3.3  Was increasing the toll the best option?

We are not convinced that increasing the toll was the best way to cover these cost increases. In our view, the RTA underestimated the likely reluctance of motorists to pay the extra amounts from both toll changes.

The information in the previous section makes it clear that there were legitimate cost increases which were the responsibility of the RTA totalling $38.1 million.

At the time of the First Amendment Deed, the RTA used $3.1 million from the upfront payment. The RTA applied it to the outstanding $38.1 million costs, leaving the balance of those costs totalling $35 million.

Exhibit 3.3 shows how the RTA expected to use the upfront payment at three key stages: the signing of the initial contract, the signing of the FAD, and just before the opening of the CCT.

Exhibit 3.3 shows that at the signing of the contract, and the FAD stage, all of the upfront payment had been allocated - i.e. no BCF would remain. This Exhibit also shows about $9 million ($97 million minus $88 million) not allocated close to the tunnel opening in April 2005. The RTA advised that this $9 million will be used for unsettled claims. Clearly, the RTA could not have contributed more to the FAD costs from the upfront payment.