The massive Transmission Gully project was in the news twice yesterday.
In the first bit of news, the NZTA announced that once complete in 2020, Transmission Gully will not be tolled.
“In line with our tolling policy, the Transport Agency assesses all new state highway projects for tolling feasibility,” Transport Agency Director of Regional Relationships Emma Speight says.
“Part of this feasibility assessment is to understand the impacts that tolling might have on road users, the transport system, and local communities.
“When considering whether tolling may be appropriate, we need to weigh the potential benefits netted in revenue against any likely negative impacts in terms of safety, access and value-for-money.
“Our assessment indicated that the net potential revenue over the lifetime of the toll was unlikely to make a meaningful contribution to the cost of the road.
“In addition, our assessment showed that tolling the road would likely result in more drivers choosing to use the coastal route (the current State Highway 1), which would compromise the safety, environmental and access benefits which the new road will deliver for drivers as well as for communities along the coastal route.
“The Transport Agency was also asked to consider whether tolling could be used as a measure to reduce congestion in the region by managing demand.
“Modelling, in this instance, indicated that tolling Transmission Gully would be ineffective in encouraging people to choose other modes of transport and would more likely encourage people to take their cars on the coastal route.
There are a couple of things to unpack here.
It’s unclear just how much a toll would have been but Radio NZ reported a 2016 review estimated a $1.50 toll on cars and $3 on trucks would raise $3.5 million a year.
The article also published a document from the NZTA obtained via an OIA that on the issue and it includes this comparison of the other toll roads in NZ.
Since this was created, the NZTA have increased the cost of tolls by 10c for cars and 10-20 cents for trucks.
The business cases to justify many large transport projects like Transmission Gully rely heavily on the benefit of travel time savings. It is worked out how much faster the project will make trips and then multiply that by the number of trips that will be made over the assessment period. This results in some obscenely large number of hours of travel the project is expected to save which is then multiplied by a dollar value (as set out in the NZTA’s Economic Evaluation Model). That dollar value is meant to represent the value of saving that time.
In their evidence used to get the project consented, the NZTA say Transmission Gully will save 7 minutes despite the road being 0.7km longer than the current coastal route.
A vehicle travelling at the posted speed limit of 100km/hr between Linden and MacKays Crossing will take approximately 16 minutes on the Main Alignment, which is nearly 7 minutes (or approximately 30%) less than using the existing SH1, which is approximately 23 minutes
While a much longer route, that’s a similar overall time saving to what the Northern Gateway Toll road achieved.
They also have estimated that by 2026, about 22,300 vehicles a day will use the main part of Transmission Gully. This compares to the current route which sees approximately 26k vehicles per day through this section
But if even a small toll causes a lot of people to be diverted away from using the road then clearly those travel time savings are junk and perhaps we need to reassess just how valuable they actually are.
Contributions to the cost of the road
Transmission Gully is one of the largest transport projects undertaken with an estimated cost of about $850 million. However it’s also the first project to be built using a Public Private Partnership (PPP) which is essentially a rent to own scheme where the private entity pays to build the road and then we pay them back over a long period of time at a much higher interest rate than the government can get providing the road is open. The only other project currently being built as a PPP is the Puhoi to Warkworth motorway, although the Super Fund essentially want one to build Light Rail.
For Transmission Gully that once construction finishes, every year for the following 25 years we’ll be paying $125 million or more – as shown below. All up we’ll end up paying well in excess of $3 billion for the project. In this context even the $16 million annually achieved by the Northern Gateway toll road is a small, but surely something is better than nothing at all.
While on the subject of cost contributions, inevitably people will claim that they pay for the road through fuel taxes. While that is true at a broad level across the transport sphere, at a detailed level these big projects don’t come close to breaking even financially. For example, a standard car will probably use probably use around 3-4 litres of petrol to drive the 27km of Transmission Gully which means about $2-3 of tax. As with the tolling, based on the number of people expected to use the road it doesn’t come close to covering the cost of the project.
Goes against advice
It’s hard to see how the NZTA have arrived at this interpretation given their position in the previously mentioned document obtained by RNZ. It includes a briefing to Phil Twyford from February last year on tolling the project and shows the NZTA were enthusiastic for it. This is because tolling would allow them to get “a more mode-neutral solution” and could be a step towards “a more modern road pricing system“.
In the second piece of news, it was reported that runoff from the project was having a significantly negative impact on Porirua Harbour
Runoff from the huge Transmission Gully roading project in Wellington has contributed to sediment build-up suffocating wildlife in Porirua Harbour, a survey shows.
Completed by Porirua City Council and Greater Wellington Regional Council, the survey of Te Awarua-o-Porirua Harbour paints a bleak picture of the health of the waterway north of Wellington.
It shows sediment rates have more than doubled in the last five years.
Scientist Megan Oliver from the regional council said long-term patterns of silt build-up were becoming clear.
She said the average silt build-up rate over the last 10 years was 4mm per year for Pauatahanui and 3.6mm for Onepoto.
This is about three-times the normal rate, she said.
Dr Oliver said the increasing sludge was smothering wildlife such as fish and invertebrates and destroying biodiversity.
“When we have a big rainfall event and a whole slug of sediment enters the harbour it basically … smothers everything … it chokes them.”
The nearby giant Transmission Gully highway construction project – a major new arterial route into the capital – was likely contributing to silt entering the waterway, she said.
This follows on from it being discovered back in 2017 that the project needed 50% more earthworks presumably more associated runoff.
Is there anything good about this project?