Tauranga City Council has endorsed its proposed Route K Bylaw – a law change that introduces new payment methods and sees the toll on the route increase for cars.
The new Route K Bylaw also permits ‘toll holidays' allowing the council to run toll exempt promotion periods to see how many cars use the route compared with when tolls are payable. There's one planned for February.
Route K's finance is a slippery issue for ratepayers, with the highway's users taking on a toll rise from January 1.
The council has set the new toll at $1.50 for cars and other two axle vehicles from January 1.
The toll for three axle vehicles will remain at $2 and heavy trucks (four axles or more) remains at $4. Bicycles and motorcycles remain exempt from paying tolls on Route K.
It is the first increase in Route K tolls since they were imposed in 2003.
The increases are required for the road to pay its way – a requirement if the NZ Transport Agency is ever to buy it.
The car toll increase also brings Route K tolls in line with the projected toll on the Eastern Link highway.
The toll increases are part of the council's ongoing efforts to sell off the highway to the NZTA as it is not paying its way.
Route K cost $63.6 million and has a debt of $64.6 million, including the council's share of the Pyes Pa Bypass.
The council is faced with either on-selling or raising the tolls to prevent ratepayers having to bail it out.
Without a toll increase, council staff estimate $32.5 million of Route K debt will need to be transferred, meaning a permanent annual rate increase of $38 per rateable property.
Route K is an ‘orphan' system.
Talks are underway about making Route K part of the Land Transport Management Act scheme so the two road tolling systems can be integrated when the Eastern Arterial Link begins operations.
That integration with the state highway system was originally set to happen when the Harbour Link Project was being considered as a tolling project.
When the government decided to pay for the harbour link, Route K was left to struggle alone.
Priority One in its submission on the Route K Bylaw stated Route K has proved to be a vital piece of core infrastructure for the sub region, catalysing the substantial business and residential development at Tauriko and The Lakes.
Matters that remain to be addressed include increasing the toll level to the point the road moves into cash flow positive and is projected to repay that debt over a toll period consistent with the Land Transport Management Act.
The council also has to obtain the traffic information that will show the actual level of diversion occurring on Route K at varying toll levels, and to further encourage the use of Route K in preference to Cambridge and Moffat Roads.
17 comments
Posted on 22-11-2011 17:24 | By chatter
"The council is faced with either on-selling or raising the tolls to prevent ratepayers having to bail it out." Once again the "residents/rate payers" are the ones that are doing the bailout with their cars - why not increase the heavy vehicle users tolls , as they are the ones that cause the most wear and tear damage to the roads...
Financial Suicide?
Posted on 22-11-2011 17:42 | By Muz061
With the slim benefits of using Route K for ordinary motorists combined with the woeful accessibility for western suburbs heading south, the 50% increase may see total $ take decreasing not increasing. That's what I predict in the short term. If they held their nerve and added an access point or two, waited as the Rotorua direct traffic got in the habit, and other factors likely to drive significant increases, councillors could have seen the longer term benefits and even surpluses generated within the next 5 years. I think this will just stuff it for a few more years. Paying your $s and being confronted with road works and significant delays is just one of the insults we have come to accept.
TORTURE THE PUBLIC
Posted on 22-11-2011 17:46 | By SCOTT NUFFIN4U
Only the cars, how fair is that will only generate $500,000 more income at best and that assumes that the same number of cars travel on Route K after 1/1/2012. By the time you drop off a few cars and increase the price will likely end up the same result, the loss of course of $3-4m for this year will still be there.
Unfair...
Posted on 22-11-2011 18:09 | By quinn
How come only cars and 2 axles are subject to this increase? I tell you what - as a family that has two cars that use the toll road everyday to and from work - you may well have just lost yourself some funding. No incentives or discounts for regular users and I can't see us forking out $30 a week for tolls. Thanks TCC - you just strengthened my resolve to ride a bike to work....
lovely
Posted on 22-11-2011 19:19 | By tonyb1
This is a prime example of the council being reckless in forecasting projects of this kind Just hit the working man with a 50% increase, well done TCC
This rortish dog of a thing has cost TCC Ratepayers 10s of millions and it is still bleeding
Posted on 22-11-2011 19:59 | By POCO O POCO
How long has it taken the TCC bozos to deal with this as thought it was floated mid yearish. Anyway hit the public between the eyes forget the trucks and waive tolls on cycles and motorbikes. Don't these contraptions use the paved surface and ain't they always screaming for special rights on the roads so why the special treatment. Looks like NZTA is not taking this lemon over anytime soon either so $70m + is looming fast as the debt careers out of control.TCC have never got Route K right and TCC never will. Do a deal with NZTA and do it now !!If you are incapable then let someone with some nous attend to it.WOFTAM
TCC BUDGET PLAN ...
Posted on 22-11-2011 22:01 | By DRONE
The toll revenue is $890,000 and the annual loss after interest for this year is planned to be $4,000,000. TCC logic is that by increasing the price by 50% for cars will result in a 3x increase in users so as it then "breaks even", I guess the truth will filter through in a couple more years, one hopes!
Show me the road to go home...
Posted on 23-11-2011 14:09 | By PeteDashwood
How stupid and inept does it have to get? Do these people have absolutely NO idea about promotion, marketing, and managing? INCREASING the cost will DECREASE the flow. Muz061 and some others are right on the nail. They should cut the toll for private cars to 50 cents, small increase on the big vehicles, and start a campaign to get people using the road. A lot of road usage is by habit. Change the habits, get people to try it and the road could become viable. Bleating about the Government not picking it up is just pointless. Even the Government are not as stupid as our Administrators. Make it viable, THEN either sell it or keep it. It was OUR glorious leaders who built it; (with the usual lack of thought and investigation, it would seem) so now we are stuck with it. It needs some imagination and flair to turn this around and those are qualities we don't see a lot of in TCC.
Reduce tolls
Posted on 23-11-2011 21:40 | By Capt_Kaveman
to min 50c for cars $1 for anything class 2 or more / free motorbikes cycles and or donations over and above, if there was an increase of 50-75% i think it will be a win/win as getting traffic off cameron rd
What a joke
Posted on 23-11-2011 23:19 | By The Tomahawk Kid
I cant get over what a stupid decision this is. What I would like to know is WHO are the majority of councillors that think this is a good idea. Who exactly voted for this to go ahead. I would like to know what other ways of increasing revenue on this road that they have investigated (The mayor recently made it sound like they have been looking for other ways) A good way would be to relocate the council offices halfway down the road, and make all the councillors pay $1.50 toll to get ON the road, and $10 to get OFF!
STATING THE OBVIOUS
Posted on 24-11-2011 14:22 | By WARTS N ALL
The truth of it is plain to see, the road was, is and will always be a financial disaster. There is no way it will pay its way, except by one means. If all other road options are closed off then motorists will have no other option but to use and pay, that will fix it.
REGIONAL PETROL TAX
Posted on 24-11-2011 22:02 | By PLONKER
That is just a cop-out for a really bad decision from the get-go. We are meant to be in a user pays world, if this idea is properly applied then paymetn will follow the usage. There is no fair basis to ask all of the Bay's citizens to pay more for petrol for the moronic decisions of this lot, the last thing that should happen is to bail them out of the hole here.
Lost a fortune on a half baked project
Posted on 25-11-2011 07:26 | By Investigator
Yes fully agree ROUTE K is a case of total road planning and financial mismanagement by TCC and its predeceasors yet the public keep voting for them.Unbelievable !!
MUST BE
Posted on 25-11-2011 13:45 | By SCOTT NUFFIN4U
Suckers for punishment to keep voting in the same lot, then of course expect an improvemetn somehow, they are at the limit of ability well before today so mate don't expect and change until 2013, then only if the voters see through the charade.
PRICE UP, BIGGER LOSS
Posted on 25-11-2011 21:24 | By SCARLET PIMPINEL
Bet that is what happens next, anyway as this pathetic effort continues to try and manage a toll road at a profit (no chance) the looses mount up more and more each year. Quite simply this is like lifting the bar to jump over and each time fails to lift more and more, in end result no one will stand a show, it fails EVERY time.
WHAT HAPPENS ON TOLL ROAD
Posted on 26-11-2011 10:31 | By SCARLET PIMPINEL
$1.245m in car tolls, $850k in trucks, interest $3.6m (on $57m of debt), wages, admin repairs etc $1m, annual loss is $2.55m that has been added to the debt. This year the toll revenues may increase a little to say $1.4m (less cars at a higher price, $1 to $1.50) and $900k for trucks, Interest and costs will be $4.6m (after including the current years loss and the Pyes Pa Bypass debt of $12.8m+) wages and admin $1.1m so this years loss will be $3.2m. The loss will be higher than the year before. So with inccreased tolls, comes less traffic volumes and also with a free month in February 2012, it will be hard to see a better result being achieved for the year to June 2012, no chance of that.
Vote Pete Dashwood for council!
Posted on 27-12-2011 09:38 | By The Tomahawk Kid
The answer to Petes question is obviously NO! At LAST somebody making sense. Well said Pete Dashwood. People like THIS are who you need to vote onto the council
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