Preferred Option
12. This option is to amend legislation to create consistency where appropriate and to create a legislated process for ministerial approval for stakeholder developed codes of practice plus back stop regulation-making power for a national code.
13. Proposed amendments to existing provisions include:
- The cost-share provision outlined in the Electricity and Gas Acts to be replicated to the Telecommunications Act;
- Consistent notification requirements across all utilities, including the notification of proposed road controlling authority road works to utilities. Time for reply to notification to be a maximum of15 working days;
- Remove the ability of utility providers to impose conditions on other utilities (they can advise).
14. Proposed new elements of the regulatory framework include:
- A mechanism for the Minister of Economic Development, in consultation with the Minister of Transport and the Minister of Local Government, to approve, administer, amend and notify a code of practice for utilities access to transport corridors that have been created and agreed to by stakeholders. A code of practice would have some mandatory requirements for process and content.
- Empowering provisions to create a regulated code of practice should stakeholders fail to create their own code.
- Ontrack and Transit to have a statutory obligation to process utilities applications for access to motorway and rail corridors according to prescribed timeframes and to publish their access evaluation criteria.
Preferred option: costs and benefits
15. Benefits outweigh costs by an order of magnitude ($10 – 100M / $1 – 10M) i.e. potentially 10:1.
16. This is detailed below:
Government
17. There will be administrative costs for the Ministries of Economic Development and Transport and the Department of Internal Affairs to examine and approve a code of practice, or to create a code of practice:
- Ministry of Economic Development: Analysis of code; industry consultation and processing (0.5 FTE) $75,000 p.a.
- Advertising and publishing code $20,000 p.a.
- Specialised technical advice relating to code $40,000 p.a.
- Ministry of Transport: analysis of code and consultation (0.25 FTE) $37,500 p.a.
- Department of Internal Affairs: analysis of code and consultation (0.25 FTE) $37,500 p.a.
- Total per annum $0.210 million p.a.
18. The volume of applications to Transit for access to motorway corridors could be expected to increase, with associated resource demands. The inclusion of a notification of impending works requirement and statutory response time limit will also increase resource demands. Cost $0.3M pa.
19. ONTRACK already processes applications for access and placement of assets in the rail corridor, but to process them in accord with new statutory timeframes will have a resource impact. Costs would be recoverable from applicants.
20. With the removal of the applicability of section 54 of the Transit Act to Telecommunications, there will be increased asset relocation costs to Transit. However these are still a small percentage (less that 5%) of the overall costs for a road realignment project. Cost $1M pa.
Local Government
21. A change to legislation to require all 73 local authorities to notify other parties of their significant works and to have a time period for receipt of advised conditions will create additional resource costs. Cost $1M
22. Costs of imposing conditions of access that creates additional amenity value of an area. Cost $ variable depending on each local authority's plans.
23. Resource costs for stakeholder developed code of practice. Cost $0.3M
24. Reduction in reinstatement costs across the whole country. Benefit $1M
Utilities
25. The move to greater consistency and certainty in how local authorities manage utility access to roads by the use of an approved code should reduce utility's compliance costs. Benefit $1M
26. There will be a reduction in the costs of redoing reinstatement of the roads if there is better co-operation through the code of practice to renew surface as required. As an example a given 34 % failure rate for 650 km of road would cost around $55M to put right at $250,000 per lane km (t 0.34*650*250000 = $55.25M). If by the use of a code of practice the reinstatement costs are reduced by 50%, then the benefit (avoided cost of re-doing the road once done) is roughly $25M. Benefit $10M
27. Other benefits accrue to society due for example to less vehicle wear and tear and less need for road-works for reinstatement (counted under "society").
28. The benefits of additional notification from local authorities should be to reduce the avoidable damage to utility networks of asset strikes when the local authorities undertake road works (note that this does not imply that the only third party damage is local authorities on utility infrastructure – often it is one utility operator to another, and notification requirements already exist between these). Benefit $1M
29. Resource costs for process to agree codes of practice. Cost $0.3M
Society
30. Society benefits both from an improvement (i.e. reduction) in time costs due to road works because of construction and reinstatement and the efficient roll-out of infrastructure. Benefit $30M
Total impact and net benefit
31. Total impacts considering all utilities, one local authority (Auckland), Transit and all society = $36M per year (total benefits $ 33M (magnitude $10 – 100M); total costs $ 3M (magnitude $1 – 10 m).
32. Benefits outweigh costs by an order of magnitude ($10 – 100M / $1 – 10M). The benefit cost ratio is of the order 10:1.
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