Buying time: toll roads, congestion charges, and transport investment

New Zealanders own more cars than anyone else – surpassing even the United States. Our car ownership has grown by 25% over the last quarter century, and our urban traffic congestion has continued to get worse during this time. In the absence of demand management approaches, this trend will likely continue since kilometers driven rises proportionally with road construction.

This research shows how New Zealand can get more from existing and future roading infrastructure by charging users for faster travel times.

Key findings

• Over the past three decades, average urban travels speeds have slowed due to increasing traffic congestion, despite significant motorway expansion. Transport modelling suggests that this trend will continue, even with building further new roads, as new road capacity tends to cause people to drive more.
• Closing the gap will require increasing transport revenues, reducing investment demands, or a combination of the two. Both road tolls and congestion pricing can help.
• If toll revenues are expected to be enough to cover the cost of a new road, this signals that it may be a good investment decision – people value it enough to support its build. If revenues are not enough to cover build, this is a signal that increased investment should be weighed up against other things.
• Currently tolls tend to recover less than 25% of the cost to build new roads, and sometimes much less. This reflects our traffic volumes, cost to build roads, and the travel time savings that are possible, given we already have a mature road network with relatively few ‘missing links’ to complete. However, tolls can still be useful: partial cost recovery from tolls can enable some projects to be built earlier than they otherwise could be, as was the case for Auckland’s Northern Gateway and Tauranga’s Eastern Link.