Transfund News - November 1996 - No.3 - Working with local authorities and Alternatives to Roading

 The third edition of Transfund News in 1996 had no major focus, but included articles as follows:

• Additional funding for territorial authorities to meet the costs of former State Highways that would be redesignated as local roads by Transit New Zealand under the latter's state highway review. The purpose being so that territorial authorities are able to more gradually absorb the local share of costs of roads that are no longer state highways, through other funding sources notably rates increases.
• Development of Partnership Agreements between Transfund and road controlling authorities and regional councils, to formalise the funding arrangements between them.
• Competition for construction contracts has been strong, with an average of 4.1 responses for each contract put out for tender by Transit NZ and territorial authorities for road physical works. It was noted that the Competitive Pricing Procedures in 1995 had resulted in a 10-15% reduction in state highway maintenance and construction costs.  Competitive tendering would continue to be rolled out so that by 1998 all minor and ancillary work would be put out to tender.
• Local Authority Trading Enterprises (LATEs) won one in six local road physical works contracts in the first six months of 1996.  LATEs (now known as commercial Council Controlled Organisations) were the former local authority works departments that were required to be restructured into trading enterprises for local authorities to be able to receive central government funding for road works (this was intended to ensure a level-playing field between council and private contractors).  At the time, Manukau City, Waitomo District, New Plymouth District, Hastings District, Central Hawke's Bay District, Dunedin City and Clutha Districts had LATEs that won such contracts. 
• Transfund released a discussion document called "Financial Assistance for Alternatives to Roading". It was split into public transport and freight ATRs. The purpose was to recognise that in the absence of road pricing, the land transport system would not be efficient if it only funded roads, if there was infrastructure or services that could be funded to make up the difference between user contribution and the net benefit of the project.  Two key constraints for ATR funding were significant. One was that funding was only available for projects that met the same benefit/cost ratio threshold as road projects that were being funded (in 1996 that was 4.5/1), another was that benefits were primarily benefits to road users as they were the ones paying for the project.
• Concern about unsafe objects located around road networks, which Transfund can only provide guidelines and recommendations about.

Transfund News November 1996 No. 3 p1

Transfund News November 1996 No. 3 p2

Transfund News November 1996 No. 3 pg3

Transfund News November 1996 No. 3 pg4

Transfund News - September 1996 - No. 2 - focus on new funding procedures

The second edition of Transfund News followed its first National Roading Programme and contained the following articles:

• Release of Transfund's first Programme and Funding Manual listing all output classes, work categories and policy changes from when Transit NZ was the funding agency.  Key elements included incorporating safety fully into the capital works outputs, and for road maintenance to be  single output class across state highways and local roads. 
• Launch of Transfund. Chairman Michael Gross noted that it "removed any potential conflict of interest" in funding.  It also included a dedicated roading fund (as it meant RUC and a portion of fuel excise duty would be hypothecated, and not reliant on the usual annual Budget process) for the first time, providing security of funding for capital and maintenance funding. Also noted was the ability to fund "efficient alternatives to roading". 
• Removal of First Year Rate of Return as a funding criteria element, as increases in funding no longer rendered it necessary to ration project funding.  This was a measurement of the proportion of benefits a project would generate in its first year, compared to later years, as an additional element to determine whether a project which met the benefit/cost ration threshold had a higher priority for funding over others.
• Contracts will be created between Transfund and Transit NZ, territorial authorities and regional councils for funding granted to them.  This reflects Transfund's role as purchase of services on behalf of road users and the desire to ensure good performance. 
• Strong response to discussion paper on funding "efficient alternatives to roading", with final evaluation procedures to be decided at the end of the year.
• Funding proposal procedures to be tightened.  This followed a report that indicated 34% of projects reviewed had significant shortcomings in their Benefit/Cost Ratio calculations.. Road controlling authorities are to be required to undertake peer reviews of their calculations. 
• New software enables quicker calculation of benefits for projects that reduce accident costs

Transfund News September 1996 No.2 pg1

Transfund News September 1996 No.2 pg2

Transfund News September 1996 No.2 pg3

Transfund News September 1996 No.2 pg4