Sectoral Analysis

This section provides a description of the background and history, assets, institutional arrangements, funding and pricing, and planning undertaken for each sector covered in this Plan as well as an analysis of the sector.

The sectors included are the economic or network infrastructure sectors: transport (roads, rail, ports and airports); energy (electricity and gas); telecommunications, and water (drinking water, waste water and storm water, and rural water infrastructure); as well as the main social sectors where asset management is particularly important: education, health and corrections.

Roads

Description

Background and history

New Zealand's road network has been developed by both the public and private sectors. Ownership and management of roading assets is the responsibility of the Crown (in the case of state highways) and local councils (in the case of local roads). Transit New Zealand was established in 1989 to take over the operational management of state highways from the Ministry of Works and Development (which was funded and guided by the National Roads Board). Funding for Transit came from nationally set user charges[50] less an amount of petrol excise duty, which was retained for the Crown account. The funding arm of Transit was operationally separated in 1996 to form Transfund. Transfund and the Land Transport Safety Authority combined in 2004 to form Land Transport New Zealand. In 2008, Land Transport New Zealand and Transit merged to form the New Zealand Transport Agency (NZTA). Full ‘hypothecation' was introduced in 2008. This means that user charges are fully dedicated to the National Land Transport Fund (NLTF).[51] Management of the local road network has always been considered a core function of councils and the funding for this work comes from a mixture of rating revenue and funding from the NLTF.

The road network enables the movement of freight and people throughout the country. There appears to be a minor trend towards specialisation of the road network, with dedicated infrastructure provided for certain users, primarily cyclists and buses. However, in most instances, roads are multi-purpose in that they can be used by trucks, buses, cars, motorbikes, and cyclists.

Investment[52] in the sector has increased considerably in recent years as it became apparent that New Zealand was under-investing in transport infrastructure. In the late 1990s, the amount of funding available for transport meant that only projects with benefits four times greater than their costs were funded. In 2008/09, forecast central government expenditure on roads (including public transport) was 1.4% of GDP. By comparison, investment in 1999/2000 was only 1% of GDP.

Assets

New Zealand has 90,783 kilometres of roads, of which 10,894 kilometres are state highways and 79,889 kilometres are local roads.[53] As at 30 June 2008, 61,504 kilometres of the network were sealed, with 98.8% of the unsealed roads being rural and special purpose local roads.

Source: New Zealand Transport Agency, 2009.[54]