Stocktake of Pricing, Charging and Funding Arrangements - Understanding Transport Costs and Charges Phase One Summary Report

Last updated on 30/01/2012 9:34 a.m.

The differences in the level of commercial and government ownership in each of the maritime, road and rail sectors has led to differences in the level of pricing arrangements, annual government investment, externalities imposed, direct and indirect charges, and operating structures within each of the three transport sectors.
The UTCC Phase 1 report highlights the following major charateristics for each of the three transport sectors.

The maritime sector in New Zealand plays a crucial role in the import and export markets. In 2006/07, 99 percent of New Zealand’s import and export tonnage went by sea. Furthermore, this sector carries around 15 percent of inter-regional freight (in tonne kilometres) in New Zealand.
The maritime sector is largely commercial in nature. The majority of infrastructure providers and service operators are commercial organisations, although many ports have a high degree of local government ownership. This results in the sector being dictated by commercial charges between infrastructure providers, service operators and end users, with little government intervention or funding.
The level of commercial ownership in the maritime sector means that further costs and charges information collection may be difficult because of its commercial sensitivity.

The rail sector has experienced several significant changes of ownerships in recent decades. As of 1 July 2008, the government is the main provider of infrastructure (through ONTRACK) and the main operator (through KiwiRail Holdings Limited).
Due to a long period of neglect and deferred maintenance, additional investments are required to help improve the effectiveness of the rail network. As a result, the rail transport industry has a considerably higher level of government funding than the maritime industry.
The main charges in the rail transport industry are track access charges, freight charges and passenger transport fares. Track access charges are set by ONTRACK for all operators (including freight and passenger). The purpose of these charges is to recover the costs of operating the network. Operators then pass on the costs together with other operating costs to the end users of rail transport via freight charges and passenger transport fares.
Given KiwiRail has just commenced its operations in July 2008, it may be sensible to delay any data collection from this sector until mid to late 2009. As the development of the structure and management of KiwiRail matures, we would expect better availability of costs and charges information than in the past.

The road transport industry has a mixture of government and private ownership. The public good characteristics of road infrastructure and the history of, and legislation surrounding, public road provision means that the government is the provider.
Service providers, however, are private individuals and organisations. The result is that costs and charges within the road transport industry are a mixture of private and government charges.The government places charges on the user of transport infrastructure through motor vehicle registration and licensing, road user charges and fuel excise duty.
Private users also incur costs of ownership and maintenance of operating their vehicles on the transport network. The remaining charges are between private service providers and end users (eg freight charges or passenger transport fares).
Due to the government’s high level of involvement in the rail and road transport modes, the costs and charges information is more readily available and easier to collect.