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This page relates to the 2018-21 National Land Transport Programme.


This section sets out Waka Kotahi NZTransport Agency's funding assistance policy and describes the methodology for determining approved organisations' normal funding assistance rates (FARs). It also describes variations to normal FARs and their application.

Role and principles of funding assistance rates

FARs, in conjunction with other land transport investment tools and interventions, exist to:

  • assist approved organisations and Waka Kotahi to co-invest to achieve:
    • optimal national land transport outcomes within the combined financial resources
    • an integrated and appropriately consistent land transport network throughout the country
  • appropriately share the costs of the land transport network between land transport system users and local communities, recognising that national and local benefits are derived from investment in the network.
  • Funding assistance rate principles

    The seven principles that underlie the Waka Kotahi funding assistance framework are:

    1. Support optimal national land transport outcomes to be achieved in the right way, at the right time and for the right cost.
    2. Provide users with an integrated and appropriately consistent network throughout the country.
    3. Appropriately share the costs of the land transport network between system users and local communities, recognising that each of these groups affects the network and gains benefits from it.
    4. Provide approved organisations and Waka Kotahi with as much investment certainty as practicable.
    5. Be efficient to apply.
    6. Be based on readily accessible and reliable evidence and data.
    7. Ensure that any variations are identified and applied transparently.


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Funding assistance rate framework

 The FAR framework is based on five key components.

FARs are available by National Land Transport Programme (NLTP) period.

Methodology – normal FARs

Following engagement with approved organisations and interested transport sector groups, Waka Kotahi developed its methodology for determining normal FARs, which take into account factors materially affecting delivery and are robust, repeatable, stable and independent.

A year prior to the start of each NLTP, the inputs will be updated with the latest available information and the normal FAR for each approved organisation recalculated. The changes in FARs, if any, will reflect movements in centreline kilometres, capital values, rating units and the index of deprivation.

  • Inputs for each council

    Inputs for each council are:

    • Centreline kilometres divided by net equalised capital value provides a measure for the core transport task faced by a council relative to a measure of the asset base from which local authorities raise local share.
    • Inverse of rating units identifies local authorities that have the smallest number of ratepayers from which to source local share.
    • Index of deprivation is a demographic index published by the University of Otago and used by the Ministry of Health, which provides a measure of the relative wealth of communities.
    • Total cost of all activities for a recent period is the actual total costs incurred by approved organisations for the last three to five years.
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  • Parameters and definitions

    Parameters and definitions are:

    • The overall co-investment rate is set at 53%.
    • The end of transition normal FAR – the normal FAR that an approved organisation will receive for its activities, other than the variations described below, by the end of the transition period, ie by or before 2023/24.
    • The maximum normal FAR is set at 75% for mainland New Zealand approved organisations and 85% for off-mainland islands (Chatham Islands Council) to reflect the higher costs associated with delivering land transport activities. The rate also reflects the co-investment nature of land transport funding and the sharing of costs and risks in the investment.
    • The minimum normal FAR is set at 51%. While set as high as possible, it  ensures a reasonable spread of the impacts of the methodology, relative to previous FAR system settings amongst local authority groups (metros, provincials, regionals and rurals).
    • Taking factors materially affecting delivery into account, the funds available to do this in the model are provided from the difference between the minimum normal FAR (51%) and the overall co-investment rate (53%) and are distributed to those approved organisations that would have difficulty raising local share.
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  • Steps

    Steps include:

    1. Gather, collate and calculate inputs – employing latest available data.
    2. Standardise each of the inputs to a comparable scale based on the mean and standard deviation.
    3. Add the standardised inputs together to establish a score for each approved organisation.
    4. Multiply each approved organisation's score by a common factor to determine an interim FAR.
    5. Starting from the highest interim FAR, allocate the NLTF contribution to approved organisations' NLTP programmes and progress down, taking into account the maximum and minimum normal FARs.
    6. Iteratively fine tune the multiplying factor until the programme in total is balanced to a weighted average 53% overall co-investment rate.
    7. The resulting FARs are the end of transition normal FARs for approved organisations.

    See the methodology flow diagram below for a visual representation of the steps involved in determining the FARs.

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Model to determine normal FARs

In November 2020 Waka Kotahi undertook a thorough review of the FAR model for the last three NLTP periods. The review identified that some of the data sets used in the 2018-21 FARs model were not the most current available at the time. This resulted in changes in the 2018-21 FARs for 17 approved organisations.

Waka Kotahi made a decision not to implement changes in FARs for the 2018–21 NLTP that would have resulted in reductions in some approved organisations' end of transition FARs. The model shows the reductions as calculated.

View the corrected FAR model used by Waka Kotahi to determine normal FARs. [XLSX, 1.1 MB]

The superseded model previously used by Waka Kotahi can be accessed at this link. [XLSX, 554 KB](external link)

Transition to target normal FAR

Most approved organisations will have made the transition to normal FARs by 2018/19, due to the Waka Kotahi decision to accelerate transition for those with increasing FARs. The remaining five with decreasing FARs will make the transition by 2023/24. 

2014 FAR review and transition process

For details about the the review process and how approved organisations have been transitioned to their target normal FAR, please visit the FAR review site.(external link)

FARs applied to funding approvals

Funding approvals include the FARs that will apply during each financial year of an activity. They are made for a phase or business case of an improvement project, eg funding would be approved for the single stage business case or implementation phase, not for the project as a whole.

Targeted enhanced FARs

Waka Kotahi has developed a policy for the use of targeted enhanced funding assistance rates that may be applied in exceptional circumstances (refer to the Operational policy for application of targeted enhanced funding assistance rates for details).

For the 2018-21 NLTP,  a targeted enhanced funding assistance rate (TEFAR) may be applied to activities in the Safe Network Programme(external link) that have a high or very high results alignment (see 2018-21 NLTP- Targeted enhanced funding assistance rates for details). Once the activity has funding approval at the TEFAR, approved organisations are expected to deliver 80% of the activity in the 2018-21 NLTP period. Waka Kotahi will monitor progress to ensure timely delivery.

Lower priority activities of low or medium results alignment, and activities that are not included in a jointly developed national programme continue to be funded at a normal FAR.

Variations to normal FARs

  • Variations to normal FARs

    The following variations to normal FARs will apply:

    1. Special purpose roads and Queenstown Lakes District Council's Crown Range Road.
      The FARs for these roads in the 2015-18 NLTP were the same as those applied in the 2012-15 NLTP. During the 2015–18 NLTP, affected approved organisations and Waka Kotahi engaged to sort out appropriate transition arrangements to apply from 2018/19. These aim at achieving end of transition normal FARs for approved organisations by 2023/24.
      At the start of the 2018-21 NLTP, the FARs for these roads were the same as those applied in the 2015-18 NLTP. During the 2018-21 NLTP there will be further engagement aimed at agreeing and introducing transition arrangements.
    2. Department of Conservation (DOC) roads.
      DOC's normal FAR of 51% applies from 2018/19 to the total cost of DOC's approved programme, including any additional roads identified during the 2015-18 NLTP as eligible for NLTF funding.
    3. Rail level crossing warning devices.
      Maintenance and renewal of rail level crossing warning devices and barrier arms under work category 131: Rail level crossing warning devices maintenance and the local road component of rail level crossing warning device improvements  under work category 321: New traffic management facilities are funded with co-investment by the Transport Agency at the approved organisation's normal FAR.  
      An accelerated crossing improvement (warning devices) programme was agreed with Kiwi Rail for 2017/18 with the NLTF front-loading the additional Kiwi Rail funding. With the 100% FAR in place over the 2015-18 NLTP this means that no local share is required for this accelerated programme. Kiwi Rail will effectively fund the improvement programme in the 2018-21 NLTP to arrive at a normal cost-share position at the end of that programme. As a result, the FAR for level crossing warning devices will be the approved organisation’s normal FAR from 2018.
    4. Stock effluent facilities.
      From 2018/19 onwards, the approved organisation's normal FAR will apply for construction of access roads for facilities located on local roads. Refer to the Waka Kotahi stock effluent facility policy for details.
    5. Total mobility activities.
      Refer to the other FAR tables for Total mobility FARs that apply for the 2018-21 NLTP.
    6. Emergency works.
      The Waka Kotahi emergency works policy has been revised as part of the FAR review. Details of the new policy are set out under work category 141: Emergency works.
    7. Rail services (work category 515).
      The Waka Kotahi Board approved a 'glide path' for the FARs that will apply to work category 515: Rail services. This will continue to be applied until the FAR reaches the end of transition normal FAR for affected approved organisations in 2020/21. From then on the normal FAR will apply.
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