Transfund New Zealand corporate profile

 

The setting up of Transfund New Zealand in 1996 was intended to ensure that land transport funding would be determined entirely on a rational economic basis, without the board and entity granting and auditing funding, also benefiting from the funding decisions that it would make.  This leaflet was intended to explain how Transfund would operate.

The introduction explains basically how the system would work. The establishment of Transfund also included creation of a fully hypothecated National Roads Fund, which received all revenue from Road User Charges and Motor Vehicle Registration fees, and at the time, part of Fuel Excise Duty (in 2008 all of Fuel Excise Duty). The clear objective was to separate funding from delivery of road and passenger transport services.

Introduction and Operational Environment

A key element of the reforms was establishment of the National Roads Fund to provide security of revenue to pay for maintenance and make commitments for new capital works. Before the establishment of Transfund, the annual National Land Transport Programme was only guaranteed 97% of the previous year's funding, and would have to convince the Ministers of Transport and Finance of the need for any additional budget (with revenue from road users not being statutorily hypothecated). 

A key benefit being that as demand increased (due to increased VKT or fuel consumption), that revenue would flow directly to Transfund, meaning there was a broad proxy between road maintenance and revenue to fund it.

Transfund's core responsibilities were listed as follows:

• Approve and purchase an annual National Roading Programme (NRP) - note Transfund was seen as a "purchaser" of road maintenance and construction, and public transport services on behalf of road users
• Approve outputs and capital projects for payment from the NRP - meaning the funding for specific projects. Just because a project is in the programme does not necessarily mean it is guaranteed funding
• Make payments from the National Roads Account (to entities that receive funds)
• Review and revise the NRP in accordance with its most recent performance agreement with the Minister - (which was the extent to which there was some political direction)
• Approve competitive pricing procedures (for competitive tendering)
• Audit Transit New Zealand's performance compared to its state highway programme
• Audit local authority performance compared to their district roading or regional programmes
• Assist and advise local authorities in relation to their functions and duties
• Provide the Minister of Transport with information and relevant advice
• Carry out other functions as defined by the Minister

The board composition of five members included two from Transit New Zealand (a provision later removed, because of concern it would perpetuate conflicts of interest), one from local government, one from road users and one for the "public interest". 

Another key change was that the National Roading Programme no longer required Ministerial approval. Output classes were defined as:

• Road maintenance
• Improvement and replacement of Local Roads
• Improvement and replacement of State Highways
• Efficient Alternatives to Roading
• Passenger Transport Social Services
• Contract Management
• Audit services
• Advisory services

Project Evaluation is described as projects having potential to reduce accidents, travel times and vehicle operating costs.  Costs are measured both in financial terms and any disruptive social and environmental consequences. It noted that over the next two years the funding threshold would drop from 5 to 4.5 and then 4:1 under Benefit/Cost Ratios, reflecting the Government's belief in greater efficiency with additional spending (and also reflecting how growth in revenue was expected to enable more spending on land transport).

Alternatives to Roading was a specific provision designed to make explicit the funding of projects or activities that generate benefits to road users through alternative modes. Examples include subsidising rail or sea based transport to relieve roads that are vulnerable to damage or which cannot handle larger trucks. Passenger transport subsidies that reduce congestion or defer the need for additional road capacity were also to be justified under this category.  The key limitation was that very few projects would meet a BCR of 4:1 under this category, besides the continued subsidies for existing passenger transport services. 

The Review and Audit function was designed to ensure projects were managed cost effectively and met standards set by Transfund, it also included safety auditing of projects.

Transfund was subsequently merged with the Land Transport Safety Authority in 2004 to form Land Transport New Zealand. It was subsequently merged with Transit New Zealand in 2008 to form the New Zealand Transport Agency, also known as Waka Kotahi. 

Core responsibilities

Structure and National office divisions

National Roading Programme and Project Evaluation

Alternatives to roading, review and audit

In Transit - October 1995 - Manawatu Gorge reopening

 

New Chairman for Transit New Zealand

Re-opening of Manawatu Gorge following slips

Reopening of Manawatu Gorge, RAAM review, upgrade of Rimutaka Hill and mass and dimensions review

Paremata-Pukerua Bay upgrade and SH57 Potts Hill Bypass opens

This edition of InTransit reports on the following:

• Appointment of the second chair in Transit New Zealand's history (since established in 1989)
• Cosmetic upgrades to parts of Auckland's motorway network in advance of the CHOGM meeting
• $2m spent to repair major slips in SH3 Manawatu Gorge and improve its resilience (Manawatu Gorge road was ultimately closed permanently in 2017 due to instability)
• Review of the Roading Assessment Maintenance Management (RAMM) programme
• Over $1m to be spent on SH2 Rimutaka Hill Road to address the tightest corners, extend passing lanes and shoulders
• Paper presented on heavy vehicle weights and dimensions
• Approval given to upgrade SH1 between Paremata and Pukerua Bay, including duplication of Paremata Bridge, Clearways on Mana Esplanade, 4-laning from Mana through Plimmerton to Pukerua Bay with median barrier on the rural section (subsequently all built), at a cost of $18m
• Opening of SH57 Potts Hill Bypass between Levin and Shannon
• Noting that the National Land Transport Programme will become the National Roading Programme when Transfund is formed in 1996.

Of some note is the decision by Transit NZ to progress upgrades to SH1 from Paremata to Pukerua Bay despite considerable local opposition.  The upgrades had high benefit/cost ratios which justified them being progressed although it was accepted that Transmission Gully was the long term solution, it was not seen as being able to be funded for around 15 years (which would prove to be about correct).   Transit also pursued a bypass of Pukerua Bay which was to have been built within 10 years, but ultimately did not proceed as a strategic decision to progress with Transmission Gully had been made.

The three stages of the Wellington Inner City Bypass towards Tunnellink

 

Tunnellinkage June 1992

Tunnellinkage June 1992

Wellington Inner City Bypass Programme

History of Wellington Inner City Bypass

The origins of Wellington's urban go back to 1963 when following a report by US consultants De Leuw Cather, it was decided that what was then called the "Foothills Motorway" would be built from Ngauranga to Mt Victoria Tunnel following the foot of Tinakori and Kelburn hills. De Leuw Cather recommended it over a waterfront motorway which would have run along the wharves with ramps connecting to the quays, but it also recommended an underground rail extension to Courtenay Place.  The waterfront motorway concept was quickly abandoned, and the underground rail extension left to the Railways Department to abandon due to cost.

The motorway would bypass the intersections on the busy Hutt Road from Ngauranga south, and take traffic away from the waterfront to bypass the city towards the southern and eastern suburbs.  The motorway was built almost entirely in full as far as Bowen Street, but budgetary constraints saw it curtailed at Willis Street in 1978, with only one of the proposed two Terrace Tunnels built, and with no connection to Ngauranga Gorge. However, the land necessary for the motorway was designated and progressively acquired in the following decades.

With the Ngauranga Interchange opened in 1984, traffic at the end of the motorway at Ghuznee Street started to become a problem, as it now carried both the SH2 and SH1 traffic into Wellington (previously SH1 was the Hutt Road south of Ngauranga to Aotea Quay and then the Quays as far as Taranaki Street.  However funding was not available to complete the motorway (by then scaled down to a grade-separated arterial extension with a 70km/h design speed) throughout the 1980s.  The reforms of 1989 which saw Transit New Zealand set up as a separate state highway manager and land transport funding agency (replacing the National Roads Board and Urban Transport Council) saw revival in interest in progressing the work, but the 1980 design which included severing Cuba Street and an elevated route over Taranaki Street fell out of favour due to concern over aesthetics, noise and severance, which resulted in a cut-and-cover trenched tunnel being the preferred solution by 1992.  This was known as Tunnellink as it was designed to link the Terrace Tunnel and Mt Victoria Tunnel (without duplicating either, as that was not seen as necessary at the time).

Above is one of the newsletters issued by Transit New Zealand about Tunnellink which clearly depicts the route, and the street hierarchy for central Wellington. It also describes clearly how Wellington City Council at the time integrated the proposal into its transport strategy.  At the time it was not clear that Tunnellink would be entirely a state highway project, as SH1 terminated at Willis Street and did not continue to the airport, but that would be changed in the 1995 State Highway Review whereby Transit New Zealand included connections to airports as being of national importance (as seen by the designation of George Bolt Memorial Drive in Auckland as SH20A after the Mangere motorway extension was completed). 

The newsletter clearly shows how Tunnellink was seen was part of a wider transport strategy that was about removing traffic from inner city streets, containing growth of the central city within the boundaries of Tunnellink and the arterial routes along the waterfront, enhancing the "Golden Mile" and integrating the waterfront with the city. It was also seen as critical in enabling improved access for public transport, cyclists and pedestrians. Parking in the inner city was to be constrained, with public transport priority given and even consideration of converting the Johnsonville rail line to a guided busway (subsequently abandoned in favour of lowering the height of the railway tunnels to enable use by new rolling stock).  Integrated ticketing was also part of the strategy, along with footpath widening and cycleways.  It may be worth recalling in 2023 how much thinking in the 1990s was not out of alignment with current trends.

However, funding for road capital spending was severely constrained in the early-mid 1990s and there was little sign that it would be expanded sufficiently or quickly enough to enable Tunnellink to be funded, so in 1995 it was decided to make the Wellington Inner City Bypass (as it had been renamed) coined as a three stage project to achieve short, medium and long-term improvements.

The second leaflet summarises those stages:

1. Convert Buckle Street westbound and Vivian Street (east of Taranaki Street) eastbound into a one-way pair, to relieve Buckle Street and remove the dangerous chicane of access from Buckle Street across to Dufferin Street. 
2. Build a new one-way road adjacent from Taranaki Street, using part of Arthur Street across Cuba, Victoria and Willis Streets to a new motorway on-ramp, and converting all of Vivian Street into a new eastbound one-way street as the end of the motorway, severing the Ghuznee Street offramp
3. Tunnellink

Stage 1 was meant to provide quick temporary relief whilst Stage 2 was progressed and underway. Stage 2 was forecast in 1995 to be adequate for ten-years, by which time it was seen likely to be able to fund Tunnellink.  

In actuality, Stage 2 took much longer as opposition to the project became a cause celebre for some residents in Te Aro, and the Green Party, and it was not until 2007 that Stage 2 was completed, following legal delays and efforts by the Green Party and opponents to get the Government of the day to stop the project altogether.

As Stage 2 was being progressed, Transit New Zealand quietly ceased further efforts to progress Stage 3, as it was seen as too onerous, so focus changed.  An unrelated project to build a new National War Memorial saw part of the route placed in a cut-and-cover tunnel parallel to Buckle Street (under Tory Street) but with sufficient width to connect to a bridge from Mt Victoria Tunnel.  That bridge itself became controversial with Mt. Victoria residents (the bridge designed to relieve congestion at the Basin Reserve westbound) and was shelved in favour of a wider study of SH1 from Ngauranga to the Airport.  That was subsequently expanded in scope to be a wider central Wellington strategic transport project, which is the genesis for what is now called Let's Get Wellington Moving!

Momentum - Works Consultancy client magazine January/February 1996

The document muncher

As you can see the below magazine I was planning to scan has signs of teeth, in that the miniature dachshund above has chewed at it.  It's my fault for leaving it on the ground of course! So apologies if all the content is not clear!

Claudelands Bridge

Wellington Inner City Bypass

Wellington Inner City Bypass

Whangamoa Saddle

In 1996 the former Ministry of Works had been corporatised some years beforehand into an entity commonly called WorksCorp, but was officially the Works and Development Services Corporation.  This edition of its magazine I have selectively scanned for the articles on roads, but the first page (which was the last) also refers to its imminent privatisation.  It was sold as a going concern that year and became part of Opus Group. 

The articles in this edition include:

• Strengthening of the Claudelands Bridge in Hamilton City (which was originally the railway bridge for the East Coast Main Trunk Railway)
• Planning for the Stage 2 of the Wellington Inner City Bypass (later known as Karo Drive)
• Construction of the Whangamoa deviation on SH6 in Marlborough

In Transit - September 1995 - Auckland Airport eastern access

 

In Transit September 1995 No. 67

Images of Auckland Airport eastern access bridge

Review of winter road closures, launch of state highway review

Quality Assurance in road markings

Stock effluent, London visitors discuss accessible transport

Black spot safety audits reduce crashes

This edition of In Transit highlights the Auckland Airport eastern access route which was under construction at the time (now SH20B).  The entire route cost $17m at the time and was due to finish in March 1996. The other most notable point was the benefits of black spot safety audits in reducing crashes, noting 2700 crashes had been prevented since 1985, as 61% of black spots identified had been upgraded with low cost solutions such as improved road markings, signs and lighting.

Other points in this edition are:

• Review of the winter road closure policy for state highways
• Launch of the State Highway Review (which reviewed which roads should become state highways and which should be cancelled as state highways)
• Quality Assurance in road markings
• First stock effluent disposal facilities trialled on two state highways
• Visit by British accessible transport experts
• Decision to construct slow vehicle lanes on both sides of SH29 Kaimai Ranges
• Discussion of a private proposal to build the Te Puke Bypass, upgrade Pyes Pa Road and Route J. Ultimately Te Puke Bypass would become a state highway toll roads, Pyes Pa Road became a state highway and was upgraded, and Route J funded as part of the National Roads Programme.

Transit New Zealand Project Evaluation System Guide

 

Background - Project Evaluation - Stretching the budget

How the Benefit/Cost Ratio is arrived at. Common questions about CBA

Common questions about CBA continued

Common questions about CBA continued

Common questions about CBA concludes

For the public and the media, the idea that roads and public transport would be funded based on a process of rational comparative analysis of benefits and cost was somewhat unfamiliar, compared with how most other government funding decisions were made. Transit New Zealand (still a funding agency as well as state highway manager) published this guide in July 1995 to help inform those without training in economics.

Some of the more interesting elements are:

• Why Transit NZ believes cost/benefit analysis is the right method of assessment? 
• Brief history of the concept in NZ
• Factors taken into consideration
• How public transport and alternatives to roads are considered
• Allowances for natural disasters
• Specific comment on why it did not fund Auckland's light rail project (a proposal by the Auckland Regional Council to convert the rail network to light rail)
• Does most of the money go to Auckland?

Cost/benefit analysis began to be used in 1982, and became a requirement in 1988, so from 1989 Transit NZ would use cost/benefit analysis for all capital projects. At the time, Transit's view on concerns that many projects were not being funded was simply that there was insufficient funding to fund everything that had positive benefit/cost ratios (the funding threshold was 5 at the time).

Much would happen in subsequent years, within a year Transit New Zealand would no longer have a funding function (which was transferred to Transfund New Zealand), and by 2003 multi-criteria analysis was being applied until in 2008 further reforms saw the merger between Transit New Zealand and Land Transport New Zealand (returning to an integrated state highway manager and land transport funding agency, with regulatory functions) into the New Zealand Transport Agency. That legislative change under the Land Transport Management Amendment Act 2008 saw significantly greater Ministerial direction over the output classes for funding and the weighting given to objectives of land transport funding.

In 2023, Waka Kotahi uses much more complex multi-criteria analysis to assess funding proposals, with benefit/cost ratios being only part of the consideration as to the merits of projects getting funded.  This leaflet harks back to an era with much more limited funds (as the amount of funding granted was determined through the standard budgetary process) and a much tighter level of scrutiny on the use of those funds.

Wellington Urban Motorway extension - Inner City Bypass - Tunnellink

 

Cut and cover tunnel for Wellington Inner City Bypass

With proposals for a second Mt Victoria Tunnel included under Let's Get Wellington Moving and more recently from the National Party's 2023 transport policy, I thought I'd start a series on the Wellington Urban Motorway, which won't be in any specific order, as I have a lot of material on it.  The first article from July 1992, in the former free newspaper "Contact" about the decision by Wellington City Council and Transit New Zealand to play the motorway extension (technically not a motorway but an arterial extension with a 70km/h design speed) into a cut and cover tunnel.  It was previously proposed to go under Willis and Victoria Streets, be at grade across Cuba Street and elevated over Taranaki Street, under Tory Street and Sussex Street. 1.1km of the road would be underground, enabling use of the land above it (although there appears not to have been much calculation of the benefit of doing this).  The proposal also included a "scrubber" to remove noxious particulates and gases from the tunnel exhaust.

The Cut and cover proposal would be coined "Tunnellink" subsequently (to link Terrace and Mt. Victoria Tunnels), but did not include duplicating either of the tunnels, as it was believed there was adequate capacity with those tunnels for some time (and noting that completing the extension would help improve tunnel traffic flow in one direction at least). 

Note the estimated cost in 1992 was only $135m ($281m in 2023 values) which is a far cry from estimates today for a similar project. Note also the depiction of a park in front of the carillon, which reflects that the Arras Tunnel and War Memorial were built around 15 years later than this proposal, but the Arras Tunnel is around the size of more than half of the cut and cover tunnel depicted above.

Financial headaches along the motorway

Financial headaches along the motorway

This second article from the Dominion on September 1993 focuses on the issues with proceeding with the new proposal, including obtaining planning approvals, and also has a short history about the Wellington Urban Motorway.  This included the redesign to be predominantly trenched and then the cut and cover tunnel.  The report also noted that after the extension gets built, a second Terrace Tunnel would be necessary (as the single lane southbound will remain inadequate, and northbound three lanes merge into two). The price for the second Terrace Tunnel was estimated at $63m ($131m in 2023) which also is significantly cheaper than today's construction costs.

Also reported were variations in BCR calculations. A BCR of 20:1 was estimated in 1992, but that had dropped to 2.33:1.  Bear in mind the funding threshold at the time was a threshold of 5:1. Ultimately it was that funding threshold that saw this proposal deferred in favour of the now built Karo Drive "Stage 2" Inner City Bypass. 

Bypass could cut accidents by a third

This final article  from the Evening Post includes a short piece about Wellington City Council backing the extension, but also a report displaying the entire route and claims it would have significant safety benefits by cutting reported accidents by one-third. Noting the design would have retained Ghuznee St as an offramp and Vivian St as an onramp (one way from Taranaki St only), eastbound onramp from Victoria St and offramp westbound, with an eastbound offramp towards Cambridge Tce and another to Dufferin St (for traffic heading towards Adelaide Rd), an onramp from Sussex St westbound (akin to the Arras Tunnel arrangement) and finally eastbound onramp and westbound offramp from Mt Victoria Tunnel. 

National Land Transport Programme 1996 - Auckland regional office

 

NLTP 1996 - Auckland regional information

NLTP 1996 - Auckland/Northland summary allocations

NLTP 1996 - Summary of regional allocation by output class for Auckland

NLTP 1996 - Auckland local road construction funding

NLTP 1996 - Auckland local road safety construction funding

NLTP 1996 - Auckland State highway safety construction

NLTP 1996 - Auckland State highway construction and passenger transport funding

In the final of the NLTP 1996 regional newsletter series, is Auckland, which had by far the greatest funding allocation.  $184 million was allocated for Auckland and Northland. This newsletter mostly focuses on Auckland.  Key Northland projects include completion of the sealing of SH12 through the Waipoua Forest and local road seal extensions.  The output classes with the greatest share of spending were state highways.

Key state highway projects were commitments to complete:

• SH16 North-Western Motorway Rosebank interchange (providing eastbound off and on-ramps at Rosebank Peninsula)
• SH16 North-Western Motorway Western Springs to Newton widening
• SH20 South-Western Motorway extension connecting Mangere Bridge to the Papatoetoe Bypass and Kirkbride Road (to connect to George Bolt Memorial Drive)
• SH1 Southern Motorway widening Papatoetoe-Manukau-Manurewa 6-laning

Largest local road projects were:

• Auckland City's South East Arterial project (now the South Eastern Highway) from Church St to Pakuranga Bridge (a scaled down version of a planned motorway from the SH20 to Pakuranga and along the former south-eastern corridor.
• Completing the sealing of former SH16 (which is now once again SH16) at Cleasby's Hill.

In addition are a number of intersection and local street upgrades to improve capacity and safety.

Notable was funding granted for design of notable major projects:

• Albany-Puhoi extension to Northern Motorway, between Albany and Orewa (subsequently built)
• SH20 Hillsborough Road to Dominion Road extension (subsequently built beyond to Mt Roskill)
• SH1 Victoria Park widening (subsequently did not proceed but was replaced by the Victoria Park Tunnel)
• SH1 High occupancy lane extensions in advance of the Northern Busway (between Esmonde Road and the Auckland Harbour Bridge)
• SH1 Schedewys Hill Bypass (superseded by the Puhoi-Warkworth motorway)
• SH1 Kawakawa Bypass (not yet built)
• SH1 Kamo Bypass (subsequently built)