Comment
A Stakeholder-developed National Code of Practice Instead of the Governance Role for Road Controlling Authorities
11. The 2006 proposal to create a statutory responsibility for managing and coordinating the sustainable multi-use of the transport corridor with an explicit governance role assigned to parties within the local authorities. This was intended to be the mechanism to address the perceived poor planning of works in the road corridor causing traffic delays, damage to road surfaces, and general inconvenience to the public and businesses.
12. Further consultation produced an almost unanimous rejection from both major stakeholder groups for it.
13. The main reason for its rejection was the recognition of the different drivers for utilities and local authorities on how their assets are planned and managed. The Territorial Local Authorities plan the management of their road assets through Long Term Council Community Plans (LTCCP) and annual district plans. Transit NZ (Transit) is required to publish a 10-year State Highway Forecast detailing planned maintenance and capital improvements. In contrast, utilities, particularly telecommunications companies working in a fast-paced competitive environment, often do not wish to divulge forward plans and moreover need to supply services in response to consumer demand (which may be difficult to predict).
14. Another concern raised by utilities were that local authorities have neither the incentives nor the expertise to make decisions about other parties' assets, and that such powers would need to be clearly defined and limited through legislation. This then raised the risk that decision-making under the governance role could have adverse impacts on the timing of infrastructure development, such that the necessary processes could be slowed down.
15. Finally, a clear majority of local authorities did not wish to assume these responsibilities, although there was some support for such a management model to be able to be formed from willing parties, and a minority who thought they should have more powers.
16. In consideration of the responses to the enhanced governance and management proposal, I consider that the policy originally proposed to address improved co-ordination of works in the roads is not tenable.
17. Since the beginning of the review in mid-2005, there has been significant movement in the co-operation of local authorities and utility companies. Both are aware that the government wishes to see movement in improving the sustainable management of the multi-use transportation corridor.
18. The stakeholders have submitted that the use of an agreed code of practice is their preferred solution to the problem of poor corridor management and have established a group (the ‘working group') identified below1 to develop it further. This builds on significant achievements in the Auckland region to create a code of practice which was then used as the model for the New Zealand Utilities Advisory Group (NZUAG) to create a ‘Working in the Road' code of practice that is voluntarily used by 30 other local authorities.
19. Officials have been kept informed of the progress made in the development of a national code and the significant effort and commitment of this stakeholder-led response. I believe this will be a better mechanism to give effect to the policy intent to improve the management of the transport corridor. This submission to Cabinet was delayed to allow the process of developing the code of practice to inform whether any further changes to legislation would be required.
20. I recommend legislation empowering the Minister of Economic Development, in consultation with the Minister for Transport and the Minister of Local Government, to approve and enforce the use of a stakeholder-developed code of practice for access to the road (and to the motorway and rail corridor if a majority of service providers agree to voluntarily establish a satisfactory mechanism to implement the code)
21. Consultation with the Ministers of Transport and Local Government is to ensure that issues pertaining to transport safety and community values are considered and reflected.
22. I also recommend a regulation-making power for the Minister for Economic Development (in consultation with the Minister of Transport and the Minister of Local Government) to set up and administer an independent code of practice if a majority of stakeholders cannot agree to establish a satisfactory mechanism on a voluntary basis and it is considered that it is the best way to manage the multi-use of the transport corridor.
23. A stakeholder code of practice that is to be approved by the Minister of Economic Development must demonstrate:
- that the process has resulted in a reasonable level of agreement between the parties, and that the level of agreement reflects the area to which the code applies;
- the principles by which the parties will collaborate, including how works can be co-ordinated;
- the scope of the reasonable conditions, the operational and maintenance procedures, and how the risk from road-side hazards are assessed and managed; and
- a process for dispute resolution.
24. Appendix 1 describes the design and drafting details for these the stakeholder and regulated code of practice.
25. Funding for the approval of a code or the creation of a code will be from the Ministry of Economic Development, Ministry of Transport and Department of Internal Affairs baselines. This funding has been estimated to be $0.210 million per year. The resource requirement is expected to be ad-hoc rather than continuous.
26. The Minister for Economic Development would notify approval of a code by, for example, a notice in the Gazette.
The Code of Practice Covers Reasonable Condition of Access; Further Legislative Direction Needed on their Scope
27. Rights of access by utilities to the road corridor are subject to reasonable conditions prescribed by local authorities or other persons with jurisdiction over the road. Further direction for both main parties on the scope of such conditions is required, as this has surfaced as a sticking point in the development of the code of practice.
28. Section 119 of the Telecommunications Act lists a range of criteria for setting reasonable conditions, but the list does not limit a local authority's or other person's ability to prescribe other reasonable conditions (as indicated by the terms ‘may consider all or any of'). The conditions listed are for consideration of
- Safe and efficient traffic flow
- Health and safety of workers
- Damage to property (including the road)
- Compensation for damage
- Disruption to the community, including businesses
- Coordination with other installation works
- Coordination with road construction works, and
- Timely installation of networks.
29. A clear majority of stakeholders submitted that these criteria should be adopted for consistency into electricity and gas legislation in order to provide direction as to the scope of prescribed conditions.
30. I propose that the Electricity and Gas Acts be amended to be consistent with the Telecommunications Act.
31. Other conditions that have been prescribed relate to improving the area's amenity value, considering the risk from creating road-side hazards, and the common-law right of frontage to the road corridor. The working group identified that enthusiastic and sometimes contentious discussion on what is the scope of ‘reasonable conditions' requires legislative direction. Utilities consider conditions should relate only to getting in and out of the road (as the list above indicates) whereas local authorities consider that their primary legislation (the Local Government Acts 1974 and 2002), specifically section 10 requiring them to consider the social, economic, environmental and cultural well-being of communities, must apply to all decisions in relation to the road corridor.
32. The main risk is that, although the negotiated and agreed code of practice is intended to provide certainty to all stakeholders on the reasonable conditions for 'getting in and out' of the road corridor, some local authorities will fall back on the protection of their primary legislation to set access conditions that go beyond the scope agreed in the code. A particular concern to utilities is the risk of having uncertain conditions and costs imposed on them through the imposition of conditions that relate to creating additional amenity value above what would be considered as ‘like-for- like' (for example, requiring the reinstatement of an ordinary road surface to be replaced by an advanced road surface in order to reduce noise). The impact of such conditions is that infrastructure development could be significantly more costly than is efficient to deliver the services at a price that consumers are willing to pay.
33. Officials consulted on whether reasonable conditions should be more prescribed in primary legislation. Submissions identified that utilities generally supported greater statutory guidance and prescriptive legislative criteria, but local authorities rejected prescription as being unfair to the diversity of local government requirements in accordance with its plans for the community it represents.
34. The direction of section 10 of the Local Government Act 2002 is expressed by each Council's Long Term Council Community Plan (LTCCP). As representative of local authorities, LGNZ submitted that utilities should participate in the consultation on the LTCCP, so that they better understand and can contribute to the vision that each local government is working toward for their communities.
35. The LTCCP is a 10 year plan that describes the community outcomes that are desired for areas such as road corridors and Central Business Districts, and the planning by a council of how it will contribute to achieving them. It is necessarily not a precise document in the longer term, as community expression of needs, wants and vision change over time. It is reviewed every 3 years to ensure it is meeting the desires of the community and is put into action through each local government's (i.e. council's) annual plan. The annual plan is the detail for the first year of each three-year review cycle; it identifies for example which roads are being altered, or which public spaces are being upgraded.
36. Utilities have previously argued that conditions imposed that improve amenity value should be addressed in the District Plan (DP). However, both the DP and the LTCCP provide for such improvements.
37. Local authorities' role as road controlling authority and corridor manager is mandated under the Local Government Act 1974 and 2002. It is not appropriate that the road opening process is used by local authorities to give effect to outcomes more properly described by the DP and governed by the Resource Management Act. It is reasonable that utilities have to abide by the DP, however the scope of reasonable conditions should not be used to provide for DP outcomes. Amenity or environmental issues raised by DP's could mean that activities by utilities will also require resource consent.
38. To clarify which statutory process is appropriate to use when local authorities set reasonable conditions, I note that environmental effects are managed by the District Plan process, whereas improvements to amenity value is managed through the Long Term Community Council Plan. Reviews of the LTCCP and DP are public processes and engagement with them will enable utility operators, local authorities and the community to discuss issues such as the costs of reducing risk from road-side hazards or creating additional amenity value. Utilities' engagement with the LTCCP process would be advantageous to both parties, as such a co-operative and collaborative approach will provide the best opportunity for understanding how conditions of access to the road corridor are given consideration consistent with the communities desired objectives for the road corridor.
39. To provide greater statutory guidance on the scope of reasonable conditions for utilities and local government, I propose the following changes:
- That the Electricity and Gas Acts be amended to be consistent with the Telecommunications Act on reasonable conditions;
- That a new requirement be included such that any conditions imposed to give effect directly to creating additional amenity value (i.e. in addition to ‘like-for-like') can only be considered reasonable if such outcomes are consistent with what is identified in the LTCCP. The costs of imposing conditions that go beyond the ‘like-for-like' amenity value of an area are to fall on local government, as the value of the benefits accrues to the community that desires them. Conditions prescribed that improve amenity values not thus identified could not be considered reasonable, (but may become reasonable if for example the requester covered the costs);
- That, for clarification, where a utility decides to install infrastructure on a road that is identified in the LTCCP for future alteration or it is in an area that is to have road construction, then the costs of moving it to accommodate the future changes will be as outlined in s 33 4(b) of the Electricity Act 1999 (and similar sections in the Gas and Telecommunications Acts), which provides for utility contribution to local authorities for the costs incurred by the local authority to move utility assets.
40. An additional issue is that existing use rights deemed by the RMA for utility infrastructure means the utility providers still have statutory protection against being requested to, for example, put their poles underground or move them to make room for a cycleway. With the clarification of causer pays – i.e. that the costs of implementing the request falls on local authorities – utilities' initial objections may be reduced and they can co-operate with local government to produce desired outcomes.
41. Finally, the October 2006 policy also proposed removing the right of utility operators to impose reasonable conditions on other providers when the other providers need to alter the position of others' assets in the road and change it instead to advise. This has not changed and is recommended to reduce the risk of anti-competitive practice.
The Code of Practice Provides for a Dispute Process Other than the District Court
42. The policy proposed in 2006 was to legislate for an alternative dispute resolution process as a step before recourse to the District Court. The objective was for a low cost and time-bound process for resolving disputes between parties, while providing for escalation where necessary.
43. I now propose that an alternate dispute resolution process is a mandatory requirement for the code of practice, with the advantage that parties have the flexibility to choose and agree the dispute resolution process.
Harmonisation of Key Definitions, Processes and Timeframes Throughout Utility and Local Government Legislation
Definition of "road"
44. The October 2006 policy proposal was to amend the Telecommunications Act to have a definition of road consistent with that used in the Electricity and Gas Acts.
45. Following further consultation on whether the different (broader) definition of road in the Telecommunications Act created material problems, there was insufficient detailed evidence of any problems arising to support the proposed change.
46. As the change could potentially reduce the existing rights enjoyed by telecommunications operators and constrain responsive actions in the contestable market for telecommunications services, I recommend that there be no amendment to the definition of road in the Telecommunications Act.
Cost Allocation
47. The Electricity and Gas Acts both provide that the reasonable cost of all works that are required to be moved by a local authority is paid by the authority, unless the works were constructed contrary to provisions in other Acts in which case the electricity and gas operators, as owners, must pay.
48. The Electricity and Gas Acts also provide for cost-allocation for works in roads that are identified to be constructed or altered in that if the costs of the road project are increased because of the requirement to subsequently move the electricity or gas works, then the owner of the assets being moved must pay the increase in cost.
49. These legislative provisions are different from the treatment of cost-allocation in the Telecommunications Act. The provision in this Act is that if the local authority or Transit request a telecommunications asset to be ‘altered' then the requester meets that cost; but it does not describe cost allocation for asset relocation when a road is realigned.
50. Section 54 of the Transit New Zealand Act 1989 provides that Transit can request an equal cost share when it requests asset relocation. However, this provision is overridden in the Electricity and Gas Acts. This is not the case in the Telecommunications Act. This creates inconsistency in application of local authority and Transit's treatment of costs when requesting that telecommunications utilities move assets.
51. Stakeholders submitted that the cost allocation provision should be consistent in legislation. This should reduce compliance costs for companies operating across electricity, gas and telecommunications services and for local authorities and Transit that handle access requests.
52. I recommend that the cost allocation provisions under the Telecommunications Act be amended to be consistent with the cost allocation provisions under the Electricity and Gas Acts.
A Consistent Regime for Notification of Affected Parties for all Utilities and Locations
53. The policy proposed in 2006 Cabinet was to require that all legislated notification requirements should be consistent for all utilities and local authorities. The initiator of works should have responsibility for notification of affected parties. This proposal has not changed.
54. Under current legislation, electricity and gas operators must notify the local authority or other body or person who has jurisdiction over the road and affected utility operators of the upcoming work. The Local Government Act 1974 (which deals with roads), Transit New Zealand Act (1989), and the Telecommunications Act do not currently require that affected utility operators are notified about the upcoming work.
55. There are also different response periods for a person who has been given a notice of intention to access the road to respond with its reasonable conditions. For example, the Electricity and Gas Acts prescribe 15 working days, the Telecommunications Act prescribes 20 working days.
56. Currently, there is no specific time period for Transit or Ontrack to respond to access requests to the motorway or railway. It is proposed that when utilities request access to these corridors, both Transit and Ontrack will have to respond to the request within 30 working days. The statutory time-frame to respond to access requests to the motorway and railway will be longer than the time-frame to respond to access to the road because of the requirement to consider more stringent safety issues.
57. I recommend that telecommunications operators, Transit and local authorities are required to notify all parties with assets at the location when initiating significant works (i.e. not minor and emergency works) in the road. This will require amendments to the Telecommunications Act 2001, Transit New Zealand Act 1989 and the Local Government Act 1974.
58. I recommend that the period for response to the notification should be made consistent in the utility legislation to 15 working days. Any access requests made to Transit or Ontrack under the relevant legislation must be responded to within 30 working days.
59. The guidelines for the implementation of the reasonable conditions for access, including the operational and maintenance procedures should include adherence to relevant codes and standards for the mitigation of interference between assets.
Access Rights to Roads Maintained and Access to the Rail and Motorway Corridors Enhanced
60. The 2006 policy proposed that access to rail and motorway corridors (the side of the motorway or rail track) should be enhanced while recognising the transport and safety responsibilities of Transit NZ, and the transport, safety and business interests of Ontrack. This was proposed because submissions from utility companies identified these corridors as underutilised for the provision of utility infrastructure and preferable to accessing private land.
61. In addition, statutory time limits and the publication of motorway and rail access evaluation criteria were proposed to improve the understanding of how access could be granted and timeliness in consideration of requests.
62. A further submission from Transit repeated its statutory responsibility under the Land Transport Management Act 2003 to contribute to a safe transport system (section 1 of that Act). It described also that under the Transit Act utilities are prohibited from placing poles and wires on motorways without Transit's written consent and explained that since motorways are prime traffic routes with high traffic volumes designed to have minimal distraction, any utility works carried out on the side of the motorway are very likely to create distraction and obstruction of these routes.
63. Transit stated that it already accommodates works on motorways where there is a clear national benefit and safety is not compromised, for example crossing under the motorway or attaching infrastructure to motorway bridges.
64. With further consideration, I recommend leaving the arrangements for access as currently in place in the Transit Act to ensure there is no additional risk that safety could be compromised.
65. Ontrack also highlighted that in relation to the rail corridor, its primary responsibility is operating safety. It identified significant issues with access to the railway corridor such as insufficient space, lack of alternative routing for services on the network, and little or no access to parts of the network.
66. Requests for access to the rail corridor are considered under the Railways Act 2005. As Ontrack is a commercial entity, access to the rail corridors is achieved under contractual access arrangements and some utilities already have contracts in place.
67. With further consideration, I recommend leaving the arrangements for access to the rail corridor as currently in place in the Railways Act to ensure there is no additional risk that safety could be compromised.
68. I recommend that the policy on statutory time frames and publication of access evaluation criteria remains as was originally proposed. This is to improve the timeliness of the response to utility operators seeking access and to make transparent the decision criteria that Transit and Ontrack use which will assist utilities in the preparation of access requests.
69. A longer statutory time-frame to respond to access requests is proposed because of the greater requirement for full consideration of safety aspects.
70. I recommend that both the Transit Act 1989 and the Railways Act 2005 be amended to include a statutory time-frame, plus a requirement that Transit and Ontrack's access evaluation criteria be published.
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