2 Resource Allocation Process

Resource Allocation Process / New Zealand Southland District Council

Southland District Council (SDC) manages one of the largest road networks in New Zealand. Dairy farming is critical to the economy of the local area and more broadly to the Country (SDC generates 10% of New Zealand’s dairy exports). In the period 2000-2010 there had been significant expansion of the dairy farming industry and further expansion was likely. Maintenance and renewal costs were estimated to increase significantly and SDC’s road rates were already among the highest in the country. SDC recognized that a new approach was necessary and they could not keep doing things the same way.

SDC developed the Economic Network Plan as an asset management approach that allowed SDC to determine where investment in the network would provide the greatest financial return to the community. The Economic Network Plan considered the following services provided by the network:

  • Safety
  • Road Condition (Levels of Service)
  • Enable Exports
  • Service Delivery
  • Customer Quality

Consideration of the resources required to maintain the network led SDC to the decision that its highest volume roads would be maintained to its then-current LOS standard. These roads represented 20% of the road network but carried nearly 70% of the traffic. The remaining 80% of the network would have a reduction in standard over time. The Economic Network Plan provided the basis for this change.

Like many agencies, the SDC was forced to take a different approach when financial constraints required change. It enabled all parties to focus on:

  • Shifting from ‘Engineering’ to ‘Customer Service Network Management’ (why the service is provided)
  • Managing customer expectations proactively rather than reacting to them
  • Making safety a priority
  • Investing in technology and information to understand, manage and integrate with HCV operators

Source: https://www.nzta.govt.nz/assets/Road-Efficiency-Group-2/docs/southlandnetworkplan.pdf

Note: For more information on this example, see the case study on the SDC’s experience in the International Infrastructure Management Manual (IIMM).

Read more in the chapter:
5.1.3 Prototypical Resource Allocation Process