Toronto's 407ETR hiking tolls most in the busiest segments - toll segmentation

Toronto's 407ETR has announced a new toll policy in which tolls will be raised most aggressively on the busiest segments in peak hours. Light vehicle tolls (<5 tons) are increasing from 17.6c/km to 19.25c/km (28.3c/mi to 32c/mile) or by 9.4% in peak hours on the busy 8 and 10 lane central stretch between Highway 401 and Highway 404. (All based on Cc=USc)

That's a 1.65c/km increase (2.7c/mi). The toll increases will apply from Feb 1.

On what the pike now calls the Light Zone - the ends of the tollroad, east and west (see the map at the bottom of the page) - the peak rate toll for light vehicles is to increase 1.4c/km to 19c/km, not a big difference but enough to establish the policy. The difference gets larger for heavy vehicles which are divided into single unit and multiple unit vehicles. Tractor trailers and the like will now be charged 0.75c/km (1.2c/mi) more in the busy stretch - called the Regular Zone - than on the ends.

The Regular Zone is 48km (30 miles) between H401 and H404. The Light Zone is 35km (22 miles) west of the H401 crossing to Hamilton plus 25km (15 miles) from H404 east to the present terminus in Durham.

To keep traffic moving

407ETR say in their news release that the new approach is to keep their traffic moving: "We keep traffic moving by adding new lanes and setting toll rates which balance affordability with keeping traffic moving."

Some sections of the road have been widened from 4 and 6 lanes to 8 lanes and to 10 lanes in one stretch. Unless the strong growth in demand moderates - or is moderated by higher toll rates - they will face peak hours congestion in sections of the roadway already widened to the maximum available space in the right of way.

The company's concession as written a decade ago by the province of Ontario has no direct toll rate controls but it levies heavy penalty payments if the tollroad fails to handle extra traffic and diverts it onto parallel arterials.

Profit maximizing incentives also lead the company in the direction of levying higher tolls in times and places where traffic is getting thick. Any breakdown in traffic flow is liable to reduce throughput - from 2,000 vehicles/lane/hour to anywhere between 1,000 and 1,500 according to measurements in the Los Angeles area. So in addition to customers unhappy about the congestion there will be fewer of them paying tolls.

The Dark Zone looms

You could say that would create a "Dark Zone" for both motorists and the toll operator.

Off-peak tolls are being increased Feb 1 from 16.8c/km (27c/mile) to 18c/km (29c/mile) or 7.1%. Peak hours are 6am to 10am and 3pm to 7pm working weekdays. Off-peak rates apply 24hrs weekends and holidays.

407ETR has made a practice of "adjusting" - which means increasing - tolls each February.

Larger differentials in the future we guess

The present differentials are probably too small to have much effect in managing demand. They are probably small first steps to bigger differentials when they are more acutely needed.

The toller is also increasing monthly transponder lease fees from $2.35 to $2.55, and the already steep video toll premium for light vehicles of $3.55 is being eased up to $3.60.

Heavy vehicles (classes >5t or 11,023pd) are required by law to have a transponder to travel on the 407ETR but pay a $15/trip video toll fee (unchanged).

Overall this seems to provide for toll rate increases of 8 to 9% which should get the business seriously into the black in the coming financial year.

2007 revenue likely over $500m

2006 toll revenue was $456m based on 292k trips/day. Based on eleven months data 2007 trips will have averaged 313k/day, a 7.2% increase. Average tolls went up about 6% so 2007 revenue should be somewhere around 13 to 14% higher or $515m to $520m - putting it in the top three four in north America. (Some of that of course is the decline in the US$)

BACKGROUND: 407ETR is 108km (67 miles) long extending from Hamilton in the west to Durham in the east, spanning the greater Toronto metro area mostly along the northern fringe of its development. Designed and about half built by a public toll authority of the province it has been widened and extended by the concessionaire - a joint venture led by Cintra of Spain, Macquarie of Australia and a Canadian company.

With all-electronic toll collection (not one toll booth) it was built with 41 interchanges, some so close spaced that in a couple of places the on and off ramps had to be "woven" or grade separated. As a result it can cater to a lot of short on and off trips between five '400 series' north-south expressways and surface arterials. In east-west travel it mainly gets its traffic off signalized arterials and by offering better connections to places nearby. It is also an alternative route for some trips to the existing megahighways - to the QEW (Queen Elizabeth Way) in its western portion and to the H401 over its central and eastern section.

The average trip on the road is 20.5km (12.7 miles) and the average toll $4.55. That number takes into account all charges and covers all vehicle classes and video as well as transponder collection. Our calculator shows that at 22.2c/km (35.7c/mile) NOTE: we are treating the C$ and US$ as at a par.

This article discussed the recently opened lane additions:

http://www.tollroadsnews.com/node/3141

For their website see http://www.407etr.com

TOLLROADSnews 2007-01-04