The unsurprising impact of scrapping bridge tolls

From the BBC:

Journeys on the westbound carriageway on the Prince of Wales Bridge have increased by 16% in the year since the tolls were removed.

An average of more than 39,000 journeys are being made each day, up from less than 34,000 per day in 2018 when the £5.60 charge was still in place. Highways England said traffic rose by about 32% on the M48 Bridge, but exact figures were not available.

All those journeys mean more economic activity and so on. Tolls mean income for the bridge owner and and equal and opposite cost to motorists, so that is just a transfer of wealth and cancels out. Tolls also depress economic activity, so scrapping them is a clear win overall. Which is why I don't like tolls.

The bad news is, the value of that extra economic activity in south Wales and Bristol largely goes into higher land values, so the total rent collected i.e. land rent + tolls, stays the same.

This bit is interesting:

In the past two years the eastbound carriageway had seen a daily average of 3,000 more journeys than the westbound carriageway, where the tolls applied.

But after the removals of the tolls, the difference has fallen to about 1,000 journeys more eastbound per day since the tolls were removed, with an average of 40,364 trips from Wales to England in 2019.

How is this sustainable? To get from south Wales to Bristol, you have to take one of the two toll bridges, so the number of journeys each way should be the same.

One possible answer is that 1,000 people emigrate from Wales permanently each day, but that can't be right because Wales would be empty by now.

"Pope Francis tries to build bridges in sceptical Turkey"

From the BBC:

The crowd was small, but passionate. The civil engineering faithful here are few.

A mix of young and old architects and transport planners, though, were waiting for the Pope to arrive at the Turkish Society of Civil Engineers in Istanbul.

It is tucked behind a discreet doorway on a main road, and the pavement was sealed off behind a temporary security barrier. Attendance at the special mass with Pope Francis, who read Civil Engineering in Argentine before joining the priesthood, was by invitation only.

When the Pope arrived at last, they gave him a subdued but positive welcome; youngsters desperately holding up their mobile phones to try and get better reception to be able to reply to those last minute emails from work.

The 77-year old Pontiff did not disappoint; he seemed energized by the cheers, smiling broadly as he outlined plans for a new six-lane suspension bridge over the Bosphoris linking central Istanbul with Usküdar, five miles to the west of the exsiting suspension bridge.

Elsewhere in Turkey, though, there was little interest in what is seen as a vanity project, made largely superfluous by the new tunnel which was completed and opened a year ago.

"Where's that confounded bridge?"

Continuing my occasional series of posts on land values with titles swiped from Led Zeppelin song titles or lyrics from their albums "Houses of The Holy" and "Physical Graffiti", emailed in by Lola from Money Week/The New World:

... on 17 November, the Penang marathon took place on Penang Bridge for the last time. From now on, the annual competition will take place on the recently completed Penang Second Bridge, which, at 24km, is the longest link in Southeast Asia. The first bridge, which was state of the art not long ago, can’t handle the volume of traffic.

Since the announcement of the bridge project in 2006, land prices in Batu Maung have leaped from RM50-60 per sq ft to around RM250-300 per sq ft. New apartments, which used to cost between RM250,000-300,000 each, now cost between RM700,000-800,000. And there’s a lot more to come from the infrastructure boom in this part of Asia.

The article doesn't say what the new bridge cost to build, but let's pencil in RM2 billion as a reasonable guess (three times as much as the old one).

That means that the bridge could have been funded by collecting the land value uplift on 209 acres (one-third of a square mile) or on 4,200 apartments.

The size of area and/or number of actual or potential apartments which will benefit is of course a huge multiple of that - probably several hundreds of times as much.

So as per usual, the question is... who paid for the bridge and who will benefit most?

"Osborne predicts boost from Humber Bridge lower tolls"

From the BBC:

The Chancellor believes the Yorkshire and Humber economy will receive a £250 million boost from an increased number of motorists using the Humber Bridge.(1)

Toll charges have been reduced from £3 to £1.50 each way for cars. Motorcycle tolls have now been scrapped.(2) The lower tolls come as a result of the government writing down almost half the £330 million debt still outstanding on the Humber Bridge.(3)

In an interview with BBC Look North, George Osborne said: "The evidence we have is that the cut in the tolls will boost the local economy by £250 million over the next generation.(4) It is really good for jobs, people will be able to find work on the other side of the estuary if they haven't got it now.(5)"

1) Wrong. Transport infrastructure is good for the economy (imagine that there were no roads of railways in the UK), full stop. The boost to the economy is because it is there, regardless of how it's paid for or who pays for it. The toll for the bridge is not a user charge in any real sense, it is rent pure and simple, so if you have a toll charge, all that happens is that the rental values of surrounding land are pushed down ever so slightly (having been pushed up by the bridge).

2) I suppose there are some very, very marginal commuter journeys where the benefit of making the crossing is less than £3 but more than £1.50 which will now be viable which weren't viable before, giving a tiny additional boost, but this is barely measurable. That said, I don't agree with (public) tolls either as a way of raising income because the collection costs (i.e. you wasting a few minutes in the queue) are so high relative to the charge paid, so why not scrap them tolls completely, to maximise this marginal economic boost? (and privately collected tolls is rent-seeking of the highest ordure, of course).

3) Sunk costs, absolutely irrelevant in decision making terms.

4) How long is a 'generation'? I know that politicians spout meaningless crap, but that phrase is more meaningless than most.

5) Wot? All the unemployed north of the estuary will find jobs to the south, and vice versa?
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And if this weren't all stupid enough, let us not forget that three years ago, David Cameron's view on road tolls was quite the opposite:

The road tolls are among a range of new taxes David Cameron is being forced to consider as public borrowing is forecast to rise to more than £1trillion.

The Tory leader promised a “national endeavour” to pull the public finances out of the red as he admitted that he “cannot rule out any tax increases” if he wins the next general election... Proposals to introduce road tolls are likely to prove unpopular with motorists, who already pay one of the highest rates of fuel duty in the world at 54p per litre plus VAT.