407ETR tweaking peak-hour toll rates to manage congestion, boost revenue

407ETR are raising tolls differentially to boost revenues and to manage congestion. Toll changes announced today and effective Feb 1 2010 see an increase in the main peak hours premium from 10.3% to 16.3% over off-peak. Peak hour charges in the regular or heavier trafficked zones (turquoise on the map) go up by 7.6% (from 19.85c/km to 21.35c/km in the more congested 'regular' zones) while the off-peak rate goes about 2% (from 18c/km to 18.35c/km).

All cents are Canadian - currently C$1.00=US96c, so x0.96 to get USc/km or x1.55 to get USc/mile.

In lightly trafficked zones (yellow on the map) the increase in tolls is 4.4% (from 19.25c/km to 20.1c/km) raising the premium over off-peak from 6.9% to 9.5%.

Regular zones and lightly trafficked zones have been changed, a central section H410 to H427 that was widened recently is downzoned to light from regular. That means peak hours toll rates only rise 1.2% (19.85c/km to 20.1c/km). A far eastern stretch of the highway from H404 to the eastern end however gets reclassified from light to regular and toll rates there rise from 19.25c/km to 21.35c or nearly 11%.

Toll rates for heavy single unit or straightbody trucks (over 5t) is double the toll rates quoted so far for light vehicles or cars. Multiple unit heavy vehicles (tractor trailers) toll rates are three times the light vehicle rates per km.

Another important change is a big 60% increase in the trip toll charge for light vehicles from 25c to 40c imposed on top of the per-km charges. This adds considerably to the cost of short on and off trips. For example a 9.7km (6mi)  journey between the H401 and H403 on the west side of Mississauga - the north-south dogleg - will now cost $2.47 or 25.5c/km v $2.18 or 22.5c/km, a 13.3% increase.

There is no increase in the trip toll charges for trucks however. They remain at 50c for for straightbodies and 75c/trip for truck trailers.

Transponder lease charges remain the same at $2.50/month or $21.50/year.

Video toll charges - for vehicles without a transponder -  go up 11% from $3.25 to $3.60 per trip.  This makes for very expensive per-km short trips. The 9.7km (6mi) journey H401 to H403 in peak hours for example with the video toll added becomes $6.07 (62.6c/km) now v $5.43 or (56c/km). That's similar (97c/mi) to the very highest tolls on 91 Express Lanes in LA: 95c/mile.

Peak hours on the 407ETR are weekdays 6am to 10am and 3pm to 7pm. Off-peak tolls/km are the same everywhere on the road - new tolls will be 18.35c/km v 18c/km now. The new C18.35c/km offpeak toll is US28.4c/mile.

A typical journey might go 30km so with the added 40c trip toll charge becomes $5.90 (in effect 19.7c/km) off-peak and if in the higher trafficked zone in peak hours the total trip costs $6.80 or in effect 22.7c/km - all with a transponder.

The company mitigates the high tolls by up to 10% for the heaviest users of the road with a rewards program of free weekend travel and discounts on gasoline at Petro Canada stations. 100k of 950k transponder users qualify for the volume benefits.

Traffic on 407ETR dropped away in 2008 compared to the previous highs of 2008 but has come back in recent months. Canada hasn't suffered the real estate bubble burst or major financial collapses of the US.

 September 2009 vehicle-km were 206.7m the highest September ever. Average workday trips are about 370k, down a few percent on 2008, so for some reason average trips are longer. Weekends are very weak - high toll rates and lesser time savings? - and average daily traffic - measured in trips - over the whole week is a bit over 300k.

In peak hours transponder transactions reach as high as 70k/hour weekdays with video transactions steady through most of the day at around 10k/hr. No cash is handled. Those driving without a transponder have their license plate number taken and they are billed in the mail.

Motorists close to the tollroad who use it most frequently are virtually all equipped with transponders but video tolls are more common among motorists based away from the road some miles, and typically only occasional users.

950k transponders are on issue.

Three-quarters of users in a survey say they save 15 minutes or more per trip based on average trips of 20km or so.

An independent survey found a 40km trip in peakhours (toll is $8.94) on 407ETR typically takes 25min v 58min on alternate free routes. If time in traffic is valued at $20/hr the time savings are worth $10. The study showed the average car on reeflowing 407ETR  used 4 liters of gasoline v 7 liters in the 'free' route. Gasoline is about $1/liter in Toronto so fuel savings are $3 for the trip on the tollroad. Stop and go and signals wear brakes and transmission and use more engine oil which might add another dollar to trip costs - making the value of time, fuel and extra wear and tear $14.

Explains why people pay the $9 toll.

http://www.407etr.com/About/custserv_fees.asp

copy of announcement:

http://www.tollroadsnews.com/sites/default/files/NewsRelease.pdf

BACKGROUND: 407ETR is operated by 407 International Inc, under a 99 year concession. The company comprises Spain-based Cintra Infraestructuras, Australia-headquartered Macquarie Infrastructure Group and the Canadian SNC-Lavalin.

The automated cashless, highway-speed toll systems in use on 407ETR are from Raytheon.

The road is 108km (67mi) long and ranges in width between 4 lanes and 10 travel lanes.  It goes the full length of northern portion of the 6.5m pop Toronto metro area.

Toll revenues on the cashless pike are around C$600m/year putting it right up there with New Jersey Turnpike, Pennsylvania Turnpike and New York State Thruway as a top revenue generating pike in North America. Only toll bridges and tunnels in the New York area make more money.

TOLLROADSnews 2009-12-31