Tuesday 13 February 2007

Tolls and Roads

I keep hearing people complain about Tolls Roads and it's often struck me that folks don't have a good handle on just how much they cost vs their carrying capacity.

Cost. An average motorway costs €15-€20M/km if you are lucky enough to have options as to route and design. The cost in constrained environments can be double or more than that.

Carrying Capacity. A highly efficient 2 lane motorway has a safe saturation carrying capacity of around 5.7K vehicles/hr (2 lanes both directions 2.5 seconds separation). If it is outstandingly busy and has a 50% loading on average over a 24 hour period then it has a carrying capacity of around 70K cars per day or 25M cars per annum. The Fermoy bypass currently carries 11k vehicles per day with a planned capacity of 25K per day. As a (somewhat shocking) comparison the M50 is probably carrying over 90K cars per day.

Economic Cost. Assuming a replacement lifetime of 20 years, a competitive initial construction cost of €15m/kilometer and a cost of capital of just 3% since the economy is doing so well. Then each kilometer actually costs €19.5million in todays money so you have to charge 0.04c per kilometer in a toll to break even over 20 years. For the Fermoy bypass (and accounting for the planned capacity vs its carrying capacity) the break even toll is €1.88 per vehicle.

Damage - road damage is traditionally accepted as being roughly proportional to the 4th power of the per axle vehicle weight. That was based on AASHO studies from 1960. More recent rework of that has tended to drop that number down closer to somewhere between a 2nd and 3rd order effect. Let's be very kind and estimate that it is just proportional to the 2nd power.
That's still quite nasty because it means that large commercial trucks hauling 20 to 30 tons on 5 axles 60 - 150 times as much damage to roads than a typical 1 ton private car.
Commercial trucks are actually only charged 2-3 times what cars are charged so they are in fact heavily subsidized when you look at it that way.

Congestion - Arguably a better reason to charge tolls on roads is to effect a pricing for the use of the service as that is the smartest way to manage congestion. From that point of view commercial HGV's probably should be given a pass or at least some subsidy but that also means that we really should charge variable tolls depending on the cost of congestion at the time the toll is being imposed as Edward L. Glaeser explains here.

Some numbers:
The new Fermoy bypass:
Cost €290M ( €16M/km)
No of Vehicles per day
Current: ~16000
Planned: ~25000
Ratio of HGV's 20%.

* 6000 of those are "temporarily" going through Watergrasshill

With current tolls (€ 1.60 for cars € 4.10 for trucks) daily revenue is between €35K and €50K so the payback period is somewhere between 15 and 22 years.

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