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North Shore City Council Submission Road Pricing

North Shore City Council Submission To
Ministry Of Transport On Auckland Road Pricing Evaluation Study

1. Introduction

The NSCC welcomes the opportunity to comment on the Auckland Road Pricing Study. The Council recognises the importance of reducing travel demand as a means of addressing increasing traffic congestion within the region. It also recognises that road pricing is a potentially effective means of reducing private car travel.

However, the Council has concerns in principal about the effectiveness, cost and equity of road pricing and, more specifically, has concerns about the options ** that have been evaluated. The following submission, endorsed by the Council’s Infrastructure and Environment Committee, elaborates on these concerns, comments on the proposed options, suggests consideration of alternatives, and reflects on the possible passing of legislation to enable road pricing to be implemented.

** During this submission, unless stated specifically, reference to “road pricing options” includes both road pricing and parking options or schemes.

2. General Community Concerns

There has been considerable community reaction to the Study both in the region and within the North Shore to publication of the Road pricing Evaluation Study. Reaction against the study has primarily focussed on questions of equity and the prospective imposition of additional out of pocket costs. Reasons for opposition to road pricing as a whole include:

- Existing transport assets such as the Harbour Bridge have already been paid for.
- The region not only pays normal petrol tax but already pays a surcharge to fund Auckland transport infrastructure.
- North Shore residents will potentially pay more in total charges than others in the region except for Auckland, which is the principal beneficiary of reduced congestion.
- Lower income families will be hit harder than higher income families.
- Those who have no feasible alternative to car travel, and/or who travel for unavoidable reasons (such as for emergencies), will be forced to pay toll charges.

3. General Council Concerns

In principal, Council shares community concerns about any potential imposition of additional transport charges. However, it recognises the potential effectiveness of road pricing as a means of reducing transport demand, and the resulting in benefits to City residents and businesses through reduced congestion. If road pricing is to be introduced as a means of altering travel behaviour to address traffic congestion, Council’s concerns focus on:

- Need to provide for transport alternatives (particularly public transport) prior to introduction of road pricing measures.
- Equity for North Shore residents and businesses.
- Ability of sections of the community to pay.
- The need for positive outcomes for the regional and North Shore economies.
- Degree of support for the City’s urban growth strategy.
- Road pricing system efficiency, costs and practicability.

These are discussed in more detail.

4. Strategic Perspective

a) Alternatives to Road Pricing

The North Shore City Council believes that greater attention and priority needs to be given to other means of reducing travel demand and providing transport alternatives is a key requirement before serious consideration is given to introducing road pricing options. Alternatives which could be implemented in the short to medium term include:

- Reducing and simplifying public transport fares.
- Better integrating of public transport services and ticketing.
- Accelerating bus priority measures.
- Accelerating and expanding non-pricing TDM initiatives.

- Providing priorities for commercial traffic (so that the adverse economic impacts of increasing congestion are reduced).
- Reducing network demand for education related travel (such as inhibiting student parking in the Auckland CBD, increasing PT subsidies for students, changing school/university hours).
- Encouraging businesses to use transport services outside of peak periods.
- Restricting the number of imported vehicles, or increasing vehicle tariffs to better reflect the costs each additional vehicle creates.

Many of these potential initiatives are being actively pursued in the region, though with varying degrees of effort, funding and success. Council supports further investigation of measures which reduce travel by car and which make alternatives more attractive. Where feasible and cost-effective, urgent attention should be given to investigating, funding and implementing the relevant measures.

Other measures could also be effective in achieving other benefits such as reduced vehicle emissions. Clearly, Government requirements to improve fuel standards and engine emission standards would be immediately effective without altering transport demand and would provide significant health benefits.

b) Trends and Timing

Evaluation of the proposed road pricing options based on projected 2016 population and economic activity was carried out assuming travel behaviour investigated in the early 1990s. It also assumed current levels of income and current transport costs. In addition it did not take into account the public transport changes adopted in the 2005 RLTS. For these reasons, results of the Pricing Study must therefore be seen as preliminary in nature. It is inevitable that as world oil supply tails off and demand continues to increase that fuel prices will continue to rise. This will have an income effect (i.e. will generally reduce incomes) and it will make private cars more expensive to own and run. Together with an aging population, this suggests that congestion estimated for 2016 may occur at a later date, implying the need for road pricing initiatives could also be delayed.

If the need to introduce road pricing to reduce congestion were delayed, it would allow a longer time for growth strategy policies to take effect. These are orientated towards reducing travel demand through concentrating growth in and around existing employment and transport nodes, through promoting mixed-use developments and through minimising further urban sprawl. It would also allow more time to develop better public transport infrastructure and services. This is an essential pre-requisite before any form of road pricing is introduced.

c) Benefits of Road Pricing

Principal benefits of road pricing via reduced traffic levels are:

- Safety improvements.
- Improved access and mobility for personal travel.
- Greater protection and promotion of public health.
- Reduced adverse environmental impacts.
- Reduced fuel usage.

Analysis undertaken as part of the Study concluded that the economic impact of the road pricing schemes evaluated was neutral or even slightly negative.

This latter analysis result is consistent with the results of earlier investigations of the estimated costs of Auckland traffic congestion. These studies concluded that a very large proportion of the value of time lost due to congestion accrues to private individuals. Further, these impacts affected leisure time rather than working hours, and hence had less impact on the wider economy in terms of GDP.

Though the Study results are consistent with the results of earlier investigations, the Study acknowledges that further work is needed to better understand the economic consequences of road pricing.

In terms of the options evaluated, it should be noted that the Study assumed that commercial traffic would pay the same toll charges as private traffic. If support for economic outcomes is considered to be a high priority, it would be worth evaluating the road pricing options assuming lower or nil toll charging for commercial traffic. This could be expected to result in net economic benefit to businesses.

d) Funding

The Study estimates that revenue streams from tolling or parking levies will cover the operating and capital costs for all of the options. However, it is also estimated that only three of the five pricing options evaluated will produce positive net revenues after payment for mitigation measures. These are the Double Cordon and Area tolling options and the Parking Levy option.

Costs of mitigation measures cover:

- Public transport improvements.
- Complementary roading improvements.
- Complementary traffic and parking management.
- Compensations to key groups.

For options that result in net revenues after mitigation, it is proposed that the schemes not only fund improvements to public transport and roading as a mitigation measure, but produce excess revenue which could be used to fund other transport improvements.

In these situations, Council would want to be assured that excess revenue is entirely channelled into funding sustainable transport infrastructure, services or other transport initiatives in the Auckland region. It would also want to be assured that this would not reduce Government funding that would otherwise be available for Auckland transport.

e) Longer Term Land Use Changes

The Road Pricing evaluation does not take account of the dynamic effects of transport on land use and land use on transport. In addition the Study only focussed on outcomes projected for 2016.

One of the immediate effects of introducing road pricing could be for businesses to avoid locating in areas where out of pocket tolling costs are incurred. The Study concludes that there are only marginal economic benefits for business from the tolling options. In that situation, businesses may not easily recognise or react to the transport network benefits from reduced congestion (or these benefits could erode with time as congestion builds up again). For the options evaluated in the Road Pricing Study, this would tend to disadvantage businesses located north of the Harbour Bridge and in the west.

These and other transport-land use interactions need to be better understood before there can be confidence about the impacts of road pricing on supporting the regional and individual local authority growth strategies.

5. Comments of Road Pricing Options

a) Single and Double Cordon Tolling

The immediate concern with both these options is the evaluation assumption that vehicles crossing the Harbour Bridge pay a substantially higher toll than those crossing the cordons in the west and south. This is likely to be highly unacceptable to North Shore residents and businesses. In the Study, the high charge for the Harbour Crossing was imposed to effect a reduction in the high level of traffic congestion on the corridor. To begin to be acceptable, the same charge would need to be applied across all cordons and other non-pricing alternatives (such as ramp metering) also pursued at the same time as a means of reducing demand, (see later comments on ramp metering as well).

b) Area Tolling

Evaluation of the area tolling option assumed the same level of tolling for all cordons. As a variation on cordon tolling, this appears to have no further effects on North Shore residents or businesses other than those noted above.

c) Network Tolling

In the Study, network tolling has a major impact by diverting traffic from the motorway to the local street network. This would cause major congestion on North Shore roads where there are few alternative routes. The option also raises questions about the potential relationship between network tolling and ramp metering. In particular, would there still be a need for network tolling if travel demand is already being managed through ramp metering?

Because of the potential for significant congestion on City roads, Council recommends that this option not be investigated further.

d) Parking Levies

Based on Study information, it appears that there are significant practical challenges in introducing and enforcing a parking levy scheme, which suggest that it is not viable option. Imposition of parking may also distort achievement of the regional growth strategy by undermining existing town centres and encouraging developments in areas where parking levies are not applied. Clearly, North Shore’s principal town centre, Takapuna, would be greatly jeopardised in these circumstances. For these reasons, Council considers that this option should not be investigated further.

e) Robustness of Options Evaluations

The Study report and the Ministry of Transport and their consultants acknowledge that the Study is deficient in several respects. The Regional Transport Executive Group together with the technical liaison group will also be making technical comments on the Study methodology and results to the Ministry of Transport.

Issues already identified, including those noted in this submission, encompass:

i. The need to evaluate longer-term transport, land and economic use effects.
ii. Better understanding and evaluation of the economic consequences of options.
iii. Full consideration of the effects of ramp metering.
iv. Evaluation of the effects of directly tolling new transport infrastructure e.g. State Highway 20 extension.
v. Improved understanding of social impacts.
vi. Assessment of equal levels of tolling for cordon options.
vii. Testing of further pricing options and their effects on mitigation and on the economy.

6. Progression of Road Pricing Options

The Road Pricing Study is intended as a preliminary evaluation of the attractiveness, acceptability and feasibility of road pricing as a means of addressing the effects of increasing traffic growth in the Auckland region. It is acknowledged that much further work is needed to refine and better understand options before a road pricing scheme or schemes is agreed for implementation.

The Ministry of Transport has indicated that Government is prepared to consider passing enabling legislation for road pricing during 2006. This may provide momentum for pursuing the option and provide a more concrete background for development and refinement of options.

7. Summary and Conclusions

Review of the Evaluation Study and consideration of its implications suggests that whilst there are potential benefits from introducing road pricing, there are also risks and uncertainties which affect their viability, acceptability and timing. There is also a need for better understanding of the effects of road pricing options and further thought on how to deal with such issues as equity, efficiency, effectiveness and appropriateness.

One of the major risks with road pricing is public acceptability. This is not likely to eventuate unless, in particular, regional residents and businesses see that there are real benefits from road pricing, that road pricing is equitable, and that viable transport alternatives (especially public transport) are in place.

Initial public reaction to the Road Pricing Study would suggest that the arguments to reduce congestion with road pricing measures are not compelling enough, and safeguards and transport alternatives (especially public transport) not sufficiently available, for the public to readily support the early introduction of road pricing.

The Study concluded that road pricing would only result in marginal benefits for the Auckland business economy. Greater support for road pricing would be forthcoming if economic benefits were demonstrated to be larger.

Given these risks and uncertainties, there are advantages in more intensively investigating alternative means of reducing traffic congestion and reducing adverse traffic impacts.

However, the Study suggests that there are sufficient grounds for further investigating and refining road pricing options. An additional advantage of road pricing is that it could provide a revenue stream to fund the development of transport alternatives, particularly public transport.

Further investigation would help to reduce uncertainties about road pricing, build a better appreciation of its operations and benefits, and maintain momentum as an option for dealing with the effects of traffic growth if other means prove less effective.

8. Council Position

i. Council recognises the importance of reducing travel demand as a means of addressing the adverse effects of increasing traffic congestion within the region. It also recognises that road pricing is a potentially effective means of reducing private car travel and of generating funding to support the provision of alternative forms of travel.

ii. Nevertheless, there are risks (particularly public acceptability) in implementing road pricing at an early stage, and these need to recognised and addressed.

iii. Council believes that, as a matter of urgency, priority be given to investigating and implementing other cost-effective and potentially more publicly acceptable measures to reduce traffic congestion and the adverse effects of motor vehicles usage.

iv. Council is prepared to support further investigation of road pricing and considers it essential before any introduction of enabling legislation, and subject to the provisos contained in points (v) to (vii) below.

v. If road pricing options continue to be considered, further investigation must take into account the shortcomings of the Study noted by the region as well as suggestions for variation or additions to the pricing options. Further investigation should include:

- The need to evaluate longer-term transport, land and economic use effects.
- Better understanding and evaluation of the economic consequences of options.
- Full consideration of the effects of ramp metering.
- Evaluation of the effects of directly tolling new transport infrastructure e.g. State Highway 20 extension.
- Improved understanding of social impacts.
- Assessment of equalling tolling for cordon options.
- Testing of further pricing options and their effects on mitigation and on the economy.
- Evaluating the potential impacts of further rises in the cost of fuel.

vi. If the Government seeks to introduce legislation allowing road pricing, such legislation should:

- Ensure that any net revenue derived from road pricing in the Auckland region only be directed to supporting regional transport infrastructure, public transport services and other transport initiatives within the Auckland region.
- Ensure that road pricing is equitable within the region.
- Ensure that safeguards will be put in place to compensate or mitigate effects on those less capable of bearing the costs imposed by road pricing.
- Ensure that key decisions regarding the consideration and adoption of any road pricing schemes (or their modification) be developed and approved by the region.
- Ensure that the region is primarily responsible for administering such a scheme(s).

vii. If road pricing is implemented in the region, it must be ensured that:

- Public transport improvements and widespread non-pricing TDM measures are fully in place prior to the start of the scheme(s).
- Government provide the initial funding to develop and implement the scheme(s) and to fund mitigation measures.
- Government funding for regional transport improvements and operations is not otherwise reduced.
- Road pricing supports the achievement of regional and City growth and transport strategies.

ENDS


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