The Government and Auckland Council have announced details about the latest plan for congestion charges in the city, but any action is years away when tens of thousands of new cars will be clogging the roads.

The parties today agreed on terms of reference to establish a project to investigate smarter transport pricing in Auckland.

The announcement comes amid rapid population growth and traffic chaos on the city's roads with a dire prediction by Auckland Transport that one in three roads will be congested by 2020.

We're worried that traffic conditions will become unbearable before congestion charging or any other big-ticket solution is introduced

On the current growth path, 160,000 new cars will be competing for space on the city's congested roads by 2020.

Auckland Mayor Phil Goff has welcomed the joint Auckland Council and Government investigation into road pricing for Auckland as a practical, long-term solution that will help address the city's chronic congestion issues.

Among the solutions to the problem of increasing congestion and gridlock is to adopt a smarter road pricing system. Well-designed road pricing systems have proven successful in influencing driving behaviour and reducing congestion in cities around the world such as Singapore, London, and Stockholm, Goff said.

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"With 800 extra cars on Auckland roads each week, and 45,000 additional residents in our city each year, radical changes need to be made to stop our city grid-locking," he says.

"However, it will be years away before a congestion charging system could be put in place. In the meantime, with a deficit likely to be more than $7 billion to fund new transport infrastructure in Auckland over the next 10 years, we need new sources of revenue now."

Finance Minister Steven Joyce said that "alongside our current multi-billion dollar transport investment in Auckland, we need to look at new ways of managing demand on our roads to help ease congestion".

"Smarter transport pricing has the potential to be part of the solution."

Transport Minister Simon Bridges said "work undertaken last year by the Government and Auckland Council found that smarter transport pricing could help make a big difference in the performance of Auckland's transport system".

Auckland Council did extensive work on congestion charging under former Mayor Len Brown but this got the thumbs down from the Government and resulted in the council introducing a three-year transport targeted rates of $114 a household.

Bridges said smarter transport pricing could involve varying what road users pay at different times and/or locations to better reflect where the cost of using the roads is higher (i.e. where there is congestion). This could encourage some users to change the time, route or way in which they travel.

"It is essential that we carefully consider the impacts of pricing on households and businesses. A key factor will be the access people have to public transport and other alternatives.

"The Government has also made a clear undertaking that any form of variable pricing will be primarily used to replace the existing road taxes that motorists pay. This is about easing congestion, not raising more revenue."

The Smarter Transport Pricing Project will undertake a thorough investigation to support a decision on whether or not to proceed with introducing pricing for demand management in Auckland.

Officials from the Ministry of Transport, Auckland Council, Auckland Transport, the New Zealand Transport Agency, Treasury and the State Services Commission will work together and engage the public to develop and test different options.

The first stage of the project, which will lay the groundwork for assessing pricing options, is expected to be complete by the end of 2017.

"Any decision on the use of a demand management tool like road pricing is still some years off," Joyce said.

"We look forward to receiving advice from officials as this work progresses. The Government and Auckland Council will then consider the project's findings."

Transport officials are making important strides in exploring congestion charging in Auckland, but they can't lose sight of the city's more immediate transport issues, the Automobile Association said in a statement.

AA principal adviser - infrastructure Barney Irvine said it was good to see the officials keep up the momentum around congestion charging.

"We all agree that congestion charging is something we have to look at," he says. "It's now up to the Government and council to show how it would work in Auckland, and whether it would make sense when you weigh up the costs and benefits - and the sooner they can do this, the better."

But congestion charging would be a solution for the long term, he said.

"Right now, there are big questions around our ability to cope with near-term congestion, and how to fund the projects Auckland needs.

"We've all felt the rising congestion tide in Auckland, and the scary thing is that it's going to keep rising for the next four or five years at least.

"We're worried that traffic conditions will become unbearable before congestion charging or any other big-ticket solution is introduced."

Irvine said the Government and council needed to provide more clarity on what road users were going to face in terms of travel-time delays, to reassure Aucklanders that the investment that was planned was going to be enough.

"If the current programme's not up to the task, they need to show what projects can be brought forward or added to the list."

Irvine says this has to go hand-in-hand with clearing up the uncertainty around Auckland's transport funding gap, which Auckland Mayor Phil Goff said had risen from $4 billion to $7b over the next decade.

"It's time for local and central government to stop bickering and work out exactly how much more Auckland is going to have to pay," he says "Aucklanders deserve more clarity - without it, we'll struggle to move the debate forward."


Auckland Congestion Pricing Project Terms of Reference are available at www.transport.govt.nz/smarterpricing