Tuesday, 12 June 2012

News shorts - Australia, Canada, USA

The New South Wales Government is facing continued pressure on budgets, like many governments, and so according to the Daily Telegraph (Australia) appears to be pushing for another PPP toll road in the form of the F3-M2 motorway It is expected the new highway will be tolled and entirely privately financed and owned.   The F3 is the Sydney to Newcastle freeway that currently ends in the northern suburbs, the M2 is a private toll road (managed by TransUrban) that forms the northwest to north-central connection of the “Sydney orbital” motorway network connecting the M7 toll road (which effectively forms the western leg of a “Sydney bypass”) to the freeways at the northern end of the Sydney Harbour Crossings.   The M2 is a fully electronic free flow toll road as of January 2012.  The F3 to M2 link would complete the Sydney bypass by providing a full motorway standard ring route from the north to the south, and so is considered to be a strategically critical link in Sydney’s motorway network.  The Government is apparently having talks with TransUrban about the project, although   Other projects under consideration include widening the M5 motorway (the toll road running south-west from the airport to the southern outskirts of Sydney) and the M4 east (an expensive extension from the major western motorway to bypass inner city suburbs to connect to the downtown Western distributor freeway).


The Calgary Herald reports that the University of Calgary School of Public Policy has published a paper advocating that users be charged directly to fund infrastructure including roads.  Although it will be “phenomenally difficult” politically, it needs to be undertaken in an open and transparent way, with acknowledgement that existing taxes are incapable of stretching to pay for maintenance and renewal of networks.

The newspaper reports:

Although tolls exist throughout the United States, on Toronto’s 407 Highway and the Vancouver area’s Golden Ears Bridge, it’s a no-go issue in much of Canadian politics. It’s so hot that when a Transport Canada call for proposals for a study on road pricing made headlines on the eve of the 2008 election, the Harper government’s transportation minister swiftly quashed that idea.

Similarly there is little enthusiasm with the current Alberta Provincial Government for tolls:

Transportation Minister Ric McIver said he won’t go near the idea of user fees on the big-city ring roads. He’ll entertain the possibility of tolls for the fast-tracked twinning of Highway 63, but only as part of his promise to “look at all the options,”

The Calgary Mayor, Naheed Nenshi also ruled out congestion pricing on existing roads.  Brian Flemming, from the School of Public Policy says the reasons to consider user pays are:
  •  The need to find a gap in funding following the end of “stimulus spending”, which can also leverage private capital;
  •  Increased fuel efficiency and alternative fuels diminishing revenues from fuel tax.
 However, this doesn’t mean just a few toll roads, he is pushing for proper network road pricing, and that is a debate that Canada hasn’t started to have yet.

“This means something far beyond mere traditional tolling of roads and bridges. It means creating a system whereby those who use infrastructure will electronically have to pay small and sophisticated fees or this use.”

That means a debate about replacing existing taxes, the debate that has started to emerge in the US and Australia, and one that could well do with being catalysed in Canada.


What about rental cars? An article by Larry Elkin, President of the Palisades Hudson Financial Group, sings the praises of a Florida state policy to convert all toll roads into fully electronic free flow operations. I can agree with all that.  However, his concern is how to deal with rental cars when those hiring fail to pay for a toll road.   He wants regulations for rental car companies to stop them charging high surcharges for passing on toll fees.   I disagree.   Experience elsewhere suggests a range of alternative options.  For a start, toll roads are usually well signposted, so it shouldn't be a surprise to motorists.  In Australia, rental car hirers in Sydney (which has many such toll roads) receive a leaflet explaining how to pay electronic free flow tolls online or by phone.   In addition, it is perfectly feasible for rental car firms to install tags in vehicles so that tolls can be charged to a vehicle, and then charged to the hirer at the end of the hire, or to have accounts based on number plates which also enable the same thing.   Given the rental car industry is competitive, with low barriers to entry, it seems more likely that suitable solutions will be developed by providers working with toll operators than some sort of government regulation.


Debate over the privatisation of the Indiana Toll Road continues.  This time in the Evansville Courier and Press (Indiana), the Press Secretary of Indiana's Governor, Mitch Daniels, counters an article by a journalism lecturer.   She claims the sale helped fix the state's finances and provided a structure within which tolls could be increased to allow the road to be upgraded.  The view she is countering is that the lease meant revenue that would have come to the state would be going to a foreign private company.   Interesting the debates in a country sometimes held up to be the bastion of free market capitalism.

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