16 October 2005

Statement clarifying the potential for a local authority contribution to the cost of the .

Clarification of potential local authority contributions to Transmission Gully "Conflicting statements in recent days about the likely requirement for a local contribution to the funding gap for the Transmission Gully motorway, and the basis for calculating that contribution require some clarification," said Terry McDavitt, Chairperson of the Regional Land Transport Committee.

"The following information outlines the basis for including the possibility of a local authority contribution and a rates calculator in the consultation documents. That the possibility of a local contribution has caused public debate is a legitimate outcome of the consultation process, and reflects the facts of the current funding situation.

For these reasons, the rates calculator and background information will remain part of the consultation process." Background information on the potential for local authority contribution The Regional Land Transport Committee included the possibility of a local contribution for funding the Transmission Gully route in its resolutions on the Western Corridor.

Resolution seven, passed 17 votes to 0 at the meeting on 29th August reads: ... if the coastal route proves to be unconsentable, and consequently an alternative such as Transmission Gully is adopted as the preferred project, that Government be requested to assist with an appropriate funding package involving Crown, users, and local authorities.

The reference to Crown assistance refers both to seeking additional direct funding, and also to seeking legislative authority to enable local authorities to contribute to the funding of the gully route, if such legislation proves to be necessary. Local authority contributions to the funding of state highways are rare, but not unknown.

A current example is SH1 East Taupo Arterial which is proceeding ahead of schedule because the local authority has made a contribution to its funding. Local authority contributions could take several forms, including rating or the imposition of some form of road pricing (such as London's congestion charge). The use of rates to fund projects of regional importance in the Wellington Region was recently demonstrated in the funding of the Stadium.

The exact form of local contribution would be a matter for debate, but rates are a good indicator of the likely cost per household.

Background information on calculating a rates contribution Concern about the $465 million funding gap between the cost of the Coastal Highway upgrade and Transmission Gully routes prompted the Regional Land Transport Committee on the 15th of June to ask officers to prepare a report on how the gap could be funded. One option identified was for local authorities to make a contribution to the cost.

A cost allocation model was prepared by consultants Maunsell Ltd and it was from this work that the table outlining the potential rating cost was developed. The basis for this approach is the Local Government Act's requirement that costs are allocated where the benefits lay. A similar process was used to develop the rating mechanism for the Stadium. The rating model is indicative only, but reflects the potential rate increase should local funding be required. If this approach is required a funding policy would have to be developed in a transparent way.

The full paper outlining the basis for local contribution was tabled at the Regional Land Transport Committee meeting on 29th August, and can be read on Greater Wellington's website (links below).

ENDS

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