, holding and the selling property around transport nodes and stations. 

The Government has set out these options in a section on funding land transport.

“When seeking investment from the Fund for large intergenerational projects (over $100 million) and projects where transport and other outcomes are advanced together, financing approaches should be considered,” the policy statement says.

“This includes considering alternative sources (e.g. new Infrastructure Funding and Financing tools) and alternative operational models (e.g. Public Private Partnerships).”

“The Ministry of Transport and the NZTA will expect confirmation that there has been adequate consideration of financing before supporting such large projects.”

“The blue highway”

Twyford told reporters on Wednesday that it was the Government’s view that there were opportunities to take freight off the roads and ship it by sea. 

“The blue highway is a fantastic way to move freight and reduce greenhouse gas emissions so we’re going to work with the shipping industry now to see how we can move more freight on the blue highway,” Twyford said.

“And it may be through things like, for instance, helping them to develop their workforce or by investing in infrastructure that makes coastal freight a more attractive option.”

Rapid transit for the fastest growing centres

The Government’s draft GPS also set out a clear expectation that the New Zealand Transport Agency (NZTA) work with local governments in Auckland, Tauranga, Wellington, Christchurch and Queenstown to implement “mode shift plans”. 

This a reference to rapid transit plans for centres like Hamilton and Tauranga. 

Newsroom reported in January that these plans were well advanced in Hamilton with several potential station locations in the mix.

New activity classes

When projects are put up to be funded through the NLTF they are considered under different activity classes each with a funding range set for a particular year.

The last GPS in 2018 had 12 activity classes, in the latest draft GPS a “coastal shipping” category has been added and some categories have been combined to leave 11 activity classes, these are:

Road to Zero (road safety), public transport services, public transport infrastructure, walking and cycling improvements, local road improvements, state highway improvements, state highway maintenance, local road maintenance, investment management, rail network and coastal shipping. 

The 2021 GPS document is a draft document. Local government, the transport sector, community groups and the wider public will have an opportunity to provide feedback on the document until April 27.

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