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Introduction

This section describes the sources of funding available for investment in land transport activities under the National Land Transport Programme (NLTP).

These include:

  • the National Land Transport Fund (NLTF)
  • Approved Organisations’ local share,
  • Crown funds and loans,
  • debt finance and public private partnerships, and
  • supplementary funding.

NLTF funds

Revenue collected from Fuel Excise Duty (FED), Road User Charges (RUC), Vehicle and Driver Registration and Licensing, state highway property disposal and leasing and road tolling is credited to the NLTF. These funds are used to pay for investment in land transport activities under the NLTP.

The Agency's policy on raising revenue from road tolling is available at this link.

 

  • Types of funds

    Types of funds

    NLTF funds comprise:

    • nationally distributed funds (N funds), which are invested in land transport activities following assessment and prioritisation under the Transport Agency's Investment Assessment Framework
    • regionally distributed funds (R funds), collected between 2006 and 2015 and pro-rated on the basis of regional population to invest in the highest priority improvement activities under the Transport Agency's Investment Assessment Framework within each region. As at July 2018 all remaining R funds, apart from Nelson, have been committed/assigned to projects and will be spent by the end of the 2018-21 NLTP. Around $10 million of Nelson R funds remain unassigned and will need to be committed to projects for expenditure in the 2018-21 NLTP.
    • C funds, from Crown appropriations made prior to full hypothecation of the NLTF, which the Transport Agency is required to allocate to specific activities or types of activities as originally directed by the government in Auckland, Waikato, Bay of Plenty, Wellington and Canterbury when it approved the appropriation. As at July 2018 around $8.5 million of Bay of Plenty C funds remain uncommitted.
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Local share

Land transport activities that are proposed and delivered by Approved Organisations, e.g. local road maintenance, local road improvements, public transport, are delivered by the local authority with funding assistance from the NLTF. The amount that the Transport Agency co-invests from the NLTF in local activities is largely determined by the Funding Assistance Rates (FARs) applicable to Approved Organisations.

Approved Organisations raise their local share from rates revenue, debt, developer contributions or other financial contributions and revenue.

The Transport Agency's own funding rate is 100% of the costs of any activity, or share of an activity, that it delivers, given that its only source of funding is the NLTF.

Crown funds and loans

There are Crown funding outside of the NLTF, and Crown loans available for land transport investments. 

 

  • Crown funding sources outside of the NLTF

    Crown funding sources outside of the NLTF

    Crown funding sources outside of the NLTF are described in GPS 2018(external link)  and comprise:

    • the Accelerated Regional State Highway Package, which relates to Crown funding provided to investigate, design and construct specified regional state highway roading projects. $212 million has been approved to deliver projects that would otherwise not have sufficient priority to be progressed from NLTF funding alone in the NLTP. Delivery of the programme commenced in 2014/15 and is expected to be completed by 2021/22.
    • the Urban Cycleway Programme, which relates to funding to accelerate the delivery of state highway and local urban cycleway projects. $100 million of Crown funding has been approved, which is augmented by around $125 million of NLTF funds, plus funding from local authority and supplementary sources. Delivery of the programme commenced in 2014/15 and Crown funding expenditure will be completed in 2018/19.
    • rebuild SH1 between Picton & Christchurch – relates to Crown funding for the reinstatement of State Highway 1 between Picton and Christchurch following the November 2016 earthquake.
    • the Provincial Growth Fund – Crown funding that relates to a range of land transport projects from feasibility studies, capacity building and small local projects through to larger sector-led initiatives and infrastructure investments to raise the productivity potential of regional New Zealand. Funding will be determined as the projects are confirmed. Co-funding of some projects with the NLTF is expected.
    • the SuperGold Card Concessions Package, which relates to funding for free off-peak public transport by superannuitants who hold SuperGold cards. This activity is outside of the NLTF and the Agency acts as the Crown's agent in allocating and managing funding as directed by Government.
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  • Crown loans

    Crown loans

    The Government has also provided Crown loans to the Agency to assist its NLTF cash-flow management in delivering:

    • the reinstatement of earthquake damaged transport infrastructure in Christchurch. The loan has been made available to top up contributions from the NLTF approved by the Agency's Board at $50 million per year. It commenced in 2013/14 and expired in 2016/17, with draw-downs repaid along with interest from the NLTF. The final repayment will be made in 2018/19. Prior to the loan being made available the Government provided a Crown grant to assist the Agency to manage its cash flows following the Canterbury earthquake.
    • acceleration of the Auckland Transport Package, which otherwise would have been programmed over a longer period of time within the constraints of NLTF revenue. Delivery of the programme commenced in 2014/15 and the state highway component of the $375 million loan will be drawn down by the end of 2018/19 and repaid, without interest, from the NLTF over 10 years.
    • the Housing Infrastructure Fund – Relates to loans from the Crown to the NZ Transport Agency to fund land transport investments that will help ensure an increased supply of serviced land for housing development. Funding will be determined as the projects are confirmed to be funded through the Housing Infrastructure Fund, with the first drawdown scheduled for the first quarter of 2018/19.
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Debt financing and PPPs

Funding may, in certain situations and with approval of the Ministers of Transport and Finance, be raised from debt financing and public private partnerships (PPPs). The Agency's policy on these can be accessed at this link.

Supplementary funds

Supplementary funds refer to contributions that are additional to NLTF and local share funding.

Where a third party benefits from a land transport investment, the Agency expects that the third party will contribute to the level of that benefit.

 

  • Examples of supplementary funds

    Examples of supplementary funds

    Main examples of supplementary funds are:

    • financial contributions towards the costs of improving network infrastructure (to the benefit of the development)
    • betterment from landowners receiving value from road improvements
    • additional contributions from local authorities or other parties that reduce the proportion of the Transport Agency’s contribution to the cost of an activity below the normal FAR
    • contributions from community groups or other government agencies to community programmes
    • borrowing and payments from concession agreements
    • the value of land and buildings of redundant public transport facilities owned by local authorities, and
    • funds from the sale of future development rights of a new or redeveloped public transport facility owned and operated by a local authority.
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