NEW BRUNSWICK:Long Toll Road Continues to Build Under Shadow of Detolling Threat

Lord, a political boy-wonder at 33, beat up on the Liberal govt which wrote the toll concession, and promised during his successful election campaign last summer to abolish tolls. And he promised action on tolls (and other promises) within 200 days, which takes him to Jan 6, 2000.

The Premier’s staff have been in discussion with MRDC but neither side has disclosed their substance. Lord expresses confidence he’ll have an announcement about the ending of tolls on Jan 6, but MRDC says until there is something definitive by way of a change in the concession, they must proceed to develop the toll road regardless.

The toll concession covering 206km (126mi) makes it one of the longest single toll road projects in North America since the grand days of toll construction in the US in the 1950s when major state turnpikes were built. Now, some 23km of this length was existing motorway but the concessionaire is building 183km more including 20 interchanges, side road works and some major bridging for a construction cost of $390m (C$584m). Tolls averaging a minimum $15m/yr are supporting $100m of bonds while another $500m of bonds have been floated on the basis of a $40m/yr lease commitment by the province covering years 5 through 30 of a 50 year concession.

Traffic projections are small (less than 10k/day) and hardly seem to warrant 4-lanes, but heavy trucks will be forced to take the pike and safety and economic development are used in further justification of the design. A closed toll system with ramp plazas was originally designed but the lesser plazas could not justify themselves. As now planned, the road will have four mainline plazas and several stretches of the road will be able to be used free with ramps untolled.

The premier while saying that he will fulfil his election promise to end tolls also says now that he will not agree to anything which involves “any penalty of millions of dollars to get out of the deal.” So he seems to be giving himself an ‘out.’

Interestingly though the press was pretty sympathetic to Lord and his anti-toll campaign when he was in opposition, now he’s in government the thrust of much of the reportage and commentary has turned skeptical. The toll road is reported to be attracting more traffic than forecast on the section opened – 6900 veh/day vs forecast 5800 for its first year through the River Glade plaza. Moreover heavy trucks that pay big bucks number 2100/day vs 1770 forecast.

Big Rigs Love New Pike

When we visited a couple of months ago those big Canadian rigs, 22-wheelers and more, were roaring through one after another on the unusual outside highway speed ET lanes that are barriered off from the cash lanes. The tolls are quite low. Cars pay only 3c/km. Trucks will pay 1.5c/axle/km or c$20 for the full trip. As well as being faster the road when complete will be more direct, avoiding Sussex and cut 29km off the trip. It will also be flatter than the current route up the infamous Kierstead Mountain, when the whole project opens up in Nov 2001. The posted speed limit is 110km/hr (67mph) but the design speed is higher.

Toll revenues were only projected at $15m in the first year of full operation but it’s attracting more traffic than expected. And numbers bruited around suggest it could cost the province upward of $140m to buy its way out of the concession.

Lord was clearly misinformed about the costs of the project when in opposition. Far from being expensive it provides amazing road for the money. Indeed CHIC and other unsuccessful contenders for the concession who claim they cut their tenders to the bone were undercut by a third by the Dragados-led group. It is almost unheard of for a high standard road to be built in North America for $0.5m/lane-km [$390/732]. Total project cost is $0.8m/lane-km ($587/732) No wonder their competitors made jokes about “these Spaniards getting in a shipload of Guatemalans with picks and shovels.”

Lord’s other criticism was the geographic discrimination fairness argument. He said: “It is simply unfair to have tolls on one section of 4-lane road between Moncton and Fredericton when we don’t have tolls on the other 4-laners of New Brunswick....”

He does not seem to have knocked tolls as such, as a means of paying for roads.

In government a lot of the commentary has been that the toll road is doing rather well and that the de-tolling promise will be too costly to the province in extra taxes and debt. Lord could, in theory, announce he’s addressing the fairness issue by saying that all major 4-laners will be tolled, and deadweight motorist fees such as fuel taxes, license fees and registration reduced by an equivalent amount. That would mean establishing a state toll authority or concessioning out the still incomplete 4-lane motorway Moncton to StJohn and the 4-laners east of Moncton as well as on the Fredericton-Moncton road. Conservatives are supposed to favor people paying their way. But we’d guess that’s would be a bit too big a leap from the anti-toll election talk.

Cash-Back for Locals an Option

More doable, Lord could instead take a page out of the book of Premier Bob Carr in Sydney Australia, a wily politician recently re-elected. He found himself with a similar conundrum in 1996 after promising voters from opposition that he’d abolish tolls – he was faced with buying out two concessions (on the M4 and M5 toll roads) to get rid of tolls to Sydney’s western suburbs. It was going to be ruinously expensive to end tolling as promised, and at least one of them (M5) had heavy interstate truck traffic from the country’s major port, Melbourne. Instead he announced he was fulfilling his political commitment with a cash-back scheme whereby he left the actual concessions and the tolls in place, but local private motorists could get refunds on tolls from the state government.

This is a variant of what many US toll authorities regularly do to assuage the locals – Staten Is residents get a big break on the toll over the Verrazano as do users of the NYS Thruway on Grand Island near the Niagara falls, and users of the Coleman Bridge VA.

Give local private NB drivers the right to claim their tolls back on local trips as recorded on their ET accounts. Then, most of the tolls are in effect paid by the truckers and tourists, and by those local residents who are not much troubled by tolls.

A lot of motorists can’t be bothered claiming tolls back and it ends up costing a fraction of what it would cost to get rid of tolls entirely, let alone all that messy undoing of a concession. (www.mrdc.ca)