Those who benefit from transport investment should pay

Introduction

The Transport Agency 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 fund established under section 10 of the LTMA ).

The beneficiaries of the fully hypothecated NLTF The fund established under section 10 of the LTMA  

The primary contributors to the NLTF The fund established under section 10 of the LTMA are road users, who pay Fuel Excise Duty on petrol, Road User Charges(RUC Road user charges in accordance with the Road User Charges Act 1977. ) 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.

The Transport Agency may invest in transport related activities that are not related to the roading network, where these benefit road users, e.g. reducing peak traffic congestion congestion is where the volume to capacity ratio exceeds 80% for 5 days per week over at least a 1 hour time period that affects at least 1.5 km of a route.  For information on the volume to capacity ratio, see Appendix A3 of the NZTA's Economic Evaluation Manual by investing in public transport. Any such funding contribution will be in proportion to the benefits that accrue to road users.

The Transport Agency may allocate funding to address adverse impacts of proposed improvements to, or material changes in, the transport network, e.g. noise barriers to mitigate the adverse impacts of a new arterial road. Refer to guidance on Working in a socially and environmentally responsible manner.

Sharing the benefits and costs

The Transport Agency expects that Approved Organisations and third parties will fund transport activities in proportion to the benefits they receive.

Funding assistance

The Transport Agency will augment Approved Organisations’ transport funding for eligible activities in accordance with its Funding Assistance Rate (FAR The usual contribution in percentage terms, that the NZTA augments funding of an approved organisation, for the delivery of an activity or combination of activities. ) policy and, its assessment of value for money Selecting the right things to do, implementing them in the right way, at the right time and for the right price. . Funding assistance to Approved Organisations will be provided:

• at a Funding Assistance Rate (FAR The usual contribution in percentage terms, that the NZTA augments funding of an approved organisation, for the delivery of an activity or combination of activities. ) set under the Transport Agency’s FAR policy, or
• as a fixed proportion of the cost of the activity dependent on the type of activity irrespective of which Approved Organisation is undertaking the activity, or
• as an amount that reflects the Transport Agency’s consideration of value for money Selecting the right things to do, implementing them in the right way, at the right time and for the right price. from its investment in an activity and its consideration of the level of supplementary funding available or potentially available for an activity.

Any Approved Organisation that does not receive funding from Transport Agency may invest in its own right in transport services and/or infrastructure that local communities want and are prepared to fund themselves.     

Supplementary (third party) funding

In developing their activities, Approved Organisations and the Transport Agency must consider whether a third party will, or has the potential to, benefit from the activity. 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 the Transport Agency pays, or has the potential to pay, fees, fares, rent or any other payment for their benefit or use.

The Transport Agency 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 The increased value of land arising from improved access in terms of s.326 of the Local Government Act.

The Transport Agency expects territorial authorities to apply Section 326 of the Local Government Act 1974. 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 the Transport Agency 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.