Wednesday, April 23, 2008

ALPURT toll road might not be viable

According to the NZ Herald, the Order in Council approving tolling on the motorway extension from Orewa to Puhoi has been amended, in that the Minister no longer needs to be satisfied as to the financial viability of it as a toll road.
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It is not a surprise for two reasons.
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First, ALPURT has been green-plated. Transit deliberately increased the cost of the project because it believed that if a toll road is built it should be of better quality than the similar untolled road. It put a tunnel in where a gully would have done the same job, and made it all four lanes instead of four and three lanes (the latter makes sense, but the tunnel was green-plating). This is even though the toll on ALPURT wouldn't actually pay for the full cost or even more than half of the cost of the road. A road that once was costed by Transit at just over $90 million in 1999 is now $360 million. Part of that is inflation, part of that is the inflation of the contracting sector due to the government spending up large on roads.
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Second, the tolling of ALPURT was politically driven. Transit sought a whole programme of toll roads to be built, including the Tauranga Harbour Link. These would share the cost of the back office and billing systems to operate tolling (which is to be fully electronic free flow with no toll booths). Now with only one and Transit having funding to build the toll system for a whole set of roads, it isn't quite the economies of scale of transactions Transit had hoped. You might think it is odd that road users pay for the cost of building a tolling system, after all shouldn't a tolling system pay for itself? Yes, good question. One that hasn't been properly answered.
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So you see when road users finally pay to use ALPURT as a toll road, they will be using a road other road users have paid for too. Yes every motorist paying fuel tax and road user charges is paying for a road that they have NO right to use. Interesting that. It would be fine if the fuel tax and road user charges used to pay for ALPURT equalised those used by the people USING the road, but this is a subsidised toll road, green-plated for political reasons.
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Will it work? Will it be well used and popular? Will it be empty with people not wanting to pay to use it? or will many use it, fail to pay and face unpopular penalties for not paying a couple of dollars? We can only hope that the new Land Transport Agency - a big government bureaucracy can make it work. Bureaucracies are good at customer service after all....

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