The Transport Agency is currently undertaking a two-stage review of the EEM. The intent of this review is to retain the basic policy framework of the EEM while incorporating changes that:
- reflect industry best practice
- ensure value for money from land transport investments
- simplify procedures to assist investment partners when they assess the economic efficiency of their proposed land transport investments.
The timing of this review has taken into consideration the planning cycle for the 2015-18 National Land Transport Programme.
- About the EEM review
- Stage one review – what's changed?
- Effective date for stage one changes
- Updated Economic Evaluation Manual
- How else can I find out about, or who should I ask about, the EEM review?
- For more information
About the EEM review
The first stage of the EEM review is now complete. This has resulted in policy changes to the discount rate, evaluation period, default traffic growth and values of travel times across modes, and inclusion of additional wider economic benefits. We have also consolidated the two previous volumes into one comprehensive economic evaluation manual.
The second stage of the review is expected to start shortly. Areas to be reviewed in this stage include the validity of procedures within the evolving assessment framework and the particular values used in the calculations (eg the base value of time, vehicle operating costs and crash costs).
Stage one review - what's changed?
The Transport Agency's Board agreed to key policy changes at its meeting on 5 July 2013. In summary, these policy changes are:
- A revised discount rate of 6%, along with an extended evaluation period of 40 years.
- The addition of wider economic benefits relating to imperfect competition and increased labour supply.
- Greater emphasis on a multi-modal approach to evaluation, including:
- public transport evaluation periods made consistent with other modes, and
- equal values of travel time across modes for monetising the total value of travel time benefits.
- Discontinuing the use of default traffic growth rates. Evidence will be required to support any traffic growth assumptions.
The NZTA Board also approved a change to the 2012/15 Investment and Revenue Strategy. The strategic fit criteria will now recognise predicted crash risk in transport safety assessments as one of the components contributing to achieving a high strategic fit.
Effective date for stage one changes
The updated economic evaluation policies and procedures took effect from 1 July 2013 and apply to all proposals for the 2015-18 NLTP. They may also be used for any new proposals in the current 2012-15 NLTP.
For any new proposals in the current 2012-15 NLTP (ie all existing unapproved projects or project phases included in this NLTP), investment partners are able to choose to apply in full either:
- the existing EEM policies, or
- the updated policies and procedures outlined above that have been released in the updated manual.
Whatever version of EEM is used it should be applied in total to that phase of a project – do not mix and match parts from both versions.
New Activity Phase
* For 2012/15 NLTP funding applications, old procedures can be used where there is a prior funding approval, particularly where there would be considerable rework to change to the new procedures.
Although the Transport Agency prefers that the new policies are applied, we recognise compliance costs need to be a key determinant of whether the new policy is applied for proposals in the current NLTP period.
Updated Economic Evaluation Manual
The updated EEM document is available only in electronic PDF format at the link below.The EEM includes links to a set of updated spreadsheet-based processes designed for seamless input into our Transport Investment Online system. Projects must use the Transport Agency's spreadsheet forms where these are available, without any variation to these forms. This will apply primarily to the use of Simplified Procedures.
How else can I find out about, or who should I ask about, the EEM review?
- We're running a series of workshops from time of EEM release to highlight the changes and how they apply to real world examples. These workshops are initially for Transport Agency staff, and will be followed by workshops for the wider transport sector. We'll invite local partners when dates are confirmed.
- You can ask your local Transport Agency Planning and Investment representative.
- You can send questions, or feedback about the review directly to the EEM review project team via our website, or email the review team at firstname.lastname@example.org .