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Northern Gateway Tolls to rise

The NZTA have announced that the toll on the Northern Gateway toll road are set to increase by 10c at the end of November.

The NZ Transport Agency says tolls on the Northern Gateway Toll Road (NGTR) on State Highway 1 north of Auckland will increase on November 29 2015.

The price of each trip will increase by 10 cents for cars, motorcycles and light vehicles to $2.30 and by 30 cents to $4.70 for heavy vehicles.

The increases are the first in three and a half years and only the second increase since the toll road opened in January 2009.

The Transport Agency’s National Manager Delivery, Robyn Elston, says in order to ensure the Northern Gateway Toll Road remains viable and on course to repay its debt of $158M by 2045, occasional increases to toll prices to adjust with the rate of inflation are necessary. “As soon as the costs are repaid the toll will be removed.”

“5.7 million trips are now made each year on the 7km section of SH1 between Orewa and Puhoi, providing a shorter, quicker option to the free alternative on SH17 through Waiwera.”

Customers with a toll account don’t need to do anything as the new toll price will be automatically debited from their accounts for travel on the road from 29 November.

Administration fees for toll payment notices and service and transaction fees remain unchanged.

The Transport Agency encourages people using the toll road more than once to set up a toll account or pre-purchase tolls online, rather than stopping to pay each time you travel. Set one up today at www.tollroad.govt.nz

A couple of things come to mind about this.

  • The toll is used to pay off a loan of $158 million however it needs to be remembered that the loan doesn’t cover the total cost of the road. The entire project cost $356 million with the loan being just to build the road sooner.
  • At $2.30 the toll road still represents great value for drivers. At around 7km it saves 5km over the old route through Waiwera. Using the IRDs standard mileage rate of 74 centres per kilometre using the toll road would cost $7.48 vs $8.88 of the old route.
  • Unlike many other roads, traffic volumes on the toll road have fairly consistently risen since opening in 2009 which is fairly unsurprising given it is a faster easier route. One of the drivers of traffic increase is also that a higher percentage of traffic is choosing it over the alternative. Back when the road opened it accounted for about 73% of trips, now it accounts for about 80% of all trips. The chart below shows the average traffic volumes for each month, interestingly there hasn’t really been any growth in the number of heavy vehicles, perhaps all the trucks are just waiting for the next motorway to be built before showing up.

Northern Gateway Toll Road Taffic Volumes - Sep-15 2

 

  • Of the current light vehicle toll, only $1.21 is budged to goes towards paying off the actual loan, 70c to transaction costs and 29c for GST. Positively the cost per transaction has been decreasing and the net cost is actually 55c per transaction. I’d hope it will continue to reduce further now that the Tauranga Eastern Link and Takitimu Dr (formerly Route K) are now using the same system. The chart below shows the cost per transaction for each six monthly period since the road opened.

Northern Gateway Toll Road - Transaction Costs - Dec-14

  • There is bit of variability in the cost of toll roads the NZTA operate. With these changes the Northern Gateway toll will be $2.30 for light vehicles and
Light Vehicles Heavy Vehicles
Northern Gateway $2.30 $4.70
Takitimu Drive $1.80 $4.80
Tauranga Eastern Link $2.00 $5.00

 

29 comments to Northern Gateway Tolls to rise

  • If any road with its time-savings benefits were going to revolutionise the Northland economy, it would have been the Northern Gateway – its costs are well below, and time savings are well above, the next project, being the Puhoi-Warkworth proposed route.

    Basically if this road didn’t have big benefits for the Northland economy, the next certainly won’t.

    • Yup, like most of the RoNS Pu-Worth is simply spending a great deal of money to buy truck movements, presumably so those who believe that wealth only comes from heavy lifting and diesel burning can feel like this is still the only basis for an economy. Soooooo backward, so last century: Like a Soviet 5-year plan.

      • Lord Maths

        Patrick, have you ever actually studied the Five Year Plans? The amount of development in the USSR between say 1920 and 1939?
        Maybe don’t criticise the things you don’t understand

  • Warren S

    Yes, Patrick, I think three successive Transport Ministers seem to have been incapable of interpreting the statistics and evident trends and planning accordingly

  • Ricardo

    Why do we in NZ so willingly accept the government adding GST to taxes (of which this toll charge is just another)?

    • BBC

      You are paying a toll for a service, it’s not a tax anymore than paying for having electricity is a tax. Or is your definition of a tax anything that is collected by a government department or SOE regardless of whether it was your choice to use a user pays service from said organisation?

  • I just go through Orewa/Waiwera, its faster than going to pay the toll online. 😛 But I am sure for frequent users it makes more sense.

  • luke

    Pu-worth is basically a subsidy for northport and the truckies dressed as a fancy new motorway for holiday makers.

    • Not really, North Port is in competition with the road: http://www.nzherald.co.nz/northern-advocate/news/article.cfm?c_id=1503450&objectid=11441655

      This will make it even easier to drive trucks directly to then through Auckland rather than trans shipping goods. Trans shipping is better for Northland jobs and Auckland’s road, traffic congestion, and air quality. And the nation’s carbon balance, and import costs.

      Yes it is a subsidy for the truckers in that race, but the only pressure on the route comes entirely from holiday makers: This is literally the Holiday Highway, and most of them turn off before they leave the Auckland region. Other than during construction, for some Northland contractors this will bring no wealth to Northland, and is in fact likely to facilitate Auckland businesses attracting even more business away from Northland ones. It is just spin and wishful thinking that this huge spend in the Auckland Region is for Northland.

  • There is simply no comparison between going through the Johnson Hill tunnels or winding your way up and over the cliff tops between Orewa and Puhoi. The latter way be good for a Sunday drive or a motorcycle club run but that’s about it.

  • Waspman

    Double charging is becoming an issue with their tolling, the error and incompetence firmly being at their end, so keep your tickets if you pay cash, they will be relentless and expensive otherwise!

    • Really? When’d this start, got any further information or links?

      • Waspman

        No links or media of course as they barely exist anymore, only experince of myself and others who have had reminder notices in the mail demanding payment for tolls already paid, on more than one occasion for seperate trips. And if you don’t have your ticket they are none too willing to engage in discussions. Something is not right when their system allows this and it has happened several times to other people. Good way of increasing revenue I suppose if not highly dishonest! As I said always keep your ticket if you pay by cash. At least with the text system there was proof immediately if you kept the text.

  • mfwic

    So why does the toll have to increase? The toll is to cover a loan and interest rates have presumably dropped since the road opened. Shouldn’t the toll be decreasing? WTF does inflation have to do with it?

    • Stuart Donovan

      Good question. Couple of potential reasons spring to mind:
      1. Perhaps traffic volumes aren’t keeping up with business case forecasts.
      2. Perhaps administrative costs are higher than anticipated (I understand NZTA originally envisaged that tolling would be rolled out across more roads, hence splitting the fixed costs).

      • mfwic

        and perhaps it is 3. Because they are a monopoly who can do what ever they please.

        • Sailor Boy

          They aren’t a monopoly. 20% of customers use the competitor product.

        • Stu Donovan

          hmm. I struggle to follow whether you’re commenting on:
          1. Market structure – i.e. monopolistic vs oligopolistic vs small firms. Evidence suggests road networks experience economies of scale and density which tends to lead to oligopolistic if not outright monopolistic outcomes.
          2. Public versus private ownership – this seems to be a separate issue from market structure. My hunch is that under private ownership road user charges would be higher they are currently, given that road users don’t cover full asset replacement, i.e. the land occupied by roads. I also doubt whether tolls + fuel excise taxes cover cost of Northern Gateway.
          3. Relative price levels – again, this is a somewhat separate although related issue. Monopolistic private ownership would probably lead to the highest costs. And I’m not sure a private oligopolistic road network would deliver lower costs; the market power and transaction costs may outweigh efficiency gains.

          Basically, if you’re worried about transport user charges being too high, then I wouldn’t be criticising public ownership and current road pricing – because it seems to favour road users.

    • bbqroast

      Roads are expensive, the loan (which covers a third of the cost) is $158 million. At $2.3 that’s still 67 million trips, or 12.5 years given my eye ball approximation, not including interest!

  • nonsense

    and why do motorbikes pay as much as cars? who and how sets the prices?

  • Anthony

    I don’t think any long haul freight trucks use the old road. We drove it recently and didn’t see any, or many other cars.
    Static truck numbers on the route therefore indicate a static economy up north, which is probably about right.

    5km @ 10km/L = 0.5L of fuel consumed
    0.5L * $1.80/L = $0.90 fuel costs
    $2.30 toll – $0.90 fuel = $1.40 cost of time saved (other operating and depreciation costs are irrelevant or negligible as car is making trip anyway)

    Assume average speed of 65km/hr given route is a mix of 50km/hr and 80km/hr.
    5km @ 65km/hr = 4.6 minutes of time saved
    $1.40 per 4.6 minutes = $18.20 per hour

    So for a single occupant the time saving costs more than minimum wage.

  • jezza

    My understanding is that the toll is mandated to go up with inflation and it can’t go up just because NZTA feel like it or because the interest on the loan goes up or down. It was originally $2 in 2009 and went up to $2.20 a few years ago. However, inflation is pretty low at the moment and I just put it in the inflation calculator and it should be $2.23 at the moment so seems odd to round up to $2.30.

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