Planning and investment principles superseded August 2020

Introduction

The development, operation and maintenance of the land transport network is a shared responsibility between Waka Kotahi and:

• central and local government
• approved organisations
• other investors, and
• community stakeholders.

It is a relationship founded on trust, clarity and accountability.  As an investor, and as manager and operator of the state highway network, Waka Kotahi will adopt a collaborative approach to planning and investment in the land transport network.

A collaborative approach

Planning processes should provide an effective and collaborative forum for those affected by the outcome to engage in the identification of problems and the development of solutions that address national and, where aligned, regional and local priorities. Participants will depend on the particular circumstance, but include, as appropriate, Waka Kotahi, approved organisations, central government agencies and business and community interests.

Aligning national regional and local priorities

Waka Kotahi will use its knowledge and expertise to work with its investment partners and stakeholders to translate national priorities into the local and regional context. Our goal (where possible) is to align regional and local investments with Waka Kotahi national priorities to optimise our shared investment and deliver whole of network benefits.

Adaptable and fit for purpose

Future events or a change in circumstances may require adjustments to an agreed strategy or business case. Planning and investment processes need to respond to change and provide a forum to reach agreement on any change required in the agreed strategy or business case.

Developing sector capability and sharing good practice

Adopting an integrated and collaborative planning approach requires  development of skills, evidence and ways of working. Waka Kotahi aims to build its own capability to apply a multi-disciplinary approach to planning and investment in the land transport network.

As a national organisation, Waka Kotahi aims to share good practice with our partners and stakeholders across the sector. We will also participate in international forums where that contributes to improving sector performance.

For improvement investment proposals this involves stating the problems, based on evidence, and the benefits that would arise from them being addressed. It then involves the progressive development of the business case through an investment gate process that can be tailored to the scale, complexity and risk of the proposal.

For continuous programmed activities, eg maintenance programmes, identification and articulation of problems and benefits is required,  based on evidence. Development of the business case for investment is incorporated in a continuous planning improvement and investment cycle, passing through an investment gate when funding for the programme is reconsidered.

The principles of the business case approach apply to strategic and tactical planning and programming cases, eg regional land transport plans.

Introduction

Waka Kotahi promotes an integrated approach to land use and transport planning to ensure that the interaction between land use and the transport network is clearly understood, and that the development of both is managed to optimise the use of and investment in the transport network, while improving the economic performance and quality of life of communities.

A shared responsibility

A strong interface between land use development and transport infrastructure and activities is critical. Achieving this is a shared responsibility amongst approved organisations, Waka Kotahi (state highways),  landowners, developers and infrastructure providers.

Supporting an integrated planning approach to land use and transport          

The use of existing, and development of new, transport infrastructure can play a significant role in place-shaping and stimulating demand for new development. Waka Kotahi encourages and supports an integrated planning approach, under which all parties involved in transport and land use decisions will consider:

• the impact of the decision on transport functionality and on past, current and planned investment in the transport network    
• the opportunities to develop settlement patterns that will improve connectivity, accessibility and safety across modes
• ways to reduce or mitigate any adverse social and environmental effects of transport
• delivery of an affordable and resilient transport system.

Planning for growth and development    

A long-term strategic approach should be taken to planning for growth. Waka Kotahi supports the preparation of regional growth strategies, structure plans and spatial plans as mechanisms for identifying integrated and sustainable patterns of growth, future land use changes, transport alternatives and funding options.

Waka Kotahi strongly advocates that these strategies and plans are recognised and given effect in the regional policy statement, regional land Transport plan, district plan(s) and long-term plan(s) at the earliest opportunity.

The impacts of land use decisions on transport network  

Waka Kotahi will work with local authorities, developers and others to understand and communicate the implications of their land use decisions. We will work with these parties to encourage an integrated approach that protects and optimises past, existing and new investment in the land transport network.

At a practical level, Waka Kotahi expects that local authorities will consider the funding implications of any transport infrastructure that may be transferred to the local network. Any change in the network that is inconsistent with agreed levels of service under an endorsed classification system should not expect to receive funding assistance from Waka Kotahi.

Waka Kotahi position on resource management issues

Waka Kotahi will adopt a tailored approach to its involvement in resource management issues (eg subdivision and land use consents) depending on their impact on the land transport network and their alignment with robust planning principles. This means that:

• where land use matters impact on state highways, Waka Kotahi will actively participate in any issues that adversely affect the state highway network, such as increasing congestion or reducing safety, regardless of whether the activity is adjacent to or distant from the highway concerned
• where land use matters adversely impact on local transport networks or services that do not affect the state highway network, Waka Kotahi will support efforts of relevant approved organisations to ensure that their transport investments support, and are supported by, good land use policies and plans. Accountability for local transport networks and services rests with the relevant approved organisation and, as a rule, Waka Kotahi will not be involved in its own capacity,

Land use matters that are contrary to good planning principles but do not have transport impacts, fall within the ambit of the relevant regional or territorial authority rather than Waka Kotahi. We will not be actively involved in these matters unless there are exceptional circumstances.

Investment in the state highway network

Waka Kotahi will identify and manage strategic state highway routes to ensure that the expected benefits from past, current and future investments in those routes are delivered. Waka Kotahi will use the state highway classification to inform its responses to development proposals to achieve nationally consistent outcomes. In particular, we will:

• place greater emphasis on promoting the through-traffic function of national state highways compared with regional and sub-regional state highways
• recognise that, in many rural areas, state highways also perform a local road function, particularly on regional and sub-regional state highways
• recognise that urban state highways that are not motorways or expressways often have a diverse range of transport functions
• encourage the development of local roads that connect with state highways under agreed network plans, particularly in peri-urban areas, so property access is provided primarily via a local road network
• avoid allowing direct access to motorways, expressways and bypasses.

Meeting the costs for the state highway of land use development

Waka Kotahi will use the state highway classification to identify the function of each part of the state highway system and to inform its responses to development proposals. Where there are significant adverse effects from new land use development on the safety or function of the state highway network, these should be avoided in the first instance and, if unable to be avoided, must be remedied or mitigated. Waka Kotahi will:

• share the costs of state highway network improvements required to mitigate the adverse effects of development on the network through contributions from developers, local authorities and other relevant parties, where:
• • it can be demonstrated that the development will have a significant adverse effect on the safety or function of a state highway
  • practical and economically justifiable solutions exist to mitigate the adverse effects directly attributable to the development
  • there is reasonable certainty through the cost sharing arrangement that the state highway works will be undertaken within a reasonable time period
• negotiate with developers, local authorities and other relevant parties to agree on the equitable sharing of costs. Generally, this will be based on the proportion of the traffic generated by the development, whether the development significantly advances a state highway project identified in the National Land Transport Programme and the costs to mitigate the effects on the state highway network
• seek recognition of the importance of sharing the costs of state highway network improvements directly related to developments in regional policy statements, district plans, long-term plans and other planning documents such as growth strategies and regional land transport plans through the inclusion of objectives, policies and rules.

For further guidance on the Waka Kotahi approach to sharing the costs associated with mitigating development effects on the state highway, refer to Cost sharing with Waka Kotahi NZ Transport Agency(external link).

Investment in transport planning

Waka Kotahi invests through the transport planning components of the investment management activity class in programme business cases and associated studies to ensure that an integrated approach to land use and transport planning is adopted. See Programme business case work category for more details.

Links to further guidance

Further guidance is provided based on content from the Waka Kotahi Planning policy manual(external link), which has a technical/implementation focus (eg guidelines, standards).

Introduction

To achieve value for money, Waka Kotahi seeks an integrated, multi-modal network that will optimise the use of and investment in the network.  

An intervention hierarchy to optimise investment in land transport network  

Waka Kotahi will work with investment stakeholders in applying an intervention hierarchy to optimise past and new investments in the land transport network. This approach is fundamental and is applicable to all steps in the planning and investment process. It comprises:

• Firstly, planning and developing an integrated land use and transport pattern that stages growth to coincide with programmed capacity on the network
• Identifying the function of the network and ensuring it delivers a level of service appropriate to its function through investment in maintenance and operation of services
• Then identifying opportunities to manage traffic growth to utilise the network more efficiently and provide appropriate mode choice
• Then optimising the use of the existing network through road marking, signage, phasing of signals, ramp metering, etc
• And finally, considering investment in new infrastructure, matching the levels of service provided against affordability and realistic need.

A whole-of-network and whole-of-life approach to investment

Waka Kotahi takes a whole-of-network and whole-of-life approach to land transport investments to maximise the opportunities to improve efficiency and integration across the network over time.

Our network optimisation priorities  

Optimisation is a core component of the Waka Kotahi state highway activity management plan. While we aim to improve optimisation across the whole land transport network, our immediate focus will be on major urban areas under growth pressure and key strategic freight networks.

Optimisation of the land transport network

Investment that optimises the provision and use of the land transport network will focus on two key areas:   

• Network provision: Optimising the way the network is provided to users to manage the network more efficiently and improve safety, for example allocating space within corridors to high priority modes at peak times, providing for public transport, walking and cycling facilities, utilising new and emerging technologies, maintaining levels of service, and improving or constructing infrastructure
• Network use: Optimising the way the network is used by users to get the most out of the network, for example providing real-time traveller information, implementing pricing and charging measures, and initiating marketing and education to influence the choices that network users make about their trip making.

Planning for network and services optimisation

Waka Kotahi works with its partners to develop whole-of-network and service optimisation plans. The initial focus for these plans will be on major urban areas experiencing severe congestion (particularly Auckland), strategic freight networks (particularly for the upper North Island) and major routes linking to tourist destinations. Typically, these planning processes will consider:

• At a strategic level, why the network is important, eg key objectives for the operation of the road network and major road user services to be delivered, multi-modal priorities, etc.
• At an activity management level, what can be delivered, eg levels of service across the network, network hierarchy and other factors such as function/type, traffic flows, etc.
• At an operational level, how to operate the network effectively, eg monitor the performance of networks, identify gaps in performance and service delivery, and determine which measures best address those gaps most efficiently against the needs of a broad range of users.

Multi-modal issues

Waka Kotahi actively supports the development of a multi-modal land transport system that integrates road, rail, shipping and other modes. While the priority for our planning and investment effort is generally road user related, it does consider other modes, eg passenger rail activities, that may impact road users.  

Investment in public transport services

Waka Kotahi expects public transport programmes to reflect the whole-of-network context and to be well linked to long-term planning documents, particularly regional public transport plans and long-term plans. These documents should explain the assumptions underlying the programmes and forecasts, and how the proposed activities will contribute to the optimisation of the network.

Waka Kotahi will prioritise its investments on peak time public transport patronage in major metros to improve access to social and economic opportunities. It will also support investments that improve fare box recovery rates and optimise public transport services, eg by simplifying fares, zones, and ticketing, improving route planning, rationalisation and the ability to transfer between services.  

Introduction

Waka Kotahi invests all funds over which it has discretion to land transport activities that it considers will provide best value for money. Our focus is the delivery of the right outcomes, at the right time and at the right cost.

Investment thresholds and caps

Waka Kotahi has established and will review thresholds for investment proposals, based on its prioritisation methodology, which is one means by which it achieves value for money. Applications for activities to be included in the National Land Transport Programme, or to receive funding from the NLTF, below those thresholds will be approved only by exception.

Waka Kotahi may also cap the level of funding it is prepared to invest in a programme or project, either based on the level of land transport benefits delivered from the activity, which may be less than the cost of the activity, or as a means of limiting the risk to the NLTF from an activity with highly uncertain costs.

The Business Case Approach 

A cornerstone of achieving value for money is the Waka Kotahi adoption of the Business Case Approach (BCA), and our expectation is that all land transport investment proposals will be developed under this approach over time. If activities have commenced under the policy prior to the Waka Kotahi adoption of the BCA, they may be progressed using the old policy. However, we expect that the principles and concepts of the BCA will be applied to these activities.

New transport planning activities, other than regional land transport planning management, that require funding from the NLTF from the 2015-18 NLTP onwards must be developed using the BCA.

Value for money

When evaluating programmes and projects, the GPS requires approved organisations and Waka Kotahi to consider best value for money.

Value for money is defined in a variety of ways and the Waka Kotahi Board has approved the following description:

“Value for money describes the optimal balance of spend and inputs in order to deliver optimal outputs and outcomes. It is about maximising the net present value of government spending, subject to other non-quantifiable constraints.”

When evaluating programmes and projects, Waka Kotahi defines best value for money as:

“doing the right things in the right place at the right time for the right price in the right way to achieve the desired outcomes”.

Effectively this means: “when considering any activity the issue of value for money is always part of the discussion and questions are continually asked as to whether the activity is being undertaken in the optimal way to achieve the desired outcomes, ie is it being done in the most efficient, effective and appropriate manner”. This requires taking a long-term, whole of life view of the total value for money attributable to a programme or activity, not just the initial capital cost.

Activities defined in GPS

To ensure that investment using NLTF funds is directed to the results sought by the government, only those activities defined in an activity class in the current GPS will be eligible for inclusion in the NLTP and funding approval. This means:

• transport infrastructure that is vested in public ownership may be considered for NLTF investment, but not new land transport infrastructure directly serving a new development, eg construction of new roads and footpaths/cycle ways within subdivisions is not considered an NLTF cost
• public facilities that serve a transport function, and are not solely or predominantly for recreational or private use, may be considered.

Waka Kotahi encourages non-transport or ineligible activities where these integrate with the desired land transport system, and may provide partial funding assistance where components of an investment proposal are eligible.

Eligible and approved purpose

Funding from the NLTF must be used only to purchase eligible activities, as defined in an activity class in the current GPS, and must be applied only for the purpose they were approved. Any funding that remains after the purchase of the activity or activities to approved scope must be declared surplus.

Smart investor approach

A basic requirement of all organisations, including Waka Kotahi, that request or receive funding from the NLTF is that they will act as smart investors, meaning that they will:

• apply the planning and investment principles set out in this Knowledge Base to their investment proposals and decisions
• demonstrate sound planning, evaluation and decision making processes and judgement, and provide evidence of this on request
• ensure that proposals are affordable, that finance from appropriate sources is available and financing arrangements are managed within identified, approved risk frameworks
• demonstrate smart buyer competence in procuring services and infrastructure
• be able to competently manage their suppliers and consultants and hold them accountable for delivery as specified.

Intervention hierarchy

Waka Kotahi expects that its intervention hierarchy approach will be applied to all investment proposals, at programme and project levels (refer to the guidance on Optimising the provision and use of the land transport network). 

An intervention hierarchy is applicable to all steps in the planning and investment process. In practice, this means that alternative and option selection should start with lowest cost alternatives and options, including making best use of existing transport capacity, before considering higher cost alternatives and options.

Intellectual property

Waka Kotahi expects that it will share ownership of intellectual property rights created by co-investment in approved organisation activities. It may, at its discretion, make these rights available to other parties that it funds, unless specifically agreed otherwise.

When funding is provided to create intellectual property, Waka Kotahi will consider the ownership and use of rights of the intellectual property on a case-by-case basis. We will take into consideration the State Services Commission’s Guidelines for treatment of intellectual property rights in ICT Contracts(external link).

Use of national systems, etc.

When Waka Kotahi funds the development of systems, standards, guidelines and processes to deliver national benefits, eg for tolling, and these are applicable to investment proposals, they shall be used by all organisations requesting/receiving funding from the NLTF unless specifically agreed otherwise with Waka Kotahi.

Monitoring and reporting  

Continuous improvement at policy, process and operational levels is a fundamental concept in achieving value for money. Achieving this requires feedback of the performance of the investments made in land transport activities, through monitoring and reporting of their outcomes.

Approved organisations, Waka Kotahi (state highways) and other investment partners are accountable for the monitoring the outcomes of their transport investments from strategy to implementation. A monitoring programme shall be agreed with Waka Kotahi as part of the construction/implementation funding application.   

Monitoring and reporting of investments is expected to track key indicators that are linked to desired outcomes, over an appropriate period of time, and will demonstrate the success of the investment in achieving the outcomes. Monitoring and reporting will be undertaken at a level commensurate with the type of activity (strategy, programme, package or project) and the scale and risk of investment in individual activities.

Introduction

Waka Kotahi applies a risk-based approach to ensure risks are considered and managed through the planning to delivery process, including financing.

Assessing and managing risk

Waka Kotahi and all organisations allocated funding from the NLTF are expected to take a risk-based approach in assessing and managing risk associated with investments.  This risk-based approach applies to all transport activities funded from the NLTF, and includes the risks arising from:

• growth and changes in land use
• changes in critical business case assumptions
• procurement of services and infrastructure
• financing investments
• organisations delivering activities
• ownership of the service or asset resulting from investment
• exercising of delegated authority
• the readiness of activities to be delivered after commitment of funding
• payment of claims for delivery of activities

Waka Kotahi policy

Business Case Approach (BCA) principles must be applied to investment proposals. The BCA incorporates a risk based approach with the requirement that the strategic case be reviewed at each stage to ensure that the problem still warrants addressing despite changes in growth, land use and other assumptions. The BCA also requires demonstration of robust financial, commercial and management cases, including financial risk management.

The processes and procedures set out in this knowledge base and in other documents, eg the benefits management approach (from August 2020) and Economic Evaluation Manual (superseded August 2020), support a risk based approach, including a requirement to test the impact of assumption changes to the viability of investment proposals. Organisations requesting or receiving funds from the NLTF must follow Waka Kotahi policy, processes and procedures, including the use of the Waka Kotahi Procurement manual.

Financing risk

Waka Kotahi aims to adopt a flexible approach to the financing of investment proposals. Where sensible in terms of the scale and risk of the investment proposal, and having complied with all legislative requirements, this includes the use of debt and advanced procurement arrangements such as public private partnerships (PPPs). Waka Kotahi will consider the arrangements for financing its share of the cost of capital projects on a case by case basis. Waka Kotahi may opt to fully or partially fund its share of the:

• direct operational and capital costs of activities on a pay-go basis (the majority of activities will be funded in this manner)
• financial servicing costs of loans raised by itself or its investment partners to fund capital projects (subject to meeting legislative requirements)
• cost of the activity through other arrangements, including tolling and partnerships.

As a rule, Waka Kotahi will not fund depreciation, interest costs or any other financial servicing costs of capital projects, directly or indirectly, unless by specific agreement. In any event, we will not meet such costs when we fund the direct capital cost of the project from the NLTF on  a pay-go basis.

Waka Kotahi will only provide funding assistance for the cost of insuring or hedging against inflation, damage or disruption to transport activities, operations or facilities when it considers that it is most likely that the long-term costs to the NLTF will be reduced.  Waka Kotahi will not also directly fund remedies or costs arising from events covered by hedging or insurance.

Where debt funding is employed, whether through a loan arrangement or a PPP procurement arrangement, Waka Kotahi expects that the debt will be managed within an identified, approved risk framework specific to the activity being procured. Management will include continuous monitoring and regular reporting of the identified risks, including interest rate risk, to the Waka Kotahi Board.

Public ownership

Property and infrastructure for which funding has been provided from the NLTF will be in public ownership and available to land transport network users who have paid for its access and use through their contributions to NLTF revenue.

Waka Kotahi will consider funding of infrastructure not in public ownership for transport purposes but will do so only on condition that the use of the facility for transport purposes will endure and that the Waka Kotahi right to compensation, should the purpose or ownership of the facility change, is protected.

Compensation

Waka Kotahi must receive compensation for property and infrastructure it has funded from the NLTF if the purpose or ownership changes. The compensation that the Agency receives will be in the same proportion of the current value of the property and infrastructure as its contribution was to the total funding of the property and infrastructure when procured.

Waka Kotahi may waive its right to compensation in the event that ownership changes but the purpose and use of the property and infrastructure remains intact. Waka Kotahi expects that the provision of service through use of the facility would continue to be delivered at a similar cost to that prior to the change in ownership.

Tailored engagement

Waka Kotahi will tailor its level of engagement and monitoring of approved organisations and the Waka Kotahi (state highways) based on its assessment of its investment risk.

In practice, Waka Kotahi will not involve itself at an individual activity level where activities are low risk and low cost and where Waka Kotahi has assessed that approved organisations and Waka Kotahi (state highways) have the capability to deliver their programmes effectively.  In such cases, Waka Kotahi will delegate the management of programmes of low risk and cost activities with as few compliance requirements as possible.

Apportioning of risk

The Waka Kotahi  Procurement manual requires that all risks should be appropriately apportioned to the party (contractors, approved organisations and Waka Kotahi) best able to manage it.  

Unless otherwise agreed at the time of funding approval, the Waka Kotahi acceptance of project risks will be in the same proportion as the Waka Kotahi contribution to total funding of the project from all funding sources.

Delegated authority

Waka Kotahi has delegated authority to its partners to make investment decisions for specified programmes within set funding allocations. These delegations will continue and may increase, where our investment partners demonstrate the capability to manage delegations prudently.

The Waka Kotahi expectations of those exercising delegations is set out in this Knowledge Base.

Waka Kotahi requires its investment partners to take full accountability for all decisions and actions made under delegation. Investment partners should apply The Waka Kotahi Investment Assessment Framework to achieve desired outcomes and the best value for money. Waka Kotahi reviews a sample of investment decisions made under delegation and expects that its investment partners will also monitor and report their performance under delegation.

Readiness

As a rule, activities are only approved for funding when they are ready to start.  Waka Kotahi considers the type of activity (or combination of activities) when ascertaining readiness for funding approval. For instance, it will consider that:

• the construction/implementation phase of an improvement project is ready when all previous phases have been completed, all planning approvals are in place and there is a commitment from the activity owner to start the phase within three months of funding approval

• a programme of routine, low risk activities is ready when the Agency considers that it is backed by robust activity management planning and that the National Land Transport Programme negotiations between the programme owner and Waka Kotahi are concluded.

No retrospective funding

Waka Kotahi does not provide funding assistance retrospectively, unless by prior agreement. Any organisation that commits or commences a new activity prior to Waka Kotahi funding approval or specific agreement, or commits expenditure on an activity in excess of the funding approval, does so at its own risk. Exceptions to this are:

• activities within a delegated allocation where Waka Kotahi approval permits adjustment of funding to activities within the total allocation and where over-expenditure on some activities can be offset by under-expenditure on other activities

• fees for the investigation and design phases of small improvement projects, which may be claimed if/when the construction/ implementation phase of the project is approved.

Payment on delivery

Payment will only be made when the completed portions of approved activities have been delivered as specified in the funding approval. Exceptions to this policy must be individually agreed between Waka Kotahi and the investment partner.

Waka Kotahi expects to pay claims on an accrual basis, ie submitted on evidence of work completed without requiring a supplier invoice.

Breaches

Waka Kotahi may reduce, refuse or withhold payment for any approved activity if it considers that (in relation to an approved activity) an approved organisation or person:

• is in breach of a procurement procedure
• has been or is or will be likely to be in breach of any other provision of the LTMA relating to payments from a land transport disbursement account
• has already constructed or undertaken the activity
• is proposing to construct or undertake the activity to standards that are excessively high or unsatisfactory.

If Waka Kotahi makes any payment for an approved activity that is based on information that is subsequently found to be erroneous or inaccurate, the payment is recoverable in any court of competent jurisdiction as a debt due to Waka Kotahi.

Introduction

Waka Kotahi plans and invests in transport programmes and solutions that support the achievement of a safe land transport system that is free of death and serious injury.

Implementing the Safer Journeys strategy  

Waka Kotahi will invest in activities aligned with the government’s Safer Journeys Strategy(external link) priorities. Waka Kotahi will take a leadership role in the implementation of the strategy and will work with its partners (approved organisations, Accident Compensation Corporation, NZ Police and the Ministry of Transport) to address the government’s Safer Journeys high priorities of:

• reducing alcohol/drug impaired driving
• increasing the safety of young drivers
• safe roads and roadsides
• safe speeds
• increasing the safety of motorcycling.

Road safety is a priority

Safety is an important issue for all providers, managers and users of the whole land transport system.

The Waka Kotahi Investment Assessment Framework places an emphasis on road safety through the criteria used to assign a medium, high or very high results alignment.

Focus on road safety - the safe system approach

Road safety is considered an integral part of all land use planning and network optimisation activities and the safe system approach should be embedded into core business functions. The four guiding principles of the safe system approach are:

• people make mistakes and crashes are inevitable
• the human body has limited ability to withstand crash forces
• system designers and system users must share responsibility for managing crash forces to a level that does not result in death or serious injury
• it will take a whole of system approach to implement the safe system in New Zealand.

The safe system approach requires the designers, managers and operators of the land transport system to consider:

• safe roads and roadsides that are predictable, promote safe behaviour and are forgiving of human error
• safe speeds that suit the function and level of safety of the road, the skill of the driver and the safety of the vehicle
• safe vehicles that incorporate emerging collision avoidance technologies and modern warning systems, and are well maintained to help prevent crashes and protect road users from crash forces
• safe use by having drivers, motorcyclists, cyclists and pedestrians who are skilled and competent, proactive in managing hazards, predictable, alert, unimpaired, compliant and make safe choices. 

Waka Kotahi expects that applications for funding of roads safety activities will be focused on effective safety interventions from a safe system perspective, while achieving best value for money.

Evaluating the value of road safety interventions

Waka Kotahi expects that its investment partners (approved organisations and NZ Police) and Waka Kotahi will evaluate the expected benefits to road safety of their planned interventions, investments and actions and will monitor actual benefits achieved.

Introduction

Waka Kotahi aims to make land transport investments that improve community wellbeing overall and where possible, avoid, reduce or minimise adverse impacts from land transport on public health and the environment.

Working in a socially and environmentally responsible manner 

Waka Kotahi will work with its investment partners to plan and invest in land transport solutions that improve linkages and transport mode choices, improve energy efficiency and help to reduce New Zealand’s greenhouse gas emissions.  

Waka Kotahi expects approved organisations and Waka Kotahi (state highways) to manage resources effectively and efficiently, and to take into account resource limitations, life cycle costs and the benefits of using energy efficiently.    

Protecting and enhancing the natural, cultural and built environment

Urban design elements should be incorporated into urban transport strategies at the outset, to address urban design in an efficient and cost effective manner. Achieving robust and effective urban design outcomes requires Waka Kotahi, approved organisations and other agencies and communities to work in planning, development, delivery and funding partnership.

As a signatory to the New Zealand Urban Design Protocol(external link), Waka Kotahi plans and designs state highways in a way that supports good urban design(external link) and value for money. In particular, Waka Kotahi aims to:

• Ensure state highways contribute to vibrant, attractive and safe urban and rural areas
• Achieve integration between state highways, local roads, public transport, and cycling and walking networks and the land uses they serve.

Managing environmental and social impacts.

Waka Kotahi expects approved organisations and Waka Kotahi (state highways) to consider environmental issues (constraints and opportunities) in network planning, design and maintenance. Public engagement may be required to identify and understand those issues. Approved organisations and Waka Kotahi (state highways) must ensure that environmental issues are not considered in isolation but alongside other priorities and outcomes, eg value for money. 

Waka Kotahi (state highways) will determine the need for, and scope of, public engagement depending on the potential social, environmental and economic impacts of the decision to be made, the level of public interest, previous engagement, any statutory requirements and the extent to which public engagement is likely to influence the decision.

Mitigation of adverse environmental effects from land transport

Waka Kotahi recognises that the provision and operation of the land transport network can result in adverse environmental effects. Waka Kotahi expects approved organisations and Waka Kotahi (state highways) to avoid these effects to the extent reasonable.  However, where there are adverse environmental effects that cannot be reasonably avoided, they may be mitigated by low-impact and, preferably, multi-purpose measures. Statutory compliance is the minimum requirement.

In its role as state highway provider and manager, Waka Kotahi has developed best practice approaches and implementation plans to address environmental and social impacts(external link). These resources should be utilised by all approved organisations and Waka Kotahi (state highways).

Taking appropriate account of the principles of the Treaty of Waitangi

Waka Kotahi recognises the special relationship of Mäori and their culture and traditions with their ancestral lands, water, sites, waahi tapu and other taonga. Waka Kotahi will continue to work with Mäori to build effective working relationships with iwi and hapu.

Introduction

The Waka Kotahi primary investment focus is on activities that benefit the land transport system users who provide the revenue into the National Land Transport Fund (NLTF).

The beneficiaries of the fully hypothecated NLTF  

The primary contributors to the NLTF are road users, who pay fuel excise duty on petrol, road user c harges (RUC) for diesel vehicles and motor vehicle registration fees. In general, this group will be the primary beneficiaries of investment made using funds from the NLTF.

Waka Kotahi may invest in transport related activities that are not related to the roading network, where these benefit road users, eg reducing peak traffic congestion by investing in public transport. Any such funding contribution will be in proportion to the benefits that accrue to road users.

Waka Kotahi may allocate funding to address adverse impacts of proposed improvements to, or material changes in, the transport network, eg noise barriers to mitigate the adverse impacts of a new arterial road. Refer to guidance on environmental and social responsibility.

Sharing the benefits and costs

Waka Kotahi expects that approved organisations and third parties will fund transport activities in proportion to the benefits they receive.

Funding assistance  

Waka Kotahi will contribute to approved organisations’ eligible transport activities in accordance with its funding assistance rate (FAR) policy and its assessment of value for money. Funding assistance to approved organisations will be provided:

• at a FAR set under Waka Kotahi FAR policy, or
• as an amount that reflects Waka Kotahi consideration of value for money from its investment in an activity and its assessment of the level of supplementary funding available or potentially available for an activity.

Any approved organisation that does not receive funding from Waka Kotahi may invest in its own right in transport services and/or infrastructure to the level of service that local communities want and are prepared to fund themselves.     

Supplementary (third party) funding

In developing their activities, approved organisations and Waka Kotahi (state highways) must consider whether a third party will, or has the potential to, benefit from the activities. If so, then they should assess the potential for supplementary funding and actively seek such funding where applicable. Supplementary funding should be sought where a third party:

• benefits from a change in scope or timing of a project, or
• beneficiary or user of an activity, service or transport facility proposed to be funded by Waka Kotahi pays, or has the potential to pay, fees, fares, rent or any other payment for their benefit or use.

Waka Kotahi and the approved organisation will share any funding and/or any cost reduction arising from a third party, relative to their respective shares of the residual funding required for the activity.

Betterment

Waka Kotahi expects territorial authorities to apply Section 326 of the Local Government Act 1974(external link). This requires territorial authorities, under certain circumstances, to collect betterment from landowners receiving value from improvement works.

The proceeds of betterment shall be apportioned between Waka Kotahi and the approved organisation at the same rate of funding assistance for the improvement work. Any betterment will be applied as supplementary funding against the cost of the road improvement work.

Introduction

The scrutiny principle is the principle set out in section 96 of the Land Transport Management Act 2003. This provides that when making decisions in respect of land transport and planning and funding under subpart 1 of part 2 of the LTMA, Waka Kotahi must give the same level of scrutiny to its own proposed activities and combinations of activities as it would give to those proposed by approved organisations.

When was the scrutiny principle implemented?

The principle is a provision in the LTMA and was inserted as a result of the Land Transport Management Amendment Act 2008, which came into force on 1 August 2008. (The amendment act also provided for the effective merger of Land Transport New Zealand and Transit New Zealand and creation of Waka Kotahi).

What decisions does the scrutiny principle apply to?

The scrutiny principle applies to funding and planning decisions under subpart 1 of part 2 of the LTMA. Broadly, those decisions fall into three areas:

The National Land Transport Programme (NLTP)

Decisions:

• whether or not to vary the NLTP based on a variation to a Regional Land Transport Programme (RLTP)
• connected with the preparation and adoption of an NLTP, applying the core requirements and content specified in sections 19B and 19C of the LTMA
• not to include an activity or combination of activities in the NLTP
• to include an activity or combination of activities but at a different level of priority than that accorded in the RLTP
• whether or not to vary the NLTP if an RLTP is varied, or at its own instigation
• whether or not to vary the NLTP if a current government policy statement on land transport funding (GPS) is amended in order to give effect to that amendment.

Funding of activities

Decisions:

• whether or not to approve activities for funding from the National Land Transport Fund (and in doing so satisfying itself, taking into account, and considering the matters in sections 20(2)(3) and (4) as applicable)
• about the method of assessment to be used to determine whether a particular activity or combination of activities qualifies for funding
• whether or not to impose any terms and/or conditions on a funding approval and the nature of those terms and/or conditions
• about the rate of funding assistance to be set for different activities and combinations of activities
• whether or not to withhold any information as permitted by the LTMA when providing decisions and reasons to affected approved organisations for approving or declining funding
• whether or not to approve activities relating to Māori roadways for funding as if they were state highways or local roads, as applicable.

Procurement (purchasing) of goods and services

Decisions:

• whether or not to approve a procurement procedure for a specific activity or combination of activities
• whether or not to exempt particular payments from the need for a procurement procedure.

What does Waka Kotahi do to take the scrutiny principle into account when making relevant decisions?

We will apply the scrutiny principle where required to all decisions related to any of our own activities. We will apply the level of scrutiny that we would expect to apply if that activity was an activity of an approved organisation.

In making decisions, Waka Kotahi will:

• follow similar processes for similar types of activities (for example, the processes set out in this Planning and Investment Knowledge Base(external link))
• apply equivalent evaluation criteria (eg in assessing urgency, effectiveness and efficiency)
• require an equivalent level of information to support an application
• apply the same level of rigour to the analysis of that information
• apply the same level of tolerance to cost estimate rigour and potential cost overruns
• have people of equivalent seniority and experience involved in the assessment and decision-making process for comparable Waka Kotahi/approved organisation activities.

Where can I find the systems and procedures Waka Kotahi uses when making relevant decisions?

We have systems and procedures in place to apply the scrutiny principle when making certain planning and funding decisions. Those systems and procedures are contained in the following manuals:

• the Waka Kotahi Procurement manual(external link)
• this Planning and Investment Knowledge Base(external link)

Where can I find a decision made by Waka Kotahi that is subject to the scrutiny principle?

You can read the investment decisions made by our board and delegated decisions made by Waka Kotahi staff on our website:

Read the funding decisions made by the Waka Kotahi Board
Read the delegated funding decisions made by Waka Kotahi staff 

Some NLTP and procurement decisions, unlike funding decisions which have a statutory requirement to be published on our website, may not be published. However, you may make a request to us under the Official Information Act 1982 for a copy of any such decision. There are a large number of funding and planning decisions made every month, so please provide as much detail as possible to help us to locate the decision.

How can I find out more about the scrutiny principle?

If you have any further questions about the scrutiny principle please email info@nzta.govt.nz.