Connecting New Zealand

Government transport policy gets back on the rails

17 Aug 2023

New Zealand’s civil contractors welcome the focus on consistency, resilience and maintenance in today's Draft Government Policy Statement on Land Transport 2024/25-2033/34 - but caution there is a long road ahead to resolve historic underfunding and build resilience into the country’s transport network.

Civil Contractors New Zealand Chief Executive Alan Pollard noted similarities in the National Party’s proposed transport policy, and said it was positive to see both major parties proposing consistent forward work programmes, increasing the likelihood planned projects would go ahead without disruption following the 2023 election.

“It’s good to finally see what the government’s transport priorities are after months of waiting. Our decision makers don’t seem to be poles apart, and an increasing focus on priority projects, maintenance and resilience is encouraging, given recent severe weather events.”

Mr Pollard said many of the priority projects proposed were sorely needed. Contractors were likely to support the Policy Statement’s strategic priorities, which focussed on maintenance, resilience, safety, emissions reduction, urban development and integrated freight.

A significant increase in maintenance funding would keep the country’s transport network in a safe condition for road users and help resolve the degradation in pavements that had led to a plague of potholes over the past decade.

Maintenance investment was also a great way to provide certainty and retain capacity and capability in the industry, and consistent investment in rail would mean a growing industry of skilled constructors that were well-prepared to service rail projects.

Renewed focus on value for money innovation and best practice was laudable, but Mr Pollard noted this should focus on the best ‘fit for purpose’ solutions. The procurement process needed to be clear that lowest cost doesn’t equal best long-term solution.

Greater emphasis on partnership and collaboration with the people and companies constructing and maintaining the transport network was needed for the ‘best value’ approach to be successful.

“Many of the issues we are experiencing at present result not just from underinvestment, but also from cases where the project price at tender time has been kept artificially low. That approach may be cheaper in the short-term, but it rarely yields the best long-term result.”

Mr Pollard said there was also a looming issue around long-term funding as the revenue from the National Land Transport Fund was projected to decrease, putting an increasing amount of pressure on short-term funding packages rather than creating a workable user-pays system, or enabling investment from external infrastructure funds.

The fall in income from road user charges and petrol tax were likely to continue over the coming decade, and this demonstrated the need for a long-term vision to sustainably fund improvement and maintenance of the country’s transport networks in different ways, rather than relying on bigger and bigger crown loans and national debt to prop up the programme.

Mr Pollard said he was disappointed no consideration had been given to private funding, which could bring projects forward and take the pressure off already strained government finances. He was also disappointed to see escalations to fuel taxes, and that the free ride for electric vehicles would continue – neither of which would fully fund the work required.

“We know long term underfunding has pushed roads past their design life. We know more investment is needed for resilience and recovery. We also know the current funding system needs to change to be capable of resolving these issues.

“We must do more to resolve the ever-shrinking funding pool available. We know there is a massive amount of work to do, not only to rebuild after disasters, but simply to restore the network condition. Let’s stop kicking the funding can down the road.”




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