Tolling Policy

Introduction

Tolling, is a method of raising revenue from transport infrastructure which involves a charge or fee imposed on the user in return for the benefits received from using said infrastructure.

The Transport Agency’s strategic options toolkit outlines that the purpose of tolling A toll payable under Part 2 of the LTMA. suitable state highway links can be either to advance projects through toll-funded borrowing and/or to raise additional land transport revenue.  The toolkit provides several case studies, including Auckland’s Northern Gateway.

Tolling is consistent with the Transport Agency’s beneficiary pays principle because tolling A toll payable under Part 2 of the LTMA. roads and using toll revenues collected to build roads shifts the National Land Transport Programme Interrelated and complementary combination of activities that, when delivered in a coordinated manner, produce synergies – can span more than one work category and more than one activity class, e.g. a programme could include a road improvement and public transport improvement activities. towards an increase in ‘value of service’ customer payments.

This section sets out the guidance on assessing the potential to toll new roading infrastructure as a means to support either the funding of new infrastructure or investment in general from the National Land Transport Fund.   

Tolling assessment

Any decision to establish a tolling A toll payable under Part 2 of the LTMA. scheme is made in accordance with the Land Transport Management Act on the recommendation of the Minister of Transport. This is separate to the decision to build any particular road (that may be subject to tolling), which is made by the Transport Agency when approving a project for funding.

The decision to proceed with tolling A toll payable under Part 2 of the LTMA. requires an assessment of the impact of tolls A toll payable under Part 2 of the LTMA. compared to an untolled case. The balance between the impact of tolling on project outcomes and the relative importance of project outcomes are factors for consideration, and will be determined on an individual project basis. This policy considers tolling from revenue and welfare perspectives rather than just operational matters.

As per section 48 of the Land Transport Management Act (2003), a road tolling A toll payable under Part 2 of the LTMA. 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 A toll payable under Part 2 of the LTMA. scheme;
• the level of community support for the proposed tolling A toll payable under Part 2 of the LTMA. scheme is sufficient;
• if an existing road is included in the scope of the tolling A toll payable under Part 2 of the LTMA. 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 A toll payable under Part 2 of the LTMA. scheme is efficient and effective.

Criteria for a toll road

The following criteria will be used to determine whether new transport projects will be recommended for tolling A toll payable under Part 2 of the LTMA. ;

• the application of tolling A toll payable under Part 2 of the LTMA. is consistent with key project outcomes;
• tolling A toll payable under Part 2 of the LTMA. should be able to provide net financial benefits and not result in the project’s benefit-cost ratio falling below 1; and
• tolling A toll payable under Part 2 of the LTMA. must be implemented in a cost-effective manner that is convenient to users.

In assessing potential toll road projects, the Transport Agency will also investigate whether:

• the tolling A toll payable under Part 2 of the LTMA. scheme achieves the government’s priorities as set out in the Government Policy Statement on Land Transport;
• the project is large enough in scale to be able to support the fixed costs of tolling A toll payable under Part 2 of the LTMA. ;
• the number of vehicles expected to use the road (and therefore pay the toll) more than covers the toll-collection costs;
• the toll revenue makes a meaningful contribution to the road’s construction costs (after deducting the operating and maintenance costs of the road and the tolling A toll payable under Part 2 of the LTMA. mechanisms), and;
• it would be physically or practically possible to charge tolls A toll payable under Part 2 of the LTMA. .

Matters to be taken into account

The requirements of the Land Transport Management Act and Crown Entities Act need to be met and recommendation of the Minister of Transport is required to implement a tolling A toll payable under Part 2 of the LTMA. scheme.

Setting the Toll Price

Toll prices need to strike the right balance between recovering costs and pricing benefits.

In order to maximise the potential returns for our customers, the Transport Agency needs to have the flexibility to set prices in ways that reflect infrastructure cost, ongoing operational costs and customer value, recognising that these may vary at different times and locations and for different customer groups and that this variation can contribute to the customer value proposition.

In determining the price at which the toll should be set the Transport Agency will consider the following toll price principles:

1. Toll prices should preserve the project’s investment outcomes.
2. Toll prices should reflect the underlying costs.
3. Toll prices should reflect the value proposition to the user.
4. Toll prices should consider how they can influence smart travel choices.