Part 1: Introduction

1.1
In this Part, we discuss:

• the scope of our audit; and
• how we carried out our audit.

The scope of our audit

1.2
Responsibilities for maintaining roads in New Zealand are primarily split between Transit New Zealand (Transit¹) and local authorities. Under the Transit New Zealand Act 1989 and the Land Transport Management Act 2003, Transit's main objective is to operate the state highway system in a way that contributes to an integrated, safe, responsive, and sustainable land transport system. Transit is responsible for maintaining state highways. Under the Local Government Act 1974, district councils are responsible for administering the networks of local roads within their districts, which includes maintaining local roads.

1.3
In most districts, Transit and the district councils carry out their respective road maintenance responsibilities separately. However, three district councils have entered into collaborative agreements with Transit to jointly maintain local roads and state highways. Each agreement is different in how it was set up and the specific objectives of Transit and the district councils involved. Nevertheless, all of the agreements were expected to result in cost-effective maintenance of both local roads and state highways as a single district roading network.² Several collaborative agreements between other local authorities and Transit have been proposed but have not proceeded.

1.4
In our audit, we looked at whether the three existing collaborative agreements between district councils and Transit were set up in a robust way (see Parts 2 to 3), were functioning well (see Part 4), and were resulting in effective maintenance of local roads and state highways at lower cost (see Part 5). We also looked at the reasons four other proposed collaborative agreements had not proceeded (see Part 6). We drew together views on lessons learned and what made collaborative agreements more likely to be successful (see Part 7).

1.5
The three existing collaborative agreements between Transit and district councils that we looked at were in the Marlborough, Rotorua, and Western Bay of Plenty districts. Figure 1 shows the districts, together with information on the local roads and state highways that make up the district roading networks.

Figure 1
Districts where the three collaborative agreements were operating

Source: Map of councils - Local Government New Zealand
District roading network information - Land Transport New Zealand and Transit data

1.6
The three agreements were:

• a delegation from Transit to Rotorua District Council under the Transit New Zealand Act 1989;
• a contractual agreement between Marlborough District Council and Transit; and
• a 10-year performance-based contract let jointly by Western Bay of Plenty District Council and Transit.

1.7
Under the delegation to Rotorua District Council, the council, on Transit's behalf, performs certain functions and duties, and exercises certain powers, for state highways that pass through the district, including managing their maintenance.

1.8
Under the agreement between Marlborough District Council and Transit, Transit provides roading management services to the council. This includes managing the maintenance of local roads and providing other services, such as parking control, on the council's behalf. A local Transit office, known as the Marlborough Roads office, has been set up to jointly manage roading services for local roads and state highways.

1.9
Under the 10-year performance-based contract in the Western Bay of Plenty district, a consortium of contractors provides all products and services associated with planning and delivering network maintenance activities for the combined Western Bay of Plenty District Council and Transit district roading network.

1.10
The four proposed collaborative agreements that did not proceed that we looked at were between Transit and district councils in Central Otago, Taranaki, Southland, and Tasman.

How we carried out our audit

1.11
For the three existing collaborative agreements, we interviewed Transit head office and regional managers with responsibilities covering the agreements. We visited each of the district councils. During our visits to the councils, we interviewed council officials and elected members with responsibilities covering roading matters, some roading contractors, and representatives from the New Zealand Police, New Zealand Automobile Association, and the New Zealand Road Transport Association.³ We also reviewed Transit and district council documents relating to the set up and ongoing operation of the collaborative agreements, and analysed Transit and Land Transport New Zealand⁴ data on the condition of the district roading networks.

1.12
For the four proposed collaborative agreements that did not proceed that we looked at, we interviewed some Transit staff involved in negotiations and conducted telephone interviews with representatives from the district councils. We also reviewed documents, including agreements, feasibility reports, and other papers leading up to the decision not to proceed in each case.

1: We note that in May 2007 the State Services Commission released a land transport sector review that recommended Transit and Land Transport New Zealand be merged - State Services Commission (2007), Next Steps in the Land Transport Review, Wellington, page 6.

2: Throughout this report, we use the term "district roading network" to mean the combined network of state highways and local roads within the geographical area covered by a district council.

3: The New Zealand Road Transport Association represents the road transport industry in New Zealand. Its mission is to create and sustain an environment within New Zealand in which the road transport industry can grow and prosper, and to assist members to realise their business goals.

4: Land Transport New Zealand is the Crown entity set up under the Land Transport Management Amendment Act 2004 to promote land transport sustainability and safety. It also allocates government funding for land transport - a function formerly carried out by Transfund. In this report, we refer to Transfund for activities carried out before November 2004, when Transfund was disbanded and its functions were transferred to the new Land Transport New Zealand.