In recent months we’ve become increasingly concerned about the performance of the NZTA. In particular that they appear to have come down with a case of organisational constipation. The NZTAs central role in the transport industry as both a builder but also a part funder of local government projects means it’s critical that they are operating well but more recently it appears there’s simply not much coming out. This view is the result of a number of observations, some of which I’ve tried to highlight below.
Key projects suffering from analysis paralysis
In Auckland we’re seeing little progress other than what was already under construction as the NZTA keep reassessing projects. Light Rail is meant to be one of the government’s flagship projects and despite already having been subject to significant investigation by Auckland Transport, was effectively started again by the NZTA. They’ve now essentially paused the project while they assess in more detail a bid from the NZ Superfund. Similarly, we’ve now seen that Skypath is being delayed as the NZTA investigate other options.
It’s not just NZTA projects either with many AT projects seeming to be subject to reviews and delays, especially cycling projects. It appears, and is backed up by come comments we’ve heard, that the NZTA are putting projects “through the ringer”. It’s unclear of the reason for this although some possible ones are further in the post.
Despite all of this, the NZTA have managed to find plenty of time to keep working on projects like Warkworth to Wellsford motorway which even in the best case scenario which isn’t even due to start construction within the coming decade.
The construction companies are getting worried
In mid-February we saw a few articles and press releases about contractors being concerned that work was drying up once the current Roads of National Significance are completed. In some cases this concern seems to be more a worry that the current motorway building gravy train is ending as a result of the new government changing the priorities for transport. But while there was plenty of noise from some areas about these changes, there is still more planned to be spent on roads in the three years from 2018-21 than from 2015-18. What is changing is where those funds are directed. The new Government Policy Statement and subsequent National Land Transport Programme will see a little bit less spent on new state highways but that is more than made up for by spending a lot more on local road improvements and maintenance of both state highways and local roads. Essentially the change would see transport focused away from a few large roading projects into lots of small ones that will deliver much more benefit. This also doesn’t include all of the new funding for other projects, such as public transport, walking and cycling and rail.
Again, what we have been hearing is that the NZTA haven’t been releasing that funding. Like we’re seeing with the high profile cases we’ve seen in Auckland, the NZTA are putting projects all around the country under the microscope and it is meaning in some areas, there’s almost no work being approved.
What’s causing this disarray?
There are several possible ideas as to what is causing these issues. In all likelihood it could be a combination of many or even all of them.
Budgets are tight
While funding may have increased, so to have construction costs. There have been plenty of noises about the increased cost for the CRL, and while that’s not funded by the NZTA, it’s likely many projects they do fund are suffering a similar fate. This could mean the funding that is available is being more hotly contested and may explain why business cases are being reviewed again and again as the NZTA try to decide what to fund.
This is also backed up a bit by a Newsroom article last week suggesting the NZTA is struggling with pressure on transport funding, especially from public private partnerships.
The NZTAs regulatory functions are currently being independent assessed after it was found they weren’t managing compliance properly. That poor compliance resulted in at least one death. While this is a different part of the organisation the one that approves funding, it’s not hard to imagine that this is having a knock-on effect to other parts of the organisation. Perhaps they are finally coming to the realisation of the responsibility they have for safety, and that it means more than just putting out nice words and documents.
The regulatory issues above have already resulted in Fergus Gamie resigning as CEO and the chair has in the past said others may end up leaving too. Changing management is usually very disruptive to organisations. It isn’t just the management team being disrupted but the board too with news in January that three directors resigned within six-weeks. Notably, this was almost exactly the same thing that happened to Vector when the NZTA’s current chair took over there in 2006.
Government Policy Statement
On top of all of the above, the NZTA is likely still trying to come to terms with what the new Government Policy Statement actually means in reality. The 2018-28 GPS prioritises safety, accessibility, the environment and value for money and that has meant many of the projects they were working on simply aren’t a priority anymore.
Whatever the cause/s of the issues the NZTA are having, they’re going to need to get on top of them and quickly. Projects are rapidly falling behind and that’s not acceptable, especially in Auckland where there’s so much to do. As for Transport Minister Phil Twyford, we certainly know he can say the right things but he also can’t afford to sit by and let this situation carry on or else he’ll quickly find himself under attack, like he has been over Kiwibuild.