6/20/2007Australia: Congestion Created to Boost Toll Tunnel Profit
Australian toll tunnel relies on congestion for profit. State government raises millions with speed cameras.
The Lane Cove Tunnel, a toll route in Sydney, New South Wales, Australia, is entirely dependent on government-created congestion to turn a profit. When the route opened as a free road for its first two weeks of operation, 75,000 vehicles used it. Once an A$2.55 toll was imposed, use plunged 34 percent to just 50,000 cars a day -- half of the number expected. After a second $1.27 toll was added to travel one-tenth of a mile on the Falcon Street ramp, use of that part of the route plunged another 25 percent.
The tunnel is now struggling because the NSW government paid tunnel owner Connector Motorways A$25 million so that the government could renege on its contractual obligation to create congestion on nearby Epping Road by narrowing lanes. In the months leading up to the decision in December last year, officials faced elections in March. Political fallout from the Cross City Tunnel disaster would have made the planned narrowing unpopular. By February next year, however, the state government plans to go ahead with installation of dedicated bus and bicycle lanes on Epping Road to create the desired level of congestion for Connector Motorways.
While the tolling has been unsuccessful, the route was still successful in generating other revenues. NSW officials installed six speed cameras in less than a two-and-a-half mile stretch of tunnel.
Between March 25 and May 30, these cameras mailed out 13,500 tickets -- worth A$8 million. A variable nighttime speed limit dropped the legal speed from 80km/h (50 MPH) to 40km/h (25 MPH) without adequate warning to motorists. Thousands were surprised when hit with the stiff A$590 fines and three-month license suspensions in the mail days later.
After initially refusing calls for a refund, NSW officials finally agreed to dismiss charges against anyone accused of driving 80km/h or less in the tunnel.