Chapter A1 The planning, programming and funding process

A1.4 The six-stage approach to planning, programming and funding

Introduction

This section summarises the six stages in the NZTA’s approach to the planning, programming and funding process. This approach takes account of the requirements placed on approved organisations, RTCs and the NZTA under the LTMA.

The LTMA sets a challenging framework for planning, programming and funding land transport activities. It reflects a multi-modal approach, encourages integrated long-term planning and allows funding flexibility to achieve an affordable, integrated, safe, responsive and sustainable land transport system.

Purpose of the approach

The purpose of the six-stage approach is to allow the NZTA to:

• enable approved organisations and the NZTA to formulate proposals that best meet legislative requirements
• ensure proposals are assessed uniformly and in accordance with the requirements of the LTMA and other relevant statutory requirements
• prioritise and programme activities over a 10-year period in accordance with the NZTA’s objective and other requirements in the LTMA
• approve activities and combinations of activities for funding in accordance with LTMA requirements
• report on the contribution that the NLTP has made towards achieving the outcomes of the government as set out in the New Zealand Transport Strategy (NZTS) and the Government Policy Statement (GPS).

The six stages

The six stages are:

1. formulation
2. assessment
3. prioritisation
4. programming
5. approval
6. monitoring.

Each of these stages is characterised by specific methods and policies.

Application to the planning, programming and funding process

The methods and policies involved in the approach may be applied in various stages of the planning, programming and funding process. Thus, for example, in the case of assessment:

• there is a legislative requirement for approved organisations to assess the various packages, programmes and other combinations of activities they propose
• RTCs and ARTA must also assess their RLTPs
• the NZTA needs to review the assessments done by approved organisations and must also assess the NLTP
• the NZTA also assesses strategies developed by approved organisations and the NZTA.

Process used iteratively

The six stages are often applied iteratively. This gives the organisation formulating activities and combinations of activities confidence that they can be prioritised and programmed.

Value for money

The LTMA requires the NZTA to use its revenue in a manner that seeks value for money, including approving procurement procedures that are designed to obtain the best value for money spent by the NZTA and approved organisations.

Reference: LTMA s25(1) and s96(1)(b).

When assessing strategies, programmes, packages and projects, the GPS requires both local government and the NZTA to consider a number of matters, including achieving value for money.

Value for money has been defined in a variety of ways but in general it means selecting the right things to do, implementing them in the right way, at the right time and for the right price. Determining value for money requires taking a long-term view of the total value for money attributable to an activity and not simply the initial capital cost. A whole-of-life assessment will consider the social, environmental and economic impact of the outputs, any on-going maintenance and operation costs of the asset or service, and costs associated with its disposal.

In relation to land transport, value for money outcomes are identified first through the selection of activities that make the largest contribution for the funds invested towards achieving the GPS impacts and the wider objectives of the LTMA and NZTS. The assessment framework shows how the NZTA's strategic investment direction will be implemented while ensuring value for money when selecting activities for inclusion in the NLTP. Activities proposed for inclusion in the NLTP will be assessed against 'strategic fit', 'effectiveness' and 'economic efficiency' to determine the right time for implementation and their relative priority for funding. The assessment criteria reflect the NZTA's strategic investment direction.

It should be noted that when assessing an activity's readiness to proceed, a number of criteria are considered that can impact on value for money. These include: social responsibility; project management and delivery; consultation; peer review and audit; and risk assessment and management.

The further components of value for money, implementation in the right way for the right price, are addressed by the NZTA's Procurement manual.

Summary

The following diagram summarises what goes on in the six-stage approach.

Planning, programming and funding manual, first edition, amendment 1, effective from 1 July 2009.

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