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Tolls Roads & Funding Reform In NZ


18 July, 2005

Tolls Roads & Funding Reform In NZ

A Forum on Infrastructure in Wellington has been told that there are opportunities for funding reform in New Zealand that could open the way for the introduction of new toll roads in the future.

The Forum, conducted by leading consulting firm, Sinclair Knight Merz, examined the current roading environment in New Zealand and the various options available.

Derek McCoy, the Sinclair Knight Merz Infrastructure Manager in New Zealand, told the Forum that the conditions are right for stronger consideration of toll roads.

"Using the Sydney Toll Road Network as an example, the Forum examined the pros and cons of toll roads," Mr McCoy said.

"There is evidence from Sydney that toll roads have improved road safety, accessibility, reduced congestion and provided economic benefits," he said.

"But, it was noted that toll roads have some problems, including increased noise and emission levels in the immediate vicinity of the road, although overall air quality does improve.

"The overall cost to the economy of a toll road can also be greater, due to higher private sector borrowing costs and additional Government administration costs," Mr McCoy added.

The Forum heard from respected Sinclair Knight Merz Principal, Peter Prince, who has been involved in advising Governments across the globe on private sector infrastructure projects for many years.

In focusing on funding reform, Mr Prince said Government has a range of options worthy of further debate.

"Funding arrangements could be improved through a combination of integrated pricing, including the use of tollway revenues, the utilisation of lazy government assets and further use of transport revenues to fund transport improvements," Mr Prince said

"Such a combination could assist all transport users in New Zealand," he said.

The keynote speaker at the Forum was John Talbot, formerly with the Commonwealth Bank of Australia and a Past President of the Australian Council for Infrastructure Development.

Mr Talbot looked at the advantages and disadvantages of the various project delivery models.

Among them was the Build, Own, Operate and Transfer or BOOT project delivery model that involves private sector participation.

"The BOOT Model enables Government to transfer the three major risks that exist at the outset of development, namely Design and Construction, Operational and Financial," Mr Talbot said.

"It also enables the time scale for the delivery of road projects to be brought forward," he said.

"The private sector brings a spirit of innovation to these projects, along with a road that eventually reverts back to Government at no cost," Mr Talbot added.


Background on Sinclair Knight Merz

Sinclair Knight Merz is a leading project delivery firm, employing more than 4000 staff in offices across the globe.

The firm operates across five broad market areas: Infrastructure, Water & the Environment, Buildings & Property, Power and Industrial, and Resources.

In New Zealand, the firm has offices in Auckland, Wellington, Christchurch and Invercargill.

It is involved in a range of key transportation projects such as Auckland's Central Motorway Junction, along with the Wellington Regional Road Pricing Study and Transit New Zealand's Advanced Traffic Management Systems Project in Auckland.

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