MEMO Mark Ratcliffe, Chief Executive To Charles Ronaldson, General Manager Operations Date 28 June 2019 Subject Tolling of Transmission Gully: Background overview and Board options Ac From t1 98 2 Cc n Background to this paper In fo rm at io Section 9(2)(g)(i) al Purpose of this paper ci This paper provides a background overview as to the history of the tolling of Transmission Gully O ffi Section 9(2)(g)(i) he Tolling of Transmission Gully Background rt Discussions and assessments regarding the tolling of Transmission Gully began in 1999. During this time, de several assessments and investigations were completed into the proposal (including two by external organisations). Section 9(2)(g)(i) un Section 9(2)(g)(i) meaning toll revenue was se d not required to advance the project. In 2005, the possibility of tolling Transmission Gully was subject to Transit New Zealand/Greater Wellington ea Regional Council public consultation and sub-committee scrutiny as part of the proposed Western Corridor plan. The resulting Hearing Sub-committee’s report released in March 2006 and signed by the Transit New R el Zealand Board, noted that: • Tolling was not necessary to fund Transmission Gully, and the net revenue would be relatively small (page 3, paragraph 1.13); • The removal of tolling infrastructure costs made the project more affordable (page 44, paragraph 4.77); • While there was support for the concept of using tolling for travel demand management (TDM) purposes, this was not possible without legislative change to enable network or cordon tolling schemes (page 54, paragraph 4.128), and noted there were only low TDM benefits anticipated (page 54, paragraph 4.129). File Ref • In paragraph 5.4 (page 57), the sub-committee recommended that the toll facilities be removed from the Transmission Gully design. In 2012, the final Board of Inquiry into the Transmission Gully Project (as part of the consenting process) 19 82 asked about NZTA’s intention to toll, to which the Transport Agency’s representative stated that ‘NZTA does not currently propose to do so’. The representative went on to note that tolling may cause a transfer of drivers to choose the un-tolled alternative route, and therefore negatively impact the benefit/cost ratio (BCR) of the project (page 78, paragraph 239). Later in the document (paragraph 878), it was stated ‘as confirmed Ac t by NZTA and discussed elsewhere in this decision, tolling is not proposed and is not considered material to this decision.’ fo rm at io n Section 9(2)(g)(i) In The current re-assessment The current re-assessment comes from a direction to re-complete a tolling assessment for Transmission Section 9(2)(g)(i) O ffi ci al Section 9(2)(g)(i) Not long after this, the responsibility for tolling assessment delivery was formally transferred to Customer Design and Delivery (CD&D), and the current team. This team then began the scoping of the re- he assessment, as requested. The final scope and approach of the re-assessment was only agreed by the Chief Executive in August 2018 rt Section 9(2)(g)(i) In addition to this assessment, it was de requested consideration be given to the possibility of using tolling for TDM purposes, as per BRI-1247. As ea se d un Section 9(2)(g)(i) el Section 9(2)(g)(i) R Section 9(2)(g)(i) Section 9(2)(g)(i) In addition to this, the late commissioning of the Section 9(2)(g)(i) Section 9(2)(g)(i) Section 9(2)(g)(i) As it was, staff were only directed to re-do the assessment, in more depth. This resulted in the 2 19 82 Section 9(2)(g)(i) R el ea se d Section 9(2)(g)(i) un Summary de rt he O ffi ci al In fo rm at io n Ac t Section 9(2)(g)(i) 3 Timeline of recent events 1999-2012 Various assessments and investiations corn oleted noting that although Transmission Gully met the basic criteria for a toll road Section September 2012 Board endorsed the use of a procurement procedure to deliver Transmission Gully and approved funding for the construuion and ensu'n 25 years maintenance, operation and renewal costs (meaning tolling was no longer considered an appropriate means for advancing the June 2013 Land Transport Management Amendment Act (201 3) streamlined the decision criteria for road tolling schemes, and changed from the need for complex concession agreements to manage public-private partnerships to existing procurement processes in the Act (refer Cabinet pagerl. NZTA changed its tolling policy to state that all new state highway links are assessed for tolling and that the purpose for toll revenue could be for advancing the construction of a project, AND for revenue purposes. At this time the current criteria were also endorsed by the Board. July 2014 Availability signed for T0, tolling rejected for funding the project. as supply risk deemed unacceptable to ?nance i x, and predicted level of revenue less than can costs, plus ?nancing charges. December 2016 Funding included for tolling investigations by the TC project, presumably for revenue?based tolling assessment. Investigation scope included public surveys. March 2017 Section September 2017 December 2017 a tolling business case for T0 and commission a nt delayed due to sensitivities ar AK rvices to develop business cases for four announcements on other capital projects March 2018 Minister greed to developing a tolling proposal for T0 with a strong de 1 Mgement theme, this was based on a paper prepared by a sub-committee on the Board (Adrienne Young-Cooper, Nick Rogers e) - Bin-1247. The lead-up to this brie?ng is unclear. May 2018 Pont process identi?ed as owner of tolling assessment process. . June 2018 July 2018 August 2018 - 0 August 2018 November 2018 0 December 2018 A Paper was removed from Board agenda, delaying decision further. January 2019 Investigation continues with the development ofa transport demand model with updated assumptions to identify toll revenues and network effects, to be prepared should NZTA Board instruct NZTA to proceed with toll Scheme development, and public consultation on tolling. Feb?? Recommendation paper to Board scheduled for presenting at 1? 2019 meeting, removed from agenda 2019 May 2019 Section Section June 2019 Section Briefing TRANSPORT AGENCY MINISTFRIAI Suhwc? Iluic'.? II ?nh u: -. i" Buo?nmrlunbtl' (ontatnxn ?m dauuasn?m Nanw l'usu? um F?V?hliAuw'l ??rm by Ol?uc 0? Nu- null-I Voted it Seen tn anh?r Agree-d L. worded lo' mum-(1m Hoods rhanue .plrav sped?? \VIH?Idlawn Cxcrukcn by cut-Me [Mien I 2 I FEB 2018 -.I BRIFHNC NOTE I u: I .rl I 21 February 2018 Minister of Transport UPDATE ON INVESTIGATIONS INTO TOLLING OF TRANSMISSION GULLY 1. The purpose of this briefing is to provide you with an update on investigations into tollin?~ the Transmission Gully project ahead of the New Zealand Transport Agency (NZT A) agi the public on its toll proposal. 6 2. The Transmission Gully project meets a number of criteria that make it su' tolling under provisions within the Land Transport Management Act 2003. The legi requires a decision before completion of the project. which is being constructed und? biic Private Partnership agreement with an anticipated opening of mid?2020. tolling. the NZT A next needs to develop a tolling proposal and then assess the pub?pon thereof. 3. Enabling tolling of Transmission Gully would permit the NZTA t- i to help better manage demand throughout this corridor. Toi long-term solution and couloS?m-io-n 'Eii2i(g)(range of options ode neutral Section . - tions wou - not at erwuse . possible under existing legislation. 0. . 0? Why investigate tolling of state highway lan\ 4. Tolling is an Important part of the tervention toolkit because it provades an extra source of raising land transport reve also helps shape demand of the transport system and can play a valuable early rol as ew Zealand transitions to a more customer centric responsive pricing system in the @r term. Tolling gets people used to paying as they travel and paying extra for certai . To date. the NZTA has established three toll roads. as described in Appendix 1. S. in line with the oiling policy. all new state highway projects are assessed. during development of th b? case. against a set of toll criteria to determine their suitability for tolling. if the i sessment identifies a project as suitable for tolling. a more comprehensive roposal is developed that details the tolling scheme and the degree of community su? or it. 0 Update Gully 0v ransmission Gully was assessed as potentially suitable for tolling. it is one of the roads of national significance enabling economic development and regional connectivity as well as providing inherent additional resilience for Wellington. its funding for implementation has been approved via the National Land Transport Fund (NLTF). 7. To construct the Transmission Gully project. an $852 million was awarded in July 2014. with a programmed opening in mid-2020. Under the terms of the agreement. the NLTF will . TRANSPORT 2 . AGENCY VIA-A (all. 10, Section 1247 nr (or rug Avtllal): tv payments lur years a?tu ()pvnurtq. ll tollv'd. the terms of the wound remain maf?ected chap .95 use and the VITA would be all the toll . - Section and 9(2)(f)lv) nU A Clemson 5 now needed 0n ?nether to th furthe' urn-vshgatmns ?or Cull-a, v.12 lows on uevelopmq :a Ceta-led to'mq proposal and bette' orderstanqu publrr support 11.; heipr rams: a more mode-neutral solutu": Whe" opened, T11: 5".Isstun (lolly rs expected to redou- the LJSIS of travel my road w-thln this UvPr tr'ne. m5 mar-a rem". '1 some 'nr'ease '1 the demand tor "and trave . \?hrch rmy (Ale-(t the Wide! to: nut-t. tr of trawl movements In the torridnr :nd rate that the untol'ed Lull', route will remit In nrreases rn 00th we tota volume of (mt-g; t?rq- corridor and aisu the- 0? t" trawl that Is .mdu'i-au-n by mart there mu be A small ft?dtKUOD In the rumher 3t mp5 made by public transport, or manly ral I: IS Important to rule that muss because ul Improved provrdec by the T'arsmisslon (lullr, nrmec', which al?cw people to travel to the Cestnratrons they mush at the ?has and using the mod?: 0? transtt-crt that an.- tlu: most consume-rt to them To'ling of Curl-v would attempt to maxm so the ocncfus {Waugh thr- curtzdor Tolls (nu-'1 perterved (rost f?dU' . - a mode luau te'm solutionSeCt'on Tollwq mm ides 1 step towards a more modern mad pun/1g nstem 11. Int? 15 rs only a step towards a mo? road system an} holds son?s hmrtatror?s, .t rs possrh-e to rmpiement spurt pr one; using .t4 Svmlar to road pnunq, tulls ca". help pcoplr- get used to wqu as and when they travel, as well as paymo ext'a tor (erta '1 hene?its Srnd't ptrunq may mt ude u;mb'natrnn of ?xer: and vatitihle tolls at mffe'er" mmes of any and for different classes of senrc'es. For example. to muld be sor to [em and than no del?P?J In peak tune-s 0an tonqestion Inwls ruse Th?z N7lA's? to'- ?no proposal to! Cu would the ol surh a rest from key stakeholders and the media UD to new. loca' (Ouncrs nave been kept Informed gm-n that the tormr-r state highways ll arc 58; Ml! potentzally be revoked to them and th- effect of to. would need to be understooc and t0ns:cered as part of the negotrat or?s. lhere have a'su been recent moth: mtr) whether Trars'n he tn'lad. and mvestrgar-nns are lrxf-lv to attract Ntllu-t Irltt'es'. TRANSPORT AeeNev it is recommended that you: 10 Note that the $852 million Transmission Gully project has been identified as a candidate for toiling. Note that construction of Transmission Gully is being undertaken as a Public-Private-Partnership. with a programmed opening in mid-2020. Note that enabling the tolling of the Transmission Gully project provides an opportunity to maximise the bene?ts through the entire corridor by creating a demand management tool and giving effect to more mode- neutral transport options. Note that to enable the tolling of the Transmission Gully project the NZTA needs to develop a detailed tolling proposal and confirm public support. which are likely to attract the interest of key stakeholders and the media. . Agree that the NZTA progress the development of a toiling proposal for the Transmission Gully project, which will identify how toiling can be used to help shape demand to enable a more mode neutral corridor. Fergus Gammie Chief Executive Hon Phil Twylord. MW Transport Date: 3 . 3Q 2018 ?b TRANSPORT 810-1247 Yes I No 3.90 Appendix 1 - Current state highway toll roads Tolling is governed by specific legislation and other agreements. with the Land Transport Management Act being the key enabling legislation. Through this the Governor-General may. by Order in Council made on the recommendation of the Minister. establish a road scheme. lmportantly. only new roads can be tolled. and the funds raised may only be purposes of planning. design. supervision. construction. maintenance and/or operation of the new road. The legislation also requires that the NZT A demonstrates a degree of community support for the proposed tolling scheme and that a feasible. untolied. alternative route is available. Under this legislation three state highway toll roads have been established: applied for the 03b The Northern Gateway toll road Is a 7.5km motorway north of Auckland between Siiverdale and POhol. part of it Road interchange. near Pa roundabout (State Highway Whaltatane and Rotorue). mo the Paengaroa State Highway 33 to State Highway 1. Heading north. the toll road begins just before Orewa and ends after the Johnstone Hills near POhol. 9 Annual l@hue ?szao an.? ?00 suo (incl. a out 0qu ?1 A The Tauranga Eastern Link toil ro ?I?Skm tolled section of State Highway 2 run en the Domain Annua $7.0m . A. .szoo Maf?wgg? (incl. CST) is about I toll revenue _i @nu Drive toll road. formerly known as Route is a 5km road that bypasses the Tauranga city Rand takes traffic from State Highway 29 to State Hig ay 2 in the direction of the Port of Tauranga and Mt Waunganul i . I Annual toll revenue 80 a $1.80 00 (incl. GST) is about 36.7m A nsport Management Order has been established for each of these toll roads. These speci?c conditions in addition to those of the Land Transport Management Act. which de: \0 . the maximum tolls that can be charged and how they can be varied. Q9 0 any exemptions from paying tolls: TRANSPORT AGENCY WAKA WM Bill-1247 - . requirements on how tolls are to be collected; and . any speci?c reporting requirements that the NZTA must comply with (both prior to opening of the toll road and ongoing). There are also a range of other agreements. documents and policies that specify the NZTA's commitments to tolling. Those include the toll proposals (submitted to the Minister in advance of requesting an Order in Council) and relevant debt agreements for each of the existing toll roads. TRANSPORT 5 AGENCY MM MM