Twyford backs transport officials in extracting value for money in policy statement

Thursday 28th June 2018

Transport Minister Phil Twyford backed his officials' ability to get the best bang for the taxpayer's buck when weighing up investments, ignoring the Treasury's advice as being too narrow in identifying wider benefits.

The government today released its policy statement on land transport funding, which will see petrol excise rise by 3.5 cents a litre a year for the next three years to help pay for an annual $4 billion spend over the next decade. The draft plan published in April remains largely intact, reducing spending on four-lane state highways to boost investment in rapid transit and regional roads with a new emphasis on safety.

That draft attracted more than 900 submissions, some of which were concerned the cost-benefit ratio would restrict "some projects from advancing that were critical to successfully completing an overall programme" and prompted a re-wording, enabling the New Zealand Transport Agency to evaluate a programme of work when safety and access outcomes are being reviewed rather than the individual projects.

A Cabinet paper shows the Treasury recommended against that, warning that low-value projects could get bundled with high-value projects as a means to sneak them over the line in a wider programme, and that using an economic evaluation model could address those concerns.

Twyford rejected that advice, saying in the paper "a programme approach may be appropriate to capture benefits for a network", and that NZTA's "expertise would safeguard against a bundling of low-value projects or an arbitrary aggregation or disaggregation of transport projects".

Other substantive changes in the final policy statement include explicitly supporting public transport in socially deprived areas; explicitly supporting regional priorities such as tourism, freight and resilience; putting greater emphasis on proactive risk management for the network's resilience; and stating the desire to cut greenhouse gas emissions.

The policy statement also spells out the government's investment intentions for public transport and a willingness to use alternative financing arrangements, something that's already been made clear with the New Zealand Superannuation Fund-led consortium that lobbed in an unsolicited bid for part of Auckland's light rail project.

The government still plans a second stage of the policy statement, which will add coastal shipping to the mix, effectively developing a national transport strategy. That will allow upper North Island logistics and supply chain study to inform the policy. The final document added specifics references to the urban growth agenda and work considering the cost of transport in investment appraisal and pricing mechanisms.

(BusinessDesk)

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