Infrastructure / Construction

The Bill

Mid-August quietly saw in the introduction of the Land Transport Management Amendment Bill (Bill) to the House. See here for a copy of this Bill.

The Bill amends the Land Transport Management Act 2003 (Act) by simplifying the planning and funding framework, and repealing the Act's regional fuel tax provisions. Specifically the Bill:

  1. Proposes changes to the planning and funding framework which annually channels around $3 billion of Central Government funds towards land transport activities;
  2. Suggests changes to streamline the framework for assessing toll road schemes; and
  3. Seeks to establish in legislation, a new policy framework for building a long-term partnership between regional councils and public transport operators, known as the public transport operating model.

Given that the Act forms a third of the local government planning triumvirate, it is interesting to note the more subdued introduction of this Bill into the House, compared for example with the Local Government Amendment Bill and reforms to the Resource Management Act 1991 (RMA'91).

New Purpose

The Bill replaces the existing purpose in the Act with the following:

"The purpose of this Act is to contribute to an effective, efficient, and safe land transport system that supports the public interest."

Planning and funding

The Bill aims to:

  • Refine the funding framework of the Act to focus on the "effectiveness and efficiency of public expenditure". This will be reflected in a new purpose and streamlined decision-making criteria.
  • Make the application of the Act simpler and reduce compliance costs.
  • Ensure that the land transport revenue meets the costs of activities related to the protection of the land transport revenue base, and the maintenance of the integrity of the revenue system, subject to Ministerial approval.
  • Combine national and regional planning documents. Of particular note is the proposed consolidation of regional land transport strategies (RLTS) and programmes (RLTP) into a 'regional land transport plan' (RLT Plan) with a 10‑year planning horizon; and the combination of the National Land Transport Strategy with the Government Policy Statement (GPS) on transport funding into a single GPS on land transport. This will also have a 10-year timeframe.
  • Remove the duty to include non-voting representatives as members of Regional Transport Committees (RTC) resulting in smaller committees.
  • Enable borrowing by NZTA to fund future land transport projects subject to Minister of Transport and Minister of Finance approval. Currently borrowing can only be used to manage the National Land Transport Programme's cash flow.
  • Repeal the Regional Fuel Tax provisions (which came about through the 2008 amendments to the Act).

Tolling and concession agreements

The Bill simplifies:

  • The process for approving tolling schemes by replacing a number of existing statutory tests with high-level testing.
  • The consultation provisions to eliminate duplication between tolling and other funding decisions.

No change is proposed to the requirement that a toll road scheme must relate to a new road or an existing road that is integral to a new road. However the requirement that a tolling scheme must include one method of payment that does not collect personal information will be removed.

The Bill also proposes to bring the existing toll road at Tauranga (Route K) into its toll road regime to enable consistency between the setting, collecting and enforcing of tolls. Doing so will repeal the Tauranga District Council (Route K Toll) Empowering Act 2000.

The Bill also replaces the special concession agreement procedure for public-private partnerships with standard approved procurement procedures. Ministerial approval will be required before land may be leased, or road management powers delegated for tolling purposes under a public-private partnership.

Public transport operating model

The Bill establishes this model to implement a new policy framework for planning and contracting public transport. The Government says that this model was developed following a review of the Public Transport Management Act 2008, which found there was little incentive for operators to invest in public transport services or to improve services.

The Bill requires all bus, ferry, and rail services in a region to be segmented into units and provided under exclusive contracts to the regional council. Regional Councils will be required to identify these units in their Regional Public Transport Plans together with policies on procuring units, and the public transport services that they intend to assist financially.

The Bill also repeals the Public Transport Management Act 2008. The provisions of that statute will be carried over to the Act (as modified by the Bill).

Matters to note

The Bill raises some of the following matters worth noting:

1. Of key interest to regional councils, is the proposal to remove the requirement to produce a RLTS and to replace this with the RLT Plan (a consolidated RLTS and RLTP).

  1. The RLTS currently provides the long-term strategic overview for land transport in a region. A number of the strategic components of a RLTS are absent from the requirements of the RLT Plan, which arguably makes the RLT Plan more of an extended RLTP than a combined RLTS and RLTP.
  2. The Bill also reduces the RLTS planning horizon from 30 years to 10, with the attendant risk that a shorter-term planning programme will result in a less strategic focus than was promoted in 2008 when the planning horizon for RLTS was increased to 30 years.
  3. The statutory link between the management of land use and urban form under section 30(1)(gb) of the RMA'91 and the Act is absent from the requirements for the new RLT Plan.
  4. Also if passed, the Bill will mean dedicated time and resources to combine regional transport planning documents.

2. The Bill also removes the requirement to appoint RTC members representing various transport objectives. Potentially, this reduces the ability of regions to benefit from wide experience on matters of longer-term regional transport issues that may not necessarily be on the Central Government funding agenda.

3. The Bill's public transport operating model may also have implications for regions with lower population densities and/or mostly rural districts.

4.The Bill's new purpose removes all references to an affordable, integrated, responsive, and sustainable land transport system.

  1. It appears that, as with the proposed new purpose in the Local Government Act Amendment Bill, there are to be no references in the Act's purpose to economic, social, cultural and environmental considerations. This raises questions of the extent to which councils can ensure that alternative transport modes are met.
  2. The Act's current purpose was shaped by the 2008 amendments which made a number of significant changes, including: enabling regions to put in place a regional fuel tax scheme; providing for a 6-year GPS on transport funding; changing to a 3-year funding cycle; introducing 3‑yearly RLTPs; and increasing the term of a RLTS to 30 years. At the time it signalled Central Government's move toward more land use and transport integration within a wider integrated planning framework. Citing a focus on the effectiveness and efficiency of public expenditure, the Bill proposes to either replace or amend these provisions.

The Bill passed its first reading on 11 September 2012 and has been referred to the Transport and Industrial Relations Committee Parliament. The Committee's report to the House is due on 11 March 2013.

Given the implications the Bill looks set to have for the form and nature of transport planning documents, the information which feeds into those documents, how longer-term transport issues will be addressed, and how public transport works, Councils will wish to maintain an interest in this Bill's progress in the House, and take part in the submissions process.

Submissions on the Bill can be made here, and close on 26 October 2012.

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The contents of this publication are general in nature and are not intended to serve as a substitute for legal advice on a specific matter. In the absence of such advice no responsibility is accepted by Brookfields for reliance on any of the information provided in this publication.


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