Cashflow Management

Introduction

This section provides information and guidance to inform Approved Organisations, the NZTA and other investment partners and stakeholders on NLTP cash-flow management processes and their responsibility to provide quality information to support the process.

Overview

The NZTA is required to balance revenue coming into the NLTP with expenditure for land transport investments over time. To do so the NZTA develops cash-flow plans and targets, forecasts revenue and expenditure and manages NLTP cash-flows to achieve its targets.

A short-term borrowing facility, effectively an overdraft, is available to assist the NZTA manage its cash-flows. The facility cannot used as structural debt and its limit cannot be exceeded. It comprises two components:

• Up to $150 million to manage regular seasonal cash-flow cycles, where borrowing is expected to be repaid annually, and
• Up to $100 million to manage unexpected and unavoidable cash-flow variations relating to project timing variations, emergency works beyond normal levels and unanticipated increases in unit prices.

Forecasting of expenditure is a critical part of cash-flow management and requires a coordinated and timely gathering, collating and analysing of Approved Organisation, NZ Police and NZTA forecasts.

Accountability for NLTP cash-flow management

The NZTA Group Manager Planning & Investment is accountable for NLTP cash-flow management. This includes management decisions around expenditure levels and the use of the short-term debt facility for unexpected and unavoidable cash-flow variations.

The National Manager Investment and team, assisted by the NZTA’s Finance team, are responsible for modelling cash-flows and recommending responses to variations from plan.

The NZTA’s Finance team has responsibilities that are either a direct part of the cash-flow management process as described in this section or influence the process, including maintaining accounting records and providing the NZTA’s treasury function.

Finance also has a specific role of reporting to the Board from an independent financial perspective and makes decision on the draw down and repayment of the short-term debt facility for managing regular seasonal cash-flow cycles.