Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

Archive for November 22nd, 2010

“Shadow tolls” and related issues

leave a comment »

“When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean – neither more nor less.”

When Lewis Carroll wrote that he was joking. But the world has changed – and in one where Henry Kissinger can get the Nobel Peace Prize political satire has become next to impossible.

Laila Yuile has been tracking this issue for a while and it has now been picked up by Mark Hume in the Golbe and Mail

Under the deal, the government pays a set amount when certain traffic levels are reached, but the payments fall as traffic numbers climb.

“Basically, let’s say the traffic today is 10,000 per week … then we get X-amount per vehicle … and then … [at] 12,000 to 15,000 vehicles, you get a lower amount per vehicle. And then above a certain band, let’s say 15,000 vehicles, we get nothing,” he said.

So even if you do call it a shadow toll, it’s a shadow that fades away as vehicle use increases?

“Exactly. Yeah. I guess to me the strict term ‘shadow toll’ would imply that if there’s 100,000 vehicles using the road, then we get paid for 100,000 vehicles. That’s not the case in Sea to Sky,” said Mr. Hahn.

Peter Milburn, deputy minister of Transportation, said “shadow toll” is not a term he would use. But he acknowledges the private consortium will get incentive payments of about $75-million over 25 years depending on safety performance targets and vehicle use.

If it looks like a duck and walks like a duck and quacks like a duck ….

Tolls are not popular. This is not surprising, for we have become used to the idea of using the roads for “free”. We pay for them of course, but through means which bear no relation at all to our use of them. That means that we overuse them – as with most things that are not controlled by price at the point of use. This results in queuing – or “line ups” if you speak only “American”. We distribute a scarce resource – road space at peak travel times – in the same way that the former Soviet Union distributed nearly everything. With the same result. People who have time to spare get in the line up and wait, while those who don’t but would be willing pay to jump the queue are forced to wait with them. Now that the private sector operates most airlines, the complexity of fares is amazing, but it is designed to be as effective as possible at extracting the maximum “consumer surplus”. Once the plane has taken off, any empty seats are a dead loss. The same applies to cruise ship cabins once the vessel has left the dock. So pricing up to that moment is very variable. Some airlines used to offer payments to passengers that were oversold to free up seats (but I have not heard that recently). Others now sell off upgrades at cut prices when they want to fill the seats at the front of the aircraft. And in the month before the cruise ship sails, there are all kinds of deals available to those willing to be flexible about where and when they take their vacation.

The problem with the shadow toll is that the signals are not getting through to the market that matters. There is a signal to the contractor – who gets more money if, for example, a repair is expedited to re-open blocked lanes. But there is no signal at all to road users. Indeed in the case of the Sea to Sky the BC government made sure that there would be no train service that might attract people out of their cars.

But BC Rail was not sold. Oh no, the same government that denies it sets shadow tolls also denies that CN “bought” BC Rail. They just leased it. For 999 years. So it’s the same usage: “sold” is a “strict term” which is not applied to what happened to a publicly owned corporation that was actually performing very well and managing to operate passenger services too.

The sale of BC Rail (for that is still what I am going to call it) is, of course not the only reason why the voters of BC lost faith in the Premier. As Iain Hunter points out. He joins the growing band of mainstream media commentators who have decided that they can now start doing their jobs properly, as Campbell is going to step down. Rafe Mair calls this “hypocrisy“. He’s right, of course, just wrong to be surprised. But then we have “been down so long it looks like up

To the present administration there is no doubt at all that they will say anything to hang on to power. They do not necessarily mean it – or mean to stick to what they say later. All kinds of praise was heaped on Gordon Campbell for his leadership in imposing a carbon tax. None of those commentators seemed to notice then the expansion of coal, oil and gas extraction taking place at the same time. I ran for the Greens at the last provincial election: not once did I hear any of the Liberals talk about the HST at any of the all candidates meetings. Not that they actually ever said anything of much significance. They certainly never addressed any policy issue in a substantive way in those forums.

I am in favour of road pricing, but not as way to pay for roads. Experience shows that drivers do respond to price signals – hence the success of HOT lanes. We need to ration urban road space sensibly – not so that we can build more but so we can use what we have efficiently. We also need to at long last start to get serious about how we make the alternatives to driving more attractive. We have to do that even if we do not bite the bullet on road pricing – because the way we pay for our private transportation means we have a huge incentive to make the most of that upfront investment. About the only people who are getting close to the right price signal about car use are members of car sharing schemes.

I think incentives to contractors do make sense – but P3s in general don’t. They are basically a device to drive down the wages (and other benefits) paid to the people who provide public services, and divert public funds into corporate profits. Making companies profitable is not, in my opinion, a necessary function of government. Markets can be made to work – but they need oversight and regulation to keep them honest and efficient – and to take care of issues where things we value but have no price are under threat. Things like clean air, clean water, safe food, biodiversity and planet that will support future generations of human beings (and other life forms) in reasonable comfort. And community. We should value that – it is essential to humans – but we have not found a way to attach a dollar value to it.

The problem in BC is not that we cannot trust Gordon Campbell. (In fact, just assume that if his lips are moving, he’s lying: that’s a pretty safe assumption.) We can no longer trust government to do what governments are supposed to do, because they have become too much like the corporations who pay for the elections of our political leaders. That’s all of them. Carol James is assiduous in her wooing of the same constituency: she thinks that to get elected she has to move the NDP to the “centre”. The same route that was advocated (disastrously) by Blair and Brown in Britain – and Rafe Mair here, by the way. Both the NDP and the so called “BC Liberal Party” want to represent the corporate agenda – the agenda espoused by the elite. The one that says there has to be less government – except when it comes to defence or “law ‘n’ order” (both being highly profitable). The one that says there must be economic growth – despite the fact that it is clear as can be that exponential growth cannot continue on a finite planet. The one that still spouts the “trickle down” theory – which has been totally disproved. The one that opposes government subsidies – except for those that directly feed into the pockets of the big corporations.

In that context it seems to me to be a minor issue that the Sea to Sky may or may not have a “shadow toll”. I think that it does, but it does not alarm me at all that the present government denies it. They also say that the expansion of the freeway will solve traffic congestion, that the Gateway programme is essential to the health of BC and that using property tax to pay for transit is a good wheeze. I could sit here typing out a longer list of wrong headed policies in every portfolio. I think you get the point.

After I finished writing this, I went back to reading other things and came across the video below. I learned early on in my campaigning against the SFPR that you should never, ever try to speak at a meeting after Corky Evans. We do not share the same background, or the same party political platform. But he is a great speaker and I think this is well worth your time

Written by Stephen Rees

November 22, 2010 at 11:59 am

Posted in politics, Transportation

Tagged with