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Tolling
Tolling is a way of building projects earlier and for implementing demand management.
The primary source of funding for State highway improvement and management projects is the National Land Transport Fund (NLTF), allocated by Land Transport New Zealand (LTNZ) through the National Land Transport Programme (NLTP). Transit prioritises state highway projects in a delivery programme according to available funds and publishes results via its 10-year State Highway Forecast (SHF). Transit's traditional approach to funding for construction projects is to pay for work as it occurs from the NLTF.
The option of using toll revenue to fund new roads has been enabled by the Land Transport Management Act 2003 (LTMA). It allows for tolling as a way of advancing projects that might otherwise be delayed because of funding constraints, subject to obtaining approval by an Order in Council on the recommendation of the Minister of Transport.
Legislation
The Land Transport Management Act 2003 (LTMA) provides a framework for promoting tolls as a means of supplementing National Land Transport Programme (NLTP) funds.
Under the LTMA:
The Minister must not recommend the making of an Order in Council unless a number of considerations have been met, including how the activity:
Also the results of consultation must be taken into account. The project must be shown to have a high level of support from affected communities or be included in the current National Land Transport Programme (NLTP). Once satisfied that all criteria is met (which is specified in the LTMA) the Minister may recommend to the Governor General that an Order in Council be made to allow tolling.
Screening Methodology
Sceening methodology is used to identify roading projects that will be suitable for tolling. New projects are identified from the State Highway Forecast. High level, coarse screening methodology, is used to systematically analyse all state highway proposals for a subset of projects with the potential to be toll roads.
This subset is then assessed to identify 'candidate' projects which should be subject to more detailed analysis because they:
Proposed 'candidate' projects are then screened in more detail. The more detailed methodology for coarse screening of candidate projects is to:
Toll roads vs privatisation
It is important to note that enabling Road Controlling Authorities to develop toll roads does not constitute privatisation of roads. The legislation directs that once the road is paid for tolling stops and the road remains a public asset. Nor does the legislation allow for toll revenue on one road to be diverted to pay for other projects.
Travel Demand Management
The development of toll roads will enable effective travel demand management strategies to be implemented, contributing to regional growth strategies. Toll roads within a network enable sustainable traffic flow by setting the toll at levels that balance the number of motorists that use a toll road with those who use alternative routes according to willingness to pay. This not only increases the overall effectiveness of a network, it also provides motorists with more reliable travel times. Overseas, toll roads are commonly and successfully used as an element of travel demand management in many countries including Australia, USA, UK, Germany, Singapore and South Korea.
Collection and Administration
One of the lessons that Transit have learned from overseas experience is that as toll roads increasingly become a feature in the transport network, the mechanism used to collect and administer toll systems need to be compatible. In New Zealand, Transit have the opportunity to ensure this compatibility from the outset and avoid inconveniencing road users with different methods of payment and administration on different toll roads. To this end, Transit has initiated the Toll Systems project to investigate the best options available for toll collection and toll management.
Projects where tolling will be undertaken
ALPURT B2 View website
Project update
Auckland's Northern Motorway Extension, known as ALPURT B2 is New Zealand’s first approved toll road under the Land Transport Management Act (2003). Work on ALPURT B2 began in December 2004 and is planned for completion mid-2009.
Tolling is being considered as a funding option for the below projects:
Waterview Connection View website
Project update
The Government is currently investigating the feasibility of progressing the Waterview Connection as a public private partnership (PPP). A steering group has been established to deliver a business case that assesses whether procuring the Waterview Connection, as a PPP is viable and could deliver value for money.
Following public consultation, the Transit Board in April 2007 resolved not to progress its toll proposal for the entire Western Ring Route. The Steering Group will consider whether it is appropriate to toll the Waterview Connection but a tolling application will still need to be made to the Minister of Transport, as required under the Land Transport Management Act 2003.
Penlink View website
Project update
Enabling legislation for a regional fuel tax could see the beginning of Penlink construction as early as next year. Rodney District Council is hoping to award a contract in mid-2008. This can go ahead once they have received government certainty that legislation will allow for Regional Fuel Taxes to provide funding to the Penlink project.
Transmission Gully View website
Project update
The Transmission Gully project is one possible part of a package of rail and road options that are intended to address congestion, traffic flow and road safety in the Wellington region. While funds have been approved for the first stage of investigatory and preliminary design work, the project as a whole has not been given the 'green light' to proceed to construction stage.
Transit New Zealand is currently working on the investigations and preliminary design phase of the Transmission Gully project. The purpose of this first stage of the project is to establish cost and design options for the project.
The next stage will see Transit assisting the regional and local authorities with developing funding solutions to enable future construction. Tolling is one of the possible sources of funding that will be investigated as part of the overall funding solution. Full public consultation is required prior to applying for approval for Tolling on any project.
Tauranga Eastern Motorway View website
Project update
The Tauranga Eastern Motorway is part of a comprehensive transport network - the Tauranga Eastern Corridor - which will service existing and future inter-regional traffic in the Bay of Plenty, as well as urban growth in Papamoa East, the largest growth area of the Western Bay of Plenty sub-region.
The Bay of Plenty Regional Land Transport Committee (RLTC) is working hard developing a funding package to enable the Tauranga Eastern Motorway to be built as soon as possible. This is likely to require a range of funding sources to supplement funds from the traditional National Land Transport Fund. Funding is likely to include a Crown Grant, Regional Fuel Tax, developer contributions, regional contributions and tolling.
Transit is at a preliminary stage of working with the RLTC to understand the opportunities and impacts of tolling the Tauranga Eastern Motorway. Full public consultation is required prior to applying for approval for Regional Fuel Tax or Tolling on any project.
Past consultations
Under the Land Transport Management Act 2003 a public road controlling authority that seeks funding by way of road tolling must consult on the proposal. The Minister must not recommend the making of an Order in Council to toll a road unless they have taken into account the outcome of consultation undertaken by the public road controlling authority and is satisfied that there is a high degree of support from affected communities. Please find below links to past toll consultations.
Western Ring Route View website
ALPURT B2 View website
Penlink View website
Harbour Link View website
Tauranga's Harbour Link (State Highway 29) project is the last remaining section of the Central Corridor of the Smart Transport network to be built. It will provide a continuous four-lane expressway from Takitimu Drive through to Mount Maunganui. Construction commenced in late 2007 and stage two of the project will be completed in 2010.
The project progressed to designation and design on the basis that it would be part-funded through tolling. An Order in Council was granted for the project to be tolled, however at the last General Election an agreement was reached between the Labour Party and New Zealand First that the project would be fully funded by the Crown without the need for tolls. Funding for the project has been split - half from the Crown grant and the other half through the National Land Transport Fund administered by Land Transport New Zealand.
On commencement, the whole central corridor, stretching from Takitimu Drive to Maunganui Road, became state highway, with Transit taking responsibility for its development and maintenance. With the increased state highway capacity through the central corridor once the new Harbour Link Project is opened to traffic, Fifteenth Ave/Turret Road will become a local road managed by Tauranga City Council.
Contact us
Capital Projects - Tolls
Transit New Zealand
Investment House II
20-26 Ballance Street
PO Box 5084
Wellington
New Zealand
Email: tollsteam@transit.govt.nz
Public Private Partnerships
PPPs are long-term contracts between the public sector and the private sector covering planning, construction, operation and/or financing of public infrastructure and services. At the end of the contract, the facility is usually returned to the government or a local authority.
While few public private partnerships of this kind (PPPs) have been undertaken in New Zealand, they have been popular in a number of countries for advancing the construction of large public infrastructure projects.
The Land Transport Management Act (LTMA) recognises that, as the pressure on public funds to build road infrastructure further increases over time, other sources of funding will need to be found to supplement public funding available for state highway projects. The LTMA enables long-term concession arrangements as a means to supplement NLTP funds for the development of new road infrastructure. The LTMA enables a concession agreement whereby land is leased to the private sector for a period of up to 35 years.
The Government is currently investigating the feasibility of progressing the Waterview Connection section of Auckland's Western Ring Route as a Public Private Partnership (PPP). A Steering Group has been established to deliver a business case that assesses whether procuring the Waterview Connection, as a PPP is viable and could deliver value for money.
Transit New Zealand is currently working with the Waterview Connection PPP working group, which is made up of representatives from Treasury and the Ministry of Transport, to help support the Steering Group's objectives.
Please find further information on the Treasury website