Toll motorways to pay for rail?

There’s an interesting opinion piece in today’s Herald by Alan Griffith – a former director of finance for the Tauranga City Council – on motorway tolling and the funding of rail projects.

One thing Mr Griffith does very well is outline the argument for why roads should pay for rail – something I have argued repeatedly in recent times:

Why, you ask, should road traffic fund rail development? You cannot go on building motorways forever.

Firstly, it is an uneconomic use of land which is a scarce resource in the city. Secondly, every time we build an extension to a motorway, surprise surprise, we create another traffic problem 4km further down the road.

The classic example of this is the joining of the Southwestern Motorway (State Highway 20) to the Southern Motorway at Manukau where the created congestion is worse than the original problem.

The effective way to eliminate the ongoing need for motorways is to force people onto public transport. In environmental planning terms, even a relatively short 50 years ahead we will not survive in Auckland without an effective rapid rail network.

This needs to include the centre city loop, an airport loop (Onehunga-Airport-Manukau), a southeastern loop from Manukau-Botany-Pakuranga-Mt Wellington, and a loop from Onehunga-Mt Roskill-Balmoral-Eden Tce to the city.

The side benefits of this proposal include: Fewer motor vehicles on the road, less motorway construction, lower carbon emissions and less wasted time spent travelling to work or play.

Also a reduced requirement for inner city parking which means parking buildings can be converted to facilities that contribute positively to the economic wealth of the city, kerbside parking will be available again and it will also eliminate the need to implement congestion taxes. With a solid funding base the suburban network can be upgraded to world standards and the result will be an upwards spiralling success.

When suburban rail acquires quality rolling stock and can run to a timetable, people are going to use the service as it will be the most convenient and economic method of travel.

In short, roads should pay for rail because road users benefit from a better rail system. This is shown quite clearly in NZTA’s economic evaluation manual, with every peak time rail trip in Auckland generating $17 in benefits for road-users. I’m sure most readers would have seen the table below a few times before, but it is worth posting again to stress the benefits that road users get through investment that encourages people to use the rail network. The key figure is highlighted in the red box:But how should road users pay to help fund rail? The current way this could be done (and I say ‘could’, as currently the government has banned the spending of NZTA funds on rail construction projects) is simply through allowing NZTA to spend its money – which is raised from petrol taxes, road-user charges and licensing fees – on rail projects at some sort of funding assistance ratio that would split the cost between them and the local body.

Mr Griffith proposes another option – that motorway users be tolled (at a relatively low rate) and that toll money go into funding the rail projects:

It is simply a matter of placing tolls on all major motorways in the Auckland area and then using this revenue to fund the extension of an urban rail system….

…This is how it can work. By 2011, average daily vehicle movements on Auckland motorways will be approximately 800,000 per day. Of these 5 per cent, or 40,000, will be heavy vehicles over 3.5 tonnes. I suggest that tolls be implemented as soon as possible and set at levels of $1 for cars and light trucks and $5 for heavy vehicles.

After adjustments for weekends and holidays, this is likely to generate total revenue of $328.5 million a year. From this we allocate $28.5 million for operating costs and maintenance and we are left with $300 million a year to fund rail projects.

The idea of having $300 million extra in transport funding a year, dedicated to implementing public transport projects, is pretty exciting. But would this work? What would other side-effects of such a proposal be? This is where I start to question the effectiveness of Mr Griffith’s proposal.

Firstly, in my opinion tolls seem a pretty inefficient way of raising revenue. You need toll booths or automatic sensors, you need a whole back-office system, you need to chase up overdue bills and so forth. Experience with the Northern Gateway tolling system is that administration costs can eat up around half the money raised – with a lower toll of $1 (compared to the Northern Gateway’s toll of $2) I suspect the share of money for administration would be even higher.

Then there’s the issue of tolls potentially diverting traffic onto local roads. Perhaps the one true benefit that building more motorways brings to an urban area (and this is generally only true if the benefits are “locked in” as I have detailed in previous posts) is that they take traffic off local roads – allowing those roads to be more pedestrian friendly, cyclist friendly, public transport friendly and generally just nicer urban spaces. How many people would, faced with a toll to enter the motorway, choose to instead stick on the free local road alternative? It wouldn’t take much of a traffic diversion away from the motorways to start clogging up those local roads.

Could petrol taxes be increased as an alternative way of raising this $300 million a year? With around a billion litres of petrol and half a billion litres of diesel sold in the Auckland region each year, I guess we’d need to add around 20c a litre, not something you’d want to do overnight. But such an approach would surely be administratively simpler than a tolling system and would also not result in shifting traffic onto local roads.

Share this