Shorter tunnel had higher percentage increase

Second, the base toll of $2.50 for the main tunnel increased by 6.0 per cent. The RTA applied the same increase to the toll on the shorter run (vehicles from the east exiting at SJYC). The toll changed from $1.10 to $1.25, an increase of 13.6 per cent. In our view, the RTA should have considered the impact of this on the attitudes of potential users, and also applied a pro rata increase to the main tunnel and the SJYC exit.

Exhibit 3.5 shows the continuing effect of the two changes to the tolling structure for the main tunnel. It assumes an average CPI increase to illustrate how the toll might have increased without the two changes agreed. The exact amounts shown clearly depend on this assumption.

Exhibit 3.5: How the toll for the CCT main tunnel goes up as a result of the two deals

Source: Advice from the RTA to the Audit Office, and Audit Office analysis

The escalation formula change has the biggest influence on the tolls. Increasing by a set 4 per cent a year for 12 years, then by a set 3 per cent a year for the next 6 years, would increase the toll by around $1.12 by 2018. Adding the 15 cents FAD increase to the base toll brings that up to around $1.43 each way. Together, these mean the toll would be 35 per cent higher than originally planned by 2018. The long-term effect on patronage of these increases is a significant issue.

The toll for heavy vehicles remains double the toll for cars shown in the exhibit. This may have a discouraging effect on the rate at which heavy vehicles use the tunnel.

The effects of the changes are more severe for the short tunnel (the exit via SJYC). See Exhibit 3.6.

Exhibit 3.6: Toll increases - short tunnel (exit at Sir John Young Crescent)

Period/Year

Original toll formula (CPI increase only*)

New escalation formula (4% then 3%)

Difference (escalation formula only)

15 cents increase in base toll (FAD)

$ Difference (both changes)

Per cent Increase (both changes)

Base toll (Sep. 1998)

$1.10

$1.10

$0.00

$1.25

$0.15

14%

CCT Opens (Sep. 2005)

$1.34

$1.48

$0.14

$1.68**

$0.34

25%

Future toll (June 2018)

$1.81

$2.30

$0.49

$2.61**

$0.80

44%

*  Future CPI increases estimated based on the average CPI increase between 1998 and 2005

**  The 15 cents base toll increase becomes a 20 cents increase by 2005, and a 31 cents increase by 2018 after the application of the new escalation formula.

Note: After 2018 the toll escalation goes back to CPI only so the main effect of the two changes will have been felt by then.

Source: Advice from the RTA to the Audit Office, and Audit Office analysis

The increase in the planned toll (base toll plus CPI) for the short tunnel is 44 per cent by 2018. Motorists would be paying 80 cents more per journey through it.