Borrowing For Highway Projects will Save Money

Borrowing to Advance State Highway Projects will Save Money and Lives.

The New Zealand Council for Infrastructure Developments supports Transit New Zealand proposals to advance much needed improvements to the state highway network through borrowing, saying that it will decrease road trauma and will save both money and lives.

This follows comments by Transit NZ CEO Rick van Barneveld on Thursday that some Waikato road projects could be fast tracked through borrowing with the debt repaid with revenue from tolls, regional development levies or rates.

Major works mentioned for fast tracking in the Waikato included the $41m Kopu Bridge replacement, the $66m Maramarua deviation, $160 million Ngaruawahia bypass.

“Under the current “pay as you go” approach where we rely just on petrol taxes to improve the roads it is taking decades to see important roading improvements completed,” says NZCID CEO Stephen Selwood.

“It’s a bit silly really, people object to paying tolls to have a road upgraded sooner, but seem prepared to accept years of traffic congestion, pollution, unpleasant and hazardous driving conditions, and unnecessary road trauma and loss of life on unsafe roads. The hidden cost of this is enormous,” Mr Selwood said.

“On the other hand many people are now saying they’d rather pay a two or three dollar toll to use a decent road.”

“The key advantage is both the local community and road users alike gain the benefits of a high quality safer highway much sooner than would otherwise be possible.”

“Debt funding is commonly used in most western countries to fund roads and other important public infrastructure.”

“Often the private sector builds the road and then charges a toll to both maintain it and recover the cost of construction. Once the road is paid for, ownership transfers back to the government.”

“There are many ways this can be managed.”

“Sometimes the government pays the operator an agreed amount, called a “shadow toll”, for every vehicle that uses the road. Instead of paying a toll, road users continue to pay through fuel taxes.”

“Major projects across the country that could be advanced through tolls include:

Auckland State Highway projects such as the Western Ring Route

SH1 Auckland Hamilton 4 laning

SH1 Warkworth Bypass

SH1 Wellington to Levin or Transmission Gully

SH2 Mangatawhiri and Maramarua 4 laning

SH25 Kopu Bridge

SH2 Katikati Bypass

SH2 Tauranga Eastern & Northern Bypasses

SH1 Christchurch motorway extensions.”

“Using tolls for these type of projects would not only speed things up but means that fuel taxes can then be used to upgrade public transport systems or upgrade other roads that might not be viable for tolling,” Mr Selwood said.

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