2001/02 Financial review of the Ministry of Transport. Report of the Transport and Industrial Relations Committee

Transcription

1 2001/02 Financial review of the Ministry of Transport Report of the Transport and Industrial Relations Committee December 2002

2 2 Ministry of Transport Recommendation The Transport and Industrial Relations Committee has conducted the financial review of the 2001/02 performance and current operations of the Ministry of Transport and recommends that the House take note of its report. Financial and management performance We congratulate the Ministry of Transport for again achieving ratings of excellent from the Office of the Controller and Auditor-General for all the financial and management aspects assessed. Land Transport Management Bill The Land Transport Management Bill was introduced into the House on 3 December 2002, subsequent to the hearing of evidence on this financial review. The bill enables tolling and public/private partnerships for the funding of some transport projects and includes criteria for the different funding options. The bill allows the implementation of a number of initiatives outlined in the Moving Forward land transport policy and funding package announced by the Minister of Transport in February Public/private partnerships The ministry has listed in its work programme for 2002/03 preparing for an assessment of public/private partnership and tolling proposals. In 2001/02 the ministry spent $27,555 on consultants who undertook modelling on public/private partnerships. 1 The ministry will be developing guidelines for applicants seeking approval of concession agreements according to provisions in the Land Transport Management Bill and will advise the Minister on any application it receives. The ministry will be working with Transit New Zealand as it develops project selection criteria and draft contract documents for potential State highway public/private partnerships. The ministry estimates that there will be less than 20 projects in New Zealand that, because of size and monetary value, could be potential public/private partnerships. 1 Response to the Transport and Industrial Relations Committee question 39.

3 3 New Zealand Transport Strategy The Government released the New Zealand Transport Strategy on 3 December It outlines the Government s vision for transport in New Zealand. The Government has set five objectives in the strategy: to assist economic growth to protect and improve public health to assist safety and personal security to improve access and mobility to ensure environmental sustainability. The ministry had planned in its work programme for 2001/02 to complete the New Zealand Transport Strategy and introduce legislation by 31 March Cabinet agreed to a revised timeframe in July Finalising implementing the strategy is one of the ministry s priorities for 2002/03. The ministry discussed the draft strategy with eight reference groups representing social non-governmental organisations, environmental non-governmental organisations, local government, unions, business and transport providers, Maori, and other users in mid The ministry included feedback from the groups in the final version of the strategy. The ministry spent $491,000 on developing the New Zealand Transport Strategy during 2001/02. The ministry spent $5,500 on consultants for the preparation of background papers during the financial year and $987 among three consultants for Maori reference group hui. It did not use consultants in writing the draft strategy. The ministry noted that implementation of the strategy will require it to extend the focus of its policy advice to include understanding the role of transport in social participation, regional development, logistics, and public health issues. Balance road/rail The ministry has commissioned a land transport policy project considering the balance between and the future demands on road and rail transport in New Zealand. The research includes an examination of the comparative costs of road and rail transport. The ministry is using consultants to undertake this work and has set the key milestone for this project at 31 March It estimates expenditure on consultants working on this project will be approximately $400,000. We are concerned about the effect increasing numbers of logging trucks will have on New Zealand s roading infrastructure and other road users. As part of the land transport package announced in February, the Government has allocated $30 million to regional development. This funding is allocated through Transfund New Zealand to Tairawhiti and Northland in 2002/03. The ministry emphasised that the

4 4 Government has focused on these two areas to develop the shortest route for transportation of logs to processing plants in Gisborne and rail heads in Northland. We are also concerned about the skill shortage in the transport sector especially for truck drivers. We believe that there is insufficient effort being made to encourage people to train as drivers. The ministry pointed out that there are currently a number of activities underway to encourage people into the sector. For example, the Road Transport Forum is undertaking a lot of activities in schools and the Salvation Army runs driving courses to assist people to obtain heavy vehicle licences. Road vehicle emissions The ministry recently completed a preliminary report on the health effects of vehicle emissions. 2 The report revealed that health impacts of vehicle emissions in New Zealand are greater than previously realised. It is estimated that approximately 400 people aged 30 and over prematurely die each year from air pollution associated with vehicle exhaust pollution. The ministry has now reassessed the potential for significant economic and social benefits to come from introducing a more stringent national vehicle emissions policy and is reviewing the policy options on managing road vehicle emissions. In addition, the ministry is supporting further detailed research by the Health Research Council into the health effects and costs of exhaust emissions. The council has a three-year contract for the research. The ministry is investigating various ways to reduce the impact of vehicle exhaust emissions, including incorporating changes to vehicle standards into land transport rules. The ministry notes that reducing traffic congestion can reduce exhaust pollution, as will improving the overall exhaust performance of the fleet. Possible policy options include requiring vehicles to be properly maintained and tuned, introducing emissions tests as part of warrants of fitness and introducing roadside remote emissions testing to identify the worst exhaust emissions offenders. A Vehicle Emissions Rule (Petrol and Diesel) is currently being developed. We support the exploration of ways to reduce vehicle emissions without imposing undue costs and restrictions on the general motoring public. Rail safety In December 2001 Cabinet agreed to make changes to the rail safety legislative framework to take into account the changes in ownership and operational activities of the rail network, including: introducing a regime that will include all key rail participants implementing the recommendations in the Ministerial Inquiry into Tranz Rail Occupational Safety and Health (the Wilson Report) 2 Health effects due to motor vehicle air pollution in New Zealand, Report to the Ministry of Transport, G.W. Fisher, K.A. Rolfe, Prof. T. Kjellstrom, Prof. A. Woodward, Dr S. Hales, Prof. A. P. Sturman. Dr S. Kingham, J. Petersen, R. Shrestha, D. King. 20 January 2002.

5 5 consolidating railway safety legislation into a single Act. A Railways Bill is being drafted and the ministry expects it will be ready to be introduced in The ministry told us the bill covers previously identified legislative shortcomings by extending the licensing regime to cover rail participants who provide access to the track. The bill will allow the Minister to make rules relating to standards, practices and procedures, and creates a new sanctions regime that will encourage individual rail licence holders to take proactive measures on critical safety issues. The bill will also provide a new safety assessment regime to replace the current audit and inspection process, which can be tailored to reflect the particular safety history of each rail licence holder. The ministry told us that the Land Transport Safety Authority and Tranz Rail are currently working towards Tranz Rail implementing the recommendations in the report by Halliburton KBR that was commissioned by the Land Transport Safety Authority. The Railways Bill will, where appropriate, reflect some of the findings of the report. Air New Zealand ownership issues The ministry has worked closely with The Treasury to advise the Government on Air New Zealand ownership issues. The ministry focused on regulatory issues concerning constraints imposed by air services agreements and the competition implications. The ministry wrote several papers for the Minister on his kiwi shareholder responsibilities. The ministry was unable to discuss information about airlines that have contacted the ministry about entering the New Zealand market since this information is commercially sensitive. Shipping Industry Review The Government released the report of the Shipping Industry Review on 15 March The review looked at how to increase New Zealand participation in shipping and maritime services. We noted in our report on the 2002/03 Estimates Vote Transport that the ministry has reported to the Government on a number of issues involved in developing a response to the review. 3 Action has been taken on two recommendations in the review but the Government has not completed its consideration of the remaining recommendations and the ministry is still undertaking work on the review. The ministry spent $53,000 on the review during 2001/02 and its key milestone for this work is now 30 April We noted in last year s financial review of the ministry our concern that the issues had not been resolved. 4 Some of us are concerned that consideration and implementation of the review s recommendations have taken so long and believe that little progress has been made since December /03 Estimates Vote Transport, Report of the Transport and Industrial Relations Committee /01 Financial Review of the Ministry of Transport, Report of the Transport and Industrial Relations Committee.

6 6 Review of accident investigation The ministry began a review of transport accident and incident investigation in The review initially focused on aviation, but it has now been extended to include maritime and road and rail accident investigations. The ministry is planning a consultation phase for the review early in It may use some external resources for peer review prior to the consultation phase but otherwise staff from the ministry are conducting the review. We look forward to seeing the results of this review. Research projects The ministry has funded a number of ongoing research projects by external consultants during the financial year. We will follow with interest the findings of the research into sustainable settlements and the transport effects on water ecosystems. The ministry told us it is a complicated project that aims to understand what contributes to successful settlements. The ministry spent $49,000 on external consultants on this project in 2001/02. Another ongoing project on which the ministry employed external contractors in 2001/02 is investigating the transport effects on water ecosystems. The ministry spent $185,625 on consultants for this project in the financial year and its milestone for the project is 30 June Staff turnover The ministry is a small policy organisation employing 68 people. Staff turnover in the ministry in the 2001/02 financial year was 20 percent compared to 22 percent in 2001/02. The ministry believes a turnover rate of around 15 percent is to be expected in an organisation of its size, so is working to reduce the current rate, particularly in the policy development area where turnover was 17.5 percent in 2001/02. The ministry completed an overhaul of its training programmes in 2001/02 and its new retention strategies focus on customised and targeted development. Currently the average length of service in the ministry is five years. The ministry advised us that the average length of service has reduced over the last 18 months. It noted that a contributing factor to this decrease in length of service has been the increase in baseline funding for more staff. The ministry s numbers have increased from 60 staff in July 2000 to the current 68 full-time equivalents. Ethnic diversity The ministry notes in its annual report that it continues to work at capturing the benefits of a diverse workplace. 5 Six percent of its staff as at June 2002 were of Maori descent compared 5 Report of the Ministry of Transport Te Manatū Waka for the year ended 30 June 2002, F.5. p.15.

7 7 to eight percent as at June The ministry has a target for 12 percent of its staff in 2005 to be Maori. Its target for 2005 for Pacific people is 5 percent but as at June 2002 it did not employ any Pacific people compared to 3 percent of its staff in The ministry provides a scholarship for Maori tertiary students but this year the Maori scholarship was not awarded, as there was no suitable applicant who was studying transportrelated subjects. The ministry did award its first scholarship to a Pacific person. We congratulate the ministry in offering scholarships, including to Maori and Pacific people, and look forward to them being able to meet their targets for ethnic diversity in future years.

8 8 APPENDIX Approach to this financial review We met on 7 November and 12 December 2002 to consider the financial review. Our review took two hours and 15 minutes. We heard evidence from the Ministry of Transport and received advice from the Audit Office. Committee members Helen Duncan (Chairperson) Hon Roger Sowry (Deputy Chairperson) Peter Brown Deborah Coddington Hon Harry Duynhoven John Key Lynne Pillay Hon Judith Tizard Mike Ward Evidence and advice received In addition to the 2001/02 annual report, we considered the following evidence and advice during this financial review: Response to the Transport and Industrial Relations Committee s questions, dated 4 November 2002 and Audit Office briefing report, dated 7 November 2002.