6.1 - Funding gap analysis of transport

Introduction

In the case of transport service proposals, service provider costs are compared with the predicted revenue or increase in revenue (where there is a pre-existing service), using a net present value (NPV) methodology to determine whether or not the proposal is commercially viable.

Rules

Where the increase in revenue (for an existing service) or total revenue (for a new service) is more than the service provider costs, the project is commercially viable and is not eligible for Land Transport NZ financial assistance.

Where the increase in revenue (for an existing service) or total revenue (for a new service) is less than the service provider costs, a full economic evaluation is necessary to further assess the eligibility for Land Transport NZ financial assistance.