Wednesday, February 08, 2006

Melbourne’s priced roads: Some facts

Melbourne’s has, or will have, two types of priced roads: The CityLink tolled roads that operate as a radial link from the North and from the East to Melbourne’s city centre and the proposed cross-town road, the Mitcham-Frankston Project that links the Eastern Freeway in Donvale to the Frankston Freeway near Seaford. Neither of these two projects is (or will be) effectively congestion priced. Pricing is based on a ‘user pays’ principle which recovers project costs and yields a return to the private sector operator. There is a case for renegotiating the agreements the State Government of Victoria has with the operators of these projects.

CityLink Roads. Transurban was given the concession to operate these roads in 1996. The concession was generous with the project costing $1.8 billion to build and shareholder equity in the operation now amounting to $5 billion. Revenues are of the order of $250 million which would have been sufficient to support $6 billion of investment which exceeds the cost of both the CityLink and the Mitcham-Frankston projects by $1.5 billion. Tolls are claimed to be at least twice the level required to recover the cost of a publicly-funded tollway. The traffic catchment area for the project covers about half of Melbourne. Transurban is entitled to compensation if future Victorian Governments develop plans to improve alternative forms of transport that would divert revenue from CityLink.

Tolls currently depend on where motorists enter and where they exit CityLink as well as on the type of vehicle used (car, light commercial (LCV), or heavy commercial (HCV)). In the main however charges are independent of the extent of congestion on the roads. A 24 hour day pass ranges from $9-95 for a car to $18-95 for a HCV. The maximum charge on either section of the road is $5-20 for a car and $6-95 for a HCV during day hours discounted to $5-20 between 8pm and 6am. That higher charges are levied for larger vehicles and that a discount is offered to LCVs and HCVs overnight is consistent with the spirit of the congestion pricing philosophy but these effects are modest. Overall charges are congestion-independent. There are substantial ‘boundary problems’ reflecting the accumulation of congestion externalities in areas such as Essendon adjacent to CityLink as motorists divert around the tolled road. These problems would be reduced with congestion-pricing and thus more even traffic flows.

Mitcham-Frankston Road. The concession to operate this project was awarded to the ConnectEast Group led by Macquarie Bank, Thiess Pty Ltd and John Holland Pty Ltd. Thiess and John Holland are responsible for design and construction. The project comprises 39 km of toll road including 1.5 km of tunnels. It will be a fully electronic tollroad using short-range microwave transponder tags and advanced video camera technology. The tags will also operate on CityLink. The project is forecast to cost $2.5 billion and is scheduled to open in late 2008. .

Unlike CityLink the Mitcham-Frankston prospectus states there are no restrictions on government upgrades to competing roads and public transport. Some have suggested that government should upgrade bus services in the area and replace urban level crossings with grade separations along the Ringwood Railway line to allow roads such as Stud Road to compete more effectively with the proposed tollway. This would reduce the market value of the Mitcham-Frankston Road and permit a public buyback of the tollway at reasonable prices as suggested by the Victorian Branch of the Liberal Party.

As it stands the maximum toll set will be $4-43 for cars (in 2004 dollars) with neighbourhood and weekend discounts for cars. While the proposal does not involve congestion pricing, tolls are low enough to minimise boundary problems on substitute routes such as Springvale and Blackburn Roads. With congestion pricing there would be low induced congestion on these congested substitute roads. Indeed traffic pressure on these roads should substantially fall.


Anonymous said...

Having lived a decade in London, I would think that the vast majority of car journeys by daily commuters to/from central London are not made by people living in the suburbs of London, but by those living further out than that (ie, not in Greater London at all). I doubt that the congestion charge has reduced these journeys much, but merely displaced their end-points (to outside the congestion zone) or displaced their timing (to outside the congestion period).

Anonymous said...

I appreciate your blog. In only one day of accessing it (result of John Q's reference), I've learnt more about road pricing than I have heard before.

This is part of what academics should be doing, making their knowledge available to John Doe.

Thank you!

Anonymous said...

Awesome! Searching for the keyword
traffic online came across ur blog.
traffic online

answer-man said...

Hello just stopped by to view your blog and to let all interested know I am offering free plumbing repair information and safety tips for California residents and all others interested. If you are not interested then please excuse us and please disregard this comment.

For Plumbing Press Release and Free Plumbing Repair Information please feel free and stop by and read and take advantage of our blog info or viist **A-Affordableplumbing.Com** Thank you and have a great day.

Anonymous said...

warhammer gold warhammer money warhammer accounts tibia money tibia gold tibia item runescape accounts buy runescape accounts runescape money runescape gold runescape gp runescape power leveling runescape powerleveling cheap rs2 powerleveling runescape equipment buy rs equipment runescape runes cheap rs2 runes runescape logs cheap rs2 logs runescape items buy runescape items runescape quest point rs2 quest point cheap runescape questpoint runescape gold runescape items runescape power leveling runescape money runescape gold buy runescape gold buy runescape money runescape items runescape accounts runescape gp runescape accounts runescape money runescape power leveling runescape powerleveling tibia gold dofus kamas buy dofus kamas wow power leveling wow powerleveling runescape questpoint rs2 questpoint Warcraft PowerLeveling Warcraft Power Leveling World of Warcraft PowerLeveling World of Warcraft Power Leveling Hellgate money Hellgate gold buy runescape logs buy rs2 items cheap runescape items Hellgate London gold Guild Wars Gold buy Guild Wars Gold runescape items rs2 accounts cheap rs2 equipments lotro gold buy lotro gold buy runescape money buy runescape gold buy runescape runes lotro gold buy lotro gold runescape money runescape gold cheap rs2 powerleveling eve isk eve online isk buy runescape power leveling rs2 power leveling tibia gold tibia item runescape accounts Fiesta Silver Fiesta Gold Scions of Fate Gold Hellgate Palladium Hellgate London Palladium SOF Gold Age Of Conan Gold AOC Gold ArchLord gold tibia money tibia gold runescape accounts runescape gold cheap rs2 powerleveling buy ArchLord gold DDO Plat Dungeons and Dragons Online Plat