Applicant
NZ Transport Agency
Purpose
To seek funding to enable us to deliver on our value proposition for an Electronically Tolled Route K in Tauranga, by making a one off payment to Tauranga City Council to recognise that it is foregoing the future tolling revenue stream when Route K is declared a State highway.
Date of decision
15 August 2014
Resolutions
The New Zealand Transport Agency Board:
- approved the addition of the Route K project in the 2012-15 National Land Transport Programme, subject to the Bay of Plenty Regional Land Transport Committee varying its 2012-15 Regional Land Transport Programme to include the Route K Project
- approved funding to Tauranga City Council of up to $65m, from N funds at a special funding assistance rate of 100%, to recognise it is forgoing the future revenue stream when Route K is declared a State highway, subject to,as a conditions precedent, an Order in Council being declared to enable Route K to continue to be tolled under the Land Transport Management Act 2003 (LTMA), and LTMA programme requirements being met
- agreed to delegate the negotiation and execution of the commercial terms of the funding amount and this arrangement with Tauranga City Council to the Chief Executive
- noted that Route K will be tolled until all Transport Agency costs associated with Route K establishment are recovered, including an internal cost of capital to recognise the opportunity cost of the upfront use of NLTF funds.
- noted that an application will be made to the Minister of Transport for the Route K toll revenue to be included as an inflow into the National Land Transport Fund.
Reason for the decision
The Land Transport Management Act provides for converting Route K to a Transport Agency operated Electronic Toll Collection system. It allows for tolling Route K to be bought under. The Board agreed to declare Route K in Tauranga a State highway and introduce an Electronic Toll Collection system (ETC). Route K will be classified as National Strategic because it functions as the primary link between State highway 29 and the Port of Tauranga.
The value of declaring Route K in Tauranga a State highway is:
- providing nationally and regionally consistent user experience through electronic tolling
- delivering travel time savings to our customers
- supporting our toll system with additional transactions, reducing the overall per- transaction cost
- managing and operating a nationally strategic highway.
The payment to Tauranga City Council is in nature a financial arrangement that is cash neutral over time and does not constitute an investment. Accordingly, the activity has not been assessed as an investment under the Investment and Revenue Strategy. The arrangement enables the Board's investment decision to electronically toll Route K as a State highway. All costs associated with the payment to council and the introduction of electronic tolling on Route K will be recovered through tolling.
Matters in sections 20(2) and 20(5) of the LTMA have been satisfied, and matters in section 20(3) have been taken into account.
