The owner and operator of Sydney’s Lane Cove Tunnel has been placed in receivership, after creditors finally refused to grant another extension over the repayment of $1.14 billion of debt. …
About three years after it opened at a cost of $1.1 billion, the 3.6-kilometre tunnel has proved a disaster for Connector Motorways, a consortium including Leighton Holdings, Mirvac and the Hong Kong billionaire Li Ka-shing. The trio have already written off all of their investment in the project.
The receivership is a further embarrassment for the NSW Government, which has been dogged by other failed infrastructure projects such as the Cross City Tunnel.
Here is a link to an article discussing the basic causes of the failure of the Lane Cove Tunnel business model, an almost Gordon M. Campbell-like P3 if ever there was one.
http://www.pfie.com/lane-cove-in-receivership/420748.article
The key problem cited is not construction cost over-runs, but the demand by the NSW Govt for an up front payment of nearly $100 million, plus the failure of usage projections to materialize. Daily traffic volumes have been in the 55 to 63 thousand range, not the 100,000 projected. By way of comparison, Port Mann’s traffic is about 130,000 per day.
It looks like NSW motorists and truckers haven’t been properly “educated” about induced demand and triple convergence, hence their failure to show up as popular theory demands!
As I understand many people don’t take the tunnel to avoid the hefty tolls. There are alternative routes which, while slower, don’t require the payment of a toll. The tunnel probably just took away some drivers from the alternate routes who didn’t mind paying the toll and they space they freed up was then occupied by still other drivers. Net effect – increase in absolute number of drivers using the network while congestion on existing, untolled rolled remains relatively unchanged. So this example does not ‘disprove’ induce demand in the slightest.
“Port Mann’s traffic is about 130,000 per day.” yes and the project cost CAN$3.3 billions (see http://voony.wordpress.com/2009/09/28/gordons-transportation-legacy/), not the mere AU$1 Billion for the Sydney tunnel for 60000 driver.
To answer Chris, the Province had a study saying exactly the reverse: Toll on PortMann bridge could not affect traffic on it (the study were conceding that at $8 or more, maybe it could have an effect). So when the Province has decided something…
Chris, the situation you describe, an essentially arbitrary mix of tolled and untolled facilities sounds rather like what we will end up with here. So perhaps the Austalian experience is instructive in that regard.
It think it demonstrates that structures like GEB or eventually a new Port Mann and Patullo, with tolls, are going to reach capacity volumes far more slowly than if they were not tolled. Induced demand effects, whatever they may be, will be less with a tolled than untolled structure.
I live in Maple Ridge and a couple of months ago I had a shopping call that took me to North Surrey, at 100th and 152nd, early on a Saturday afternoon. Southbound I took the GEB and then 96th to 152nd. Northbound, I stayed on 152nd, then went over the Port Mann, along Mary Hill, then Pitt River Bridge and Lougheed. The southbound trip took 19 minutes, the northbound trip 22 minutes. The travel time saving of 3 minutes using the new GEB route cost me $3.30.
So, if I value my time at over $60 on a Saturday afternoon the trip over the tolled structure was worth it. Which I do not, … therefore no more GEB trips to North Surrey.
I think that the volumes on the alternative toll route would be a function of the information available to the driver when they make the decision on which route to take.
My guess is that if you cannot tell if the free route is congested (i.e. one is not visible from the other), you may be more likely to take a chance with the uncertainty of congestion on the free route, rather than the certainty of paying the toll.
By comparison, the high occupancy toll lanes on some US freeways (adjacent to free lanes) provide an instantaneous opportunity to “get ahead” by paying a toll if you encounter congestion. However, that facility would suffer from the obvious needlessness of using the facility when traffic is light.