Road Pricing straight to GPS

As I briefly mentioned last week, I think road pricing is a discussion that’s only going to increase in Auckland in the future. Len Brown has been talking about it for some time and Mayoral Candidate Phil Goff has already said he supports some form of road charging. We also know that road pricing is being considered as part of the ATAP process. With this post I wanted to look into it a bit more.

At a high level there are two main goals in the push behind road pricing. One is a desire to manage demand for roads thereby improving their efficiency, which can deliver a mix of benefits such as reducing congestion and potentially the need for expensive and increasingly contentious projects. In this situation the aim is to use road pricing tools to change individuals behaviour. The second main goal is a desire to use road pricing as tool to supplement fuel taxes and/or raise additional money which can then be fed back to spend on more transport projects. In this situation the aim is to collect as much money as cheaply as possible.

The ATAP process is looking at road pricing from a demand management point of view while the mayor’s Consensus Building Group and subsequent Long Term Plan discussion were examples of a revenue gathering focus. In the recent discussion the tool of choice for revenue gathering has been motorway tolling where people are charged for entering the motorway but there are other solutions too:

  • Cordon pricing charges people for driving past a certain point and Auckland with it’s natural and man-made boundaries is almost uniquely set up for that.
  • A slightly more advanced version and like what happens in London is an area charge whereby there is a cordon inside of which are a number of checkpoints to pick up trips made within the cordon.

As an example the two maps below from a report into road pricing in Auckland from 2008 show the difference – in this case using a double cordon.

Road Pricing options

There appear to be a are a couple of major problems with many of these solutions.

  • Tolling just the motorways opens up the issue of diversion where drivers shift to non-motorway routes – as has already been seen without road pricing and if motorway tolling was turned on I imagine it would only amplify.
  • Cordons can have significant boundary effects, in the example above those living in the inner suburbs, the ones who might have the most alternative options, pay nothing for driving within the area but those further out will pay for travelling over a line.
  • The area charging is a little fairer on the boundary effects due to the scattered checkpoints to pick up on inter-area travel but as we also know, congestion isn’t limited to the city centre and a central area charge won’t stop Manukau from clogging up.

One of the problems with all of these technologies is they can be very expensive to install with multiple sites needing to be set up and maintained to capture the details of all passing vehicles. As a result, collection costs are normally quite high. In the case of the Northern Gateway Toll Road collection costs usually eat up 25-30% of the toll collected and reports indicate similar levels would be expected in these situations. In addition to just how revenue is collected there is also the issue of just how much is charged. Flat tolls can still leave roads busy and congested at peak times.

The holy grail of road pricing these days appears to be to use GPS to deliver dynamic road pricing. With it, people can be charged for how far they travel, where they travel, when they travel and just how busy the roads they travel on are. If the roads you want to travel on are busy then it will cost you more to join in and travel at the same time.

Interestingly some places are already starting to look at using GPS based road pricing to better manage their road systems. Singapore has been at the forefront of road pricing and was one of the first cities to implement it. They currently use a network of around 80 gantries located around the city that record passing vehicles.

Singapore ERP Gantry

An ERP gantry in Singapore

Just over a month ago, Singapore announced it had awarded a tender to replace their current gantry set-up with a GPS based one in 2020. The new system will cost about NZ $600 million and the cost and difficulty of maintaining the current system was listed as one of the reasons for doing so.

This next-generation ERP system will allow for more flexibility in managing traffic congestion through distance-based road pricing, where motorists are charged according to the distance travelled on congested roads, which would be fairer to motorists. It will also be able to overcome the constraints of physical gantries, which are costly and take up land space. In addition, off-peak car users can look forward to new policies which LTA is considering, which may allow them to pay only for using their vehicles for short periods rather than the whole day, or for using them only on uncongested roads. A new On-Board Unit (OBU) will replace the existing In-Vehicle Unit (IU), which can also be used to deliver additional services to motorists. For example, LTA will be able to disseminate traffic advisories through the OBU. The OBU can also be used to pay for parking, checkpoint tolls, and usage of off-peak cars electronically.

In my view, if we’re going to go to the cost and trouble of implementing a road pricing solution – and on the surface at least there seems a valid case to do so – it seems we might a swell skip the gantry phase and move straight to a GPS solution

Another interesting recent system is OReGO in Oregon. While not time of use pricing, it does introduce distance based pricing using a small device that plugs in most relatively modern vehicles. The basic version only charges based on distance and rebates users for the amount of fuel taxes they would have paid however 3rd parties offer GPS tracking and other features. It wouldn’t be a stretch to have versions in the future which enable time of day pricing.

One of the challenges of road pricing is whether it’s only needed in Auckland of if the solution is something that needs to be rolled out to the entire country. OReGO also gives an idea as to how GPS based road pricing could be implemented in NZ – this is also based on a post by Stu back in 2011.

  1. People can get approved GPS tracking devices from AT/NZTA or third parties to install in their cars.  These devices record time/distance/location, for which users pay differential rates.
  2. Users that sign up to the time-of-use pricing scheme would then be exempt from fuel taxes (there would need to be some verification and/or refund process).
  3. People who did not want to participate in the scheme would remain with the current system.  So fuel taxes would operate alongside the GPS scheme but prices would be adjusted over time to encourage the use of GPS tracking.

A voluntary system might not have the immediate impacts on congestion as turning on motorway tolls but ultimately it’s an approach that be required to get public buy in.

What are your thoughts on road pricing and would you sign up it (for those times you’re not on PT or walking/cycling).

 

Midweek reading: Road pricing and safety, urban-rural, the history of California, and trees

Starting this week I’m trying out a new feature: a midweek post rounding up some new articles on transport and urbanism. (Time for writing more substantive posts has been a bit tight lately.) The themes will be familiar to regular readers.

Let’s start with congestion pricing – a perennial topic of fascination for economists. Congestion pricing is mainly seen as a policy to improve the efficiency of road networks by “pricing in” the cost of delay that motorists impose on each other. But, based on London’s experience with a cordon charge, it may also improve road safety for all users. Charles Komanoff at Streetsblog NYC reports on some new data:

Evidence keeps mounting that congestion pricing can catalyze major reductions in traffic crashes. A year ago I reported on research that vehicle crashes in central London fell as much as 40 percent since the 2003 startup of London’s congestion charge. The same researchers are now expressing the safety dividend in terms of falling per-mile crash rates, and the figures are even more impressive.

The researchers — economists associated with the Management School at Lancaster University in northern England — compared crashes within and near the London charging zone against 20 other U.K. cities, before and after 2003. Their conclusion: Since the onset of congestion charging, crashes in central London fell at a faster rate than the decrease in traffic volumes. As important as the reduction in traffic has been for safety, at least as much improvement is due to the lower crash frequency per mile driven.

In short, driving in the London charging zone isn’t just smoother and more predictable, it’s safer. And safer for cyclists as well as drivers, with the number of people on bikes expanding considerably as car volumes have fallen.

And on that note, a reminder that the best way to improve the safety of cycling is to increase the number of cyclists on the road (or better yet, cycleway):

But that’s the big smoke. It couldn’t happen here, in small, rural New Zealand, could it?

Maybe not. “Town Proper”, an urban design and transport blog, points out that we often get it wrong when thinking about the rural-urban balance in our society. (Riffing off a post I wrote a while back.) We tend to “mistake want as demand“:

Purportedly New Zealanders value open space, ball games and big houses. That does not hold up to our litmus test though. As reported above, most of New Zealanders have chosen to forgo big houses, large and open (private) spaces in exchange for the vitality of a denser area.

It is not like there is a critical shortage of open land in New Zealand – you can easily buy a dozen or so hectares with a big house for below Auckland’s average house price. Rather, people do not want to live there.

When you have multiple wants, you must make a choice as to the prioritization of your wants. It seems that while New Zealanders might want the rural lifestyle they have decided to choose the urban lifestyle over it. This is where so many commentators make a mistake, they confuse wants for demand. Demand is when you not only have the want for something, but also the ability (and the willingness to expend that ability) to obtain it.

There is little demand to live in rural areas (only 20% of Kiwis live in rural areas, and most of them in “rural centers”), why? I propose that generally Kiwis value the advantages of an urban area above the disadvantages.

Indeed. When planning cities, it’s important to take into account people’s needs and the real choices that they face, not just a hypothetical idealised notion of how people should live.

Which brings us to California. The land of technological disruption is steadfastly refusing to allow its housing market to change. And so demand for urban space – particularly the dense, connected urban space of San Francisco – is colliding with scarcity. TechCrunch’s Kim-Mai Cutler puts the issue in historical perspective: “A Long Game“:

I believe we’re hitting another major juncture, although I don’t know when it will deteriorate to the point that it forces real reform. California’s fragmented, post-war suburban model, which was created for a more even wage distribution in a mass industrial economy, is clearly becoming more dysfunctional by the year for a knowledge-and-services economy with a wider level of income stratification.

Not only are we not building enough housing overall, we have scarce sources of funding for supporting those on the lower-earning ends of a rapidly widening income spectrum. So we end up politicizing and extracting funds out of new construction even though we are 40 years deep into a largely self-imposed housing shortage.

There are a couple of disturbing trends showing up in the data. If you look across the state’s workforce, Californians born in 1990 are on average spending 50 percent of their income on housing. That’s way above the 30-percent-of-income level that is generally considered to be the threshold of whether housing is affordable or not in public policy conversations.

income-spending-housing

Then, if you look at working-class segments, commutes are rapidly rising for the lower-income workers in the region:

This is troubling because commute time is one of the strongest predictive factors in determining a child’s chances of climbing from the lowest income quintile to the highest-earning one. That morning and evening time between parents and children that is taken up by commuting is invaluable for bonding and child development.

The data on the length of commutes is incredibly important. As I found when I looked at Auckland’s commuting patterns, lower-income households can access lower rents by living further out, but the gains tend to be erased by added commuting costs. If there are also additional social costs from long commutes, it reinforces the importance of giving people the option to live closer in.

Back in New Zealand, and on a very different note, Peter H from Hamilton Urban Blog takes a look at street trees in Frankton Central, Hamilton. This kind of micro-scale analysis of urban places can be incredibly valuable in illuminating what’s good about a place and what can get better.

The following map shows existing street trees in Frankton Central. Viewed in terms of ecological function, Frankton Central’s street trees represent an incomplete system with gaps. Although the mapping of street trees points towards a substantial number of trees in the Frankton, these have only limited impact on the experience of green in the wider area.

Frankton central TreesThere are a number of streets with sporadic tree canopies as seen in the map above. The green network created by street trees varies widely in quality. Both ends of Commerce St have thriving street tree corridors that give those areas a distinct character. The interesting trees contribute an artistic flair to the retail part of Commerce St.

There are new plantings throughout the town, particularly in south-eastern streets, but the ecological, architectural, and urban quality benefits of these trees are not yet evident. The current town green network has gaps and there are sections of the Frankton that do not have any real trees.

It would be interesting to see some similar maps for different parts of Auckland. I wonder if Auckland Transport maintains a database of street trees in its road reserves?

Why is Len talking tolls again

Two weeks ago John Key confirmed that the government would cover half of the costs of the City Rail Link and allow for main works to start in 2018. Immediately questions began about how the Auckland Council would cover its share of the expected $2.5 billion cost. Equally quickly Mayor Len Brown was once again raising the issue of road tolling, suggesting it was needed to pay for it.

The government confirmed yesterday it would pay about half the cost of the project, allowing work on part of the project involving a tunnelling machine to begin earlier in 2018.

Mayor Len Brown believes he has the backing of most Aucklanders to introduce higher road taxes and impose tolls to pay for the city’s half of the bill.

But Mr Brown told Morning Report road tolls were part of a range of transport funding options, and in the long term could not be overlooked.

“We know that we don’t have enough money through rates and borrowings, even if we sold things like the airport shares or the port shares, it’s still not enough.

“It is a critical issue with the growth of the city with the transport investment needs that we have and the City Rail Link in the end, with the $65 billion we’ve got to spend over the next 30 years, is only a small part of it.”

Mr Brown said he could not see any other way of raising extra revenue than with a motorway toll.

Quite why Len is suddenly raising the issue of road tolls again is odd for a few reasons.

Long Term Plan

Last year the council spent a lot of effort discussing the Long Term Plan – the 10-year budget. As part of that process they presented Aucklanders with a binary choice of either a programme of works that would build:

  • a basic version funded out of rate rises of 3.5% but that built very little over the coming decades.
  • almost every transport project ever dreamed up requiring lots of additional funding and still saw congestion predicted to get worse than it is today. To pay for the up to $12 billion extra that would be needed the council proposed either:
    • road pricing on motorways
    • a combination of additional rates increases and regional fuel taxes

The important thing though is that both versions of the transport plan included the funding for the City Rail Link. That means the project was never subject to the alternative funding options like Len is suggesting now.

LTP Basic vs AP networks

To realise either of funding options for the Auckland Plan option it would have required government approval and that didn’t happen. So instead the council ended up implementing a three-year interim transport levy of $99 for households and $159 for businesses with the money from it earmarked primarily for PT, walking and cycling projects. There is absolutely no reason why the transport levy couldn’t be continued in to the future which is enough to effectively fund a sensible middle option of something between the two original LTP transport plans.

Just coming back to the CRL, the council’s own LTP documents show the project already has funding budgeted for it over the next decade. It includes the expected contribution from the government – which the council correctly assumed would be on board by then.

LTP approved capital projects list

click to enlarge

ATAP

As you know the Auckland Transport Alignment Project (ATAP) is currently going on and is reviewing options and timings for future transport projects in Auckland (the CRL and East-West link sat outside of this). In the Terms of Reference it specifically mentions road pricing, saying they will consider (I’ve underlined the important part)

all land transport interventions, including roads, rail, public transport, personal mobility services, walking, cycling, technology, network optimisation and demand management (including pricing for demand management purposes)

In other words, as part of the process they’re looking at what impact road pricing could have but not as a revenue gathering tool like Len wants but as a demand management one. The distinction between the two are important and would likely lead to quite different looking systems. As the name implies a demand management tool is really about trying to optimise the use of transport networks we have by using road pricing to keep roads from becoming congested. We’ve long suggested that if implemented it should be introduced in a revenue neutral way, lowering rates by the amount raised from the road pricing. In our view doing it this way would separate a potentially very useful tool from the more politically fraught issue of raising more money as by tying the two together it’s more likely neither will happen.

Perhaps the biggest benefit of road pricing is that it changes the question from how much traffic do we need to accommodate to how much do we want to accommodate. With it, it will almost certainly change the priority of many projects and it would kill off many projects altogether. For example, spending billions to widen or duplicate a motorway because an (unreliable) traffic model says vehicle volumes will increase in the future likely becomes a thing of the past. Every silly project that is no longer needed means a less extra funding that needs to be raised, easing pressure on Aucklanders and the government.

Of course to really implement road pricing we really need a much more complete range of good quality alternative options but if we know we’re going to do it in the future it should allow us to prioritise what is needed before that happens.

 

In conclusion, the council’s plans have the CRL clearly in the budget even if we had stuck with the no additional funding option. As such it seems that Len was perhaps trying to reignite the debate about road tolls from last year in a bit to push once again for a more build everything approach. But given the ATAP process is well under-way it seems the best option right now is to wait and see what comes from that.  The only other option for why he would suggest it is perhaps to keep the idea in the government’s head so they know the issue hasn’t gone away.

Supply and demand and regional airfares

Back in June, Stuff published a report on regional airfares, focusing on the way that prices are affected by major events such as concerts and sports competitions. Now, I’m no airline economist, but I’ve got a general interest in transport pricing so I figured that it would be worth taking a look at the topic.

The point of the article seems to be that airplane tickets are higher during periods of high demand. That doesn’t seem too weird, but this guy in Nelson is absolutely ropeable at the thought:

Nelson man Steffan Eden is furious about Air NZ’s fares from Nelson to Auckland and return for the weekend of March  5 and 6 when Madonna will give her first New Zealand concert at the Vector Arena.

Fares that the previous weekend cost $79 are twice that at $159 on the weekend of the concert, an $89 fare rises to $169; and a $129 fare becomes $209…

“Look at the fares the weekends before and after the concert, they’re normal fares. Then on the concert weekend they’re virtually double.  It’s quite blatant.”

Eden said the same thing happened when he wanted to go to the Cricket World Cup match between New Zealand and England on February 20.  “I wanted to take my kids but didn’t in the end because of the cost,” he said.

The man quoted in the article seems to argue that these jumps up in fares are due to uncompetitive or discriminatory practices by Air NZ. By contrast, the airline says that the price increases are just due to cheaper tickets selling out faster:

An Air New Zealand statement said it has been experiencing high demand for flights into and out of Nelson that weekend due to both the New Zealand Masters Hockey Tournament which is being held in Nelson from February 28 to March 5 and the Madonna concert in Auckland.

“As you will appreciate, where there are major events on flights tend to sell out well in advance, with the cheaper fares selling out the fastest, so booking as early as possible is recommended.”

Now, as an economist I’m always wary of the potential for companies with few immediate competitors to exercise market power over their customers. But in this particular case, I don’t think that’s happening. What we are seeing is the normal, and in fact beneficial, working of supply and demand.

Let’s start with the supply side. Air NZ doesn’t have an infinite budget for airplanes and staff. It faces constraints. If it wanted to run more services between Nelson and Auckland on particular weekends of high demand, it would have to either:

  • Pull airplanes off other regional routes, which would potentially satisfy Nelson’s demand but would in turn lead to similar stories about how unfair Air NZ was being to Napier or Timaru or what-have-you, or
  • Buy extra airplanes and hire extra staff that would sit idle most of the time and fly only during a few periods of exceptionally high demand. This is superficially appealing, but it would mean an across-the-board increase in fares to pay for a bunch of empty planes.
mojave desert boneyard1

This isn’t really related, but it’s an interesting picture (Source)

So that’s the supply side. What about demand?

Air NZ has observed, correctly, that demand for flights is not constant over time. Simply put, more people want to fly at some time periods than during others. Airlines can respond to this in a few different ways. The first would be to keep prices constant, regardless of demand. This would turn air travel into a first-come-first served game, which is great if you always buy tickets months in advance but terrible if you have to take a last-minute trip for work or a medical emergency.

The second approach, which Air NZ may be using, is to charge higher prices during periods of higher demand. This may seem less fair, but it’s actually better for (almost) everyone. It means that airlines aren’t constantly booking out flights well in advance or misallocating resources in a futile attempt to give everyone a cheap flight. Travellers also benefit – they get a choice between paying more to travel at their preferred time or finding a cheaper fare at an off-peak time.

I fly for work on a semi-regular basis so I’ve noticed some of the patterns over time. Between 4-6pm, departure gates fill up with suit-wearing men and women headed home from their meetings in time for dinner. Not surprisingly, prices are highest at this time. Later on, prices drop, planes get a bit emptier, and the suits get replaced with casual clothes. By the end of the night, most of the people who want to get home have gotten there, and for a price that they’re willing to pay.

Occasionally, this means that somebody decides not to go to a Madonna concert. But that’s not a flaw with supply and demand – that’s how it’s supposed to work! If the man quoted in the Stuff article didn’t go, it’s only because someone who valued being there more bought the ticket instead.

Finally, I have to ask: Why are people outraged when the principles of supply and demand are applied to airfares? Perhaps it’s because we routinely ignore those principles everywhere else in our transport system.

As numerous economists have observed, we manage our roads like a Soviet supermarket. The price to use roads is set at a single, low value – i.e. NZ’s comparatively low petrol taxes – and thus people queue up for ages to drive on them every morning and evening. The same thing happens with parking, where we have regulated to make it abundant and free and ended up in a situation where people can never get enough parking.

In economic terms, there is no difference between this:

SH16 traffic

And this:

latvian-bread-line

They are both situations in which scarce resources, including people’s time, are misallocated due to poorly-functioning price signals. So rather than asking “why don’t we price air travel as inefficiently as roads?”, we should ask “why don’t we price roads as efficiently as we price airfares?”

A failure to price roads efficiently badly distorts our supply decisions. We are forever pouring more asphalt and concrete that accommodates a few more slowly-moving cars at peak times and sits idle much of the rest of the time. By contrast, congestion pricing would allow us to avoid many of these expenditures by giving people an incentive to travel differently.

What do you think about airfares – and transport pricing in general?

If congestion is so bad, we should price it

Last Thursday, the Government shut the door on the idea of road pricing for Auckland, saying that it would prefer to undertake “a year-long negotiation with the council on an agreed 30-year programme focusing on reducing congestion, and boosting public transport where that reduces congestion.”

The following day, the road/infrastructure lobby undertook a bit of a media blitz pushing for more construction. As part of that, we got sent this press release from the Auckland Chamber of Commerce:

Media Release

12 June 2015

Auckland – defined by congestion

The Auckland Chamber of Commerce strongly supports the initiative of Government to seek a negotiation with Auckland Council on an agreed 30-year programme focusing on reducing congestion, and boosting public transport where that reduces congestion.

Michael Barnett, head of the Auckland Chamber was responding to news reports that Transport Minister Simon Bridges and Finance Minister Bill English have sent Auckland Mayor Len Brown a letter proposing a negotiation and ruling out allowing Auckland to bring in motorway charges to help fund transport projects.

“The Auckland business community overwhelmingly agrees that immediate action to address the City’s transport congestion is required,” said Mr Barnett.

In short, congestion is bad. Really bad. It’s a crisis deserving immediate action… in the form of a year-long talk-fest between local and central government.

Of course, it’s difficult to find reliable empirical evidence that Auckland’s congestion levels really are that bad. Average commute times are a cruisy 25 minutes – well below many other cities. NZTA research has found that the actual cost of congestion is neither (a) largely a monetary cost for businesses or (b) anywhere as large as people claim. While people like to claim that congestion costs “billions” annually, a more realistic figure is $250 million. The one source that does claim that Auckland has world-beating congestion, the TomTom index, has serious methodological flaws.

Nevertheless. Even though its empirical basis is shaky, the Auckland Chamber of Commerce’s recommendations for projects are not crazy. In fact, they seem to be on Auckland Transport investment radar already:

A good outcome from Government and Auckland Council working together would be a package of fast-tracked projects aimed at:

  • Improving public transport services’ reliability and frequency
  • Getting as much use as possible out of the transportation system we have
  • Removing parking from major arterial routes to create more usable road space.
  • More high occupancy lanes to encourage a reduction of sole occupancy cars.
  • Strengthened integrated traffic management covering arterials and motorways.
  • Expanding park and ride facilities at main trunk rail and busway stations.

But even if the ideas are sensible, “fast-tracking” them will be expensive. We simply can’t build everything at once. Even if Government was willing to give Auckland Council more tools to raise revenue – which is unlikely given its refusal to consider road tolls – capacity constraints in the civil engineering business would make it hard to do much more.

To its credit, the Chamber seems to recognise this and agree that we need to prioritise use of our scarce resources:

“Good leadership is about partnership,” said Mr Barnett. “It is about understanding that we have limited resources, so we must learn to prioritise correctly,” he concluded.

Which leads me to my point. If congestion is such a big problem, why don’t we use congestion pricing to make sure that we’re prioritising use of our road network efficiently?

I find it very strange that business groups aren’t more enthusiastic about this idea. If congestion is really as bad as they say it is, why aren’t they loudly advocating a policy solution that would actually address it? (Road-building doesn’t work.) Surely freight companies and construction firms would benefit from the resulting reductions in traffic, even if they had to pay a bit for them.

In my experience, congestion pricing is one of those ideas that virtually all economists agree on. It’s like free trade in that regard – there might be some disagreement about the fine details, but most agree that it’s a good idea. But it hasn’t gotten as much attention in other quarters.

So here, for example, is William Vickrey, who won the Nobel Memorial Prize in Economics for his pioneering work on the topic:

Known among economists as “the father of congestion pricing,” Professor Vickrey sees time-of-day pricing as a classic application of market forces to balance supply and demand. Those who are able can shift their schedules to cheaper hours, reducing congestion, air pollution and energy use — and increasing use of roads or other utilities. “You’re not reducing traffic flow, you’re increasing it, because traffic is spread more evenly over time,” he has said. “Even some proponents of congestion pricing don’t understand that.”

He has admitted that his ideas have sometimes not been well received by those who set public policy because, “People see it as a tax increase, which I think is a gut reaction. When motorists’ time is considered, it’s really a savings.”

And here’s urban economist Edward Glaeser commenting that more megaprojects aren’t the best fix for transport issues:

Infrastructure investment only makes sense when there is a clear problem that needs solving and when benefits exceed costs. U.S. transportation does have problems — traffic delays in airports and on city streets, decaying older structures, excessive dependence on imported oil — but none of these challenges requires the heroics of a 21st century Erie Canal. Instead, they need smart, incremental changes that will demonstrate more wisdom than brute strength…

IMPLEMENT CONGESTION PRICING: We should expect drivers to pay for more than just the physical costs of their travel. We should also expect them to pay for the congestion that they impose on other road users. If you have a scarce commodity, whether groceries or roads, and you insist on charging prices below market rates, the result will be long lines and stock outs, like those that bedeviled the Soviet Union decades ago. Yet U.S. roads are still running a Soviet-style transport policy, where we charge too little for valuable city streets. Traffic congestion is the urban equivalent of a stock out.

And here’s economist Matthew Turner, who co-authored one of the most comprehensive studies of “induced traffic”, which I discussed here:

So what can be done about all this? How could we actually reduce traffic congestion? Turner explained that the way we use roads right now is a bit like the Soviet Union’s method of distributing bread. Under the communist government, goods were given equally to all, with a central authority setting the price for each commodity. Because that price was often far less than what people were willing to pay for that good, comrades would rush to purchase it, forming lines around the block.

The U.S. government is also in the business of providing people with a good they really want: roads. And just like the old Soviets, Uncle Sam is giving this commodity away for next to nothing. Is the solution then to privatize all roads? Not unless you’re living in some libertarian fantasyland. What Turner and Duranton (and many others who’d like to see more rational transportation policy) actually advocate is known as congestion pricing.

And here’s the OECD in its latest country report on New Zealand:

A just-released OECD economic survey blames years of under-investment in infrastructure for the city’s roading problems. It calls for a mix of tolls and congestion charges to alleviate peak-hour traffic pressure and help fund new roads and more public transport.

“Placing a cost on travel during peak periods could incentivise drivers to travel at different times (off-peak), if they are not required to be on the roads, or could encourage more carpooling and use of public transportation,” the report says.

In short, if you’re worried about congestion, you need to take congestion pricing seriously. There are undoubtedly reasons why we may not want to implement congestion pricing, ranging from technical feasibility to equity concerns. But in my view it’s ridiculous for business groups and politicians to get all up in arms about the issue – and promptly rule out one of the few realistic solutions.

What do you think about congestion pricing?

Inside the Independent Advisory Body

This is a guest post from Donna Wynd who was part of the Independent Advisory Body tasked with looking into how to raise funding for transport in Auckland.

Myself and a range of others representing organisations from across the Auckland region have been working on a way to find the funds for Auckland’s so-called transport funding gap – in the order of $12 billion over 30 years (about $300 million per annum) – for close to two years now. The organisations represented included my organization, Child Poverty Action Group (representing the region’s ‘poor’, whatever that means), the AA (in the first phase), the business community (in various guises), tangata whenua, unions, and transport nerds Campaign for Better Transport, Cycle Action Auckland and Walk Auckland. I was the only woman on the group (a major blooper) and there was no Pacific representation which was also an oversight. While I held my ground reasonably well (I think), I cannot possibly claim to represent or speak for all the region’s women and low-income households.

Initially called the Consensus Building Group, we changed our title in the second phase that commenced in April this year to ‘Independent Advisory Body’. This was because we felt that when we got to the nuts and bolts of the funding decisions, it was unlikely that we would agree, much less arrive at a consensus.

Before getting to the group’s considerations, it is important to note that we were specifically precluded by our terms of reference from examining the merits or otherwise of the transport projects in the Auckland Plan that the Council is seeking to fund. Given the significant ideological differences within the group, this was probably a good thing. Also important is that the underlying driver of our future congestion is population growth. Two-thirds of that growth is internal (births and internal migration) and one-third is external migration. While we have some control over external migration, there is little we can do about the other two-thirds.

The final report of the group has recommended three possible ways forward for Auckland. The first is the low-cost ‘basic’ option. The other two were a package of either rates and fuel excise duty increases, or a motorway user charge. Unsurprisingly (for the readers of this blog, at least) the projects that would be dropped under the basic option are mostly public transport projects and arterial upgrades.

The decision to put forward the two funding mechanisms outlined in the report was made after a great deal of research into other options, including a cordon charge such as that operating in London. The point was not to maximize revenue, but to find a way to plug the $300 million per annum gap. Under the models used, both options generate the same revenue.

With respect to the rates and fuel tax pathway, it was considered that an additional general rate based on the value of the property was fairer than an annual general charge. Given the general distribution of the benefits of the additional investment in the transport network, it was also felt there was little justification for a geographically targeted rate. Under this option, businesses would pay less but be the major beneficiaries of the investment.

The motorway user charge option includes the option of a flat charge or a variable charge depending on when people travelled. Although our mandate did not include considering demand management, there is little doubt that building in a demand management component through variable pricing would provide the option to implement this at a later stage if desired.

So how much of an improvement to the performance of the network can Aucklanders expect for the additional $300 million per year? Not much, as it transpires. What the additional investment does is arrest the rate of deterioration in the performance of the network. The motorway user charge provides better performance as the charge will change people’s behaviour – there is no reason a rates increase will change anyone’s driving habits.

The graph below shows the percentage of time spent in severe congestion on the Strategic Freight Network (basically the motorway network) at the AM peak. Under all the options drivers are spending more time in traffic by 2036. ‘Flat Rate’ here refers to a flat rate motorway charge and ‘Peak Demand’ refers to the variable charge.

Donna Wynd - Time In Congestion

 

The flip side to this is passenger transport. We would expect to see PT use increase if a motorway user charge was introduced if it provided a cheaper, viable alternative (see graph below). The main reason PT boardings are lower under the low-cost option is that some PT projects will simply not go ahead. One of the key findings is that PT investment and investment in alternative modes such as the regional cycling network need to be brought forward to ensure that these alternatives are available. As a matter of equity, this is an absolute necessity; as a matter of politics none of this will work if the Auckland public does not see significant upgrades to the PT system.

My concern with much of this is that transport is about access and mobility for all, while most of the focus of the group’s work was on peak traffic congestion. Motorways do not improve travel options for much of the population whereas better PT does.

Donna Wynd - PT Boardings

Back to the revenue: while the two options generate the same revenue, the incidence of the additional charges on households and individuals is very different. The average cost per household is about the same for both options. The key difference is the incidence on vulnerable (ie low-income, approx. $25,000 per year income) households. Strangely, the rates and fuel tax package affects a greater proportion of vulnerable households (12% as opposed to 7%). Equity considerations were given a great deal of deliberation throughout the process, and several options were rejected on equity grounds.

The single biggest problem in trying to think of a way around the uneven impact of the motorway user charge is linking an income with a number plate. While the research used by the group focused on household income, there are plenty of singles for whom this is an inappropriate measure. Given the existing complexity and fragmentation of New Zealand’s system of social assistance, there is no easy solution to this. Indeed some families interviewed as part of the background research commented that they would have to move out of Auckland if a motorway user charge was introduced given their current income.

At this point it seems fair to ask (as the group couldn’t) exactly what Aucklanders will be funding with their increased rates/petrol tax/motorway tolls? The central rail link is in, although the focus remains on roading. Aucklanders have been very clear that they want improved PT and cycling facilities and unfortunately some projects including rail to the airport are not within the ‘basic funding envelope’. With the Long Term Plan and its associated transport plan coming up for public consultation, this is the chance for Aucklanders to scrutinize where their money is going, and tell the Council what they would like it spent on if they are to be whacked with additional costs. And this is the chance to get in and plug the congestion-free network as an alternative model. It costs less and in these tough times that must make it an attractive option.

Lastly, I’d like to take the opportunity to thank all those who participated in the CBG and IAB. I think that for the most part members made a genuine effort to come up with a result most of us could agree on, and that would be of benefit to the region as a whole. This involved many of us putting aside our ideological differences, and I’d like to commend my fellow group members for managing that. I’d also like to thank the Council staff who provided technical and other support, and Peter Winder’s team for their assistance and hard work. Whether or not you agree with our conclusions is up to you, and I would encourage anyone who is interested to make your views known through the LTP process.

Auckland Transport’s 30 Year Project List

As part of the discussion on Alternative Transport Funding, which was launched yesterday, the Council also released a copy of Auckland Transport’s entire 30 year transport programme which includes the cost of projects and seemingly ranked according to some combination of criteria. The programme unfortunately does not include state highway projects, which makes it difficult to fully assess the merits of the overall transport packages outlined in yesterday’s announcements. However, it’s certainly clear what Auckland Transport projects can and cannot be afforded over the next 30 years under the two scenarios.

The document doesn’t explain the list in any detail, but it seems as though there are a number of projects on the first page which have some form of existing commitment or are ongoing requirements and therefore are not really considered “discretionary”. These are shown below:

committed-projectsThe ‘committed’ projects include those that appear to have contracts in place (electric trains, Albany Highway, a few things around Westgate), renewing existing assets and the City Rail Link. I actually wonder if it would be helpful for CRL to be ranked against all the other projects – rather than be included in this “other” list – as almost certainly it would rank either right at the top or very near it.

Anyway, moving on to the top of the list the projects listed below are those that are in both the Basic Network and the Auckland Plan Network – as well as some fairly broad brush allocation of funding to support sprawl in some of the areas identified by the Unitary Plan:

basic-network-projects

It’s a pretty short list for the 30 year transport programme, as well as being strangely focused on the first decade. The other key thing to notice here is the yellow boxes, which appear to be wrapped up programmes of projects (e.g. walking and cycling) where the amount of funding allocated to the programme varies quite significantly, depending on whether it’s the Auckland Plan Transport Network or the Basic Transport Network.

Even taking a fairly harsh look at the list above, there doesn’t seem to be too many projects that don’t make sense doing at all over the next 30 years. For me the three most glaring ones that need to be questioned are:

  • The Reeves Rd flyover at $141 million
  • The widening of the almost $200 million and soon to be opened Te Horeta Rd for another $74 million
  • Mill Road at $472 million which is something that we’ve highlighted could be looked at for a cheaper option, especially seeing as the government are now widening the southern motorway.

The rest of the projects are those which form part of the Auckland Plan Transport Network only. Essentially, these are the additional projects from Auckland Transport which the additional funding is being asked to pay for:

auckland-plan-network-projects

While there are a few really dumb projects on the list above (Mt Albert Park & Ride, what the heck?) there’s also a lot of pretty good stuff that is missing out under the Basic Transport Network. Furthermore, while there is some, it seems at first glance that there isn’t a huge amount of really expensive dumb stuff in the programme list of Auckland Transport’s projects. That contrasts with the package of state highway projects highlighted yesterday which doesn’t appear to have been questioned at all.

Over the next few days I’ll be starting to look into the detail at the overall balance of the packages, as well as assessing the extent to which they are similar to what we proposed in the Congestion Free Network.

Alternative Transport Funding Report Released

The latest report on alternative transport funding for Auckland, prepared by the Independent Advisory Board (formerly the Consensus Building Group), has just been released. The report will form a critical part of the Council’s public consultation on the next Long Term Plan (the 10 year budget), essentially asking Aucklanders two key questions:

  • Are you willing to pay more for a better transport network?
  • If so, then should that extra money be from existing sources (rates, fuel taxes etc.) or from a “motorway user charge”?

We have been highly skeptical of past proposals that request more money to be spent on transport – in particular the first version of the Integrated Transport Programme as well as the initial report on alternative funding prepared last year by the Consensus Building Group. In fact, the Congestion Free Network came into being as a result of our frustration with the transport programme being a “build everything” and we felt a large part, if not all of the $12 billion funding gap could be resolved through removing poor value projects, rather than by requiring additional funding.

Overall, the new report is a clear step in the right direction and combined with the work being done as part of the next LTP and the next ITP it seems as though quite a lot of effort has gone into removing the more idiotic projects included in the original ITP, although there isn’t a huge amount of detail in the information that has been provided. There are, however, still many unanswered questions that the report doesn’t seem to address – plus its key recommendation of suggesting a “motorway user charge” is fraught with problems. But I’ll get onto that in a moment – first to summarise some key points from the report.

A comparison between what is in the two programmes – known as the “Basic Transport Network” (that which can be afforded under the 2.5-3.5% rates increase proposed in the LTP) and the “Auckland Plan Transport Network” (the preferred network, which requires additional funding) is shown in the series of tables below.

Firstly, for bus and ferry investment:

bus-ferry

The main difference between the two networks seems to be in the scale of the bus lane programmes and the provision of additional busways in the second and third decades, supported by service frequency improvements. The proposed Botany to Manukau busway appears to be extended to the airport like we suggested as part of the CFN however more interesting is to see a new proposal for a “cross isthmus” bus RTN between New Lynn, Onehunga and Otahuhu. I wonder what route and form that would take.

Next for rail:

railThe difference between the two networks is fairly stark in the second and third decades, with no investment at all in rail over this period in the Basic Transport Network. I must say the complete lack of rail investment in the Basic Transport Network after 2025 is a bit surprising and raises some questions about the prioritisation process that determines what’s in and what’s out of the Basic Transport Network after 2025. Importantly, CRL is in the Basic Transport Network and therefore does not require alternative funding.

Next, for roads:

roadsLooking at arterial roading projects first, it’s clear that even the Auckland Plan Transport Network is much smaller than what was proposed originally in the first version of the Integrated Transport Programme. In fact it seems like billions upon billions have been shaved off the previous ITP’s numbers, which included crazy things like nearly a billion dollars on upgrading Great South Road. We’ll take a more detailed look at this in a future post, but credit where it’s due to Auckland Transport who have responded to criticisms of the first ITP by ensuring the Auckland Plan Network has been significantly refined to deliver much better value for money.

Unfortunately the same cannot be said about the state highway programme, which doesn’t vary much between the two networks – aside from some rather optimistic “widening to reduce congestion” in the final decade (haven’t they heard of induced demand?) A whole bunch of very dodgy projects (Additional Harbour Crossing, SH16 Port Access, SH1 Warkworth to Wellsford etc.) have been included in the Basic Transport Network for some unknown reason, as well as of course being in the Auckland Plan Transport Network. This is important to keep in mind when considering the resulting “funding gap” – which of course could be a whole heap smaller if we stripped out the $5.5 billion Harbour Crossing and multiple billions on these other unnecessary projects.

Components of the walking, cycling and safety programmes for the two networks are shown in the table below:walking-cyclingIt’s not clear what the cost difference for walking and cycling is between the two networks, but it’s clear that only the Auckland Plan Transport Network goes anywhere close to delivering on the Auckland Plan vision for active transport.

Now for miscellaneous other stuff, like maintenance, renewals and supporting sprawl:

maintenance-renewalsThe shortfall in funding maintenance and renewals under the Basic Transport Network is a real concern, as the last thing we want to do is end up like the USA where infrastructure is falling to bits because politicians want to “cut ribbons” rather than look after what we already have. The lack of funding for developing the greenfield sprawl areas may not be such an issue as this could force the developers themselves to come to the party a bit more.

Overall, as I noted above it’s clear the Auckland Plan Transport Network is vastly improved from what was in the first ITP. A lot of the really poor investment in the arterial network appears to have disappeared, although there are still a few remaining remnants like Penlink and Mill Road, although even with these projects it seems like the bulk of spend has been pushed out into the future. However, the big remaining issue is that a similar exercise doesn’t seem to have occurred with the State Highway network and there are still billions upon billions of dollars in poor value for money projects – most particularly the Additional Harbour Crossing but also other duplicative projects like SH20B, Warkworth-Wellsford and others. NZTA have really dropped the ball on this one and unfortunately I suspect part of this comes about because the under the current situation motorway projects get full government funding while every other transport project has to beg for a slice of the funding pie. More than once I’ve heard council people say we should build certain projects simply because the government are paying for them.

Cut out what I estimate to be around $8 billion in very poor value for money state highway projects and we’re left with a $4 billion funding gap. If we push $8 billion of state highway projects out of both the Basic Transport Network and the Auckland Plan Network, it means we can afford $8 billion more of good projects before we have to turn to Alternative Funding and it means that we only need to find ways of raising an additional $4 billion. Over 30 years, that’s not a particularly huge issue to overcome.

So if we think back to the two questions at the top of the post, it seems as though the answer to the first one is there may well be value from paying a bit more to get a better transport network, but the actual requirement for additional funding might be around a third of what the report highlights. Now let’s turn to the second question of which would be the best way of raising this additional funding.

Essentially the two options proposed are:

  1. Increasing existing funding mechanisms like rates, fuel taxes, development contributions, central government grants etc.
  2. Introducing a charge for entering the motorway network

Some more detail on the “Rates and Fuel Tax” option are shown below:

rates-fuel-taxI must say I was pretty surprised to see how low the additional rates and fuel tax increases would need to be in order to close the funding gap. A rates increase of between 3.4 and 4.4% is actually lower than what was assumed in the 2012 Long Term Plan (that had 4.9%) while a 1.2 cent per litre annual fuel tax hike would probably get lost as a rounding error in typical price fluctuations. It’s a credit to Auckland Transport’s project prioritisation that they’ve managed to develop a network that could be fully funded under the funding assumptions of the 2012 Long Term Plan, and it’s only the political decision to have a much lower rates increase that’s essentially “re-created” the funding gap.

Combine this with the above observation that the “funding gap” could be further reduced to around $4 billion instead of $12 billion and we could see the gap closed by rates increases only 0.3% higher than otherwise or fuel tax increases of a mere 0.4 centre per litre compared to what would otherwise occur. That’s starting to look like a pretty compelling option.

The other funding option is called a “Motorway User Charge” and is summarised below:

motorway-user-chargeThere’s a lot of discussion in the document around the relative costs and benefits of the two approaches – with the report seeming to express something of a preference for the motorway user charge scheme, based on its travel demand management effects of discouraging some trips and encouraging higher levels of public transport use. We’ll look at the details of this analysis in further posts, but note that this option does come with some fairly significant set up and operational costs (~$110 million set up with opex costs of 24c per trip) as well as potentially diverting quite a lot of traffic off the motorway network and onto local roads – which seems quite counter-productive.

To summarise, there’s quite a lot to like in the Independent Advisory Board’s report. It seems like some hard work has gone on by Auckland Transport (although sadly not NZTA) to optimise their desired transport network so it’s far more realistic than what was proposed in the first ITP. Take out a few of the dumber motorway projects and we’re left with a pretty damn good 30 year transport network that can almost be funded from existing sources (just requiring 0.3% higher rates increases and 0.4 cents per litre higher fuel tax increases) or from a very low motorway user charge. Or from other ways we might think up of to find $4 billion over 30 years.

 

Update: unsurprisingly the government has once again poured cold water on the idea of tolling or fuel taxes.

http://www.beehive.govt.nz/release/govt-responds-auckland-transport-report

Why it’s not possible to build our way out of congestion

Wired magazine recently published a good, succinct explanation of induced traffic. It’s worth reading in full as it hits upon an incredibly important, often overlooked fact: it’s not possible to eliminate congestion by building more roads. Here are a few of the more interesting excerpts:

The concept is called induced demand, which is economist-speak for when increasing the supply of something (like roads) makes people want that thing even more. Though some traffic engineers made note of this phenomenon at least as early as the 1960s, it is only in recent years that social scientists have collected enough data to show how this happens pretty much every time we build new roads. These findings imply that the ways we traditionally go about trying to mitigate jams are essentially fruitless, and that we’d all be spending a lot less time in traffic if we could just be a little more rational.

But before we get to the solutions, we have to take a closer look at the problem. In 2009, two economists—Matthew Turner of the University of Toronto and Gilles Duranton of the University of Pennsylvania—decided to compare the amount of new roads and highways built in different U.S. cities between 1980 and 2000, and the total number of miles driven in those cities over the same period.

“We found that there’s this perfect one-to-one relationship,” said Turner.

If a city had increased its road capacity by 10 percent between 1980 and 1990, then the amount of driving in that city went up by 10 percent. If the amount of roads in the same city then went up by 11 percent between 1990 and 2000, the total number of miles driven also went up by 11 percent. It’s like the two figures were moving in perfect lockstep, changing at the same exact rate.

Los Angeles: Sitting in traffic after ignoring supply and demand for over 50 years.

In their excellent paper on the topic, Duranton and Turner describe this as “the fundamental law of road congestion: New roads will create new drivers, resulting in the intensity of traffic staying the same.” Their research also digs into a couple of other related and equally interesting phenomena:

  • Better public transport provision doesn’t actually reduce road congestion – but it does enable more people to move without being affected by congestion
  • Reducing road capacity has no measurable impact on congestion – if less road space is available, people take public transport or active modes instead, or avoid making low-value trips.

Urbanist.co also has some further discussion of Duranton and Turner’s work. The economists go on to suggest economists’ favourite answer to congestion: road pricing. (If you’re interested in reading more about that topic, Stu Donovan and I have written several posts about the economics of road pricing.)

So what can be done about all this? How could we actually reduce traffic congestion? Turner explained that the way we use roads right now is a bit like the Soviet Union’s method of distributing bread. Under the communist government, goods were given equally to all, with a central authority setting the price for each commodity. Because that price was often far less than what people were willing to pay for that good, comrades would rush to purchase it, forming lines around the block.

The U.S. government is also in the business of providing people with a good they really want: roads. And just like the old Soviets, Uncle Sam is giving this commodity away for next to nothing. Is the solution then to privatize all roads? Not unless you’re living in some libertarian fantasyland. What Turner and Duranton (and many others who’d like to see more rational transportation policy) actually advocate is known as congestion pricing.

Incidentally, I like Turner’s “Soviet Union” metaphor a lot – I’ve said on occasion that we’re running our transport system like a Polish shipyard.

Lastly, it’s incredibly important to consider induced traffic when making policy recommendations. As I wrote in my review of Alain Bertaud’s talks in Auckland, keeping commute times down is an important part of maintaining an efficient urban labour market. Some people seem to have taken Bertaud’s recommendation that policymakers focus on keeping average car commutes under 30 minutes (and PT commutes under 45 minutes) as a call for more roads. This is a superficially appealing but deeply wrongheaded idea.

Induced traffic means that building roads to keep commute times down will not work. And it will be expensive. While there is often a good case for specific road improvements to remove key bottlenecks or improve safety – the Victoria Park Tunnel comes to mind – Duranton and Turner’s work shows that a strategy of building lots of roads will not succeed in minimising commute times. An alternative approach is needed.

A targeted transport rate?

An article in last Friday’s NZ Herald provided an interesting insight into where the investigations into additional transport funding options are at. This is the second phase of the project to close the supposed $12 billion funding gap over the next 30 years. The article highlights that effort has been focusing on analysing different forms of road pricing and is perhaps leaning towards a motorway charging scheme:

Evaluating road tolls and fuel-tax rises and traditional funding methods such as rate rises and targeted rates is the job of the group due to report to the council next month.

The Herald understands that the independent alternative transport funding group is leaning towards motorway tolls. It will also provide options for targeted rates and extra rates rises.

On Wednesday, Transport Minister Gerry Brownlee reiterated the Government’s pre-election position that there would be no regional fuel taxes or tolling of existing state highways in Auckland.

Auckland Council cannot introduce motorway tolls or a regional fuel tax without government approval.

I think tolling motorways could have some benefits but it also could have considerable downsides and we’ve outlined some of these before. The main problem with them is the potential for traffic diversion from motorways onto local roads. What also can’t be ignored is that a fairly high proportion of money raised from schemes like these goes into the administration of the system itself, this means it’s a fund-raising system that’s likely to be quite a lot less efficient than fuel taxes and rates. Some of the strongest proponents of motorway tolling has been the NZ Council for Infrastructure Development (NZCID) and I suspect this is two fold,

  1. their members want to build, maintain and operate any tolling system
  2. their members want the additional funding that flows from the tolls to help build more infrastructure

One of the key problems with the alternative funding exercise right from the start has been the ignorance of whether we actually need to raise the additional funding for transport. The Integrated Transport Programme, which outlined the full transport programme over the next 30 years, included a huge number of incredibly costly and stupid projects included within its project list:

Knocking out $12 billion from the project list above is a pretty simple exercise – as we highlighted in our detailed analysis of the Congestion Free Network‘s financials. Therefore, based on the Integrated Transport Programme’s list of projects outlined above there is a very valid question about whether any form of additional funding is necessary. In addition even if a funding deficit still exists, if it was considerably smaller it might have allowed for some of the earlier dismissed funding options to be viable once again.

Another major flaw in many tolling proponents arguments that could have a significant impact on what projects get built is that any tolling or road pricing schemes are going to change demand substantially and as such it is likely to reduce or remove the need for many roading projects. Conversely it is likely to shift many PT projects up the priority ladder.

I guess the big question that we will all need to grapple with over the next few months, as the alternative funding group makes a recommendation to the Council, who then decides what they want to include in the draft Long Term Plan, is whether anything has changed since the ITP came out last year. It’s possible that two things have changed, which could mean a greater need for extra transport funding than we had previously expected.

  1. We know from the agendas for Auckland Transport closed board meetings that a lot of work has been going on to update the Integrated Transport Programme and the list of projects. Hopefully this means a lot of the crazier projects (like $665m on Albany Highway or around $900m on upgrading Great South Road) have been removed or the figures corrected.
  2. We know from the LTP Mayor’s Proposal that a lower level of rates increase means less money available overall for transport from normal funding sources compared to what’s in the current Long Term Plan. At first glance, it seems like most of the good projects can be funded over the next decade but there’s still no word on how much can be spent on things like walking and cycling, or the timing of various bus lanes and interchanges needed for the new network.

So given we know motorway tolling is an idea with many flaws and that the government isn’t going to approve new funding sources like this anyway, but there might be a need for a bit more money for transport, it seems sensible to be looking at other options. Which, returning to Friday’s Herald article, seems to be what’s happening:

Aucklanders could pay a new charge on top of rates to fund transport projects.

A “targeted rate” is one option being considered by an independent group looking at alternative funding measures to plug a $12 billion-plus transport funding gap over the next 30 years…

…Auckland Council cannot introduce motorway tolls or a regional fuel tax without government approval.

The National-led Government changed the law in 2009. Acting Mayor Penny Hulse said the $2.4 billion city rail link had been included in a new 10-year budget and did not need a targeted rate.

It will certainly be interesting to analyse the details of the transport budget as they emerge in the coming months, to see what can be afforded in the baseline transport programme and whether any additional money is required.