Costs set to eat up proposed Puhoi motorway tolls

Handling costs threatened to gobble up most of the money raised from tolls from the country's first user-pays motorway - before the Government told Transit New Zealand to look for a cheaper plan.

Cabinet papers obtained by toll opponents show that Transit admitted to the Government late last year that for every $1.80 it intended collecting on the Puhoi motorway north of Auckland, $1.35 would be eaten up by "transaction" costs.

Because of inflation, the toll on the 7.5km motorway is likely to be at least $2 a trip by the time the project is complete in 2009.

The papers, issued to anti-toll group Highway Robbery under the Official Information Act and passed to the Weekend Herald, also include a previously unpublished table of proposed charges for late payers - rising to almost $9 after 28 days of non-payment.

The Government has already approved the idea of charging tolls but challenged Transit to come up with a cheaper system if it wants to borrow up to $260 million from the public purse. That is on top of a $180 million construction grant that state funding agency Land Transport New Zealand has allocated for the project.

Transit has been promoting tolls to hasten construction of roads that would not gain priority approval from Land Transport on normal cost-benefit grounds.

But Highway Robbery spokesman Hans Grueber claims the Cabinet papers show most of the revenue proposed from the Puhoi motorway risks being "squandered". He said it would cost the Government nothing extra to raise shortfalls for new roads by increasing fuel taxes.

The $1.35 handling-fee disclosure was contained in a paper that Transport Minister Pete Hodgson presented to a Cabinet committee in November. Mr Hodgson's office said Transit would have to produce a more financially workable tolls system proposal by June next year, as a condition of borrowing from the Government.

The minister told the Weekend Herald last night that the $1.35 estimate assumed there was just one toll road operating, but he was confident the use of a national system by other projects would bring down processing fees considerably.

Another likely candidate was a duplicate Tauranga bridge, for which he was due to make an announcement on tolling next month, although he could not let economies of scale influence his decision.

Transit is reported to have done more work on alternative toll systems, including looking at reducing costs by farming out processing work to an overseas clearing house.

According to the papers that Mr Hodgson released, drivers without drive-through transponders - which register tolls electronically - could expect to pay an administration fee of 30c on top of the $1.80 toll for general motorists and $3.60 for truck operators.

This would include the cost of filming and recording their licence plates and then tracing them through the motor vehicle registry.

The papers also suggest raising the fee for cars to $3.98 if it is unpaid within 72 hours and then to $8.98 after 28 days.

Dr Grueber said that would make the whole scheme unworkable and turn many motorists back along the toll-free coastal road now used as State Highway 1.

"It is unbelievable - people won't put up with it," he said.

"It is ridiculous thinking of spending so much money on raising tolls. They should simply spend it directly on roads rather than throwing it out the window."

Transit chief executive Rick van Barneveld defended tolls in a statement to the Weekend Herald, insisting they would still allow motorists and communities to enjoy benefits of some new roads sooner than allowed under traditional funding rules.

"There are no free roads. They must all be paid for and maintained, and with tolling, the motorist can choose to use a superior road built at an earlier date than would otherwise be possible."

He said the price to motorists of transponders had yet to be determined, but Transit may follow overseas examples by offering refundable deposits for the devices to ensure costs "remain socially equitable".

One example is Melbourne's CityLink toll road, for which motorists are charged a deposit of A$50 ($55) for each transponder.

Ticket to drive

Proposed price of a trip on the Puhoi motorway (2004 dollars, to be increased with inflation):

Transponder user

* prepaid $1.80
* Non-transponder user $2.10
* Fee after 72 hours $3.98
* Fee after 28 days $8.98
*Source Cabinet Business Committee paper, November 2004