Toll Revenue Model

1. Toll Revenue Model

2. Contents • Objectives of the model • Scope of the model • Methodology applied to the model • How to use the model • Results of the model and possible applications of the results

3. Objectives of the Model • The model is designed to calculate toll revenue for the Brisbane motorway network until 2031 • The model aims to provide users with the flexibility to evaluate distance based, point based and time of day based tolling strategies

4. Objectives of the Model • The model aims to enable users to devise an optimal toll strategy, which can be applied by TMR to fill the current funding gap

5. Scope of the model • The motorways included in the model are the: • Gateway Motorway • South East Motorway • Logan Motorway • Pacific Motorway (until Nerang) • Ipswich Motorway • Centenary Highway • Western Freeway • Bruce Highway (until Caboolture) Source: Google Maps

6. Scope of the model • The bounds of the model are: • Warrego/Cunningham Highway Intersection in the West • Nerang in the South • Caboolture in the North

7. Methodology applied to the Model • Methodology applied to determine road user sensitivity to toll charges • Methodology applied to determine travel time costs • Methodology applied to determine future years toll revenue

8. Methodology applied to determine road user sensitivity to toll charges • The response of road users to toll charges may depend on a number of variables • The variables considered in this model are as follows: • The availability of alternative routes • The urgency of the journey • The utility the road user derives from money • Imperfect information

9. The availability of alternative routes • Demand for road travel has been assessed at the route level rather than link level • Road user’s sensitivity to toll charges is largely influenced by the availability of good alternative routes • The model includes several alternative routes per destination

10. The availability of alternative routes • It is impossible to determine the exact destinations of road users • The bounds to the predicted Brisbane tolled motorway network have been assumed as proxies for destinations • The Port/Airport and the City have also been assumed to be destinations of road users • The remaining road users have been assumed to be using the motorways for local trips

11. The availability of alternative routes • Data is currently not available to determine the number of road users heading towards the prescribed destinations • Currently, approximations of the percentage of road users travelling to a destination have been applied to the model until data is available

12. The urgency of the journey • If a journey is urgent the road user will have a higher value of time • The road user with a higher value of time will be less sensitive to toll charges • Journeys have been categorised as low, medium and high urgency

13. The utility the road user derives from money • Different road users have different levels of utility for money • Normally higher income earners have a lower utility of money than lower income earners • Road users with a lower utility of money will be less sensitive to toll charges • Utility derived from money has been characterised as high, medium and low

14. Imperfect Information • Imperfect information surrounding the actual costs of a journey may impair the road users judgement • Some road users may inadvertently choose the higher cost option • To account for imperfect information, the model incorporates an assumed normal distribution of knowledge of travel time costs around the actual cost of travel • A standard deviation parameter is incorporated into model; a larger standard deviation would result in less sensitivity to changes in travel time costs than a lower standard deviation

15. Methodology applied to determine travel time costs • Austroads unit values have been applied to determine the travel time costs per road user type • Factors have been applied to the unit values based on the characteristics of the road users • These factors are variable and can be changed by the user

16. Methodology applied to determine future years toll revenue • Toll revenue is derived for the period 2010 to 2031 • Traffic volume is multiplied by an annual growth rate • The annual growth entered into the model is adjusted according to increases in annual TTC per trip and sensitivity to peak spreading

17. Methodology applied to determine future years toll revenue • In the model, toll charges are assumed to be immediately perceived by road users, whereas, congestion costs because of diverting traffic from the toll are not immediately perceived

18. How to use the model • The model consists of 4 data entry pages • 2 pages to enter yearly data • 2 pages to enter fixed parameters for model • The model contains a results page and revenue graphs which can be used to analysis different results produced by different toll strategies

19. Results of the model and possible applications of the results • The results of the model can be used in conjunction with transport models to determine the optimal toll strategy to fund the gap • The TTC and toll costs derived in this model can be used to gauge whether the toll strategy is increasing or decreasing welfare

20. Conclusion • The toll revenue model calculates the possible revenue streams over a 22 year period • The model relies quite heavily on assumptions mostly because of the lack of data available • If more data becomes available the model facilitates changes to almost all inputs • Regardless of data constraints the model can still provide valuable insight into the possible revenue gains, which can be obtained from applying a tolling strategy to the Brisbane motorway network