7:00 am today

Transport officials look overseas for road tolling models amid calls for more user-pays

7:00 am today
Traffic build up in Wellington.

Traffic build up in Wellington. Photo: RNZ / Rob Dixon

Transport officials are looking overseas for examples of more user-pays on roads, including tolling.

The government wants more options to charge motorists and more tolling, but this requires better technology and legislative changes.

Newly released documents show Transport Ministry officials travelling to Australia, Ireland and Denmark for ideas.

A further complication is the government also wants to use public-private partnerships (PPPs) to build more roads. The documents show the large sum it costs to run the country's two existing highway PPPs.

"Transmission Gully and Puhoi to Warkworth... both have annual payments of around $100 million per year to the operator simply for the road being operating," said one report.

RNZ has been asking what advice the government is getting about tolling.

The response is veiled: 16 of the 23 documents within scope of RNZ's OIA were withheld in full by the ministry, mostly on the grounds of keeping the advice confidential. In those reports that were released, in most large parts were blanked out.

One internal ministry report from a trip to Ireland and Denmark said the Danes had $30 billion of new bridges being funded by user-pays and tolls set by the government.

As for Ireland, its 10 tolled highways were mostly PPP roads, the report noted.

The tolls the private operators could charge were capped, but were hiked in 2022 due to high inflation in Ireland.

In Australia, a separate report noted tolls in Sydney were high and were locked into deals that gave the government "no levers... to intervene".

A report from the Denmark trip also noted high tolls but said this was explained because the time savings over the alternative - ferry trips - were significant.

A government-owned company ran Denmark's toll links and could secure cheap financing partly be benefiting from a state guarantee, it said.

In Sydney, a private operator - giant Transurban - prevailed and the city had "very high" tolls across a dozen roads.

"Individual trips can now cost $50+ and there is still significant congestion," said a report for the MOT.

Alternative free routes were becoming congested, and the tolls had not pushed people to use public transport much.

The PPPs in New South Wales were attractive because of the prospect of future toll revenue.

"The key challenge now with the existing toll roads (which is also the key thing that made them so valuable up front) is the ability for the operator to continue to increase tolls at the higher of CPI or 4 percent.

"Consistency and fairness are extremely challenging," sparking an ongoing review by Treasury, it said.

Queensland had seven tolled roads, and Victoria just two - both PPPs - and was building a third $25 billion toll road with a state tolling company being set up to administer it.

Ireland often only allowed tolling three or four years after a road opened, "presumably" to encourage the PPP contractor to crack on and get the road open, said a report from a deputy chief executive who went to Ireland.

Often, too, the contractor ran a larger stretch of road than just the tolled section.

The busiest tolled highway - the M50 ring road around Dublin - charged between $4.50 and $6.70 a trip, depending on if a vehicle had an automated "etag" fitted or not.

Ireland also imposed clear expectations on PPP highway operators, to upgrade the road surface and core parts, before they handed it back to the state to run.

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