Labour Party - Speeches

Roading New Zealand conference

26.08.2008

The changes in the transport sector (mentioned in this speech) will help the Government build a transport system that is responsive to the needs of the country while offering long term sustainability.

I really enjoyed presenting the Roading Excellence Awards last night, and it is great to have this opportunity to join you again today to open your conference.

When I spoke to you a year ago, I talked about a number of imminent changes designed to improve the transport sector, particularly focusing on how to optimise value for money from our sizeable land transport investment. As you know, many of these changes are now being implemented, and I will talk briefly about some of them today.

Before all that, however, I want to acknowledge Roading New Zealand chairman Lindsay Crossen and chief executive Chris Olsen, parliamentary colleague Maurice Williamson, New Zealand Transport Agency chief executive Geoff Dangerfield, and today's keynote speakers --- Jim Barton, Director of Network Management and Chief Road Engineer for Transport Scotland; and Dr Helen Murphy, Director of Environmental Services for Vic Roads, Australia.

The changes in the transport sector will help the Government build a transport system that is responsive to the needs of the country while offering long term sustainability, and that is why I am pleased the theme of your conference is Sustainability and People.

I don't need to tell this conference that we need to keep investing with the future in mind, not only in terms of infrastructure and services, but also in training skilled people to deliver on these demands.

There is one other important matter I want to mention today right at the start --- and that is to acknowledge all the work Roading New Zealand members have undertaken in recent weeks in the wake of heavy rain and storms around the country.

Many contractors have worked long hours in terrible conditions to clear affected roads around the country, in some cases dodging falling debris to get the job done!

Your work is ongoing. Many more hours of hard clean-up and reinstatement work lie ahead after the country has ‘dried out'.

Your efforts have made a huge difference in allowing people to go about their business as quickly as possible -- so thank you all for getting on with the job with your usual ‘can-do' attitude.

But to return to them theme of sustainability and people, it is certainly worth reiterating some of the broad or overarching principles that I believe should guide the future of the New Zealand transport sector.

Firstly, transport is critical to economic progress. A high level of value for money investment is required across different modes of transport to address ongoing infrastructure needs.

Secondly, transport must be thought about in an integrated way. Each mode - from walking to rail freight, road transport to coastal shipping and air -- must play its part in our long term transport strategy.

Thirdly, transport must be environmentally sustainable. There is no one solution, but an innovative approach to creating sustainable transport alternatives will mean we will achieve our targets whilst still also meeting our economic and social needs.

And fourthly, New Zealand's international transport links cannot be put at risk. We must invest so that our exporters can compete.

These overarching principles are what would be called, in marketing-speak, "critical success factors" -- in other words, these are the factors that we have to get right.

Clearly, the challenge we face in the future is to improve the way we travel and move freight, but in ways that do not compromise our health or cost the environment. At the same time our modern economy demands a transport system that remains affordable, is more accessible and will assist economic development.

Earlier this month, when I launched New Zealand Transport Strategy 2008 -- an update of the first Strategy released in 2002 - I said the launch was probably the most significant launch in the transport sector for a number of years. The updated strategy provides direction over the next 30 years and sets out a number of targets to achieve our sustainability goals.

One of these targets will help achieve one of the Strategy's goals of halving per capita domestic greenhouse gas emissions from transport by 2040. We will see more hybrid and electric vehicles on our roads; more people walking, cycling and using public transport; and more movement of freight by rail and sea. There will also be greater use of renewable fuels, more efficient technology and improved operating practices.

Of particular interest to this audience will be the targets aimed at improving journey times and journey time reliability, with a focus on investing in critical multi-modal infrastructure. We will achieve these targets by:

I want to acknowledge the helpful submissions Roading NZ made in relation to the updated strategy. Your submission highlighted the important contribution road and rail construction and maintenance techniques can make to a number of our targets.

For example, you observed that the way in which we surface roads can play a part in reducing greenhouse gas emissions, noise and other environmental effects, as well as playing a major role in reducing road deaths and injuries. You also rightly highlighted the need for better information and co-ordination of road works to help reduce congestion and improve journey time reliability.

You can expect this engagement and collaboration to continue. There are a number of key projects on which we would like your input, including a project to develop a road surfacing strategy, one to look at the scope of better real time information for road users on roadworks and other hold-ups, and further work looking at future skills shortages.

One subject that I know always interests your members is the issue of infrastructure investment and funding, and I cannot let this issue go without commenting briefly on land transport infrastructure and funding announcements made by the National Party yesterday.

National has been talking about infrastructure investment and developing public private partnerships for some two decades now --- and I emphasise talking about rather than doing anything. It was with some interest on Sunday and yesterday, therefore, that I waited for details, but that interest soon turned to bemusement when we got a series of different versions from different spokespersons. I guess we can wait another decade or so for them to work it all out.

While we are waiting, this Government is getting on with the largest land transport programme the country has ever seen.

In June I launched the 2008/09 National Land Transport Programme, which allocated $2.7 billion across 12 activity classes. This is a record level of investment and an increase of 12 percent from the $2.4 billion allocated in 2007/08. Some of the highlights include:

The latest NLTP means total Government investment in transport since 1999 has increased by more than 180 percent from just over $1 billion in 1999/2000 to a forecast $3.1 billion in 2008/09.

As you know, all revenue from road user charges, petrol excise duty and motor vehicle registrations is now dedicated to the National Land Transport Fund. Full hypothecation won't make the tough decisions go away --- the current list of demands for transport investment already far exceeds forecast revenue --- but it will put the transport sector in a better position than it would otherwise have been.

It was really disappointing that the National Party voted against the legislation that enabled full hypothecation.

You will also be aware I recently announced a comprehensive review of the Road User Charges model, and I am also considering a wider review of how we charge for, and fund, land transport. The review will ensure that the charging system is fair, efficient and based on up-to-date information.

What is paramount to me is that we have a system of allocating transport costs that delivers fairness to all road users - whether they are truckies, contractors, car drivers or public transport users --- and I am confident this review will answer these questions.

As I said earlier, the transport sector is going through a period of considerable change, particularly around how we optimise value for money from our land transport investment.

The amended Land Transport Management Act enables the Government to issue a Government Policy Statement or GPS. The GPS provides a high-level short to medium term strategic focus for land transport investment and outlines the funding central government will make available through the NLTP. This will include the outcomes the Government wishes to achieve in the land transport system and how it will achieve these outcomes.

The GPS will also determine how much investment will be provided for land transport and how this funding will be raised. The GPS, which will be released three yearly, will assist medium and longer term planning and provide greater certainty.

The Roading New Zealand submission on the GPS raised some interesting and challenging issues over the future funding of investment in infrastructure, linked to people's willingness to pay, and the desire of your sector for future funding certainty and smooth work programmes. I agree that these are important issues.

One of our key aims in producing the NZTS and GPS is to provide long term stability and certainty in the transport sector. This will be vital for you as you plan future investments.

The amended legislation also empowers regional councils to develop regional fuel tax proposals to advance regionally significant projects that will not reasonably be funded from any other source in the timeframe desired by the region. A regional fuel tax is not compulsory and will only be introduced when needed and at a level that is appropriate for the region's requirements.

You will be aware the Auckland Regional Council has already expressed the desire to implement a regional fuel tax to fund the electrification of its urban rail network and I expect this funding tool will be a valuable addition in other regions that want to see major projects completed within specific timeframes. Auckland is also looking at a number of other roading projects to come out of the regional fuel tax.

The Act also established the New Zealand Transport Agency, which on 1 August took over the functions of Land Transport New Zealand and Transit New Zealand. This move has reduced the number of Crown entities involved in land transport planning and provision and will lead to more consistent and integrated decision making in the central government land transport sector.

I have mentioned workforce training already today, and in terms of sustainability I value the ongoing relationship between Roading New Zealand and the Government through the successful workforce initiative begun in 2005. You will be pleased to know, in fact, that the initiative has been so successful that we have adopted it as part of the Government's Sea Change Strategy.

I am delighted with the industry's many programmes to recruit, train and retain the people needed to undertake all the work required. Last night's awards provided great examples of skill and innovation. I also want to encourage you to continue your recruitment initiatives like the "Shape your future" campaign, developed by industry training organisation InfraTrain.

I also want to acknowledge the work Roading New Zealand has done to raise the industry's best practice on environmental sustainability. I understand your inaugural Environment Summit, held in November 2007, was a great success with a number of goals set around industry standards, along with training and education initiatives.

I know many of you in the sector are looking at how we can do things better, on a day to day basis. Whether this is saving diesel through the more efficient use of machinery, using recycled glass in base aggregate or new methods to recycle bitumen, even small initiatives can often have a big impact, including benefits to the bottom line.

The importance of responsible environmental management cannot be over emphasised, and I look forward to seeing further innovation in this area.

The Government certainly recognises its own leadership role in promoting a sustainable transport sector, and that is why, in addition to building more capacity within the land transport network, we are working to increase the share of freight moved by rail and coastal shipping to complement road freight.

The Government's rail buy back enables us to implement an integrated transport strategy and to invest in the business to further rail's potential to contribute in a much more meaningful way to the New Zealand economy than it currently does.

And Sea Change, the Government's strategy to revitalise domestic sea freight, is designed to promote greater utilisation of sea transport as part of the domestic network. It's environmentally friendly, energy efficient and cost effective nature makes it a viable and complementary freight mode to rail and road.

I want to reiterate that the transport sector faces a number of challenges in the future, but I believe the Government has a clear sense of where we are heading. The announcement I am going to make today is only possible because this Government is taking a long-term, planned approach to infrastructure development, one based on the considered merits of particular proposals.

With that in mind, I want to update you on progress on investigations into procuring the Waterview Connection section of Auckland's Western Ring Route as a Public Private Partnership, or PPP.

When complete, the Western Ring Route will form a 48km motorway that will bypass Auckland city and link the cities of Manukau, Auckland, Waitakere and North Shore, relieving congestion and providing a viable alternative to State Highway One.

The Waterview Connection section of the Western Ring Route is currently unfunded. The project is estimated to cost almost $2 billion.

The Government is determined to see Waterview completed by 2015, and sees it as a good candidate to test the feasibility of a Public Private Partnership in the New Zealand context. Should Waterview be progressed this way, it would be our largest transport project.

PPPs as a delivery model offer a number of advantages such as better whole-of-life project evaluation to minimise overall costs and allocating risk to the party best able to manage it. This can significantly improve the proportion of projects which are delivered on time and the opportunity for innovative approaches. Overall, this has the potential to enhance the quality of delivery and reduce the cost to the public sector.

In February this year I appointed a steering group to investigate whether delivering Waterview as a PPP could deliver greater value for money than conventional procurement.

The steering group has now reported back its findings, and I am pleased to be able to tell you today that it has found that procuring the Waterview Connection as a PPP could deliver greater value for money than conventional procurement.

Based on the advice of the steering group, work to develop a final business case is now being undertaken before a decision can be made to commit the Government to progressing Waterview as a PPP. Treasury, the Ministry of Transport and the New Zealand Transport Agency have been directed to undertake this work and report back by October or early November at the latest.

I am excited about the progress, and I am delighted the steering group, made up of public and private sector members, has worked so promptly to produce a comprehensive and thorough report.

The Government opened up the possibility of PPPs through enabling legislation in 2003, but I have always said it will take a large project to attract private sector interest.

Interestingly enough, the steering group said it is not necessary to change the 2003 Act, although some critics have suggested otherwise.

It seems that Waterview, New Zealand's largest ever roading project, could well be the first PPP, but the generic blueprint provided by the steering group report could, of course, lead to other examples in the future, such as a new Auckland harbour crossing or Transmission Gully in Wellington.

I want to thank the Steering Group members for their report and congratulate them on what has been a very successful process. The report is a good example of what can be achieved with cooperation between the public and private sectors, and I believe that co-operation is in itself a symbol of the way this Government approaches long-term infrastructure issues.

I want to finish today by re-emphasising the need to look ahead with that long term in mind - both in terms of environmental and economic implications and the sustainability of the workforce that drives projects.

It is also very important to have a government that is principled and transparent about its intentions, and puts its money where it says it is going to put it.

I am confident that with Government and industry working together as we have been, we will be able to find practical solutions to keep people and freight moving.

Thank you again for inviting me to join you last night and today, and I wish you the best for the rest of your conference.

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