Part 1: Introduction

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In this Part, we explain:

• why we carried out this audit;
• Auckland Transport's role;
• what the Auckland Manukau Eastern Transport Initiative (AMETI) is;
• AMETI's main stakeholders;
• the main risks for the AMETI programme;
• the scope of our audit;
• our approach and expectations;
• what we did not look at; and
• the structure of this report.

Why we carried out this audit

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On 1 November 2010, Auckland's seven territorial local authorities and one regional council were replaced by a single Auckland Council (the Council). Section 104 of the Local Government (Auckland Council) Act 2009 requires the Auditor-General to review the service performance of the Council and its council-controlled organisations (CCOs).

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For our third such review, we decided to look at a major Auckland Transport programme. We chose AMETI because of its significance to people in Auckland, its complex history, the long duration of the programme, and its estimated $1.1 billion cost to taxpayers and Auckland ratepayers.

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In 2013, 43.8% of respondents to a survey ranked transport as the biggest issue facing Auckland.¹ In 2015, most of those who made a submission to the Council about Auckland's long-term plan wanted investment in the transport network.

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Our decision to look at the AMETI programme was consistent with the Governance and Accountability theme in our 2014/15 work programme. Our audits and other work for 2014/15 focused on assessing whether good governance is helping entities to spend and invest public money wisely. An important aspect of good governance is running major programmes successfully, so that they deliver their intended benefits, at the intended price, at the intended time.

Auckland Transport's role

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The Local Government (Auckland Council) Amendment Act 2010 set up Auckland Transport as the regional transport authority. Auckland Transport is a CCO bringing together all the region's transport functions. These functions include:

• building and maintaining roads (except state highways and motorways);
• building and maintaining railway and bus stations, and cycle-ways; and
• managing public transport services, such as ferries, trains, and buses.

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Auckland Transport works at arm's length from the Council, its only shareholder. The Board of Auckland Transport governs the organisation.

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The Council and the New Zealand Transport Agency (NZTA) fund Auckland Transport's activities. Ratepayers fund the Council, and revenue from road tax funds NZTA.

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The general governance and accountability framework for Auckland Transport is set out in law. The Council sets out annual expectations and other expectations from time to time. We say more about this in Part 2.

The Auckland Manukau Eastern Transport Initiative

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AMETI is a package of transport improvements proposed for routes connecting Glen Innes, Panmure, Pakuranga, and Botany, and Mt Wellington with Sylvia Park, to serve the eastern suburbs (see Figure 1). The Auckland Plan states that "growth of business, employment and residential in eastern Auckland has created a pressing demand for transport investment".

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The Plan forecasts that the population of the eastern suburbs will grow by up to 25,000 people during the next 20 years. This projection includes the Tamaki priority growth area. The Council hopes that providing good transport links will unlock the economic potential of the eastern suburbs.

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Roads in Auckland's eastern suburbs are congested at peak times. Auckland Transport predicts that, without AMETI, some of this congestion will reach a critical point by 2021. Residents rely heavily on private car journeys because, historically, public transport has not been a viable alternative.

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Auckland Transport hopes that AMETI's improvements will reduce local journey times and provide faster public transport journeys on the "Panmure Bridge" route to central Auckland. Auckland Transport hopes that this will encourage local journeys and more public transport use. Freight and business traffic will be routed by the Waipuna Bridge and the South-Eastern Highway to central Auckland.

Figure 1
Map showing the Auckland Manukau Eastern Transport Initiative programme of works in Auckland's eastern suburbs

Source: Adapted from an Auckland Transport map, and provided for indicative purposes only.

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Auckland Transport is delivering AMETI in five stages (see Figure 2). Each of the stages includes at least one project.

Figure 2
Stages of the Auckland Manukau Eastern Transport Initiative

Source: Auckland Transport's AMETI programme initiation document (adapted).

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AMETI has a long history. In 2003, Auckland City Council, Manukau City Council, and the Auckland Regional Transport Authority brought together many individual projects to form AMETI. Regional transport plans included a commitment to deliver AMETI. However, the programme was not funded, and little progress was made during the next eight years.

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With AMETI's long history and a planned delivery timescale that stretches to 2028, it is important that the people now responsible for governing and managing the programme clearly understand its purpose and continuing strategic fit with other regional plans for Auckland, such as the Council's long-term plan and the Integrated Transport plan.

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Those involved with AMETI's governance and programme management will change many times during the years. This makes it especially important that good systems, processes, and records are in place to support Auckland Transport's institutional memory of the programme.

The stakeholders

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Many people, groups, and organisations have an interest in AMETI. These include the people of Auckland, government departments, individual households and business owners on affected routes, and special interest groups, such as those promoting cycling.

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Auckland Transport recognises its two funding organisations, NZTA and the Council, as important stakeholders in AMETI. Auckland Transport lists the Council's business units – such as planning, parks, and City Transformation, and some other CCOs – as important stakeholders. All of these stakeholders have a place on one of the advisory groups within AMETI's governance structure.

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Auckland Transport recognises that it has special relationships with iwi and local boards. It has arrangements in place to maintain and enhance those relationships. These arrangements include supporting monthly hui with mana whenua and regular briefings to local boards. Mana whenua and local boards are not represented on AMETI's advisory groups.

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AMETI's communications and engagement strategy requires programme and project teams to prepare a plan to say how they will inform and consult with stakeholders at each stage of the AMETI programme.

The scope of our audit

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Our audit covers Stage 2a of AMETI – improvements to the Panmure Roundabout, road changes from Panmure to Panmure Bridge, the Pakuranga bus way, and the Reeves Road Flyover.

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When we carried out this audit in February and March 2015, some of the projects were under evaluation and others were in design. Stage 2a is due to be completed in the second quarter of 2021.

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We looked at the governance and programme management structure that Auckland Transport set up to support the effective delivery of Stage 2a and to fulfil its accountability obligations. By accountability, we mean how Auckland Transport formally accounts for its use of public money and how it communicates and engages with stakeholders.

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Auckland Transport's governance structure includes:

• the Board of Auckland Transport and its committees;
• the Board's framework of policies that provide direction to the staff of Auckland Transport; and
• the management structure that the Board put in place to oversee AMETI's delivery, which includes a Programme Control Group.

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Some aspects of programme management, such as a steering group made up of staff, are sometimes referred to as "programme governance". In this report, we refer to the functions and direction of the Board of Auckland Transport, including its policy framework, as governance. We consider the work of staff such as the Programme Control Group to be programme management rather than governance.

Our approach and expectations

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In our audit, we looked at whether:

• the governance, programme management, and accountability structure had been designed in a way that supports effective governance and programme management;
• those with governance and programme management responsibilities practised those responsibilities in keeping with that structure; and
• the governance, programme management, and accountability structure was having a positive effect on programme delivery.

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We used two case studies to analyse and explain the effect of the governance, programme management, and accountability structure.

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For each case study, we spoke to members of the Board of Auckland Transport, Council and Auckland Transport staff, and external stakeholders such as local board chairpersons, mana whenua, business representatives, and NZTA. We also reviewed project documents, including dashboard reports, meeting minutes, and reports to the Programme Control Group and the Board. We then compared our observations against the direction that the Board set.

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Figure 3 sets out our expectations of good governance and programme management. These expectations are not exhaustive. We refer to elements of them throughout our report. To prepare these expectations, we drew on other reports, such as our report on Governance and Oversight of Large Information Technology Projects, the Report of the Ministerial Inquiry into the Novopay Project, and other relevant literature.²

Figure 3
What we expect of Auckland Manukau Eastern Transport Initiative governance and programme management

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Where the Council's expectations were strongly linked with the matters we audited, we have considered them in our audit. When we discuss those expectations, we draw from the Council's Shareholder Expectation Guide for CCOs. The Council sets out six principles for a good governance relationship between its governing body and CCOs. These are leadership, empowerment, accountability, transparency, public service ethos, and trust.

What we did not look at

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Our audit focused on the governance and programme management of AMETI and the framework of policies to help people carry out their roles. We did not audit:

• the effectiveness of governance and accountability for Auckland Transport's programme management of Stage 1 of AMETI or for stages of the programme beyond Stage 2a;
• the overall effectiveness of the Board of Auckland Transport;
• how Auckland Transport governs and manages other major projects; or
• the role of the Council's CCO Monitoring and Governance Committee or other institutional governance bodies in the Council.

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We did not assess AMETI's overall deliverability. Because we looked at only the early work on Stage 2a of AMETI, we did not consider the effect of governance throughout the whole programme or at Auckland Transport more generally.

Structure of this report

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In Part 2, we look at whether Auckland Transport designed the governance, programme management, and accountability structure for AMETI effectively.

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In Part 3, we look at how well the governance and accountability arrangements are working. We report on the progress of the programme at Pakuranga Town Centre and Mokoia Pā, drawing out strengths and weaknesses in how the governance and accountability framework for AMETI works in practice.

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In Part 4, we look at how well the programme management arrangements are working.

1: Herald-DigiPoll survey of 500 Aucklanders in October 2013.

2: Other reports that we drew on were our Inquiry into the Mangawhai community wastewater scheme (2013) and Maintaining a future focus in governing Crown-owned companies (2014), available on our website, www.oag.govt.nz.