Highway 407 ETR

operational

Opportunity Highway 407 ETR was Ontario’s first all-electronic, open access toll highway. When it was first conceived, Highway 407 ETR represented an ambitious infrastructure project that was 20 times larger than any other road completed by the Ontario Ministry of Transportation. The government conducted a world-wide competitive bidding process to find a private sector long-term operator for Highway 407. In 1999, the Government of Ontario entered a lease agreement with a private sector company to extend, maintain, and operate Highway 407. The government’s objective for Highway 407 ETR was to relieve traffic congestion on Greater Toronto and Hamilton Area roads and highways by offering a tolled alternative and by providing adequate highway infrastructure to meet population growth taking place outside of Toronto’s core. Highway 407 ETR continues to meet that objective, providing over 118 million congestion free trips each year. The toll highway also provides an opportunity for Ontario to showcase its engineering expertise, such as an innovative toll-booth-free tolling system. Challenges The project was subject to the commonly held misconception that the government had sold the highway to the private sector. In reality, the road itself remains a public asset, while the private sector operator sets tolls, meets traffic thresholds, and maintains and expands the road as needed to meet demand. Innovations Lessons learned from this first generation P3 project helped inform and improve the alternative financing and procurement (AFP) model being used to extend Highway 407 East from the Eastern terminus of Highway 407 ETR to Harmony Road (Phase1), and then to Highway 35/115 (Phase 2). The P3 arrangement leveraged the public and private sectors’ expertise in managing roads: the public sector owns Highway 407 ETR and determines transportation policies while the private sector is responsible for extending and widening the highway based on traffic flow, managing the tolling system and taking on all traffic risks and operating costs over the lease term. Highway 407 ETR has been in operation for approximately 15 years and as a user-pay toll highway it has been extended, expanded, maintained, and operated at no additional cost to the taxpayer. A new open access system was also equipped with technology to classify vehicle types and charge the appropriate toll. Alternative materials, such as a concrete road surface were used for the central section of the highway to provide a longer lasting road surface and to help control maintenance costs. Results Since entering the P3 arrangement in May 1999, 407 ETR Concession Company Ltd. has invested more than $1.4 billion to extend, expand, operate and maintain the highway. Highway 407 ETR now extends an additional 40 kilometres; has 41 interchanges and 208 bridges and overpasses; and nearly 200 tolling gantries, significantly reducing traffic in the GTA. Since 2004, 407 ETR has added more than 220 lane-kilometres.  Year-over-year, the number of motorists travelling on Highway 407 ETR has gone from 72 million in 1999 to over 118 million in 2014. Daily weekday traffic has grown to almost 400,000 trips. The Conference Board of Canada has confirmed that significant time savings are realized by users of Highway 407 ETR. The report also noted the potential fuel savings and lower maintenance costs that may come as a benefit of driving on a congestion-free highway at a consistent speed instead of being in stop and go traffic. Customer satisfaction has improved dramatically due to investments in customer service. For example, 407 ETR now has 640 phone lines available, compared to 21 phone lines when it first opened. For the last 10 years, its average response time is 30 seconds or less. A newly designed website delivers many customer service options (sign-up for paperless billing/pre-authorized payment, payments, or viewing past bills). Investments in technology have improved the tolling system and unbillable plates are below 2.5 per cent.

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