Monday 1 February 2016

Auckland motorway tolls re-emerge as revenue raising option

With news that the New Zealand Government has decided to fund its 50% share of the capital costs of the NZ$2.5 billion (US$1.6 billion) proposed underground rail loop in central Auckland, the issue has emerged as to how the Auckland Council can raise the revenue to pay for its share.  A previously floated proposal of tolling all of the motorways has re-emerged, as it would appear to offer both a source of revenue and introduce a mild form of congestion charging.

Auckland's motorway network
However, it faces some major challenges:

1.  It has been assessed before and been found wanting.  The option of charging motorways only in Auckland was appraised in the Auckland Road Pricing Evaluation Study in 2006.  It concluded that the main problem with this option was that it would divert sufficient traffic onto parallel local roads (a 6% increase in traffic on those roads) to worsen congestion on those roads, exposing local residents to increased pollution.   It also concluded that there would be barely any modal shift (0.1%) (Source: Table 4.5, Appendix 15, Economic Impact Assessment) and that it was the worst performing of any of the options considered in terms of net economic impact (with a BCR of around 0.7) (Source: p6. Appendix 19, BCR analysis).  Indeed it showed that the revenue raised was barely over half of the benefits to users, indicating a net loss - as congestion savings on the motorways are significantly offset by delays on local roads.  Overall speed changes would be less than 1 km/h.

An illustration is seen in the map below, showing how easy it is to use parallel routes between two of the most heavily used points on Auckland's motorway network.  In red is the Southern Motorway with between seven and ten lanes, in blue are the local streets that could be used to bypass part of it.

Southern motorway at Newmarket, with some parallel routes

The conclusion of that study is rather damning (comparing it to cordon charging options and parking levies):

This scheme is relatively simple in concept and targeted in terms of tackling particular congestion problems.  It also provides fewer social mitigation challenges as free alternatives are provided (the uncharged network).

This is, however, a significant weakness of the scheme.  Essentially it reduces the incentives to motorists to change behaviour through switching modes or travel patterns. Instead they simply change their route.  This has the effect of diverting traffic from the strategic network onto local roads and while congestion is reduced on the charged strategic network it tends to increase on the local roads which are the only alternatives to the charged routes.  The higher the charge is set, the more pronounced this effect becomes.  As a consequence the charge which can be realistically imposed is relatively low and the cost of collection represents a high proportion of the charge... Furthermore the cost of increasing capacity on the local uncharged road network is high and more than consumes the net scheme revenues.

In short, it will jam up Auckland's local roads and if the money raise is diverted into the rail scheme, it will leave nothing to fix the local road bottlenecks. 

2.  Motorways are State Highways.  Auckland Council has no authority over them as they are owned by central government.  Without central government authority (which shows no sign of being granted), it cannot happen.  Bear in mind government already effectively charges for using these motorways (and local roads) through New Zealand's weight/distance road user charges for heavy and light diesel vehicles, and fuel tax.

The issue has emerged this year as it is the year of local body elections including Mayoral elections.  Incumbent Mayor, the left of centre Len Brown, is in favour of the proposal, despite there being clear opposition to it expressed by the Government.  Other announced candidates are either opposed or lukewarm towards it, and Len Brown is not contesting the next election (candidacy is still open). 

Clearly the idea is technically fairly easy, as either DSRC technology with ANPR, or ANPR alone could deliver a system with gantries located either at on and off ramps or a series of strategic points along the motorway network, but Auckland's well established motorway network has one major problem - its interchanges are very closely spaced by global standards.  This means it is quite feasible to use motorways for short trips and to avoid motorways for such trips.

My view is that with a few exceptions (e.g. Auckland Harbour Bridge, Mangere Bridge, SH16 west of Waterview) the benefits are likely to be not worth the cost, but then it is not being driven by the objective of congestion management, but revenue raising. 

Auckland Council's primary revenue raising instrument is taxation on property prices (rates).  Given reports of the significant gains that CBD property owners and investors would get from the underground rail loop, it probably is more appropriate to look at rates on the "winners" from the rail project than to adopt a road pricing scheme that may have net negative economic impact.

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