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This section sets out the Transport Agency's funding assistance policy and describes the methodology for determining Approved Organisations' normal FARs. It also describes variations to normal FARs and their application.

Role of funding assistance rates

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

  • assist Approved Organisations and the Transport Agency 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 the national and local benefits that are derived from investment in the network.

Funding assistance rate principles

There are seven principles that underlie the Transport Agency's funding assistance framework.


  • Funding assistance rate principles

    Funding assistance rate principles

    The seven principles that underlie the Transport Agency's funding assistance framework are:

    1. Support optimal national land transport outcomes being achieved in the right way, at the 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 the Transport Agency 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 funding assistance rate framework is based on five key components.

Funding assisstance rates are available by NLTP period.


Methodology – normal FARs

Following engagement with Approved Organisations and interested transport sector groups, the Transport Agency developed its methodology for determining normal FARs, which take into account factors materially affecting delivery and that 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. The next review will occur a year prior to the start of the 2021-24 NLTP. 


  • Inputs for each council

    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 – a demographic index published by the University of Otago and used by the Ministry of Health that provides a measure of the relative wealth of communities
    • total cost of all activities for a recent period – 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

    Parameters and definitions are:

    • overall co-investment rate – set at 53%
    • 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, i.e. by or before 2023/24
    • maximum normal FAR – 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 reflects the co-investment nature of land transport funding and the sharing of costs and risks in the investment
    • minimum normal FAR – set at 51% - while set as high as possible, it  ensured a reasonable spread of the impacts of the methodology, relative to previous FAR system settings, amongst local authority groups (metros, provincials, regionals & 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


    The model used by the Transport Agency to determine normal FARs can be accessed at this link. [XLSX, 554 KB]

    The Transport Agency 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.

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Methodology flow diagram

The methodology flow diagram below provides a visual representation of the steps involved in determining the FARs.


Transition to target normal FAR

Most Approved Organisations will have transitioned to normal FARs by 2018/19, due to the Transport Agency's decision to accelerate transition for those with increasing FARs. The remaining 5 with decreasing FARs are to be transitioned 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 in respect of a phase or business case of an improvement project, e.g. funding would be approved for the single stage business case or implementation phase, not for the project as a whole.

Targeted enhanced FARs

The Transport Agency has developed policy for the use of targeted enhanced rates that may be applied in exceptional circumstances Refer to the Operational policy for application of Targeted enhanced rates for details.

For the 2018-21 NLTP,  Approved Organisations' high priority activities as defined by the high and very high results alignment criteria set out in the IAF, and that are included in one of four new national programmes, are  eligible for targeted enhanced rates (see 2018-21 NLTP- Targeted enhanced rates for details). Once included in the national programme.  Approved Organisations are expected to deliver those activities. The Transport Agency will monitor the progress of these activities 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 funding assistance rate.

Variations to normal FARs

A number of variations to normal FARs apply.


  • 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 applied in the 2012-15 NLTP. During the 2015–18 NLTP, affected Approved Organisations and the Transport Agency engaged to sort out appropriate transitioning arrangements to apply from 2018/19, aimed at achieving the Approved Organisation end of transition normal FARs by 2023/24.
      At the start of the 2018-21 NLTP, the FARs for these roads will be the same as 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 funded under work category 131: Rail level crossing warning devices maintenance and the local road component of rail level crossing warning device improvements  funded 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. 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 Transport Agency's 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 Transport Agency's 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 Transport Agency 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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