Wednesday 5 October 2011

Resistance in Ireland to more tolls on existing motorways

It’s fairly well known that Ireland has a severe fiscal problem. Its public debt and budget deficit have ballooned, primarily because the Irish government gave 100% backing to Irish banks, which subsequently collapsed (and were nationalised) following the bursting of the Irish property bubble. So as a result, the government has been looking for money.

Dublin's M50 bypasses the city to the west. Yellow marks the toll plaza
The National Roads Authority, already responsible for Ireland’s network of toll roads (most of which are under concession), is currently seeking out consultants to help it with tolling. One of the key issues is where and whether to introduce new tolls on existing roads. One idea that has been discussed is to institute more tolls on the M50 – Dublin’s “ring” road bypass to the west – which already has one toll plaza, which was recently converted to fully electronic free flow operation.

Unlike the Minister's recent comment on Dublin congestion pricing, his view is that it is "unfair" that motorists are only charged at one point on the M50. According to the Herald, he said:

You pay quite a high toll just to cross over the Liffey, the section between Blanchardstown and Lucan. The idea is to have multi-point tolling, a lower toll but spread out over a number of points on the M50...estimate is that it could bring in an extra €50m

In blue is the untolled Jack Lynch tunnel, part of Cork's bypass
He is advocating using the extra money to reinvest into roads and public transport.  He says the toll could be €0.60 (US$0.80) at various points rather than the current single toll of €2-3 (US$2.67-US$4).  The Irish Examiner reports that he is also advocating imposing tolls on the Jack Lynch Tunnel in Cork - part of the city's N25 ring road. 

The idea has resulted in considerable opposition being expressed in some quarters, as this will be Ireland’s first example in modern times of tolling a section of road that was not previously tolled.   The Herald reports the view of the Automobile Association which says "It is a basic mistake to put a toll on a bypass...In the case of the M50, a toll will automatically recongest suburbs like Sandyford, Dundrum, Rathfarnham and Blanchardstown. "

Apparently the M50 toll as it stands raises €80m per year, with a €20m cost to run the system according to the AA. It ran a poll asking motorists what they would do if there was a toll on the route they commute on, and 61% said they would find an alternative route (hardly scientific or useful as a poll though).

There is merit in replacing one toll point with several on the M50, particularly if it is to spread the toll over multiple points.   Low tolls at multiple points could result in low levels of diversion as well as picking up more vehicles,  but the traffic modelling will take some doing to ensure that realistic sensitivity tests are undertaken.  By no means should there be a rush into this as motorists have time and time again proven that every extra euro, dollar or pound they are charged is worth more to them to avoid tolls than it is in spending at a shop.

Another bonus of tolling the M50 more thoroughly will be to manage congestion, except that it is no longer that congested. 

It was, but a combination of three things has changed that dramatically:
- The recession. Demand on the road has dropped because of the economic downturn;
- Removal of manual tolls. Instituting fully electronic free flow tolling has eliminated the toll plaza queues that once existed;
- Widening. Much of the M50 has been widened to three lanes in both directions with additional lanes between some interchanges.

In other words the road is actually functioning well. More tolls are likely to have a small impact on demand, but do create the risk of diversion if not located in the right places. A sound economic argument might be made for sufficient tolls to be in place to cover the long run capital costs of the road, except motorists may rightly note that they pay fuel taxes as well, which should be taken into account. Another point is the claim of a 20% operating cost for the toll, which is comparatively high, which may result in some criticism (although NRA no doubt expects its yet to be appointed consultants to help improve that).

The use of the money from extra tolls will be critical.  Motorists tolerate the M50 toll being used to pay for the road itself and the recent widening and improvements.  Using more of that money to make further improvements on that road or adjacent roads is likely to be more acceptable than using it for public transport projects that do little to benefit the users of the M50.
For the Jack Lynch Tunnel in Cork, there is a risk of diversion through the city centre, but a deal with motorists on using the money for some road improvements doesn't seem out of the question.

The policy reasons to toll sections of road currently untolled, are understandable. The money is needed, but in exchange for paying more, motorists are right to want something in return.  Concepts of tolling existing roads need to be created and linked to a programme of future expenditure of road improvements that would otherwise not proceed.  Tolling has been widely accepted in Ireland to date, as it is helped enable the financing of a significant network of new intercity motorways.  New tolls should help finance smaller scale improvements to the road network, but also be clever enough to manage congestion where and when this makes sense.  However, there are limits.  

Conventional tolls can only be easily applied to motorways and crossings.  It will be possible, political will notwithstanding, to expand tolls on existing Irish highways, using electronic free flow technology, but Ireland's motorway network is not ubiquitous.   If the issue in Ireland is revenue, surely the time will have to come to consider more universal network charging, perhaps of heavy vehicles so that road maintenance costs can be recovered from the vehicles creating most of those marginal costs.  Such a road user charging system would vary revenue according to demand, but could also charge in a way that avoids diversion, avoids the risk of revenue erosion that fuel taxes create and can target charges towards specific types of roads and regions.

Ireland's issues are significant, but it should expand tolls in a way that can get support from motoring groups, by offering something in return - which will mean lower tolls, at more frequent locations, and for the majority of extra toll revenue to be put into roads.  Beyond that, Ireland should look more seriously at road user charging beyond the motorways.

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