Value for money

Our operating model is agile, financially sustainable and delivers economic benefits

AT is the regional guardian of $21.8 billion of publicly-owned assets. This includes 7,638 kilometres of arterial and local roads, 7,431 kilometres of footpaths, 348 kilometres of cycleways, a growing fleet of electric trains, rail and busway stations, bus shelters, ferry wharves and two airfields on the Gulf Islands.

Maintaining and renewing these assets is a significant undertaking. The temporary closure of the Auckland Harbour Bridge last year due to an accident caused by freak wind gusts and ongoing issues encountered with the rail network clearly demonstrates the importance of ensuring the resilience and reliability of our infrastructure. A number of factors place increased pressure on the local road and asset network:

• Deterioration of road pavements • Increasing numbers of heavy vehicles operating on the network including growth-related construction, service-related (e.g. waste collection) traffic and heavier axle weights from double decker buses • An increasing local network asset base – which is growing by around 1.5% every year through the delivery of new transport infrastructure (e.g. roads in new subdivisions, new transport facilities) • Significant increases in construction costs and the cost of renewals, in particular road rehabilitation, which makes up the largest share of AT’s renewal spend • Low renewal expenditure over the 2018-2021 period (including due to budget impacts from COVID-19) which has created a renewal backlog • Increased renewal requirements relating to climate resilience, seismic retrofit and slip remediation. Without action to address the impact of these, the local network asset base will fall below standard, leading to increased reliability issues and higher costs to resolve over the long-term.

Sound management of transport assets

Improving the transparency of asset management programming, and the timing, delivery and standard of asset renewals is a high priority. Despite COVID-19, and the resulting 25% reduction in asset renewal budget for 2020/21, we have continued to deliver asset management functions in a timely manner. We have matured our asset management practices in alignment with global best practice (ISO 55001); this includes asset condition assessment, renewals planning, maintenance and renewals procurement, asset-related cost trend analysis and asset planning for growth. We have completed a Draft Asset Management Plan to define future asset investment needs over the 2021-2031 ten-year period, and progressed the development of an Unsealed Road Improvement Framework, with Local Board input, which considers a wider range of improvement works such as road widening, safety improvements, pavement strengthening, drainage, surfacing improvements and seal extensions.

We also collaborate closely with Auckland Council Healthy Waters to deliver urban road stormwater services, road stormwater management and to improve stormwater water quality. Technology initiatives are being progressed to drive the more efficient and effective use and management of Auckland’s transport network. For instance, in December 2020 a new Enterprise Asset Management system (EAM) went live to support AT’s public transport facilities mangement functions.

Value for Money

The Auckland Transport Board of Directors is committed to the continuous review and improvement of AT’s operational model to make sure we function effectively and efficiently in terms of cost and productivity. We are acutely aware of our responsibility as a public body to deliver maximum value for ratepayers and taxpayers, and are committed to delivering value for money across all expenditure. We work closely with our partners to improve business case processes, generate economies of scale and savings, and to optimise programme funding, and actively explore alternative procurement models to deliver value for money, safety and sustainability outcomes. AT's financial result for the year was positive with a surplus before tax of $647.9 million, $27.1 million favourable to the $620.8 million budget. The favourable performance against budget is primarily due to stringent management of costs resulting in $76.8 million lower expenditure than budget, offsetting the lower than budgeted revenue of $49.7 million which was impacted by COVID-19. This year AT also delivered an exceptional $729.3 million of new infrastructure, 96% of this year's capital programme, which included the Downtown redevelopment programme, new Puhinui interchange, Eastern Busway Stage 1 and Karangahape Road enhancement.