This is our first report specifically about our audits of public entities in the transport sector. It builds on the overview of our work on transport that we provided to the Transport and Industrial Relations Committee in March 2012.
This report focuses on the results of our annual audits of central government transport entities and the transport-related information contained in local authorities' 2011/12 annual reports and 2012-22 long-term plans.
From our audit work in the sector, we found that the central government transport entities have good systems and controls. These entities have improved the quality of their service performance reporting in recent years. We also found that some local authorities' service performance reporting has improved through explaining their longer-term results.
In 2010 and 2011, we completed two performance audits into how NZTA is maintaining and renewing the state highway network. We found that, overall, NZTA effectively and efficiently maintains the state highway network to the required condition by ensuring that quality and timely maintenance and renewal work is completed on the network.
In our 2011/12 annual audit of KiwiRail, we found that it is making steady progress to improve its asset management and recommended where we think further attention is required.
Our audits of local authorities' 2012-22 long-term plans found that local authorities face many challenges planning transport activities – these include how best to replace ageing infrastructure, responding to changing land use, and managing higher input costs.
There is evidence that local authorities are well placed for long-term sustainability of transport assets because of forecast investment and reinvestment. However, the investment forecast relies on good asset management planning.
Transport is important to all New Zealanders. Strong links between road, rail, shipping, and aviation are vital for moving people and freight around the country and overseas and for supporting our country's social and economic performance.
The transport sector employs more than 80,000 people and accounts for about 5.2% of New Zealand's gross domestic product. The transport sector also has strategically important assets of high value, such as the state highway network, local roads, and rail networks.
There are complex arrangements between central government, local government, and private investors who provide diverse public and commercial services. Transport entities operate in a regulated environment with challenges and opportunities.
The transport sector faces both old and new challenges. Pressure on funding has led to changes such as new road user charges, and local authorities are looking at alternative ways to manage local roads. We have seen the effects of such disasters as the Canterbury earthquakes and the oil spill resulting from the grounding of the MV Rena. Events such as these challenge the resilience and reliability of our transport infrastructure and services, and test how ably the transport sector can adapt and respond effectively, efficiently, and sustainably.
Change is under way. We will be watching to see how transport entities adapt and respond to regulatory reform and reviews of the funding arrangements for work on local roads.
Lyn Provost
Controller and Auditor-General
25 March 2013