This page relates to the 2024-27 National Land Transport Programme.
This is the NZ Transport Agency Waka Kotahi (NZTA) policy on uneconomic transport infrastructure.
Date of issue: Updated 2 July 2024 | NZTA may review and amend investment policies at any time, including in response to any changes in the Government Policy Statement on land transport.
This policy was updated following the review and consultation on NZTA’s emergency works investment policies.
This policy is to ensure investment decisions are well-informed by a range of options, comply with all legislative and national settings, and assist investment decision making on uneconomic transport infrastructure.
Uneconomic means a proposed investment with a very low efficiency rating (benefit-cost ratio (BCR) < 1, or net present value < 0).
Note, ‘uneconomic’ in this context only means the monetised benefits do not exceed the monetised costs; this does not necessarily mean the proposed investment is not worthwhile or good value for money once non-monetised and/or social benefits are considered.
This policy applies to all land transport activities including roads, bridges, public transport, walking and cycling infrastructure, but excluding rail infrastructure, that seek to renew, reinstate, upgrade, downgrade or replace uneconomic transport infrastructure at a total cost of more than $2 million.
Activities with a total cost of less than or equal to $2 million must instead refer to the guidance for low-cost, low-risk programmes.
Funding decisions related to uneconomic transport infrastructure without significant, non-monetised benefits and/or social impacts must be made by an appropriate level of delegation, usually the NZTA Board. Decisions must demonstrate consideration of section 20 and section 96 of the Land Transport Management Act 2003. Approval may be for a different level of service (for example lower weight and/or speed restrictions) or type of access (for example ford versus bridge).
Land Transport Management Act 2003(external link)
The costs of investigations or business cases are eligible for inclusion in the National Land Transport Programme (NLTP) and funding, whether or not they relate to uneconomic transport infrastructure. However, the policy application process outlined in this policy must be followed for any subsequent phase costs to be approved for funding.
Any portion of the costs funded by an alternative source (that is, other than an approved organisation or the National Land Transport Programme (NLTF)) will not be eligible for NLTF funding.
This policy is guided by the One Network Framework in terms of road function, but discretion remains to select an appropriate level of service to reflect the uneconomic nature of the transport infrastructure.
For situations where the BCR is not applicable, for example like-for-like bridge replacements, the cost-benefit appraisal should use least whole-of-life economic cost. Approved organisations and NZTA (for its own activities) must also apply the decision tree shown in the simplified procedure SP2 in the NZTA Monetised benefits and costs manual, ‘Decision chart for bridge replacements on low volume roads’, to guide selection of the preferred option for bridge replacements on low volume roads.
Monetised benefits and costs manual
The proposed transport infrastructure must meet the definition of uneconomic as defined in this policy and have a total cost of more than $2 million. An appropriate level of cost-benefit analysis is required to complete this step.
In step 1 only the monetised benefits and costs must be considered. However, for steps 2 to 5 the non-monetised benefits and social impacts of the proposed infrastructure must be assessed, and to a degree of robustness commensurate with the scale of funding sought.
The elements of this assessment may include but are not limited to:
*These may include considering iwi/Māori access to ancestral lands, marae, papakāinga and other sites of significance.
The proposal must provide sufficient evidence that, if applicable, alternative forms of funding, whether from other central government sources or elsewhere, have been explored, and provide justification for why they are ineligible, insufficient and/or unsuitable.
The proposal must consider a range of options including but not limited to reduced levels of service, alterations of transport infrastructure, alternatives to infrastructure solutions, and, where appropriate, community-led retreat.
Where practicable, community views must be canvassed via a level of community engagement commensurate with the scale of funding sought (for example analysis of previous reports or iwi/hapū management plans, direct surveys, interviews, public meetings, etc).
If steps 1 to 4 have been completed adequately, and an NZTA investment advisor does not believe the non-monetised benefits and/or social impacts identified are sufficient that the investment can be considered efficient and effective, the proposal must be referred to the appropriate level of delegation, usually the NZTA Board if significant, for an investment decision.
Note on application process with regards to emergency works:
For clarity, all steps of the application process need not commence after the occurrence of an emergency event. Some, or all, of the steps may be performed pre-emptively as part of the proactive identification of critical routes or the proactive identification of low volume roads that are prone to repeated damage from weather events.
