Getting on the public transport funding bus

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While central government investment in land transport has increased substantially over the last few decades, resources are still finite and there’s keen competition to secure funds for projects. This guest blog from our Wellington Sector Leader Public Transport Doug Weir looks at how best to secure that public transport funding for key projects, based on his experience with Horizons Regional Council. 

The finite resource equation is perhaps even more true for public transport, where funds allocation is proportionately smaller than for road infrastructure development and the emphasis is on congestion-busting initiatives. And, when the discussion is congestion, that inherently puts the focus on New Zealand’s largest cities.

It’s within this environment that TDG built a successful business case for central government investment in the urban bus network of a comparatively uncongested provincial city.

Horizons Regional Council’s boundaries extend from Tararua in the east to Whanganui in the west, and from Horowhenua in the south to Ruapehu in the north. As a regional council, Horizons has statutory responsibility to plan for and deliver public transport services to the local authority areas within its region. The Council recently completed a review of Palmerston North bus services, an action included in its 2011-21 Regional Land Transport Plan.

The Palmerston North bus network review set out to address two main problems with existing services – a complicated bus network and comparatively low service levels – which were seen to be hindering patronage and revenue growth, and the long-term viability of services. The objective was to identify an optimal public transport network that would improve the service for users and the wider community, while offering value for money.

We were engaged to provide specialist consulting services for potential changes to timetable, routes and service structure. Later on, we peer reviewed the option development phase and offered guidance on the detailed costings. This was used to identify the impact of costs on the Council’s rating programme – an assessment of how much each option would impact rate payers.

By mid-2014, Horizons went to public consultation with three options for improving the bus service network, referencing TDG’s evaluations and costings.  By late 2015 Horizons had worked through a refinement of options, including technical assessment and gaining feedback of its key stakeholders, and the preferred option was confirmed in the 2015-25 Regional Public Transport Plan. This included six service level enhancements, with a staged roll-out over three years.

Over this time, the NZ Transport Agency introduced a business case approach for its investment and project development processes. The application that Horizons planned to make for central government funding needed to be framed within the format of the approach.

Te difficulty this presented was that much of the preparatory work had been done before that approach was adopted, and according to previous parameters. The main elements were there but they did not fit exactly the new Transport Agency requirements. We needed to firstly draw together the earlier work and build on it to identify clear strategic and indicative cases, then develop a detailed case for investment in the preferred option, in accordance with the Transport Agency’s business case approach.

As part of compiling the business case, we conducted a detailed economic analysis of the options, which included extensive scenario testing. Due to my considerable experience with public sector investment I usually know what the Transport Agency is looking for. This analysis provided the needed inputs to accurately predict the likely effect of each initiative on patronage, and allied to that, the effect of resulting increased demand.

Our work identified a compelling case for investment in the preferred option, and became the basis of Horizon’s funding application to the Transport Agency. This was subsequently approved, with a four-year roll-out rather than three, and ongoing funding subject to performance.

What’s the shape of bus services in Palmerston North today?  The first tranche of changes – an increase of frequency on some services during peak travel times – was implemented mid-February, with more substantial service changes to go live in mid-July. This includes adding evening services and increasing the frequency of the weekend service, both of which are strongly supported by the community of this university city.

Doug Weir is our National Specialist for Public Transport and has particular experience and interest in developing business plans. The Palmerston North Bus Network Business Plan is just one of his many recent projects. Click here for more info on Doug Weir.

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