The Infrastructure Bill, introduced to the House on August 5 2009, aims to improve the regimes for access by utility operators to roads, railway lines and motorways. To this end, Part 1 and the Schedule to the Bill will eventually be enacted as the Utilities Access Act 2009.
The Bill sets out a framework for creating a national code of practice governing how utility operators and transport corridor managers co-ordinate their activities. It also seeks to amend existing legislation governing access to transport corridors in order to provide a more consistent regime across different types of utilities.
This Brief Counsel examines these measures and the work already underway on developing a national Code.
Why legislation is needed
Transport corridors are often also used to locate utilities such as electricity lines and equipment, telecommunications lines, water and sewerage pipes, drains, and gas pipelines. This makes good sense as these corridors offer a direct route to consumers, and avoid the issues associated with locating the infrastructure assets in or over private property. However, there is a need to balance the provision of utility services with the safe and efficient use of the transport corridors.
Currently, access by different types of utilities to different types of transport corridors is regulated by a range of legislation, with some inconsistent provisions on access, notice requirements and cost sharing. This can lead to uncertainty, inefficiencies, disputes, delays, and avoidable damage to roads and utility networks.
The Bill seeks to address these issues by legislating for a consistent approach where appropriate, and providing a statutory process for the establishment of a stakeholder-developed Code of practice to encourage co-ordination.
A national Code for utility access
Who would prepare it?
Plan A is that a draft code will be agreed by stakeholders and submitted to the Minister of Economic Development for approval. Plan B, in the event of a failure to voluntarily agree on a code, is to regulate. (Unless MED has a different view, the most likely outcome would be that the regulations would be based closely on the code that could not be agreed on. There is therefore every incentive to achieve a pan-industry agreement.)
Extensive work on developing a draft Code has already been carried out by the NZ Utilities Advisory Group (NZUAG) in anticipation of the Bill being passed, and a version of this Code has already been released for voluntary implementation. NZUAG intends that a final version of this Code be submitted to the Minister for approval once the Bill becomes law, following a further round of submissions on the Code.
What does the Code cover?
The Code will be required to address, among other things:
- principles for how utility operators and corridor managers will deal with one another on access issues
- processes and rules for ensuring that work by utility operators that affects transport corridors is co-ordinated
- controls on the conditions that may be imposed on access to transport corridors
- dispute resolution procedures, and
- operational processes and rules about work carried out by utility operators in transport corridors.The Code’s potential scope is very broad as the Bill provides that it may include any other matters consistent with the purpose of the Code and not inconsistent with other legislation or regulations.
Would the Code be binding?
The Bill currently provides that:
- utility operators and corridor managers would be obliged to comply with the processes and rules in the Code
- corridor managers would be required to comply with the Code in setting reasonable conditions for access to transport corridors, but “only to the extent that the Code is not inconsistent with any applicable criteria for reasonable conditions that are published under an enactment”
- utility operators would be required to comply with the Code when carrying out work in a transport corridor except:
- to the extent that any particular provision of the Code was inconsistent with an enactment or standard that the utility operator is obliged to comply with (quite what constitutes “obliged” and a “standard” in this context is unclear), or
- where the manager of the transport corridor and all affected utility operators agree that the Code need not be complied with in a particular situation.
Any utility operator or corridor manager could seek an order from the District Court requiring another utility operator or corridor manager to do anything required by, or consistent with, the Code or to refrain from doing anything that was prohibited by, or inconsistent with, the Code.
When considering these types of applications, the Court may take into account the practicality and cost of complying with the Code, compared with the practicality and cost of taking other steps that are considered to achieve substantially the same outcome. Knowingly failing to comply with a District Court order would be a criminal offence punishable by a fine of up to $200,000.
Amendments to access provisions of existing legislation
The Bill contains amendments to the various industry-specific Acts governing access by utilities to road or rail corridors. Proposed amendments to the Local Government, Telecommunications, Gas, Government Roading Powers and Electricity Acts aim to provide more consistent regimes in regard to the criteria for setting reasonable conditions of access to the corridors, allocation of cost where relocation of assets is required, and requirements for notification in respect of work to be carried out.
Utility operators do not have a right of access to motorway or rail corridors, but can request access. Amendments to the Government Roading Powers Act and the Railways Act would provide timeframes for responding to requests, and require the relevant corridor managers to publish criteria on which they will base their decisions to grant access.
Does the Bill address the current problems?
Commercialisation and privatisation of utilities over the years has increased the pressure to use the road for utilities because it avoids having to compensate private landowners for use of their land. Commercial imperatives can make it difficult for utilities to share their plans in advance; and they often need to install their work as quickly and efficiently as possible which can be inconsistent with good traffic management. At the same time, road networks are operating for longer periods at or near total capacity, and are less able to absorb closures while utility works are installed or repaired.
So, the Code has a multitude of objectives to achieve. Good progress and reasonable compromises have been made in getting the current draft Code into shape. It is unlikely that anyone will want to see all that effort come to nothing, and the alternative of Government imposed regulation is unlikely to be palatable.
No doubt parties will be looking to avoid cross subsidisation (unless they are the beneficiaries) and looking for appropriate cost allocation.
The argument that utilities should pay rent for use of roads has been lost, in favour of the concept that roads are utility corridors with traffic at one level and utilities above and below. But cost allocations and relative (in)convenience will remain tension points.
There are some minor aspects to be tidied up in the Bill but we expect most clients will now focus more closely on the draft Code itself, and how that will affect them once it is binding.
A practical crunch-point will come in the application of the statutory (not Code) requirements that corridor managers must specify their conditions for utility works within strict deadlines after receiving notice of them. We anticipate tensions around what constitutes adequate descriptive notice of proposed works. Hopefully the Code and common sense (or, at worst, a couple of test cases) will contribute to resolution of what is an important matter, but probably too detailed to be subject to regulation.
We are also aware that some stakeholders remain concerned that the new regime does not go far enough – for example, the Bill allows Code provisions to be applied differently in different geographic locations. However, it remains to be seen whether this will result in real headaches or if the reality will be a high degree of coherence.
Much depends on the final provisions of the Code itself. Further reviews of the draft Code are planned for later this year. It will also be possible to amend the Code in the event that significant problems are identified.
How can I get involved?
The Bill has not yet been referred to Select Committee and no date for submissions on the Bill has been set. We will keep you informed of developments.
The Bill requires that, before a draft Code is submitted to the Minister for approval, it must be released to the public for comment. Any public feedback must be considered by the body responsible for developing the Code with revisions made where appropriate.
For further information, please contact: John Hassan or Siobhan Hale.