From toll debacle back to the future for the Transport Agency

The editor has opposed toll for over 10 years. He recently was in the High Court in an appeal hearing defending himself against charges for not paying toll on the Northern Gateway toll road. The decision has not come out yet.
Don’t get me wrong I am not generally opposed to building roads and of course accept that they have to be paid for. However I am opposed to paying more than necessary for the privilege to have and use vital infrastructure.
If the road would be financed through – if need be – an increase in petrol tax there would be no extra collection costs. In case of financing the road through toll an extra cost of at least 50% needs to be added.
As the NZ Herald reported the Northern Gateway tolls to last nine extra years. The the Transport Agency previously hoped that by 2045 tolls would pay off a $180 million loan raised towards the full $356 million cost of the 7.5km motorway extension from Orewa, the Johnstone’s Hill tunnels. However as no more toll project have been added and economy of scale not been reached administration costs are still chewing up 34c of every $1 raised in tolls. If we add the extra infrastructure costs like toll gantries and other hard- and software, which has costs millions of dollars the real costs of toll collection is rather 50% or more of each dollar raised. This is pure economic madness if you can have it at no extra costs by financing the road via (regional) petrol tax.

However it all makes sense if we envisage the future privatisation of the Queen’s Highways. In that case the private owners will need an established system to collect revenue from the roads, which is only possible through toll. The Transport Agency in its previous incarnation as Transit New Zealand clearly envisaged that future and said in its long term plans when the Northern Gateway was changed from a publicly funded into a toll road that it wanted to be at the forefront of future privatised roading systems. Transit was expanding from road construction to financing and toll collection. I called it empire building.
Now in this latest development the Transport Agency is again adding to its empire by urging their political masters to support an early start to Auckland’s $2.4 billion underground rail project. “The risk of not being involved in these early stages is that the key elements of the project get determined in the meantime,” the agency said. “If the Crown is to be a future funding partner, it needs a mechanism to identify options and risks around planning, design, procurement and financing.” So the empire grows.

It all started with the old Works Department, which built the whole range of public infrastructure from roads to dams to public buildings. Now over thirty years of governments divesting from their responsibilities the Transport Agency is going back to the future by adding ever more strings to its bow. Good on them as long as we get some decent public transport out of it.

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