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The 2015–18 National Land Transport Programme (NLTP) concentrates in detail on the three-year period but also considers the 10 years to 2025.  Over the 10 years, investment in the land transport system through the NLTP is expected to be influenced by a range of factors that will not only shape travel demand, but also the supply of inputs used in the delivery of transport solutions. The significant forthcoming land transport issues that the Transport Agency is aware of are summarised below.

Factors shaping the use of the land transport system

Changes in population demographics

New Zealand’s population will increase over the next 10 years as people live longer and net migration flows remain positive. The pace of growth will, however, continue to decline as fertility rates fall, resulting in further increases in the average age of people living in New Zealand.

Increases in population size are expected to be reflected in a proportional rise both in the number of families as well as households. These dynamics are expected to result in two conflicting trends; an increased demand for more housing in established urban areas, and a greater need for more affordable housing located close to and on urban limits (with people trading off lower housing costs for higher personal travel costs).   

These factors are expected to lead to an increase in aggregate demand for travel, and to result in some modal shift from private vehicles to public transport, cycling and walking, particularly in fast growing urban areas. Improvements to make better use of the capacity of the transport system, and increase it where justified by demand, will be needed to remove bottlenecks and pressure points to access economic and social opportunities. 

This is particularly true for Auckland, which continues to experience significant delays on the network, and greater Christchurch, where traffic patterns have been greatly affected by land use changes following the 2010/11 earthquakes. Land use policy and demand management will also have a role to play in shaping travel demand.

Changes in economic structure and performance

The services and knowledge sectors will remain the largest contributors to New Zealand economy over the next ten years.  Similarly, the primary sector will continue to account for the majority of export earnings.

The manufacturing sector will be dynamic, reflecting the likely challenges of competing on price in a global economy, and searching out growth opportunities for differentiated products particularly where leveraged on medium to high-tech research and development.

Domestic influencers of the New Zealand economy such as construction activity and employment prospects, are expected to wane over the medium to longer term, with an expected net slowdown in growth.  While these structural changes will reduce the freight intensity of the New Zealand economy, output gains over the next 10 years will result in an increase in freight volumes.  Growth in domestic consumption, underpinned by increases in population size, will boost inter-and intra-regional freight movements, as well as import volumes.  At the same time, a stronger global economic climate should boost export volumes. 

Most of the expected increase in freight will go by road, although rail will remain a key transport option for the movement of some bulk commodities and longer distance container movements. The provision of fit for purpose connections between key areas of production, processing and markets (both domestic and external) are essential. Growth is expected to be uneven, with Auckland and Canterbury predicted to experience the greatest increase in freight, followed by Waikato.   

Changes in technology

The pace of technological change is expected to accelerate across a number of fronts over the next 10 years.

The trend towards increasing types and levels of transactions through the internet will continue.  Mobile connectedness will increase dramatically, device and application costs will reduce and increasingly sophisticated robotics will emerge. Nano-technologies will increasingly find new applications within energy, transport, biotechnology, manufacturing and materials science. 

There is likely to be significant uptake of geo-positioning technology into the vehicle fleet and embedded network technology - allowing access to real-time and geospatial information on road conditions and other journey time benefits, to road users. Logistics suppliers will make increasing use of technology to optimise freight transportation and warehousing and to utilise resources more fully.

We do not anticipate 'game changing' technological advances over the next 10 years to move away from fossil fuel vehicles.  Stronger demand for more energy-efficient vehicles, ongoing development of high-performing combustion engines, changing materials and other developments are expected to continue improving travel efficiency.  However continued demand for used vehicles, mostly for short distance or occasional use, may see the average fleet age remain around 14 years, which is high in OECD terms.

Sustainability of resources and our environment

The outlook for energy is unclear. Continued growth from non-traditional sources is expected to maintain energy supplies and limit possible price volatilities. Global demand is expected to continue rising, underpinned by population dynamics and a favourable economic outlook.  Assuming no geo-political shocks, the net result will be energy prices remaining under pressure in the short term and resuming higher levels over the medium to long term.

Rising energy prices are likely to result in greater demand for more efficient vehicles, demand for alternative transport modes will grow and people will choose to locate closer to transport hubs. The transport system will require provision of appropriate travel choices.

Climate change impacts will affect transport, directly and indirectly. More weather events could directly threaten physical transport infrastructure, while proactive measures to safeguard network resilience will require prioritisation for funding. Climate change could also indirectly affect transport by altering settlement patterns, what is produced in New Zealand and where.  While the exact nature of these changes is difficult to predict, climate change will shape future demand for transport. 

Developments in the construction sector

The short term outlook for the construction sector remains positive, with growth expected to peak in 2016. Building and construction activity will grow, on the back of increased investment in residential and non-residential building activity in Auckland and Canterbury as well as earthquake strengthening works in Wellington. Civil construction activity will be underpinned by a number of major roading projects in the main centres, including the Christchurch Motorways programme, Wellington’s Northern Corridor, the Waikato Expressway and the Western Ring Route and Puhoi to Warkworth projects in Auckland. 

Increases in construction related activity are expected to increase demand for inputs such as skilled labour, materials, plant and equipment.  If supply cannot respond quickly enough to adjust to these increases, the result will be in rising input costs.  

It is expected that the cost increases will be felt more strongly in the regions where significant construction activity is occurring, ie Canterbury and Auckland. 

Response from the Transport Agency

The Transport Agency will respond to these issues by:

  • working in collaboration with central and local government, and with freight and wider transport stakeholders, to share information, agree priorities and, deliver one integrated network for customers
  • investing in sector research and in transport planning to help influence, plan and integrate land use and transport interventions that will cater for the most probable range of long term demands
  • applying the business case approach to planning and investment to ensure that problems and opportunities are clearly identified and agreed by all stakeholders at the start of the process, and that the full suite of modes, and interventions are considered to get the best outcomes at best value for money
  • applying our intervention hierarchy; to prioritise the maintenance and operation of our existing networks, to ensure we make best use of what we already have, and then considering investment in new assets and services where increased capacity or levels of service are required
  • identifying the function and fit for purpose levels of service and resilience required across the transport network, increasingly through the One Network Road Classification framework and network operating plans
  • providing choice within the transport network, particularly in main urban centres where population density and transport demands means road capacity is under pressure , and also where changing demographics, travel behaviours and technology are impacting the type of travel demanded
  • utilising technology to understand the opportunities and issues on the network, provide accurate and timely information so users can make informed decisions, reduce the costs of transport for users and optimise the use and resilience of network capacity
  • providing transparency in the way the Transport Agency operates, assumptions used and assessment and allocation of funding across national and regional priorities for best value for money
  • exploring alternative funding sources and financial mechanisms to consider interregional, intergenerational and user equity with the transport network.