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Strategic Case State Highway Activity Management Plan

30 September 2013

Approval

PREPARED BY: REVIEWED BY: ENDORSED BY: ENDORSED BY:

Neil Cree, HNO

Ben Peacey, SCP

Matt Barnes, P&I

[JOB TITLE] [JOB TITLE] PROPOSAL SPONSOR P&I CASE MANAGER

DATE: DATE: DATE: DATE:

Template Version

REVISION NUMBER: IMPLEMENTATION DATE: SUMMARY OF REVISION

1.1 23 July 2013 2nd Release – New section on KPI’s (§3.3)

Contents

Executive Summary ............................................................................................................................. A

1 Introduction .................................................................................................................................... 1

2 Partners and Key Stakeholders .................................................................................................... 1

3 Strategic Assessment - Outlining the Need for Investment ...................................................... 2

3.1 Defining the Problem ............................................................................................................... 2

3.2 The Benefits of Investment ..................................................................................................... 2

3.3 The Key Performance Indicators............................................................................................. 3

3.4 Status of the Evidence Base ................................................................................................... 3

4 Strategic Context ........................................................................................................................... 4

4.1 Organisational Overview ......................................................................................................... 4

4.2 Alignment to Existing Strategies/Organisational Goals .......................................................... 5

5 Anticipated Strategic Fit & Effectiveness ................................................................................... 6

5.1 Assessment Profile ................................................................................................................. 6

Appendix A - Investment Logic Map .................................................................................................... I

Appendix B – Benefits Map .................................................................................................................. II

Page A

Executive Summary

The government has stated that it is looking for a high performing, safe and resilient national and pan-regional transport system that improves economic growth, productivity and road safety. The government has also clearly stated that it remains focused on providing New Zealanders with better public services that deliver value for money.

We invest around $500m per annum in maintaining and operating the state highway network and $1bn in improving the state highway asset which is valued at at $25 billion. The state highway network is an essential asset for the productivity and well-being of New Zealand. The state highways provide safe, efficient and reliable travel to almost half of all vehicle traffic and 70% of freight traffic. The Transport Agency is charged with the management of the state highway network.

New Zealand’s state highway network is extensive and diverse. Although it is only a small part of the country’s total road length, it carries the majority of its traffic and is a vital contributor to the country’s economy. Accordingly, the assets and expenditure of the NZ Transport Agency are significant and require robust management. A key goal of the Transport Agency is to assist our customers to plan and make trips across the state highway network as reliably and safely as possible for a fair long term cost.

The state highways contribution to the transport system is presently not optimal in supporting business and economic growth for New Zealand and we have unacceptable levels of deaths and serious injuries on our State Highways, this is due to two key problems:

• Problem 1: Some state highways are increasingly unable to meet demand1 making the movement of people and goods inefficient.

• Problem 2: Some highways are not sufficiently forgiving for the way they are used exacerbating the risk to road users.

Through tackling these we will be able to improve the transport systems support for economic growth and also reduce the number of deaths and serious injuries on our state highways.

A State Highway Activity Management Plan (SHAMP) will play three key roles for the Transport Agency:

• it is a ten year route map showing how we plan, invest and deliver transport solutions for the future;

• it links the state highway investment to our wider strategic goals;

• it is a 6 year business case (with a 3-year funding proposal) for state highways activities (maintenance, renewals, operations and improvements) required to enable the Transport Agency to deliver its services to customers.

As a route map for the future, the SHAMP describes the programme of activities we propose to deliver the outcomes sought. It also provides the logic, reasoning and context behind how we propose to maintain, renew, operate and improve the state highway asset over a 10-year period and what we hope to achieve during this timeframe.

The SHAMP will provide a business case for the activities required to deliver the outcomes outlined, based on demonstrating a clear need for works, the effectiveness of our proposed solutions and the efficiency of execution in order to optimise the state highways contribution to:

• The Government Policy Statement on Land Transport funding;

• The Transport Agency’s long term goals, medium term objectives and short term priorities;

• Our longer term 30-year direction (the State Highways Directions);

• An integrated multi-modal solution.

It is on this basis that this Strategic Case has been given an indicative investment profile of High strategic fit and H effectiveness (H/H).

1 Demand includes volume, type of vehicle, speed and other road user expectations and can include over and under supply.

Page 1

1 Introduction This assessment outlines the strategic context for the SHAMP and the case for investment. It is the precursor to the development of a ten year plan with a detailed six year work programme which will form the basis of the Transport Agencies Highways state highway submission into the Regional Land Transport Plan and National Land Transport Programme processes.

This strategic assessment:

• Outlines the strategic context and fit for the proposed investment;

• Identifies the key problem or rationale for investing; and

• Identifies the potential benefits of investing.

2 Partners and Key Stakeholders State highway activities have far reaching impacts in terms of the outcomes we deliver. From transport network users, our investment partners in Approved Organisations, the transport sector, other government departments such as Ministry of Transport (MoT) and Treasury, and within the Transport Agency.

Engagement and integration with many of our partners is achieved through joint network planning and programmes developed at an area/corridor level. And will be important during the process of engaging on the SHAMP and inputting into the RLTP process.

In terms of setting the strategic context and direction for the SHAMP our key partners and stakeholders have been from within the Transport Agency, principally Planning and Investment (P&I) and Strategy, Communications and Performance (SCP).

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3 Strategic Assessment - Outlining the Need for Investment This chapter presents the investment story through explaining further the outcomes from the investment logic mapping (ILM) process, in particular, the Investment Logic Map and the Benefits Map.

3.1 Defining the Problem

An independently facilitated investment logic mapping workshop was held on 17 July 2013 with SCP and P&I to form a consensus around the business focus for the SHAMP. Participants of the SHAMP ILM were:

• Colin Crampton, General Manager Highways and Network Operations (business owner)

• Kevin Reid, National Manager Network Outcomes, HNO

• Neil Walker, National Manager Network Directions and Performance, HNO

• Bob Alkema, National Manager Investment, P&I

• David Silvester, National Manager Planning, P&I

• Sandy Fong / Ben Peacey, Principal / Senior Advisor, SCP

The stakeholders identified and agreed the following key problems:

• Problem 1: Some state highways are increasingly unable to meet demand2 making the movement of people and goods inefficient.

• Problem 2: Some highways are not sufficiently forgiving for the way they are used exacerbating the risk to road users.

The consequence of these are that some state highways are not optimal in supporting business and economic growth for New Zealand and that we have unacceptable levels of deaths and serious injuries on our State Highways.

The Investment Logic Map is attached as Appendix A.

3.2 The Benefits of Investment

The potential benefits of successfully addressing the agreed problems were identified as part of the first ILM where parties developed and agreed the following potential benefits:

• Benefit 1: Improved support for business and economic growth; and

• Benefit 2: Reduced numbers of deaths and serious injuries on state highways.

The Benefit Map is attached as Appendix B.

2 Demand includes volume, type of vehicle, speed and other road user expectations and can include over and under supply.

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3.3 The Key Performance Indicators

At a second facilitated benefit mapping session held on 25 July 2013 the benefits identified above were developed further and key performance indicators established. The KPIs identified are shown below and have been drawn from the Transport Agency’s Statement of Intent and the P&I performance framework.

• Improved reliability

• Better utilisation of existing capacity

• Improved journey times

• Reduction in deaths and serious injuries; and

• Reduced collective crash risk.

Through the process of developing the programme business case the KPIs will be developed further into measures which can be attributable to the SHAMP. Examples of potential measures include:

• People throughput

• Number of trips affected by closures

• Average speed (by user type)

• Number of deaths and serious injuries

Value for money and social and environmental responsibility are one of a number of critical success factors in everything that we do. As such they are not promoted as key objectives within the SHAMP2 themselves although we must not lose sight of them in the activities we develop. Similarly, recognising the role that we play with our partners to deliver outcomes within the context of one network is considered a principal at the heart of the manner in which programmes of activity will be selected and put forward.

3.4 Status of the Evidence Base

3.4.1 Productivity

Transport is an important component of the government's strategy for achieving faster economic growth. The government has stated that it is looking for a high performing, safe and resilient transport system that improves economic growth, productivity and road safety.

New Zealand's population is projected to increase to over 5 million by 2031 with population growth and internal population movement having a strong impact on how we plan for, manage, operate and develop transport infrastructure in the future.

The freight task in New Zealand was forecast, in 2010, to increase by 70 to 75 percent over the next 25 years. The bulk of this increase is expected to be carried on road with the associated increase in freight movements adversely impact on New Zealand’s roading network through increased congestion, increased fuel use, and reduced international competitiveness by imposing unnecessary transport costs on the sector3. Increases in freight movement will put pressure on New Zealand's road, rail and port infrastructure. Developing these networks to provide the right level of service in the right location to support the export sector will be a key focus for transport infrastructure providers.

Although the linkages between GDP and traffic growth are less certain, previous Ministry of Transport research concluded that with just one percent higher annual growth in real GDP, vehicle kilometres travelled could increase by 27.4 percent over the same period.

Some estimates of the cost of road congestion in Auckland are over $1 billion a year. Recent research completed for the Transport Agency4 places the cost of congestion in Auckland in a range of $250m - $1,250m per annum. Future traffic growth will further exacerbate

3 Regulatory Impact Statement (RIS) that was prepared by the Ministry of Transport prior to the implementation of the Vehicle Dimensions and Mass Amendment 2010, Rule 41001/5. 4 The Costs of Congestion Reappraised, February 2013. Ian Wallis and David Lupton

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14Time

All responsibility on the Road User

Safe System approach to Injury prevention

Car based safety systems

The four approaches to Road Safety

Traffic rules and regulations

New Zealand?

Better Australian states?

Best performing European countries?

congestion in Auckland and other major centres of New Zealand and impact future economic growth.

3.4.2 Safety

Despite substantial progress over the last 30 years, New Zealand still lags behind many other countries in road safety. Every year, hundreds are killed on our roads and nearly 2,900 people are seriously injured in crashes on our State Highways. Approximately 13,000 New Zealanders suffer minor injuries as a result of road crashes.

These numbers reflect lives lost and ruined in what are mostly preventable outcomes, but they do not show the effect of these crashes on families, the wider community and the health system. Road crashes can also have a significant economic impact – the annual social cost of crashes to New Zealand on the state highway network is estimated to be around $1.44 billion per annum.

The governments Safer Journeys Road Safety Strategy to 2020, released in 2010, has a vision of a safe road system increasingly free of deaths and serious injuries. The reduction in road trauma requires an integrated approach to improving all parts of the road system. Advice to the Transport Agency of international experts in the Safe System approach believe that over the next decade or two, the greatest proportion of the safety gains will need to come from improvements to roads and roadsides, through targeting efforts to the high risk roads and intersections and through managing speeds. Whilst in the future much of the gains may come from vehicle and ITS technologies, our vehicle fleet is relatively old and it could take 12-13 years before crash protection/avoidance technologies available today end up in at least half of our fleet.

4 Strategic Context

4.1 Organisational Overview

We contribute to and deliver the land transport network for New Zealand as set out in the Land Transport Management Act 2003. We do this through four main functions:

• Planning the land transport networks

• Investing in land transport

• Managing the state highway network, and

• Providing access to and use of the land transport system.

The Highways and Network Operations Group aim to achieve a range of outcomes. These include better use of existing transport capacity, more efficient freight and a safe, resilient and secure transport network. With our partners we aspire to ease severe urban congestion, reduce deaths and serious injuries from road crashes and seek a reduction in adverse environmental effects from land transport.

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4.2 Alignment to Existing Strategies/Organisational Goals

The Transport Agency’s Statement of intent 2013–165 describes how we will give effect to government direction by working with our partners and listening to our customers to develop and deliver a portfolio of investments and services that provide effective transport solutions at the national, regional and local levels.

Of particular relevance to this strategic case, the Statement of Intent positions the Transport Agency to deliver value for money solutions that extract maximum return from the existing land transport networks and activities, whilst also directing future capital and operational investment into areas that will provide the greatest economic and social value.

Our wider transport sector partners have similar organisational goals around:

• Better use of transport resources to maximise return on existing assets;

• Increased customer satisfaction with transport infrastructure and services;

• Providing transport networks that move people and goods efficiently;

• Increase access to a wider range of transport choices; and

• Improve safety of the transport system.

Our aim is to work with others to ensure customers experience One Network, providing seamless journeys where people and goods can move smoothly from one part of the network to another and from one mode to another. This means working with land use, urban and transport planners to align investment with planned growth, close gaps in the network, anticipate and shape demand so that the network can provide the services and capacity needed to support economic growth and well-being now and in the future. It means working with others to make best use of the existing network, unlocking its potential to efficiently, safely and reliably move people and goods. It means identifying and strengthening the most important strategic transport connections that are critical to supporting New Zealand’s economic, social and environmental well-being. In this regard we are working particularly hard to improve how efficiently goods move from the farm gate to domestic and international markets, and we are improving the resiliency of the network to adverse events. Focusing on One Network means working with others to create transport choices and options for customers so they can move as they wish, when they wish, based on their own needs and resources.

5 http://www.nzta.govt.nz/resources/statement-of-intent/docs/soi-2013-16.pdf

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5 Anticipated Strategic Fit & Effectiveness

5.1 Assessment Profile

An assessment of the anticipated Strategic Fit and Effectiveness has been undertaken in accordance with the Transport Agency’s Maximising Returns for New Zealand goal. The indicative investment profile for the SHAMP would be High strategic fit and High effectiveness (H/H).

The SHAMP plays three key roles:

• it is a ten year route map showing how we plan, invest and deliver transport solutions for the future;

• it links the state highway investment to our wider strategic goals;

• it is a 6 year business case (with a 3-year funding proposal) for state highways activities (maintenance, renewals, operations and improvements) required to enable the Transport Agency to deliver its services to customers.

As a route map for the future, the SHAMP provides the logic, reasoning and context behind how we propose to maintain, renew, operate and improve the state highway asset over a 10-year period and the outcomes we hope to achieve during this timeframe.

In developing the activities that form the SHAMP the transport sector is increasingly working in partnership with each other to develop a “one system” approach at appropriate levels of service, which is designed to improve the connectivity and integration of the transport system. The “one system” approach aims to improve the manner in which:

• the networks of the different transport modes are connected and integrated;

• the State highway and regional arterial road networks are integrated to function as one system;

• modal services are integrated to provide a seamless transport experience.

The SHAMP will provide a business case for the activities required to deliver the state highways contribution to the outcomes outlined, based on demonstrating a clear need for works, the effectiveness of potential solutions and the efficiency of execution in order to optimise the state highways contribution to:

• The Government Policy Statement on Land Transport funding

• The Transport Agency’s long term goals, medium term objectives and short term priorities

• Our longer term 30-year direction (the Highways Directions)

It is on this basis that this Strategic Case has been given an anticipated profile of H/H/-.

Page | I

Appendix A - Investment Logic Map

Page | II

Appendix B – Benefits Map

Page | III