Road user charges must not fund light rail

Tuesday, September 19, 2017

Road Transport Forum chief executive Ken Shirley is warning political parties to stop using the National Land Transport Fund (NLTF) as a convenient slush fund for their pet projects.

“The latest proposal from NZ First to fund light rail projects in Wellington out of the NLTF and pay for that through road user charges (RUCs) shows a blatant disregard for the user-pays integrity of the fund and the RUC system,” says Shirley.

“The NLTF must remain ring-fenced and reinvested back from where it comes from.”

Shirley says the reason the road transport industry broadly accepts the already-high level of road user charges is due to the direct relationship that RUCs have to the provision and maintenance of the roading network.

Heavy vehicle RUCs are calculated using precise engineering models that determine the wear and tear caused by different types of heavy vehicles to the roading network.

“The vast majority of road user charges are paid for by the road transport industry and account for around 15% of an operator’s expenses. A further increase in RUC, as NZ First suggest, would therefore add significant costs to the freight task, which would ultimately have to be passed on to consumers.

“Using the NLTF and RUCs for a project such as Wellington’s light rail destroys the integrity of the user-pays system and turns it into little more than a slush fund for politicians.”

Shirley says if NZ First want to expand the use of the NLTF to pay for rail projects then they should consider introducing a ‘rail user charges’ scheme that would allow the fund to be used to maintain and develop the rail network while maintaining its overall integrity.