NLTP Bulletin

This letter will be sent out to Mayors, Chairs and CEs this afternoon.

Kia ora koutou,

The Waka Kotahi Board recently reviewed the investment targets for all activity classes in the 2021-24 National Land Transport Programme (NLTP) that were agreed when the programme was adopted in August 2021. This is normal process during the delivery of a NLTP.

COVID lockdowns, supply chain delays, the tight labour market, and the reprioritisation of transport programmes to better address recent policy changes, have affected the sector’s ability to deliver on the ambition in the 2021-24 NLTP.

Many organisations have delayed the start of new projects or are delivering projects at a slower pace than originally forecast because of increased costs, funding pressures and supply disruptions. As a result, forecasted funding demand is much lower, with the situation remaining uncertain and there being ongoing changes to programme delivery.

Forecast revenue for the 2021-24 NLTP period is estimated to be $600 million down (or about 5 percent of projected revenue at the time the NLTP was adopted) while project costs are higher than originally expected, putting pressure on this NLTP. In response, the Board has changed the activity class targets and established new target ranges in line with what we know we can afford to fund or finance.

Based on projected funding demand from recent council and Waka Kotahi forecasts which have also considered forecast revenue, investment limits have been reduced for the following activity classes:

• Public Transport Infrastructure
• Walking and Cycling
• Local Road Improvements
• Road to Zero Activity 
• Investment Management

Investment targets in the Public Transport Services activity class has been increased.

The activity classes that have remained the same are:

• Local Road Maintenance
• State Highway Maintenance
• State Highway Improvements
• Rail
• Coastal Shipping

All these changes are shown in the graph above, and full details are available at the end of this email.

It is important to emphasise that at this stage we expect to be able to fund Probable Activities and meet all existing commitments. The lowering of some investment targets is not the result of Waka Kotahi cancelling or reprioritising any work programmes, it is simply reflecting forecast demand. However, it is unlikely we will be able to fund any new activities that are not Probable or agree to any new enhanced Funding Assistance Rates, outside of those approved for Emergency Works and other existing commitments.

Various factors have affected funding demand in the Public Transport Services Activity Class including reduced farebox revenue since COVID, diesel cost pressures, increased drivers’ wages, and an extra public holiday. Accordingly, we have increased this funding target to ensure we can continue to maintain current services and support the reduction in private vehicle use and carbon emissions. 

As you will be aware, the ongoing scale of emergency works from severe weather events is putting significant pressure on the State Highway Maintenance and Local Road Maintenance Activity Classes. We are currently managing this within the existing budgets. Should emergency events continue at the same frequency, adjustments may also be required to these Activity Class targets potentially resulting in the need to offset across the programme.

We are continuing to monitor available revenue and costs, and how these will impact the 2024-27 NLTP.  At this stage, we expect a higher-than-normal carry-over of committed activities into the 2024-27 NLTP, which is likely to limit funding available for new activities in some Activity Classes.

Given the high levels of uncertainty, it is important you are regularly reviewing your work programmes and project forecasts through Programme Monitor to help us manage delivery of the 2021-24 NLTP and plan for 2024-27.

Please contact your Director of Regional Relationships if you have questions about this change.

Ngā mihi nui,

Nicole Rosie

Chief Executive

Waka Kotahi NZ Transport Agency

New Target Investment Ranges by Activity Class

More information

For more information on the National Land Transport Programme, contact us online.

Visit our website www.nzta.govt.nz/NLTP