Toll roads aren’t the cash cows they used to be. The assumption that the roads will “pay for themselves” is no longer a reliable one, and credit rating agencies are taking notice.
Cases like this are making credit analysts nervous.
- In Orange County, California, traffic on the San Joaquín Hills toll road is half what was projected.
- A recent toll road extension outside of Austin, Texas, is also seeing just half the expected traffic volume, leading the company that oversees the road to cut toll prices in hopes of attracting more “customers.” Moody’s Investor Services has downgraded the company’s credit rating.
- In the DC suburbs, the Inter-County Connector and new high-occupancy toll lanes along the famously congested Capitol Beltway are both getting far less than half the use that was projected.
- In San Diego County, the private company that built and operated the South Bay Expressway went into bankruptcy when the cars failed to materialize. …
Fitch Ratings, one of the Big Three credit rating agencies, warned investors in June that it was concerned about the future profitability of toll roads, given that “Americans have driven less each year since 2004 and those ages 16 to 34 have reduced their driving more than any other age group.”
Interesting. I guess it depends on the alternatives.
Now with the new South Fraser Connector Highway 17 and free bridges / tunnel west of Port Mann this may be true, but if all these bridges will be tolled, too, it might make more sense to take Port Mann Bridge.
It makes sense to me to toll expensive bridges/tunnels, and if the access points into Vancouver could be tolled we would actually have a more livable downtown Vancouver. Downtown Vancouver right now is quite ugly, with no pedestrian zones and every road 80% covered by cars. The only livable areas in Vancouver are its waterfront pedestrian oriented areas.
I went Christmas shopping downtown Vancouver and it was DISGUSTING. 2 x 2 m of sidewalk with hoards of people and then 6 lanes of traffic, or 20 meters, i.e. a 1:5 ratio of space allocation shows me that pedestrians are not the focus in Vancouver. This is “green” ? This is a “livable” city ?
The goal must be 50% less cars and every second street a green street, starting with Robson.
So, yes, the tolls make sense and have the intended purpose: more careful trip planning, more people per vehicle, less driving overall, car sharing, more public transit.
If Granville, Burrard, Cambie and Lionsgate bridge charged $20/trip into the city, how would Vancouver look like ? [perhaps pahsed in over 10 years to allow adjustment of behavior]. But our spineless municipal politicians are unable to lead in this regard, as they are cautious vote gatherers.
Toll roads should ‘help’ pay for construction and maintenance, not be a source of profit. Also the public policy goal should be to stimulate urban density that liberates people from the social and economic manacle of the car. Driving less is a positive not negative.
Volume on the old Port Mann was apparently 127 000 vehicles per day (Wikipedia).
Passenger volume on the 19 km, $2.1 billion Canada Line reached 136 000 people per day in June 2011, and during the Olympics it averaged 228 000 per day – which may be close to its capacity as currently configured.
It will be interesting to see the usage numbers over time of the 37 km, $3.3B Port Mann / Hwy 1 upgrade.
The Port Mann Highway 1 project website claims that the Port Mann Bridge serves more than 800 000 vehicles/week, which works out to more than 114 000 vehicles/day.
The 2012-13 annual report puts the traffic count at 10.6m vehicles to March 2013, which, works out to 118 000 vehicles/day. The 10.6m figure appears in the Revenue & Traffic Highlights section, and it is consistent with a year-to-date revenue of $20m at $1.89/vehicle.
Revenue of $1.89/vehicle at the introductory rate means that between 91% and 95% of vehicles are small and now pay the $3 rate. Of 120 000 vehicles/day, if 93% pay $3, 4% pay $6, and 3% pay $9, the annual revenue is $145m.
The overall project cost is pegged at $3.3b on the project website. The website puts this at an annual $250m.
“Following construction, TI Corp’s annual expenses are estimated at approximately $250 million per year. This figure includes all costs –bridge and highway maintenance and ongoing operations as well as debt servicing and repayment. Although it is premature to forecast precise revenues and costs beyond the next three to four years, annual expenses in future years are expected to be generally in line with this figure.”
http://www.pmh1project.com/Policy%20Planning%20%20Reports/Annual%20Report%20-%20TI%20Corp%20-%202012-2013%20-%20Final.pdf
Mike, a quick point of clarification, that document represents TI Corp’s *fiscal* year-end, through March-2013 (p.26 of PDF).
Within their own write-up, toll collection began Dec. 1 and the reporting period ended March 31 for a total of 121 days.
10.6M crossings over 121 days gives me about 88’000/day. Would be interesting to see your updated numbers.
This is certainly in the middle of the ramp-up period, but given that 2011 AADT was nearly 110,000/day and partial-year 2012 was in the ~107,000/day range this represents a pretty steep drop off.
When you compare it to the traffic forecast of 121,000/day in 2013 it does make you wonder what the rest of 2013 looked like. Since the Province doesn’t seem to be releasing any counts themselves, it will be interesting to see the next financial report.
You might be right that the revenue is for the fiscal year end. The tolling start date was December 8, 2012 according to this press release.
http://www2.news.gov.bc.ca/news_releases_2009-2013/2012TRAN0119-001971.htm
Using December 8, 2012 as the start date means that there were 93 000 vehicles/day.
You were right! Data released today shows 95,147 trips per weekday and 2,656,906 trips in January 2014, which works out to 85,707 trips per day.
If there are 85,707 trips per day, the annual revenue will be $104m given the above distribution of trips between small cars and trucks.
http://www.pmh1project.com/Policy%20Planning%20%20Reports/Port%20Mann%20Bridge%20Traffic%20Report%20-%20January%202014.pdf
The Sun is reporting today (2014.02.07) that traffic on the Port Mann is 100 000 a day.
Which begs the (possibly facetious) question – would we have been better off to just toll the old bridge to reduce use and congestion, and not build the new one? Or (less facetiously) introduce a lower level but universal system of road pricing, limit the amount of new highway infrastructure, and deliver the excess proceeds to transit?
It seems ridiculous to build a much higher capacity piece of infrastructure and then set tolls which decrease its use to below that of its smaller, paid-for predecessor. Nor should we put ourselves in the position of having to adjust tolls to fill this huge new bridge to capacity simply in order to pay for it.
According to the letter sent by Minister Stone to the mayor’s council, TransLink is forbidden from collecting tolls on any provincial highway infrastructure.
That effectively bans comprehensive road pricing.
The Canada Line collects $3 to $5 per person in ‘tolls’ from its 136 000 daily users – so its revenues may be close to that of the Port Mann ($400 000 per day?) if Port Mann usage levels stay the same at the $3 toll level.
According to a 2009 article in the Georgia Straight, governments put in about $1.4 B to build the Canada Line. The private partner put in $700 M, collects all the fares, and pays all the operating costs. So the full public cost of the 19km line may have been $1.4B. If the Port Mann annual costs (capital and operating) are $250M and tolls bring in $145M, then about 38% of the cost is being paid by government from other revenues. Which translates to $1.25B of the ‘total’ $3.3B cost.
It will be very interesting to see how these two projects compare over the years. Even if their dollar costs are equivalent in some sort of appropriate ‘apples to apples’ way however, I can’t help thinking that the other benefits of transit investment (increasing reductions in overall car usage over time, and encouraging more efficient land use) will never be realized by the Port Mann project. And ultimately a transit line will still have to be built to north Surrey / Guildford.
Port Mann bridge, Massey Bridge and Golden Ears bridge must be seen as necessary infrastructure to make Vancouver’s 30+ ports more competitive in a global marketplace, i.e. accessible by trucks. it is also about goods movement, not just people.
One also has to see this over-investment in light of the NDP’s reckless destruction of BC’s economy in the 1990’s due to underinvestment.
The Lower Mainland needs both, road and public transit infrastructure.
Also, the Canada Line is not collecting a toll. It is shifting users from buses to some degree, too. Unclear what the incremental toll vs. the previous buses is. Anyone ?
You may well be right. But my overall point was that perhaps spending more of the $3.3 billion on rapid transit, taking some of the commuter load off the old Port Mann and extending its life, combined with less expensive fixes to the rest of Hwy 1, might have been a better option. If 40 000 commuters could have been taken off the old bridge, would we have needed a new one?
And if the new Port Mann fills up in 10 years then what? We will still need to build rapid transit to north Surrey (another $2 billion), but we will have had another 10 years of more car-oriented development in the interim – which won’t make transit any easier to build or finance when we get around to it.
With regard to the Canada Line, I don’t see the fares as any different from the tolls collected on the Port Mann – they’re a charge to use an expensive piece of physical infrastructure. Virtually all of the bus capacity that used to serve the Richmond Vancouver route is gone – that shift is over – and the fares / tolls on the Canada Line help to pay for a big expensive tube in the ground (with some revenue sharing with the rest of Translink).
I think Translink had a commitment to subsidize the operating costs if ridership fell below 100 000 a day. At over 130 000 (current ridership), the operator is likely making good money (after the $1.4 billion public investment of course). I’m sure the numbers to north Surrey wouldn’t be as good at this point – I just find it hard to believe that a new 10 lane bridge was the best use for our money.
One of the problems with building rapid transit that serves commuters’ needs is the distribution of job sites in the Lower Mainland. Since downtown Vancouver is not a major corporate head office centre, you don’t have as great an influx of workers as downtown Toronto or downtown Calgary.
You can see the distribution of commuters’ travel patterns in a recent Vancouver Sun story here.
Click on the pull-down menu to see the stats for each municipality:
http://blogs.vancouversun.com/2014/01/08/interactive-map-shows-metro-vancouver-commuting-patterns/
You’ll also note that the municipalities with the highest numbers of commuters going to Vancouver are also the ones best served by SkyTrain and WCE (i.e. likely in response to the existence of rapid transit)