Today the Auckland Transport Board have their latest meeting and I’ve taken a look through the reports to pull out the interesting bits.
Firstly and surprisingly the agenda for the closed session is surprisingly bare. The only non-regular item is Tamaki Regeneration Project – funding and governance agreement.
The main business report seems to have a bit in it to cover. As always, this is based on the order they appear in the report.
Supergold – at the time of writing the report, AT say they had almost 105k cards loaded with SuperGold concessions (both the blue and gold ones), up from 45k in May. A recent press release also stated that now 97% of SuperGold trips were taking using HOP cards. The map below shows where paper tickets were still being issued
Urban Redevelopment – AT say give a brief overview of some of the work they’re doing to work with Panuku Development Auckland.
Key priorities at this stage include:
- Takapuna – Ongoing input into options for development of AT parking sites, and identification of short and long term public transport infrastructure requirements.
- Manukau – Ongoing input into the Manukau Framework Plan currently under development. This document will identify potential streetscape upgrades, and potential sites for redevelopment including parking sites.
- Onehunga – Analysis being undertaken on the potential impact of East-West Connections and Airport-Mangere rail on future development proposals.
- Henderson – Early stages of high level visioning. The AT focus is on providing for train station expansion requirements associated with CRL operations, and on any implications of street network proposals including on level crossings.
Northwest Busway – They have selected Aurecon to develop the Indicative Business Case for the NW Busway between the City Centre and Westgate and is due to be completed by April 2017.
Harbour Crossing (AWHC) – Their work on the future RTN options as part of AWHC now includes prototype designs for several RTN modes
Tertiary Student Travel Survey – AT conducted their biennial survey and covered 2,108 interviews at campus’ across Auckland.
The surveys show that there has been a significant growth of students using public transport since 2014. Total public transport main mode travel to campus has increased from 41% to 48% and non-car travel has increased from 60% to 63%. Student attitudes towards public transport are strongly positive and nearly all students have an AT HOP card. Price and overcrowding are now seen as the biggest barriers for increasing use. Use of AT sources of information (e.g. journey planner) have significantly fallen since 2014 as the use of google maps for transport information has grown. Attitudes and use of public transport are similar across all CBD/City Fringe campuses and suburban campuses. MIT Manukau students are highly represented in train statistics.
Lincoln Rd – AT lodged a Notice of Requirement to widen Lincoln Rd. Notification is expected in September.
Albany Highway – The upgrade of Albany Highway north of the motorway has been going on for some time but AT now expect it to be completed in October, well ahead of what was in the contract.
Glen Innes to Tamaki Dr Shared Path – Section 1 from Merton Road to St Johns Road is expected to be completed by the end of September, Section 2 to Meadowbank Station and Section 3 to Orakei are expected to have resource consent completed soon with Section 3 due to start construction in October.
Newmarket Crossing (Sarawia St) – As expected the Cowie St Residents Association have appealed the consent to the Environment Court. AT now expect a likely decision on this in March/April 2017 although based on other projects like Skypath, that seems optimistic. In the past, AT have said that the opening of the Parnell Station is dependent on the Sarawia St crossing being removed.
Bike thefts – AT say they’re working with the police and our friends at Bike Auckland to address bike theft which has been increasing as cycling becomes more popular. This will include extra CCTV cameras and an education campaign.
Manukau Rd Transit Lane – The new transit lane is saving buses and T3 cars 4-5 minutes during the morning peak and has increased the people movement efficiency of the corridor by 10% – and based on anecdotal reports, that’s still with a lot of single occupant vehicles being driven in the lane.
New Bus Lanes – AT claim they are planning to deliver 19.1km of bus lanes this financial year and the first of the physical works were due to start by the end of August – but I’m not sure where. One of the lanes being added will be Gt North Rd at Waterview which is being done in conjunction with the Waterview project and expected to start construction in September and be finished by March 2017. An indication of some of what is being worked on is below.
New Bus Network – Things are on track to go live with the South Auckland network on 30 October. Tenders for West Auckland are being assessed still while the tender for the Central and East networks have gone out.
Station Gates – Designs are complete for electronic gates to be installed at Henderson, Manurewa and Papatoetoe. They don’t say when they might be installed though.
Train performance – More work to speed up trains is being planned and includes line speed, interlocking and signalling works. The report says this is for a new recast timetable in March/April 2017. Previously they’d suggested a new timetable was due in February so it appears this has slipped.
There is a separate paper about HOP which deserves its own post and will be going up at midday.
Is there anything else you’ve seen in the reports you’ve found interesting?
Auckland Transport are consulting on the widening a 900m section Neilson St in Onehunga as part of the East-West link.
The public are being given a chance to have their say on changes designed to improve travel times and congestion along Neilson Street in Onehunga.
The improvements which include changes to parking in the area are part of the local transport improvements of the East West Connections project and are designed to provide benefits for local road users including freight along Neilson Street.
The work involves creating four lanes (increasing from two) on Neilson Street between Alfred Street and Angle Street. A clearway and no stopping zone is proposed to be in place from 6am-7pm Monday to Friday. This doesn’t apply to parking at weekends and evenings.
Auckland Transport Principal Engineer Joe Schady says the improvements also include new walking and cycling facilities alongside Waikaraka Park.
“A new footpath and timber boardwalk linking to the existing walkway will make it easier and safer for the community to access the park particularly for sporting activities and the Speedway.”
The NZ Transport Agency’s Auckland Highway Manager, Brett Gliddon says creating extra lanes on this part of Neilson Street will help to deliver some early benefits to the Onehunga area, particularly for local business owners, truck operators and customers who are moving in and out of the Onehunga and Penrose area every day.
Community feedback will help to finalise the design for the work. Construction is planned to start later this year and be completed by December. The work is part of a wider package of improvements including removing the rail bridge at the end of Neilson Street and replacing it with a new, lowered road.
The Southwestern Motorway will also be widened to four lanes in each direction between Neilson Street and Queenstown road to further support traffic growth expected on State Highway 20.
Feedback from the public in mid-2015 showed that overall improvements on Neilson Street were supported to help relieve the significant congestion that is experienced on the road and on the approaches to SH1 and SH20.
A series of public information days will be held in August to encourage people to find out more about the project and have their say on the plans for Neilson Street.
Given this doesn’t appear to even require moving kerbs, only adding some pedestrian amenity and changing how the road markings it’s crazy that it wasn’t done years ago. We’ve long supported the widening of Neilson St including the possibility of truck only lanes as a quick and much quicker and cheaper solution to transport issues in the area.
In fact the same approach should be taking all the way through to the intersection with Church St (along with a signalised intersection for the Metroport entrance). The biggest reason for not doing this is that it would probably show the foreshore expressway as not being needed, at least not anytime in the next few decades. That could save us having to spend up to $1.8 billion and I have no doubt we could find some other uses for that kind of money.
The consultation is open to Friday 26 August
Back in May in this post, Matt highlighted the NZTA’s strategy of designating only for road tunnels across the Waitemata Harbour, leaving any rail designation up to Auckland Transport. The NZTA have a total budget of $27m for the designation work, $14m million of which is an additional appropriation, approved under the delegated authority of the Chief Executive, to cover enlarged works at Esmonde Road and Victoria Park. The work is proceeding even though the comparative Preliminary Business Case for a road only crossing calculated a BCR of 0.4. The Western Ring route, which is designed to reduce pressure on the existing Harbour Bridge, is yet to open.
On the back of this I wrote to NZTA CEO Fergus Gammie pointing out that the NZTA’s governing legislation, the Land Transport Management Act (LTMA), was not being complied with and therefore the route protection work currently underway should be placed on hold until a number of issues had been resolved.
NZTA have responded to the letter but, before we look at that, let’s take a quick look at the LTMA.
The LTMA was introduced by the Labour / Green government in 2003, and a ministerial press release at the time promised that it would “broaden the focus of the land transport system beyond just roads and represent a true multi-modal, integrated, approach to land transport.”
Since then the LTMA has been amended, but it still defines the objective of the NZTA to “undertake its functions in a way that contributes to an effective, efficient, and safe land transport system in the public interest.”
Key functions are:
- to manage the State highway system, including planning, funding, design, supervision, construction, and maintenance and operations
- determine whether particular activities should be included in a national land transport programme
- approve activities or combinations of activities
The operating principles the NZTA must abide by include:
- exhibiting a sense of social and environmental responsibility
- using its revenue in a manner that seeks value for money
- ensuring that it gives, when making decisions in respect of land transport planning and funding , the same level of scrutiny to its own proposed activities and combinations of activities as it would give to those proposed by approved organisations
When approving a proposed activity or combination of activities for funding, the NZTA must be satisfied that:
- The activity is consistent with the GPS on land transport; and
- is efficient and effective; and
- contributes to the Agency’s objective; and
- has been assessed against other land transport options and alternatives
- relevant consultation requirements have been complied with
The NZTA must also take into account any national energy efficiency and conservation strategies, and act in accordance with its operating principles.
It should be clear from any reasonable interpretation of the law that any work on the Additional Waitemata Harbour Crossing does not qualify for payments from the National Land Transport Fund as most, if not all, of the above criteria have not been met. But let’s return to the NZTA’s response and see what they have to say.
Under the Land Transport Management Act heading, the NZTA claim:
The NZTA claim that other land transport options (which aren’t limited to roads by the LTMA) have been assessed. But what the NZTA neglect to say is that the 2008 Summary Report found that for passenger transport alone, passenger transport in a new tunnel or on a new bridge between Esmonde and Britomart was the best option. No comparative cost benefit analysis was done for a rail only vs a road crossing – it was just assumed by the report that a road crossing was also needed.
The NZTA claim that the additional crossing was consulted on as part of the Regional Land Transport Plan (PDF 5 Mb). The RLTP contains a single line item for the Additional Waitemata Harbour Crossing, for which no discussion on the shape or form of the route protection was consulted on:
The NZTA suggest “as the proposal is only to seek route protection at present, there is no need to include (or consult on) the construction of the crossing in the Regional Land Transport Plan”. I disagree. Route protection defines the envelope of the project, and necessarily needs to cater for a chosen mode. Right now on-going route protection work affects Victoria Park, Esmonde Rd and sensitive ecological areas. Exhaust stacks at Wynyard and Northcote or Esmonde Rd are included in the designation work because the chosen solution is a pair of three lane road tunnels, yet there has been no public consultation to date. It is socially irresponsible and in bad faith for NZTA to leave consultation to the Board of Inquiry process. The NZTA need to be getting feedback from the public and businesses now on the desired mode and how much road users would be willing to pay in tolls for the new crossing and also potentially the existing Harbour Bridge.
The NZTA don’t address the issue of efficiency or effectiveness in their response. Instead they rely on the fact that there will be a business case completed after the $27m budget for a road crossing designation has been spent. That business case will not examine whether a road crossing is required at all, because the decision has already been made. The NZTA is clearly not using it’s revenue in a way that seeks value for money, nor has it adequately considered alternatives.
Even the Government Policy Statement appears to be disregarded by the NZTA in its pursuit of a road only crossing. The GPS has the objective of mitigating the effects of land transport on the environment. The focus for Auckland is investment to maximise throughput of people and freight as Auckland grows, something the AWHC project which is dedicated to the movement of single occupant cars cannot achieve.
So what do you think? Is the NZTA following the law?
The East-West Link feels a lot like the preverbal snowball rolling down a slope, constantly gathering momentum as it simultaniously gets bigger and bigger in scale, cost and the NZTA’s haste to get started. A month ago and based on documents received from an OIA, I wrote about how the cost of the project had ballooned from an estimated $550-660 million when the government gave the go ahead to accelerate its construction up to now $1.8 billion and presumably still climbing.
I’ve also written about some of the main risks the NZTA see for the project, including the biggest of them, getting consent to reclaim a massive chunk of foreshore. They’re looking to claim so much the new four lane, expressway standard road will be completely built on what is currently water.
Shortly after the second post the NZTA announced they were conducting another round of consultation on the design of the project, prior to lodging resource consent through the Board of Inquiry process.
The public are being given another opportunity to have their say on one of Auckland Council and the Government’s top priority transport projects in Auckland.
The latest round of consultation is getting underway on the design for the East West Link project which is a significant step in the project’s planning and consenting process.
That consultation closes today so if you want to have a say about the project, make sure you do fairly quickly.
Here are some of the graphics associated with the consultation. First up an overview of what they say are the key design features.
One aspect I wasn’t aware of is that this would also include a new interchange at Princes St. It looks like they want and additional traffic lane in each direction between the Tamaki River and Mt Wellington so need to replace the whole interchange. This document takes a look at the current interchange while below is what they want from a new interchange. It appears the last few houses between Frank Grey Pl and the motorway next to the interchange will be sacrificed to the motorway gods.
At the Onehunga end they conveniently highlight the area that Panuku Development Auckland is meant to be putting effort in to see some urban regeneration but which they then ram a heap of roads through. The Onehunga Wharf which could be a great development opportunity is like an island, cut off from the rest of the area by the new and wider roads planned.
Then of course there is the Northern Mangere Inlet Foreshore, their current state images showing the reclamation to date was mainly by way of landfill, one of the reasons they say want to reclaim further to fix. By contrast the concept images show a walking and cycling path along a new foreshore with stormwater treatment ponds along a more natural looking foreshore, although it’s not clear if it’s just a series of fairly similar sized and shaped bumps relatively evenly spaced apart.
They say they’re hoping to lodge the resource consent in December this year so that the decision will be made by about October next year with construction starting by the end of 2018.
Once again, if you want to have a say about the designs, make sure you do so.
While on the topic of the East-West link, I attended a media briefing the other day with AT talking about some of things they’re working on. Most of the discussion was on items regular readers of the blog will likely be fairly very familiar with but on one of the points was about the East West project. What intrigued me was the new red line that’s appeared showing the South Eastern Arterial. and something else entirely. Is the real reason for the Reeves Rd flyover decision just about making this route a motorway so people from the Pakuranga to Howick area can get to the airport with as few traffic lights as possible.
Presumably this would need to be a tunnel given it will be passing through a regional park. How many extra billions would something like this cost?
On Friday while we were basking in the glow of the opening of another great cycling project, the government were busy turning the sod of the next motorway widening project to get underway, something with decidedly less fanfare – to the point there hasn’t even been a press release about it. This was for the Lincoln Rd to Westgate section of SH16 with the most prominent thing I’ve seen being this tweet from Prime Minister John Key
The NZTA also published this video which includes Transport Minister Simon Bridges praising the project.
As mentioned, this $100 million project is widening SH16 between Lincoln Rd and Westgate includes: adding more motorway lanes, some bus lanes, a cycleway as well as upgrading the Royal Rd interchange. Some of the work was originally meant to have been done as part of that the over budget Lincoln Rd interchange project.
While there are a few useful things coming as part of the project, like all non-motorway features, they generally appear to be half arsed and incomplete. This includes:
- The cycleway will be a useful addition, mainly because it will be at a nicer grade than the local road alternatives. I currently ride through this area when going to/from work on the North Shore and the local network options drop below the motorway before rising up above it creating some very steep streets to navigate. But while the cycleway will be useful, the NZTA will force cyclists off at Royal Rd interchange, up a steep section of Makora Rd and through the intersection with Royal Rd. Given the grades, a simple underpass of the off-ramp seems like it should have been easy as well as presenting an easier grade for cyclists.
- Bus shoulder lanes are being added to the motorway. While this is definitely an improvement it’s not the dedicated NW Busway that we need and buses heading further west will be forced to merge out of the bus lane at the Royal Rd interchange. That means to get a proper busway in the future we’re going to have to go back and widen the motorway further, likely taking homes and probably rebuilding the cycleway again when it could have all be integrated at the same time. I recall that back when the NZTA were consenting Waterview and the causeway, they used the excuse that the former ARC plans didn’t list that section of SH16 as a rapid transit route as to why they weren’t including a busway. But those same plans did list Henderson to Constellation via the motorway as a future RTN route as one so it seems the NZTA pick and choose which of the plans it listens too.
There’s another feature of this project the NZTA have not said a single word about, that they’re taking 7547m² of land from a local reserve under the public works act plus another 1666m² as an easement for access, all of which is hidden under the brief bullet point above of Stormwater treatment. Information on the NZTA’s plans for Lowtherhurst Reserve are detailed in the agenda to the Henderson-Massey Local board at the beginning of April and the land they want for a stormwater pond is shown below in pink. The land in question is also what can be seen in the background of the video above.
The reserve is almost 44,000m² but most of that is steep and covered in bush. Only about 14,500m² is flat and grassed so the NZTA want to take half of that. I know somewhat well as I ride through it as part of my commute.
The NZTA offered the council/local board one of two options:
A. base option is financial compensation for the land only. Boundary fenced off from the reserve
B. the development and use of a wetland walkway and multi-activity use area for the local community with Auckland Council maintaining the footpath and multi-activity area at an ongoing cost of $500 a year (this will be cost neutral as there is a cost saving of $555 from reduced mowing on the reserve resulting from the divestment of land).
More detail on each of them is provided in the report but the minutes show the local board supported selling the land and chose option B. They’ve also requested the money received by the council for the sale of the land go to other open space priorities in the local board area.
According to the NZTA website, the project is due to be finished in February 2019.
Congestion pricing has once again hit the political radar, with the news that the Auckland Transport Alignment Project has recommended it as an option to more efficiently manage the transport network. They find that variable road tolls – highest during peak periods on busy roads and low (or even zero) at off-peak times – are the single most effective intervention to improve traffic flow.
On the whole, it looks like support for the idea is on the rise, which is positive. That suggests that the work that Auckland Council’s consensus building group did a few years back has contributed towards a better public conversation on the issue. That’s good, as it’s a challenging idea to sell to people.
The NZ Herald’s editorial on the topic was tentatively supportive and showed a reasonable understanding of the core principles of congestion pricing:
Transport Minister Simon Bridges conceded this week, “we can’t keep building new lanes on highways. We will need a combination of demand-side interventions if we are going to deal with congestion over the next couple of decades”. He prefers the term “demand-side interventions” to taxes, tolls or charges but those are what it means.
Unlike the council, the Government does not advance these for revenue raising but for reducing traffic on the roads. It clearly thinks road rationing is more politically acceptable than revenue raising and the AA agrees. Feedback from members, it says, showed support for tolls as long as people could be convinced it was for congestion benefits, not simply revenue.
However, the Herald’s editorial also exhibits a common misunderstanding about congestion pricing, arguing that free routes must be available as an alternative to tolled routes:
The joint report for the council and the Government this week did not suggest how road travel might be charged. Mr Bridges said one option was to track all traffic with GPS technology which is being trialled in Singapore and Japan. But that implies no roads would be free at times the charge applied. Travel is a basic freedom. We could welcome the chance to pay to use a fast lane when we need one, so long as free lanes remain.
The Herald’s position is basically in line with NZTA’s existing tolling policy, which states that:
…a road tolling scheme may be established to provide funds for the purposes of one of more of the following activities, namely, the planning, design, supervision, construction, maintenance, or operation of a new road, if the Minister of Transport is satisfied that:
- the relevant public road controlling authorities (including the Transport Agency) have carried out adequate consultation on the proposed tolling scheme;
- the level of community support for the proposed tolling scheme is sufficient;
- if an existing road is included in the scope of the tolling scheme, it is physically and operationally integral to the new road in respect of which the tolling scheme will be applied;
- a feasible, untolled, alternative route, is available; and
- the proposed tolling scheme is efficient and effective.
However, I think that both NZTA and the Herald are being too hasty in assuming that the untolled alternative route has to run parallel to existing roads. Alternatives can exist in time as well as in space.
Stu Donovan described the maths behind this last week. Transportblog reader Bryce Pearce also dug up a good practical example: apparently Singapore’s road pricing scheme allows people to travel for free most of the day. For example, if you are trying to drive on Lorong 6 Toa Payoh at 8:30am, you’ll have to pay $1. But if you leave an hour earlier or an hour later, you won’t pay anything:
ATAP took a similar approach when choosing how to model congestion charges. As the following diagram shows, the ATAP scheme would increase peak and inter-peak pricing, relative to current fuel taxes, but decrease charges in evening periods. Consequently, people would have options to save money for certain types of trips, for example, by shifting supermarket trips from the afternoon to the evening:
Arguably, being able to travel for free on the same road, at a slightly different time, is even better than being able to travel for free on a different, more circuitous road at the same time.
There are obvious user benefits to the approach of varying tolls by time of day. It allows people to make better choices that respect their individual preferences for time, timeliness, and money.
But there are also important system-wide benefits from variable tolls between different time periods. Because congestion can be quite sensitive to changes in the number of cars on the road at a given time, encouraging even a relatively small number of people to shift the time at which they travel can lead to large benefits.
That’s nicely illustrated in the following graph of Auckland Harbour Bridge traffic volumes. The AHB is essentially free-flowing during the middle of the day, when there are around 1300 vehicles per lane per hour. But it is considerably slower during the evening and morning peaks, when the bridge carries more like 1500-1700 vehicles per lane per hour.
Because the peakiest bits of the peak are relatively short – perhaps 2.5 hours in total across an average weekday – you could improve the performance of the bridge by charging tolls during a few short windows. People could still travel for free (or at any rate a lower price) during the remaining 21.5 hours of the day.
From my perspective, that’s a pretty good alternative for drivers! But what do you think about the issue?
Back in May I wrote about how it appeared a road only harbour crossing might be on the cards following some NZTA documents I recieved as part of an offical information act request. That prompted our friends at Generation Zero to initiate a survey to see just how much support there was for various options. The results are now back in.
The survey was conducted by UMR Research and had a sample size of 500 with a margin of error of ±4.4%. The survey asked the following question.
The New Zealand Transport Agency is planning to build an additional Auckland harbour crossing in the next decade. They’re considering three options. On a scale of 0 to 10, where 0 means “strongly oppose” and 10 means “strongly support” how strongly do you support each of these options?
- A rail-only crossing, that would mean rail could go from Albany to the CBD, which costs approximately $3.5 billion
- A road-only crossing which costs approximately $5 billion
- A rail and road crossing, that would mean rail could go from Albany to the CBD, which costs approximately $7 billion
Of the three the road only option was deeply unpopular with just 22% of respondents saying they support or strongly support it compared with almost twice as many (41%) opposing the idea. By comparison the rail only option had 42% support compared with 29% opposition while the idea with the most support was combined option.
I think it’s quite good that Gen Z included costs in the options as often these types of surveys don’t but the result is quite interesting in that the most expensive option was the most preferred. This suggests that Aucklanders want more of everything regardless of cost, and that lines up with what we’ve seen from other surveys and the likes of Mayor Len Brown often says he gets told to just get on with it. As we know, some of those views might change a little when it comes time to push the button on increasing rates or taxes to cover this extra infrastructure costs but regardless, it has interesting implications for future funding discussions.
The report also takes a look at the demographics of those who responded and they too have some interesting outcomes.
- People under 45 were more likely to support a single mode crossing compared to those 45 and over while they were comparatively less supportive of the combined option. I wonder if this reflects them taking more account of the costs of these projects while those 45+ were more inclined just to get stuff done.
- A rail only crossing had the lowest level of support from those in the South which seems to tie in with a the highest level of support for a road only crossing from that area. Perhaps this suggests that the people surveyed from the South were more likely to need to drive over the harbour and so favoured that. Conversely of the single mode options, those in central areas were more likely to support a rail only crossing which perhaps suggests a greater concern about the impacts of a road only connection.
- The combined crossing option has the most support amongst those in the highest household income brackets and also those who own a home with a mortgage
Overall a useful survey and thanks to Generation Zero for organising it.
You might recall that the recent ATAP interim report poured a little bit of cold water on the AWHC, noting
Improving access to and from the North Shore
- The bridge and its approaches are a pinch-point on the transport network, particularly during the evening peak in both directions.
- An additional crossing significantly improves accessibility to/from the North Shore, but does not appear to substantially improve congestion results.
- Projected growth in public transport demand appears likely to trigger the need for a new crossing within the next 30 years. There is potential for a shared road/PT crossing, but the costs and benefits of different options require further analysis.
High cost of potential solutions
- Because any new crossing will be tunnelled, there is a significant opportunity cost arising from this investment. Fully understanding key drivers, alternatives, cost and benefits will be crucial before any investment decisions are made.
- It makes sense to protect the route for a new harbour crossing in a way that integrates potential future roading and public transport requirements.
In light of this, if a survey were to be done again it would be interesting to see how people supported the various options if they knew the road options also result in a considerable congestion impact on and around the motorways in the future.
In last week’s post I waded through some of the political mud that was thrown about in response to the recommendation to consider road pricing in Auckland. I concluded there’s not many good reasons to avoid talking about road pricing, even if we don’t need to rush.
In doing so, however, I noticed that much of the discussion on road pricing occurs at what my friend Jarrett Walker calls “low altitude“. By this I mean the discussions tend to quickly descend into debates over things like the level of pricing, payment systems, and what to do with revenue. While I acknowledge these are important questions, they are also questions of detail: They relate to the “how” rather than the “why“. In my experience a good understanding of “why” helps answer the “how”.
In this post I want to look at two ways in which road pricing generate economic benefits. It’s a story of two brilliant people: One named Pigou and one named Vickrey …
1. Static efficiencies – The poisoned chalice of Pigouvian pricing
If you happen to search for “economics of road pricing”, then it’s likely something similar to the following image will pop up on your screen (source). In a nutshell, this graph illustrates the static efficiencies generated by road pricing.
Let’s walk through the details a bit. First, the graph measures traffic volumes on the horizontal axis and trip costs on the vertical axis.
The line marked “Demand” slopes down: As costs fall, traffic volumes rise. That’s sensible: If it is cheaper to travel by car, then more people drive – and vice versa. Now consider the ski-jump shaped curve labelled “average cost”. This shows the average cost of driving from the perspective of drivers; it curves upwards because your travel-time will increase as traffic volumes increase. Now look at the ski jump shaped curve labelled “marginal cost”, which refers to the social cost of each additional vehicle trip. The reason it curves upwards faster than the average cost is because each new car causes additional delays to all existing users. These delays are not reflected in an individual’s decisions, i.e. they are external.
Two important points are also marked on the graph; these are 1) the “Untolled equilbrium” and 2) the (somewhat vaguely named) “Objective”. The untolled equilibrium is where drivers don’t pay the costs of the delays they cause, i.e. it represents the status quo. This point is associated with higher traffic volumes and lower costs than the point marked “Objective”. The latter includes the costs of delays caused to others, and so is associated with lower traffic volumes.
So where do the benefits from road pricing arise? Well, because congestion is an external cost imposed on other people, more people choose to drive than is socially optimal. In this context, internalising congestion costs by way of a toll, a’ la road pricing, reduces demand to a more efficient level, i.e. society as a whole is better off. I should note at this point that congestion is but one externality associated with driving. Noise, air pollution, and accidents are also examples of externalities that drivers should probably pay for. The concept of internalising externalities from traffic congestion was first articulated by an English chap called Pigou, hence the moniker “Pigouvian pricing”.
At this point, many people close the road pricing story book, turn to their friends and family and ask: So shall we price the poor beggars off the roads then? To which the answer is usually “no”, or at best an uncomfortable “maybe”. But we’ll be better off, you might exclaim. Only to be chased out of town by angry people with pitchforks.
Thankfully, the road pricing storybook has another, often forgotten, chapter. Look carefully at the horizontal axis of the above figure, which shows traffic volumes as a function of price, and price only. Can you think of another variable that predictably affects traffic demands and the congestion arising therefrom? Like perhaps time of day? Hmm …
2. Dynamic efficiencies – Get onboard the Vickrey express
The image below is not one that’s easy to find online. I looked and couldn’t find any. Instead, it’s taken directly from my lecture slides (Acknowledgement: This guy).
Believe it or not, this psychedelic rectangle is the so-called “bottleneck model”. The vertical axis measures cost, whereas the horizontal axis measures clock time. The point labelled t* is the preferred arrival time at your destination, say 8am at work. The points tq and tq’ represent the start and end of the peak period respectively, say 6-9am, during which time queues form in front of a “bottleneck”, i.e. a capacity constraint. All users are the same (homogenous).
The bottleneck model was developed by Vickrey. One of his key insights is that all travelers face the same cost; the only difference is how costs are split between 1) schedule delay and 2) queuing delay. Another way to think about it: You can either 1) travel early/late and face a shorter queue (but arrive at work early/late) or 2) leave home at the time that gets you to work at the preferred time t* (but sit in queues on your way). Vickrey shows that in equilibrium, options 1 and 2 cost the same (hence why the top of the rectangle, which represents the sum of schedule delay and queuing delay, is flat).
The two green triangles in the above figure represents schedule delay; this is the cost associated with arriving at your destination before or after the preferred time t*. Note that the two green triangles are different shapes, because people generally place a higher value on arriving later than arriving early (NB: This doesn’t change the story). The red area represents the cost of time spent queuing, or “congestion”; it increases from 0 (at tq) to c0 (at t*) and then declines to 0 again (at tq’).
Vickrey showed the optimal toll at any point in time is equal to the length of the vertical red line. That is, if you want to maximise people’s welfare, then you would set a time-varying toll that started off at zero at t = tq and increased to c0 at t*, before decreasing to zero again by tq. This toll would encourage people to leave later, and therefore avoid queues forming early in the morning. In essence, this makes use of underutilised capacity that exists later in the morning; it is a dynamic efficiency.
How does charging a toll equivalent to the cost of queuing delays leave people better off? Well, for the simple reason that time spent queuing (red area) has been “monetized. And unlike time spent in traffic, monetary revenue from tolls can be spent on other things, say lower taxes or increased government investment (depending on the colour of your political pajamas). Basically, road pricing takes wasted time and turns it into something useful (toll revenue).
One point to emphasise; These so-called “dynamic efficiencies” are achieved by changes in departure times (specifically leaving home later), not changes in demand. Moreover, the cost people face is the same with or without the toll. All the latter does is take a time cost and turn it into a monetary cost. The Vickrey model is in this respect very different from the Pigouvian model discussed in the previous section, where benefits arose from suppressing demand.
In this post I’ve presented two simple economic models that help illustrate two different types of benefits from road pricing.
The Pigouvian model focuses on demand. It concludes that a fixed toll should be used to internalise congestion externalities and price some drivers off the road. In contrast, Vickrey’s model argues that a time-varying toll can be used to monetize time spent queuing. The toll encourages people to change departure times, eliminating queues, and generating revenue that can be used for other things. This is as close to a free lunch as you tend to get in economic terms.
Discussions on road pricing often ignore dynamic efficiencies. I think this is unfortunate because I think they are potentially the largest source of benefits. Consider the productivity benefits to commercial vehicles from eliminating queues. Faster and more reliable travel-times would mean that commercial vehicles, and their drivers, could get through more work every day. Think of all the times your tradespeople or deliveries have been delayed en route. It’s frustrating for them, as well as you, but ultimately it’s you and I who pay the price of those delays: Inefficiencies arising from congestion are factored into the price of almost everything we buy.
Real life is obviously more complicated than these economic models imply; real people are not identical and actual tolls are not able to vary by infinitesimal amounts. In response to these realities, some modern road pricing schemes, such as that implemented in Stockholm, blend a fixed toll (a’ la Pigou) with a time-varying toll (a’ la Vickrey). Hybrid road pricing schemes like Stockholm’s have struck a reasonable balance between pricing some drivers off the road, while also encouraging others to adjust their departure times. You can read more about the history and politics of Stockholm’s scheme here.
I want to finish with a final comment on revenue recycling, because I think it’s essential to the potential viability of any road pricing scheme and is something that I will look to cover in future posts. One option would be to use toll revenues generated by road pricing to make a direct, annual per capita payment to Auckland households. This might be similar to the electricity trust payment paid to some households, and would ensure that everyone faced the marginal costs of travelling at peak times – with some money paid back later. A second option would be to use the money to reduce rates. For example, revenue from road pricing could be applied to reduce or eliminate the uniform annual general charge (UAGC). Let me know if you think of other options.
Anyway, that’s more than enough poppycock from me. Keen to hear what others think, and if there are particular aspects of road pricing that you’d like us to research, then please let us know in the comments and we’ll see if we can build it into future posts.
Auckland has no shortage of big road projects on the go at the moment but one of them that has at least improved a bit over the last few years has been the Northern Corridor Improvements project. This plans to convert the last remaining part of SH18 to full motorway standard with some direct motorway to motorway ramps to the north along with extra lanes. The improvement has come in the form of the NZTA now confirming that an extension of the Northern Busway will be part of the project. This a significant change as it had been specifically excluded by the government when the project was accelerated by the government in 2013 – which we understand was against the advice of the NZTA at the time.
The NZTA say the next stage of the project has now been approved which means they’ll be working towards getting consents before starting construction in 2018. As part of this they’ve now come out with an “Approved Draft Plan” which they say includes:
- A new direct motorway to motorway connection between SH18 and SH1, separating motorway traffic from local road traffic.
- Additional motorway lanes in both directions on the Northern Motorway (SH1) between Greville Road and Constellation Drive.
- Extension of the Northern Busway from Constellation Bus Station to Albany Bus Station. Auckland Transport is investigating a new bus station along the extension in the Rosedale area.
- A 5km dedicated shared walking and cycling path on the eastern side of the Northern Motorway (SH1), built alongside the new Busway extension and alongside Upper Harbour Highway (SH18) all the way to Albany Highway. A proposed new walking and cycling bridge across SH1 in Albany will connect Pinehill and East Coast Bays residents with Albany’s shopping, employment and university areas.
- Local road improvements through the Constellation Drive and Caribbean Drive intersections, and a new Paul Matthews Road bridge.
- Further investigation of a proposed bridge over SH18 to improve connections for the Unsworth Heights community
Here is the latest plan which also includes a few changes from the last time we saw the project almost a year ago. The main changes I can see compared to then are:
- They’ve now clarified the connections around Paul Matthews Rd
- They’ve dropped a big swooping on-ramp providing a direct connection from Albany Expressway to the motorway southbound.
- Previously buses would use the bridge at McClymonts Rd to access the busway station before looping back to the motorway via Oteha Valley Rd. Now a new busway bridge will be built directly across the motorway to the station.
- They’ve dropped a potential walking and cycling underpass from SH18 and seem to plan to include a connection as part of a new bridge extending Unsworth Dr
- Previously there was a ‘potential path still under investigation’ showing along SH18 including west of Albany Highway. They’ve confirmed the walking and cycling path as far as Albany Highway but not west of there. This is a shame as the motorway has a much nicer grade than using Upper Harbour Highway
On the busway they say in more detail
It’s now confirmed that the project will include an extension of the popular Northern Busway from Constellation Bus Station to Albany Bus Station. This means buses will be able to travel on a dedicated busway all the way to Albany, reducing travel times and improving public transport options. Auckland Transport is also investigating a new bus station and Park & Ride options in Rosedale along the new busway extension. As part of this, Auckland Transport will look at local road improvements and additional feeder services that could help transport people in and out of the station from the East Coast Bays, North Harbour, and Rosedale. Similar to Smales Farm, it is expected that this station will be a destination station for the many people who work, go to schools or attend sporting activities in the area. It will also provide another station to catch the Northern Express service to and from the city
As part of this final step before going to consenting they are giving people another chance to have a say on the project. Unfortunately, this post is too late for any of the open days but you can still email them or fill in their survey which is focused on a few specific issues like urban design, the new busway station, walking and cycling options and some other local road changes like the potential Unsworth Rd Bridge.
I’d like to see is the busway built first as it would have an added benefit of giving people options during the inevitable disruption that will occur during the construction of the motorway.
One aspect that the NZTA hasn’t talked about since the project was announced is the cost. Back then it was estimated at $450 million but that was without the busway.
Today is the latest Auckland Transport Board meeting and it appears to be a big one with a lot of items to cover. I’ve gone through the documents to highlight the parts I’ve found interesting.
The closed session in particular has a number of interesting topics on the agenda, these are some of them up for approval/decision
- Matakana Link Road – this is the road that is planned from roughly the end of the Puhoi to Warkworth Motorway across to Matakana Rd so all those using the motorway to get to their holiday homes at Christmas don’t have to travel through the Hill St intersection. I’ve heard suggestions the NZTA and AT are looking to have this built at the same time as the motorway even though it hasn’t been budgeted for and that they might try to include it as part of the motorway PPP. The link road is shown below in green and extends past Matakana Rd to a Quarry I believe they want to source material for the motorway from.
- North Western Rapid Transport Corridor – Otherwise known as the Northwest Busway, AT currently have a tender out for an Indicative Business Case for this which includes confirming the preferred mode and alignment.
- AMETI – While most items are listed as being confidential due to commercial sensitivity, this one oddly states: “To prevent disclosure or use of official information for improper gain or improper advantage“
- Rail Operations Procurement – AT extended Transdev’s contract to run trains in Auckland a year or so ago, presumably this is about extending it again or restarting the process to put it out to tender
- South Western Multi Modal Airport Rapid Transit (SMART) – We’ve heard before that the Airport company has said that a decision was needed fairly soon on whether heavy or light rail was preferred option for rail to the airport so they can finalise their development plans. I assume AT are making that decision. (Edit: appears I was right. AT have for me they’ll get send me a copy of the report this afternoon)
And for noting
- Deep Dive – Enforcement – I assume this includes information about both road and PT enforcement.
Rapid Transit – Perhaps as a response to the issue of the AWHC we raised a month ago, AT say
AT and NZ Transport Agency are working together to ensure a future Additional Waitematā Harbour Crossing (AWHC) is delivered as a multimodal transport solution providing more options for moving people and freight across the harbour while supporting growth and resilience. Both organisations are currently investigating which modes of rapid transit will best service the growing needs of the city along with future roading requirements. This information will feed into the AWHC project and ensure the protected route enables and is fully integrated with a future public transport network.
Parnell Station – AT say planning work is still in progress “to complete the station ready for initial timetabled operations by second quarter 2017 in line with wider passenger rail timetable improvements.” Last I remember timetable improvements were planned for around Feb so this suggests they may have been pushed back too. If so this would be disappointing, particularly in the south where the new bus network will be implemented without the rail network being improved to support it.
Street Lighting – You may recall that last year AT started replacing around 44,000 high pressure sodium streets lights across the region with LEDs that over a 20 year period were expected to have net savings of about $32 million. They say so far around 10,000 have been installed which is about 9% of all street lights in Auckland. Positively they say both the technical performance is improving and cost of the lights is reducing so more will be able to be done within the funding allocated.
Bus Lanes – On bus lanes AT have this comment which perhaps suggests they weren’t going to have enough money to roll out the Gt North Rd bus lane which is meant to go in when Waterview opens “We are working with NZ Transport Agency on options to manage the funding of Great North Road Bus lane to alleviate a potential compromise of next year’s work programme“.
Red Light running – Back in May, AT announced that in conjunction with the police they were doing a blitz on four intersections on the North Shore for red light running. They say around 400 warnings/infringements were issued over the two-week period.
Integrated Fares – go live 31 July but we are yet to have prices or details of it confirmed which I assume will be a focus in July. The other day I mentioned that Monthly Passes were changing. After that post went up the details went up on AT’s website. From Friday, instead of three different monthly pass options there will only be one covering the entire region which will normally be $200, but for July AT are running it at an “introductory price” of $140 for July. If you make a lot of trips or normally have a fairly long PT commute and don’t normally use a monthly pass it might be worth picking one up and as a tip, once one has been bought and activated you can buy and load up another one. I already use the $200 monthly pass so this should save me around $120 which is nice.
Station Gating – We already knew AT were looking at gating a number of train stations but it appears they could be doing it fairly soon, saying “Electronic gating designs are underway for Manurewa, Papatoetoe, Middlemore, Glen Innes, Henderson and Papakura Stations; electronic gates have been ordered“.
Another item at the board meeting is AT’s draft statement of intent for the 2016/17 financial year. The SOI is refreshed is a three-year work plan but is refreshed annually and so combined with other council/AT documents shouldn’t present too much of a surprise. What is interesting is seeing some of the changes that have been made following feedback from the Council. Some of the interesting changes/issues raised seem to be:
- The council has asked AT to improve train travel times – we know some work has been done on this but we are still waiting for the next timetable change to actually see any improvement.
- AT have a history of trying to downgrade their PT patronage targets and obviously they tried to again but the council have said they have no intention change them without a very good case for doing so. This means that AT are going to need to put a lot more effort in to ensuring that patronage grows over the next few years so it will be vitally important they get changes like the new network rolled out as soon as possible.
- The PT patronage target is for all PT so the council have requested a rail specific target be added which AT have done and which gives a hint of where they think patronage will be in the next three years. Rail patronage is at 16.6 million to the end of May and the future targets are 2016/17: 19.5 million, 2017/18: 20.7 million, 2018/19: 21.6 million. That suggests they expect another significant jump in ridership over the next year before tapering off before the CRL is built which is what I would expect to see.
- AT wanted to focus their cycling targets on the counts from around the city centre to reflect where most of the current cycle spending will impact however the council have said they want to keep the monitoring at a regional level
Not changing the targets does have some benefits for AT though, especially when it comes to PT farebox recovery. As of the end of April they remain ahead of the target set for 2018/19 of greater than 50%.
Is there anything else you’ve seen in the reports you’ve found interesting?