Image: Civil Contractors New Zealand Chief Executive Alan Pollard interviewing Transport, Infrastructure and RMA Reform Minister Chris Bishop.
Chris Bishop says we need to move away from the rhetoric of needing a bipartisan pipeline because political parties probably agree on 90–99% of the projects in the pipeline.
“Fixing the fundamentals of our system is the single best thing we can do to build a pipeline that endures political cycles,” the Transport, Infrastructure and RMA Reform Minister told delegates at the Civil Contractors Conference in Wellington in August.
Chris says a strong system will make it politically untenable for Ministers to announce unfunded, inadequately planned projects.
“Equally, a strong system should make it absolutely punishing for a new government to stop or pause genuinely good, funded projects that make it through the rigours of the system.”
He says we have been missing “a credible and clear evidence base for the public, the sector, and others to properly hold governments to account for their investment choices”.
There’s also a mismatch between what the Government is spending on land transport and the user revenue the land transport network generates, he says.
Chris announced the Government Policy Statement on Land Transport will be delayed until after the election.
Early next year, there will be public consultation on a draft GPS, which sets out the Government’s land transport strategy, including how much funding it will provide and how the funding will be raised.
Meanwhile, he’s issued a statement for regional transport committees on the Government’s intentions and investment strategy because they’ve already started working on regional land transport plans.
That statement signals the Government is focused on value for money, cost control, maintenance, resilience of the network, productivity-enhancing investments, improving safety, and maximising the use of the existing network, says Chris.
“The GPS will likely include a focus on transit-oriented development – or TOD. This means supporting housing growth through alignment with spatial plans and concentrating development around transit nodes, key corridors, and strategic connections.”
Direct government funding of the National Land Transport programme has grown from three percent in the 2018-21 plan to 39 percent in the 2024-27 plan.
Chris says the system was designed to operate on a “user pays” principle but cost-benefit ratios have fallen from a minimum of 4:1 in the 1990s to 1.2:1 in the 2010s.
“I think we can and should build more four-lane highways. Perhaps just not at their current design, scope or specifications – or not under the current institutional or regulatory settings.
“We can build more. We just need to find a way to do it in a more cost-effective way. I challenge and encourage all of you in this room to help with that.”
Cabinet has agreed to commission an independent review of cost drivers.
“The first step to decrease major transport costs is to get an evidence-based and detailed understanding of why current costs are so expensive in New Zealand relative to other OECD countries and relative to earlier projects in our own country.
“Once we have a better understanding of cost drivers, we can consider actions to reduce premiums where possible, as some may be driven by forces that we can’t control.”
The report is due in the first quarter of 2027.
The Government will also consider other ways of funding the roads, which could include:
- returning to a system where investment is limited to user revenues, with investment and borrowing decisions made at arm’s length from the Government
- establishing economic regulation or other independent oversight
- creating rules or structures that have to prioritise funds for renewals and maintenance
- introducing independent assurance and clear performance standards
- reviewing institutional structure, legislation and funding instruments.
“I remain open to all of these options – and others,” says Chris.
He’s asked the Ministry for Cities, Environment, Regions and Transport to develop more detailed options and a plan for the reform and will report back to Cabinet on the options early next year.
“My overall goal is to create a high-performing land transport system where maintenance and renewals are prioritised, the network is mostly funded from users and beneficiaries, investment aligns with demand, and where major projects are sequenced according to value for money.”
“Waiting a few months to get GPS 2027 right is critical. This document will shape land transport investment for 10 years.”