Thursday, 23 December 2010

No Dartford Crossing hypothecation, so what should be done?

A curious article has appeared on the BBC News website reporting that UK Transport Minister, Mike Penning, has contradicted an earlier statement that all money from planned increases in the Dartford Crossing tolls would be hypothecated for expansion of the crossing.   This has upset users of the route who feel ripped off by tolls on a route that has been fully paid for (and which generates a substantial surplus after operating costs and costs to maintain the crossing).   What the Minister actually is meaning is that far more than the money from hypothecation will be spent on the road, although I would argue that over time that probably is not true, as the money from tolls should be able to sustainably finance yet another crossing.

Southern side of Dartford Crossings (courtesy Evening Standard)

The Dartford Crossing is the only tolled portion of London's motorway ring road, which is (except for the crossing) known as the M25 (Dartford Crossing is not a motorway because the tunnels have restrictions on certain dangerous goods).  Dartford Crossing consists of two 2-lane tunnels and a 4-lane bridge, providing 4 lanes in each direction.  The first tunnel opened in 1963 with tolls, followed by the second tunnel in 1980 and the bridge in 1991, as traffic grew rapidly.   It is the most easterly road crossing of the Thames and some distance from the nearest road crossing, the severely congested Blackwall Tunnels.  As a result, it carries very high volumes of traffic, with around 150,000 vehicles a day.

The tolls have over time fully paid the capital (including debt) costs for the two tunnels and bridge, so that by 2002 all were deemed to have been fully paid.  As a result, many locals have campaigned for an end to the tolls, which are primarily manually collected (although there is an electronic tag system that operates some barrier lanes).

The problem is that withdrawal of the toll is likely to result in increased demand, so the toll was legally changed from being a toll to what is effectively a congestion charge.  Around £40 million (US$61.7 million) a year is generated in surplus from the tolls.

So a toll is operated, in both directions, on one of the UK's most heavily congested stretches of highway.  The toll annoys the motorists because they know the tolls are far more than what is needed to maintain the route, the toll delays traffic and overall they feel they are paying more to use a road that offers shockingly poor standards of service.   Of course, they are right.

The new Conservative/Liberal Democrat coalition government has made its highest priority to eliminate the UK's budget deficit by the next election, so is hardly going to give up a lucrative source of revenue.  However, its approach does appear to have the elements of a solution that could satisfy motorists if done in the right order.

The government announced earlier this year that:
- Tolls would go up 33% in 2011 and another 25% on top of that in 2012 (£1.50 today for cars rising to £2.50);
- Manual tolls would be replaced by fully electronic free flow tolling;
- Another crossing would be built.

However, as can be expected the only one of those announcements that seems obvious is the increase.  The increase in itself will reduce delays by reducing demand, but it will be seen as not delivering improved service as long as nothing is done about replacing manual tolls and expanding capacity.   

One way of delivering value would be to introduce electronic free flow tolls as a transition, with half of the existing toll booths converted to fully free flow lanes.  Existing DartTag users (which have a non-EU standard DSRC system) should be transitioned to free flow accounts using the EU 5.8 GHz standard, with Automatic Number Plate Recognition (ANPR) for enforcement.   DartTag users already have a 33% discount over cash.   A discount should be maintained with electronic free flow, as it not only incentivises a shift to freeflow accounts, but increases acceptability if there remains an option to pay less.  

It shouldn't be difficult to introduce partial free flow lanes and demonstrate how easy it is to avoid the queues at the toll booths.   Enforcement procedures would need to be developed and applied so that penalties are strictly applied to those using such lanes without paying, but revenue from fines should make this easily self-funding.

Lessons from Dublin's M50 toll transition to free flow should be applied for the final shift to fully electronic free flow tolls, particularly provision of information, call centre capacity and means to pay in advance (and after the event).  Bearing in mind that removing the toll booth queues is critical to delivering value to users of the route in the next few years.

Beyond that is the question of what to do with the revenue, and although it wont be officially hypothecated, there is no reason why it can't be unofficially hypothecated for both maintenance and expansion of the route. 
Three options for increased capacity are already under investigation.  A parallel crossing, a new local crossing that will link the A2 highway to the docks at Tilbury (relieving the existing route of much local traffic and port traffic), or a third bypass far to the east.  Details are here.  Whatever is selected (my bet is that a new local connection or a major bypass to the east would deliver considerable traffic benefits, but I'll let objective appraisal determine that) should proceed, and motorists on the existing crossing should be told clearly that tolls are not simply to be treated as profit.

The three options for new capacity at Dartford

Tolling gets a bad reputation when those who impose it don't treat those who pay as customers, entitled to a high standard of service.  It already generates a cynical reputation in the UK as a way for government to rip off consumers.   If done properly, the Dartford toll can be reformed to remove one of the key sources of congestion and to be used to deliver long term value by enabling the financing of extra capacity.

If what motorists (and voters) see first are increased tolls, no progress on new capacity and no implementation of free flow tolling  (which most commentators don't seem to understand even exists), then British politicians wont be surprised that they aren't trusted on this issue.

FT reviews road charging and makes some useful points

An article in the UK Financial Times (registration required at no charge) reviews road charging, in light of the abolition of the Western extension of London's congestion charging zone this weekend.

It draws a few conclusions that I don't think can be supported by the evidence:

The end of charging in west-central London is one of many signs that sentiment across the industrialised world has turned against efforts to substitute, or supplement, traditional fuel-based taxes on motoring with direct charges.
Is it?  The London case is rather localised.  Mayor Boris Johnson campaigned against it, and is keen to be seen to be consistent with his word.  Previous Mayor Ken Livingstone introduced it more for political than for transport reasons.  Bear in mind this was not to raise revenue, but to manage congestion.   It is worth noting that Boris Johnson's draft Transport Strategy is open about the future of congestion charging, meaning it could go further in due course.

As recently as 2006, many policymakers across Europe and North America were looking closely at systems that charged for driving into the busiest areas or according to the distance driven. Those that tracked cars using satellite, microwave or number plate-recognising cameras..
The only people talking about tracking cars via satellite are technologically inept journalists.  GPS satellites track nothing, as they are broadcast satellites that allow devices to calculate location of the device.  Whether anyone tracks that requires a communication interface, which GPS certainly is not.   Indeed designers of these systems have been making every effort to avoid tracking, although this doesn't make good copy for sensation seeking journalists.

The article quotes Professor David Begg, a key UK advocate of road pricing, who points out that the recent emphasis on using road charging for environmental objectives (which is a European focus, not one seen in other parts of the world), can exacerbate congestion by providing advantages to low emission cars.  He is quite right.  A key issue for anyone contemplating road pricing is to be objective driven.   

A useful dimension far too often ignored is how, in some cases, rural motorists would be better off if there was economically efficient road pricing:

Charlene Rohr of the European arm of the Rand Corporation, the US think-tank, says a system of variable direct charges would cut costs for many drivers – and improve driving conditions for all. “Farmers in rural England would be better off,” Ms Rohr says.

The big push in the US today is to replace fuel tax with distance based charging.  It is proving politically impossible to raise fuel taxes to keep abreast of increasing fuel economy, so several states are considering road pricing to provide a sustainable source of revenue.  Take the example of Oregon:
The government of Oregon, one of many to fund its highway budget almost wholly from fuel tax, says in 1970 it received the equivalent in 2010 terms of 3.28 cents in fuel tax per mile driven in the state. Today it receives only 1.13 cents.  The result is weaker bridges and potholed rural roads. James Whitty, who manages the part of Oregon’s transport department responsible for finding fresh funding mechanisms, says the state’s highway budget will become “unsustainable” without a new means of charging for road use.

I've discussed this with Jim Whitty, and he understands the difficulties of getting confidence of motorists around issues of price and privacy.   The only way other jurisdictions are avoiding this is by ever increasing fuel tax, which cannot be a long term solution if vehicle fleets exit petroleum-based fuels over time.

I am impressed that the FT talked to noted economist Gabriel Roth, who rightly points out that politicians need to make the case more convincingly. Singapore, despite having a rather authoritarian democracy, actually has one of the most transparent and honest systems:

“The Singaporean government seems to be interested in making everybody richer and more efficient,” he says. “It’s just different attitudes with different governments.”

What I find notable about Singapore is that the revenue is not important, the prices are altered in order to ensure traffic flows freely.  Charging points are established and priced to manage traffic flows, with different charging periods in different directions.  It remains the most sophisticated congestion charging scheme, even though it is the oldest. 

The article points out that toll based financing of major roads is growing, as the numerous articles on this blog testify to.  From Australia to India to Indonesia to Russia to Turkey, tolling is becoming increasingly common as a means to enable major new routes to be built.

Heavy vehicle charging is also spreading across Europe:

The road haulage lobbies of countries with high fuel taxes – such as the UK – support direct charging because foreign trucks can avoid the levies by filling up where fuel is cheaper. France and even the UK’s coalition government – which has entirely rejected a general national charging scheme – are considering systems for trucks.

France is already committed to a charging scheme.  The UK is investigating it.  Heavy vehicle charging exists nationally in Switzerland, Austria, Germany, the Czech Republic, Slovakia and New Zealand, and is also being developed for Poland and Sweden.   Oregon has its scheme as well.  

The FT article seems pessimistic, but in the end argues itself away from such pessimism.  Tolling is widespread across the world, and still has more promise as electronic free flow technology avoids the costs of land for toll booths, and congestion caused by manual tolls.  Congestion charging is more readily implemented in cities during economic boom times when congestion is severe (and other alternatives simply don't seem feasible).  Heavy vehicle charging seems easiest to implement when it is about charging transit traffic, but a full transition to road pricing still seems elusive.   Yet all will ultimately converge, the question is not if, but when and where!

Wednesday, 22 December 2010

Malaysian toll road company, Plus Expressways, to be "privatised"

PLUS Expressways is Malaysia's biggest concessionaire toll road company, and one of the largest toll road companies in Southeast Asia.  It is part of the UEM Group, which itself is a wholly owned subsidiary of Malaysian government investment company Khazanah Nasional.   So PLUS is a government owned company.

It owns subsidiaries in Malaysia, India and Indonesia.  973km of tolled expressways in Malaysia are under the responsibility of PLUS.  PLUS is an acronym for its first concession company formed in 1986 - Projek Lebuhraya Utara Selatan -which itself is responsible for the North-South Expressway from the Thai border to Kuala Lumpur and south to Johor Bahru (border with Singapore), otherwise known as Routes E1 and E2.

PLUS subsidiaries are:
- ELITE (responsible for the E6 North-South Expressway Central Link, effectively a Kuala Lumpur bypass).
- LINKEDUA (Malaysia-Singapore Second Link and associated expressway);
- KLBK (E15 Butterworth-Kulim Expressway);
- PHS (Helicopter charter company);
- TERAS (E-commerce and online facilities management);
- PLUS BKSP (India responsible for the 21.6-km Bhiwandi-Kalyan-Shil Phata Highway in the state of Maharashtra);
- LMS (Indonesia responsible for the 116-km Cikampek-Palimanan toll highway); and
- CCTW (Indonesia responsible for the as yet incomplete 25.4-kilometre Package 4 Cimanggis-Cibitung Toll Road).

Maps are on the PLUS website, showing how it is responsible for most of the major routes in Malaysia.  It is proud of its rest areas, laybys, viewpoints and even roadside motels and restaurants.  Given it competes not only with free existing roads, but also the railway and airline services, it clearly seeks to attract motorists.  Tolls are manual with barrier based ETC, but a transition has already started to create fully electronic free flow toll points such as on the Malaysia-Singapore Second Link.   It is government policy to move all toll roads to multi-lane electronic free flow tolling to reduce congestion.

It even has its own highway patrol unit.  Another feature of PLUS is a loyalty programme, whereby motorists earn the equivalent of frequent "drivers' points", based on distance travelled.

PLUS was listed on the Malaysian stock exchange in 2002.   45% of the company is not held by the Malaysian government, but divided between a pension fund and a wide range of small shareholders.  

However, the privatisation being touted in Malaysian media actually does not necessarily mean the private sector buying out the state shareholders, but may include the state shareholders buying out the private shareholders as well  - privatisation meaning removing it from being publicly listed.

The reason for the state shareholders to seek to buy out the private sector is because government recently announced tolls would be frozen for the next four years, making it a less attractive investment in some eyes.

Still, once again it shows how highways can be managed, by and large, commercially and operate effectively and efficiently.  It's a model virtually unknown in North America.

Does Beijing need congestion pricing?

An article published by the official Chinese government owned Xinhua News Agency claims to have been written by "lead infrastructure specialist of the World Bank Office, Beijing", and that congestion can only be resolved by introducing forms of demand management for road transport.

It gives an excellent summary of how rapid growth in car ownership and traffic in Seoul, Republic of Korea, caused similar pressures and that simply building subway capacity was inadequate.   Measures were increasingly taken to reallocate road space for buses,  changing planners laws that had required minimum numbers of parking spaces in new properties, raising parking charges and raising tolls.  Measures to enhance the attractiveness of walking and cycling have also been part of Seoul's formula.

The World Bank has suggested a series of measures to manage congestion, but warned that supply side solutions have never sustainably resolved traffic congestion in any major city in the world.   The solutions promoted have been a mix of :
-  Additional road infrastructure where it is economic (and particularly to facilitate bypass movements);
- Reallocation of road space for buses and cycling;
- Controls on vehicle ownership;
- Taxes and charges on vehicle usage.

The article makes it clear that demand management measures are needed in Beijing, and it is right.

I'd also add, in the Beijing context, that it should include significant enhancements to the attractiveness of walking and safety for pedestrians and cyclists.  I've been to Beijing twice, and one of the key features is how motorists get away with running red lights, ignoring pedestrian cross signals and cutting off pedestrians and cyclists.   Enforcement of traffic laws is extremely lax, and given the high proportion of residents who walk and cycle, maintaining this is critical.

For Beijing, public transport also faces overcrowding, so ensuring short trips are more economically and easily undertaken on foot or cycle is rather important, as is pricing public transport so it is financially operationally self sustaining.   This will allow it to grow and develop beyond the vagaries of public funding, but also importantly avoid public transport taking people from the active modes of cycling and walking.  Public transport should never be allowed to be neglected for lack of funds, but be able to respond to what demand management on roads (and economic growth) should present.

However, the road side is more critical.  A crackdown on driver licencing requirements, vehicle safety enforcement and driver behaviour would buy some time, save lives, reduce accidents (which themselves generate congestion) and enable the more complex measures to be introduced.   Market based parking, which sees planning rules on minimum parking requirements scrapped and for government owned parking to be priced to make a profit, would make a considerable difference.  However, beyond that the bigger question is congestion pricing.

China has used tolls to finance many of its major road building projects, particularly intercity motorways.  However, it has no standard system to raise revenue to pay for the ongoing maintenance and enhancement of the existing network (since government has been sufficiently flush with cash).  What it needs to consider is how road pricing might be introduced to raise revenue and manage congestion.

Beijing already has several ring roads orbiting the city, all of which could be thresholds for some form of congestion pricing.   Each could theoretically form a kind of cordon, with pricing imposed for crossing it in each direction, with pricing different at each offramp or crossing over the ring road.   In other words, a sophisticated form of Singapore's existing Electronic Road Pricing system, which allows prices to vary by road and time.  Such cordons would maintain free travel within individual zones, which could be divided by the ring roads and key radial highways.   Key to this is having good quality number plate databases and setting up accounts for motorists to pay.  The money collected could ensure maintenance and enhancement of the existing road network, and facilities for cyclists and pedestrians.  Technology need not be complicated, although I might suggest that given China's ambitions, the new US 5.9 GHz standard for Dedicated Short Range Communications (DSRC) has enormous potential to not only charge, but implement a wide range of safety and information based ITS applications.

The step beyond that would be distance charging, but Beijing's geography is such that the sort of system I have briefly outlined could deliver significant demand management benefits and have a high degree of disaggregation by time and location already.   It has the advantage of indirectly creating a distance charge by ensuring those who cross multiple cordons pay the most.

Unlike Tokyo, Seoul and Bangkok, China's cities now have the chance to introduce sophisticated forms of congestion pricing to ensure roads remain functional and mobile, as well as also providing significant environmental benefits.   China is not absent political barriers, despite the obvious reputation for being authoritarian, but it would appear that what is needed is to rebalance the enthusiasm for allowing people to become car owners, to implementing market reforms on parking and roads.

Tuesday, 21 December 2010

Russia embarking on major toll funded motorway construction programme

Russian newspaper Vedomosti has reported that the Russian Government intends to build 3000km of tolled highways.  This includes the already announced Moscow-St. Petersburg motorway, and also:
- Moscow Central Ring Road;
- Kaliningrad central route;
- Moscow-Kazan highway; and
- St. Petersburg- Kazakhstan highway among others.

Tolls are reportedly to be introduced on some existing routes to help funding widening and realignment, although every tolled route is meant to have a free alternative.   The Russian Government is apparently concerned at the apparent poor state of its highway infrastructure with average speeds on major highways of only 40-60 km/h, and an appalling accident rate (with almost all major routes being single carriageway/2 lane only).  Russia is notable for having a poorly developed highway infrastructure, with most emphasis on transport being on railways and air transport.

Toll roads are the responsibility of state-owned enterprise Avtodor which is seeking private investment in concessions, but also receives taxpayer funding.

One article (Russian only) has scientific director of the Institute of Transport and Roads, Mikhail Blinkin, suggesting toll roads are the wrong way forward, but rather hypothecated fuel taxes.  Given how the US and others are keen on moving towards tolls for user pays funding, he is looking at a trend in the wrong direction.   Certainly there is a longer term issue of sustainable funding of existing routes, but for the new network if tolls can facilitate the development of a modern highway network for Russia, then all well and good.  What would be particularly advantageous is for such routes to remain unsubsidised, for electronic free flow tolling to be facilitated and for the ongoing commercial management of new highways.   This would help ensure the long run maintenance of such routes, the development of new capacity as it is economically efficient to do so, and would also mean that fair competition can be maintained between road and rail transport.

Sunday, 19 December 2010

London congestion charge changes in January 2011

On 4 December 2010 I posted about one of the major changes to the London Congestion Charging scheme that will come into effect on 4 January 2011 - the introduction of detection based accounts.

However, there are a wider range of changes which affect the geography, pricing and the discounts/exemptions to the scheme as well.  These are:
- Removal of the western extension of the original congestion charge zone (and removal of eligibility of residents in the zone for the residents' discount);
- Increase in the basic charge price from £8 (US$12.41) to £10 (US$15.51);
- Introduction of a 100% Greener Vehicle Discount which will apply to vehicles that emit less than 100g/CO2 per 100 km and meet at least the Euro 5 standard (for a £10 annual fee) to replace the Alternative Fuel Discount which is currently in place for vehicles powered by electricity;
- Extending the 100% Electric Vehicle Discount to plug-in hybrid vehicles;
- Introducing a £10 registration charge for the 9+ seat 100% discount.

Of these, the first two (and detection based accounts) will have the biggest impact.  The abolition of the Western extension was an election promise of London Mayor Boris Johnson, as it is widely believed the extension was imposed by the previous Mayor Ken Livingstone because it targeted a part of London that is particularly wealthy (and not particularly supportive of Livingstone) rather than targeting congestion.

The new map of the charging zone is here (PDF), but is essentially identical to the original charging zone.   The impact is expected (according to a firm which is my namesake) to be an increase in traffic of between 6% and 12% in the zone (15% to 21% increase in congestion), and  and a loss of £55 million in net revenue.   However, the overall London impact is expected to be only a 0.5% increase in traffic (up to 4% increase in delays).   Why?  Because there will be a reduction in congestion in the central congestion charge zone.

The reason is because the residents of the Western charging zone will no longer be eligible for the residents' discount of 90%, which has applied to them for all driving within the London congestion charging scheme.  As most of the Western charging zone is residential, the effect is modelled to be a 1-2% decrease in traffic in the central zone and a 2-3% decrease in delays in the central zone.   So the impact will be very mixed.

Of course this will be moreso, as the price is increased:
- £10 for travel paid in advance or on the day of travel (currently £8);
- £12 if paid up till midnight the following day (currently £10);
- £9 if detection based account automatically paid;
- 90p for those eligible for residents' discount if detection based (currently 80p if pre-registered);
- No more new monthly or annual prepaid discounts.  Regular users are encouraged to register for detection based accounts;
- £9 daily for Fleet autopay (currently £7).

The net effect of all of these will be to increase revenue and have a modest effect on demand.   Note that the original effect of the central charging scheme has been severely diluted according to Transport for London because:
- Widespread roadworks due to water and gas pipe replacement has reduced network capacity; and
- Measures to reallocate road capacity to pedestrians, cyclists and buses have effectively reduced network capacity.

It will be interesting to see what happens in the current Western zone once the congestion charge is gone, as to whether congestion increases significantly, and whether the countervailing increases in charges will mitigate this (bear in mind that demand for the central zone affects demand along the corridors through the Western zone).

It would appear unlikely that any future extension of congestion charging in London will be as blunt as creating new area charges (London is not a cordon charge scheme, as it charges movements within as well as across zone boundaries).  

However, in the current economic climate there is little likelihood of much political appetite to do this, even though congestion on London's ancient road network remains severe and chronic throughout the metropolis.

Swiss launch 2nd generation heavy vehicle OBU

Switzerland has the world's oldest electronic based distance road user charging scheme.  The LSVA (Leistungsabhängige Schwerverkehrsabgabe) was launched in 2001, and has the following essential features:
- All goods vehicles over 3.5 tonnes operating on Swiss roads must pay the LSVA distance charge (with few exemptions);
- Vehicles must pay for distance travelled on all public roads, not just motorways;
- The charge is based on gross laden weight, Euro engine (environmental) rating and distance travelled.

Distance is measured with an on board unit (OBU) connected to the vehicle's tachograph.  To avoid fraud (which can easily be undertaken by interfering with the tachograph signal) this is correlated with a GPS unit, which also helps to control the unit when vehicles enter and exit Switzerland.  Foreign vehicles without such units get their odometers measured at entrance and exit and are charged accordingly with a surcharge.

The distance measurement on the OBU is currently transmitted through a smart card which is removed from the OBU and either posted to the Swiss Federal Customs Administration or taken into offices where distance records are checked and payment is taken.

The 2nd generation OBU - Emotach - is to be available from 1 January 2011 with the intention that existing units are all replaced by the end of 2012.  According to Ertico the system supplier is Siemens Solutions and Services AG in Zurich, with sub-supplier Continental in Villingen/Schwenningen for the on-board unit. The new units have the following advantages:
- Greater security for units and smartcards;
- Multiple smartcards can be used so trailers can be more easily interchangeable;
- Bluetooth communication of data to cellphones or terminals, avoiding need to send or insert smartcards;
- Declaration available online;
- Data able to be produced in Microsoft Excel format.
Emotach Swiss distance charging OBU

In addition, it appears the units will be able to be used for the Austrian DSRC based ASFINAG heavy vehicle toll.

Information in more detail is on the Swiss Federal Customs Administration in German, French and Italian.
For heavy vehicle owners, the good news is that the cost of the unit replacement is being fully met by the system operator.   

The Swiss system deserves more attention, because it works well, applies across ALL roads and shows that it isn't bleeding edge technology that is needed.   Although the other side of all of this is that the system was expensive to set up, and that the main benefits for Switzerland have been revenue collected from foreign vehicles (and maintenance savings from reducing the use of its network).  Bear in mind that one of the key reasons the Swiss introduced the LSVA was to capture vehicles that used its roads to bypass French toll roads.

So whilst many consider how to introduce distance charging schemes, the Swiss quietly run one that works rather well.

London Mayor's Air Quality Strategy includes more road charging

London Mayor Boris Johnson has released his Air Quality Strategy (full version here, executive summary here), and it includes a wide range of policy measures for transport and other sectors.  However, for this blog the key interest is in the references to road pricing.   

These are:
- Maintenance of the Low Emission Zone (LEZ) (which imposes a requirement that all vehicles within Greater London over 3.5 tonnes  must be Euro 3 standard or above, or face a £200 a day charge), with it being extended to larger vans, minibuses and motor caravans over 1.2 tonnes from January 2012;
- Continuation of the central London Congestion Charging zone;
- More road charging as a last resort "the Mayor may consider road user charging schemes if other measures at his disposal are deemed insufficient to meet his overall transport goals and where there is a reasonable balance between the objectives of any scheme and its costs and other impacts."
- Tightening the Low Emission Zone to a Euro 4 standard for PM for vehicles over 3.5 tonnes by 2012 (and consider one for NOx from 2015);
- Consider a Low Emission Zone for central London, contiguous with the congestion charge zone with even tougher standards.

In short, existing measures are being maintained and the key change will be tightening of the LEZ, with a potential very high standard central LEZ.   Beyond the existing congestion charge, little more is being said other than the options remain open to undertake more road charging if other measures are inadequate.   What this really means is that the political environment to expand congestion charging simply does not exist in London at the moment, but there is official recognition of the potential for it to do more.

Indonesia aiming for more electronic toll takeup

The Jakarta Post reports that Indonesian toll road company, PT Jasa Marga Tbk, is aiming for a major increase in electronic tolling takeup in the next two years.  Current takeup is only 6%, with the goal being to increase this to 30% by 2012.   This will partly be achieved by installing electronic tolling equipment at all toll gates.

The toll prices at present are complex, partly because Jasa Marga is responsible for 13 individual toll roads, with the Jakarta Outer Ring Road (only partly Jasa Marga responsible) already having 83 toll gates.

Prices range from 2500 Rupiah (US$0.28) to 5000 Rupiah (US$0.56) for cars, with prices ranging up to 4000 Rupiah (US$0.44) to 14000 Rupiah (US$1.55) for the heaviest vehicles.   The high number of tolling points means the tolls are more closely aligned to a form of blunt distance charging, a little like the nationwide DSRC based toll system on motorways in Austria. 

However, it does not appear that Jasa Marga is incentivising electronic tolling for anything other than user convenience and reduced congestion at busy toll booths.   Given the saving in labour, it would be appropriate to have a distinction between electronic accounts and manual tolls.   

More importantly, if I was thinking about reducing congestion in Jakarta, incentivising fully electronic free flow traffic on toll roads would be a higher priority than congestion charging.

No congestion charge for Melbourne says new Deputy Premier

The recent State election in Victoria, Australia saw the Labour Party ousted for the centre-right Liberal/National coalition.  Melbourne has a well developed public transport system (focused on the central business district of course), and for some years there have been discussions about whether a congestion charge (focused on the rather easily defined central city) could help ease traffic congestion and fit in with the city's transport strategy.

The new state government seems to have made its views known through new Deputy Premier Peter Ryan who is reported by AAP as opposing a congestion charge for Melbourne.  

Unfortunately, he is making the common mistake around congestion charging in thinking that such charges automatically mean people need a public transport alternative.   The experience elsewhere is that a significant proportion of motorists do not change modes, but change travel times, consolidate trips or do not undertake trips at all.   Public transport providers should anticipate increased demand, but the real point is that public transport at peak times is also underpriced, so congestion charging is an opportunity for further reforms. 

Another option is not to introduce a new charge, but to rebalance existing charges so that it may cost less at other times.   This would make it advantageous to those driving off peak and would increase overall economic efficiency, and may be designed to be net revenue neutral.

Still, there remains some obvious attraction in introducing a congestion charge for downtown Melbourne predominantly because the city's rail, tram and bus network provides good standards of service into the city from the rest of the metropolis.   However, when most discuss such charges they think of cordon/area charges ala London, Stockholm, rather than considering more disaggregated charges that may vary by time and location.   Congestion charging for Melbourne cannot be blunt, cannot be all day and should not have the same charge on all roads approaching the central city.   Equally important is to consider whether congestion charging is better considered as a form of distance charging rather than single events (e.g. crossing a set point).

Wednesday, 15 December 2010

San Francisco congestion pricing goes forward to next phase

Mercurynews reports that the San Francisco Board of Supervisors has voted to support further studies into a downtown San Francisco cordon based congestion charge, but rejected the San Francisco-San Mateo county boundary congestion charge option.   Both were described in my earlier post here.

It voted 9-2 to dump the San Mateo proposal (which performed poorly compared to the downtown option, and which had serious boundary effect issues).   However, it voted to study the San Francisco downtown charge option based on a US$3 charge in both directions in morning and evening peaks, with an option for a US$6 evening only peak charge.  If studies are encouraging, it could be implemented, following approval by state legislators, by 2015.

This is the right decision.  

Congestion pricing systems should not be based on administrative boundaries, but on roads that are congested.   It should be based to the extent practicable on charges that reflect capacity and demand based on time and location.  Whilst the downtown option has limitations, and potentially negative boundary effects, it is more sophisticated than London's system.  Peak only charges are appropriate, although charges in both directions should differ if congestion differs by direction.  Ideally consideration might be given to charge differentially on certain roads, but this is a first step.

SFCTA now needs to do the detailed work on this proposal.  That means looking at boundary effects, bypass and ring routes, the products that motorists should have available, the discounts and exemptions (which include the ludicrous low income discount), the costs, the governance of the project and its operation and finally, what to do with the revenue.   Motorists need to get value and that means making sure the design and pricing noticeably reduces congestion.  It means the roads that are charged and the roads approaching them are well signposted, but also well maintained.  It also means thinking how public transport can be made more responsive to users and not simply think this is a new cash cow to persist with existing practices and inefficiencies.

San Francisco may be the first city to introduce congestion charging in the USA in the form of cordon pricing, as I have said before.   This is not the ideal form of congestion charging, and there are reasons to criticise the proposal, but yet it is a significant step forward in linking the basic economic principles of demand and supply with price in rationing road space.   It will not solve congestion in San Francisco, it is no silver bullet, it wont provide a pot of cash for a wishlist of expensive transport projects, but it should deliver faster speeds on the roads that are charged.  It should allow buses to flow more freely and efficiently.  It should improve the experience for cyclists and pedestrians.  It should improve the financial viability of public transport.  It should reduce air pollution, and ensure the charged roads can be properly maintained and enhanced.  If done properly it can enhance the economic, social and environmental condition of downtown San Francisco, and be a platform for more sophisticated charging.

However, I would plead that San Francisco look more at Singapore than London for its example of best practice.   For one of the big errors in quoting London is to claim that the London scheme cut congestion in London by 30% or traffic by 30%.  It didn't.  It reduced car traffic volumes by 30% within the charged zone (in the first year, eroding year by year), but around half of all traffic in the charged area was not subject to the charge and did not reduce.   The London charging zone is a tiny fraction of the area of metropolitan London, and congestion reduced only modestly because road space was reallocated to bus lanes, cycle lanes and wider footpaths (which was the goal of the then Mayor).   London has had success, but it is quite wrong to use statistics so grossly out of context and to claim it has freed traffic flow in London - the overall effect has been positive, but much beyond the charging area the effect has been minor.   San Francisco will need to ensure motorists see value for money.

Tuesday, 14 December 2010

Is Jakarta about to introduce congestion charging?

According to a report from Vivanews, a draft regulation of the Jakarta Municipality will authorise the introduction of congestion charging in the Indonesian capital, apparently based on the successful Singapore Electronic Road Pricing model (ERP).   The law apparently grants exemptions for emergency vehicles and buses, but would authorise charging of cars, trucks, taxis and motorcycles.  

It is unclear how the scheme will proceed, but it appears to target specific roads.  Charges will vary according to time of day and will apparently range

"between Rp 15,000 (US$1.6) and Rp 30,000 (US$3.3) for cars".

Another report indicates that the congestion charging scheme will be integrated with other ITS projects, including interoperability with other Indonesian toll roads and electronic ticketing systems for public transport.

Jakarta is a heavily populated metropolitan area.  The city itself has a population of over 9.5 million people, but the greater Jakarta metropolitan area has a population of over 23 million.   Congestion is severe in the city, and the government is committed to addressing this through a combination of road building, major public transport infrastructure expansion and regulatory measures.

It is already illegal to have less than 3 people per private car on certain roads in Jakarta at peak times, effectively making those roads entirely HOV roads, the intention is to replace this law with the charge.

Jakarta has wisely embarked on a high quality bus rapid transit network as well as metro rail, which is proving successful, although a key issue for the city is the dominance of walking as a transport mode.   There is little interest in shifting people from walking to public transport, but rather from driving to public transport.

It is expected that DSRC (Dedicated Short Range Communications) will be used, with ANPR (Automatic Number Plate Recognition) used for enforcement.  The Jakarta Post is supportive, mainly because congestion is so severe and Indonesia sees the success story of Singapore on its doorstep.  Berita Jakarta reports that the revenue will be new, and will benefit the city.  The question is what the money will be used for, as there is strong support for continued spending on improving the city's road and public transport infrastructure.

From my perspective it is good to see Jakarta embracing the Singaporean approach of targeting congestion by location and time.   It is far more likely to gain support, and will generate more economic benefits that the blunt approach of London and slightly less blunt approach of Stockholm (and proposed blunt approach of San Francisco).   Targeting by time encouraging time shifting of trips when the road has more capacity.  Targeting by location allows other parts of the network (if appropriate) to get better utilisation.  Together it has made the Singapore system still the most advanced from a policy perspective in managing traffic flows.

It is a shame policy makers in Europe and North America still look to London and Stockholm, when the real pioneer - Singapore - has been operating a more sophisticated (and effective) system for longer.

Monday, 13 December 2010

North Texas goes fully electronic freeflow


The roads are:
* Addison Airport Toll Tunnel
* Dallas North Tollway
* Lewisville Lake Toll Bridge
* Mountain Creek Lake Bridge
* President George Bush Turnpike
* Sam Rayburn Tollway in Collin, Dallas and Denton Counties

This obviously creates benefits for motorists in reduced congestion, and sees the conversion of the scheme to full DSRC and ANPR technology.  DSRC customers have prepaid accounts and use a specific set of Transcore tags.  ANPR users are charged at 50% higher than DSRC rates.

Good on the NTTA.   Assuming the relevant systems are in place to allow efficient and effective ANPR charging and enforcement, electronic free flow tolling should be on the agenda for all tolling agencies worldwide.  It has been proven now for well over a decade in Canada and Australia, and one of the biggest criticisms of tolling are the queues resulting from manual toll booths.  Indeed the Dartford Crossing near London has this as one of its biggest problems, as a section of highway that already lacks capacity becomes an almost daily hours long bottleneck due to manual tolls.

Questions can be raised about interoperability, about the DSRC technology used and whether it is suitable for longer term goals for ITS and pricing, but that is for another article.  The key point is that electronic free flow tolling is what should be expected nowadays.

Is the Washington Times completely wrong on toll roads?

The Washington Times editorial on 10 December is damning of the Virginian Governor’s policy on using private finance and tolls to improve Virginia’s highway infrastructure. It is easy to dismiss this as a kneejerk reaction to tolls, which advocates of tolling often observe. Some are suspicious that private finance can lead to corruption, and that users can be ripped off.

However, is there some truth behind what the newspaper is saying that those in the tolling/PPP sector need to take on board?

The editorial implies that because Governor O’Donnell announced his plans in the presence of various engineers, investors and consultants involved in the sector, that this was somehow suspicious as such firms will make money from the plans. It would be if there were not open competitive tendering and strict auditing of such procedures. Actually if the private sector was largely set free to initiate and build routes itself, there shouldn’t be a problem, but this is neither the plan, nor what the Washington Times endorses. Transparency is important and I would hope the Governor would ensure that is the case, and the state legislatures should also expect it. The phrase public/private partnership should not be a euphemism for dodgy deals. What is important is for the role of the private sector to be clear and open.

My key criticism is in the establishment of a state infrastructure bank, which implies that road projects can’t be financed by private sector investment at all (which raises the real question as to whether the projects are worthwhile in the first place). If projects are worthwhile they should be attractive to the private sector in raising their own finance and for the costs to be recovered over the long term. There is a separate value in setting up an independent funding body to bypass politically motivated roads funding decisions, but that isn’t the matter here. It should be what Virginia pursues, as it is international best practice.

However, the editorial criticism of the lease of HOT lanes is less well founded. Converting a shoulder into a lane is cheap, but the operation of HOT lanes provides a choice for motorists. The only criticism I would have is that ultimately additional capacity should be added, financed by the lanes, if viable. Finally transponders and camera systems will not track drivers’ every move. Use of a single lane is hardly an infringement on privacy. HOT lanes are a step in the right direction.

Tolling is a market oriented concept, because it is about user pays. Charging for usage of a piece of infrastructure is hardly big government oriented. The claim in the editorial that it is a tax hike is preposterous, as it is only right that those who use highways pay for them. Finally to claim that expanding highway lanes is the only true solution to congestion is part of the point. Basic economics tells you that eventually pricing needs to be combined with infrastructure construction. It would be a significant breakthrough if the Washington Times understood that the value of HOT lanes is in exposing motorists to the laws of supply /demand related to roads, but are only a first step towards moving towards full network road pricing.

Saturday, 11 December 2010

Filipino push for interoperable electronic free flow tolling

Tito F. Hermoso in Business World Online argues that the Filipino government should put a little impetus into encouraging private concessionaires across the Philippines to established a transactions clearing house.   Why?  Because he believes the building blocks are already in place to establish a fully interoperable electronic free flow based tolling system across Filipino toll roads.

The Philippines has built an expressway network between major cities using private concessionaires with tolls, including using the European 5.8GHz standard for DSRC (Dedicated Short Range Communications) technology.  However, whilst that means the tags that motorists acquire for different toll roads can be read at all of the roads, the key is to have the systems behind the different toll roads operators communicating behind the scenes so that payment is seamless.   What is far more important is contractual interoperability, which is good for users, but not necessarily always seen as so by concessionaires.

In short, what Mr Hermoso is rightly calling for is for motorists to have one account with one concessionaire that enables the motorist to use toll roads from other concessionaires and for the account to be deducted for those roads as well.   This is the holy grail of interoperability, an objective of many national or state/regional transport authorities in different countries, but often not achieved either for technical or contractual reasons.  

Of course there should be adequate incentives for concessionaires to do this.  It is cheaper to have such accounts, and they would encourage usage of the toll roads.   However, it does depend on the number of transactions from account holders from different concessionaires making it worthwhile to handle the accounts.  A central clearing house makes all the difference, but the precedents in the tolling world are not as common as one might think. 

What he also suggests is that barriers be removed and for electronic tolling to be free flow, which of course requires high quality ANPR (Automatic Number Plate Recognition) systems, but more importantly clear number plates and an accurate motor vehicle licence plate registry.   I can't say that I am sure the Philippines is ready for that yet, but the aspiration is certainly laudable as one of the big negatives of tolling is the use of manual toll booths which can contribute to congested. 

Friday, 10 December 2010

Tauranga: New Zealand's toll road capital got one wrong

There have been very few toll roads in New Zealand's recent history, but for some reason the city that seems to have had the greatest interest in tolling is not a major one, but a relatively fast growing provincial town called Tauranga (population today of around 120,000).   Outside Tauranga, only one other city (Auckland) has had a toll road in the past 25 years.

Its first project was a very successful harbour bridge, which dramatically shortened (halving) the driving time between Tauranga City Centre and the neighbouring upmarket suburban district of Mt. Maunganui (which is also the locality of the Port of Tauranga, one of New Zealand's most dynamic port companies).   Between 1988 and 2001 it was tolled, after which the tolls had fully paid down the debt and interest (and some) of the bridge and tolls were removed.  The result of removing the toll was an 18% increase in traffic across the bridge (with only a 7% reduction in traffic count on the alternative route) which is hardly surprising.  In fact the continued increase in traffic was such that the bridge and its approaches were increasingly congested.  A proposal to toll the bridge again to fund a duplication of capacity and some grade separated approaches was cancelled, because the government of the day needed support from a minor political party, whose leader was then the MP for Tauranga (and who opposed tolls).  (The duplicated bridge has recently opened).

The third project is the forthcoming Tauranga Eastern Link, being led by central government, it is a motorway bypass 23km long which is to include electronic free flow tolling, entirely ANPR based.  It is a four lane motorway that bypasses one town and a rather tortuous stretch of single carriageway.  

Tolling is specifically to help finance the road, which is also being funded from conventional road taxes (fuel tax and road user charges (weight/distance charge on heavy and diesel vehicles)).

The second project is the one that has gone wrong.  Known as Route K, it was commissioned by the Tauranga City Council as a 5 km single carriageway (1 lane each way) highway bypass of its southern suburbs.  It is located on Google Maps as Takitimu Drive between Route J and State Highway 29 only (the northern half of Takitimu Drive is the untolled approach to the Harbour Bridge).

Tauranga City Council commissioned it as a fully toll funded road, but the problems with it were rather apparent from the start.  It cost NZ$45 million (US$33.7 million) to build, but has lost money every year it has been in operation since 2002.  Tauranga City Council now owes NZ$55 million on the road, and it can neither sell it nor will central government take over this liability.  Why has it failed?

First the route it bypassed wasn't particularly congested (or rather the routes, as there are two parallel suburban main roads).  It was primarily expected to be used by residents of growing southern suburbs, which haven't grown, and the time advantage frankly wasn't good enough for a journey this short.  

Route K is between the Pye Pa Bypass and the SH2 Northern Corridor.
Secondly, the route itself was forecast to need 10,000 vehicles a day to break even.  The fact the road is a single carriageway highway, that is not a crossing should be a clue as to whether enough revenue can be generated from tolls to pay for it.  Furthermore, the road went through analysis according to the Economic Evaluation Manual of the then funding body - Transfund New Zealand - and came out with a benefit cost ratio barely over 1.  That was why it was not funded with other road projects because it was poor value for money.   That tells you that no only could it not be justified from a national economic appraisal point of view, but users also perceived it was not worth paying for to use.

Actual traffic volumes are only 4840 daily,  even that is a 28% increase on a year ago.   Assuming all of those vehicles paid fuel tax (not true but just for argument's sake) and were relatively inefficient, they would only generate another NZ$295,000 p.a. if it was shadow tolled.

So Tauranga has a problem.   It borrowed money and built a road that doesn't have enough traffic and is tolling users and has less than half the demand necessary to break even.   The tolls are not high at NZ$1 (US$0.74) for cars and up to NZ$ 4 (US$3) for trucks, and the Council struggles to raise the tolls by 50%.   It is a manual tolling system with a cheap bespoke tag system that appears to have low takeup (and with a NZ$2 monthly rental for a tag and no discount the incentives to use them are low).

What it shows is the mistake of modelling demand based on assumptions about value of time that do not take into account the cost to users of engaging the toll transaction.  Quite simply put, motorists are far less likely to part with money for a toll than money for another discretionary purchase, particularly if they do not part with tolls regularly elsewhere (After all Route K opened a year after the Harbour Bridge toll was abolished).  In particular, if the new road doesn't bypass particularly congested routes, its appeal will be limited.

Demand has increased recently for two reasons, first the duplicated and improve Harbour Bridge corridor which leads to Route K has meant that it is now part of a far less congested major corridor to the Port, secondly the southern end of Route K is connected to the recently opened Pyes Pa Bypass, which itself comprises a recently improved secondary highway to the major town of Rotorua.  In other words, the road itself was built before its time.

As Tauranga grows and the attractiveness of the route given the roads either end of it, becomes more apparent, then the road will become viable.  Meanwhile a Council is stuck with a gamble, based on poor forecasting and assumptions about revenue! Here is a newspaper article explaining the council's troubles.

Tuesday, 7 December 2010

London congestion charge changes threatened with judicial review

The London Evening Standard reports that a group of environmental activists and former Mayor Ken Livingstone are threatening judicial review of Mayor Boris Johnson's decision to scrap the Western zone of the London Congestion Charge.

"Clean Air in London" is a ginger group comprising Friends of the Earth, Environment Protection UK, ClientEarth, the Campaign for Better Transport, London Forum of Amenity and Civil Societies with Ken Livingstone and former Green mayoral candidate Sian Berry.   It has an explicitly political agenda regarding reducing overall levels of emissions and regards the scrapping of the Western extension to the congestion charge as likely to increase emissions.

The Evening Standard report claims that NOx and particulate emissions will rise 3-4% according to Transport for London estimates once the charge zone is reduced in size.  The campaign group claims that this will break EU laws requiring action to be taken on ensuring pollutants don't exceed maximum WHO standards in public spaces.

The background to this is that former Mayor Ken Livingstone, against some advice, decided to expand his successful central London congestion charge zone to include the wealthy western suburbs of Kensington and Chelsea in 2007.  This reduced traffic volumes in that zone, although it did mean the 90% discount for residents was applied to some of the wealthiest London residents who faced a reduced charge for driving into central London.

Current Mayor Boris Johnson campaigned on abolishing the Western extension, which was seen by some as Ken Livingstone's tax on rich Londoners who did not vote for him.   It was seen by businesses just within the charging zone as punitive, because the London congestion charge period is from 0700-1800, meaning no respite at all from the charge during off peak hours.

Johnson's consultation saw a majority support abolishing the zone, so he decided to do so, despite the loss of millions of pounds in revenue.   In effect the London congestion charging zone will shrink by around half, but the price for the central zone is to increase from £8 to £10 (US$15.80) and a range of other changes are being introduced (such as tightening discounts for low emission vehicles).

Whether a judicial review is undertaken or not is unclear, and will no doubt depend on legal advice to the activists, but still it raises the real issue of what now to do about traffic in the affected area.   I don't think the Western extension as it was introduced was the right option, but London's traffic congestion problems are not eased by the central zone alone.  Nor can they be eased by pricing alone.   However, I doubt if they can be eased without more pricing.

London congestion charge zones, Western extension is the left half, original central zone on the right. Dark blue routes are the free "bypass" routes that complete the ring roads around the two zones (vehicles are not charged for using those routes).

Monday, 6 December 2010

London tolls in the 18th century

Spatial Analysis blog has published a map of private turnpikes that surrounded many parts of London in the 18th century.  Some commentators said it shows London had congestion charging "centuries ago" when actually it shows how London's roads were built by private enterprise and user pays.  Bearing in mind of course that this is in the age before motorised land transport!


18th century London turnpike map

Head of First Group supports congestion charging for Aberdeen

The Aberdeen Press and Journal reports that Tim O'Toole, the new chief executive of First Group says a congestion charge in Aberdeen would see improved bus services.  The local authority had considered and rejected the idea, although it would apparently generate £2.7 million (US$4.2 million) in net revenue per annum.  He believes it would be the single biggest move to improve service reliability.

Given Scotland's devolved government has abolished tolls on all roads as it prefers tax funded roads, it is unlikely to make much difference, but still it is important to have the point raised.  Clearly the key improvements for buses would be faster and more reliable operations with less congestion, and higher demand would allow for more services to be introduced (even without subsidies, as almost all bus services in Aberdeen are provided commercially).

Congestion pricing explained by video

Lewis Lehe was an economics student who decided to use video to explain some economic concepts. These videos were featured on Rustwire here.  He is keen on the concept of congestion pricing, and frankly this is one of the clearest ways of explaining the issues around rationing road use by price.  I think these are excellent.




Just imagine the difference videos like this would have made with debates on road pricing in the UK, New York and elsewhere.  Lewis has exceptional communications talent.

Growth in toll roads in the Philippines

Manila Bulletin reports that the Philippines will see a major expansion in toll roads and PPP highways as the country continues to improve its infrastructure.

Ramoncito S. Fernandez, president and CEO of Metro Pacific Tollways Corporation (MPTC).  MPTC is the holding company that has under its wing the Manila North Tollways Corporation (MNTC), the builder and concessionaire of the North Luzon Expressway, and the Tollways Management Corporation (TMC), the operations and maintenance (O&M) operator of both the NLEx and the Subic-Clark-Tarlac Expressway.  

A range of new toll road projects are expected including the 13.2km North Luzon-South Luzon Connector, but there are also light rail projects expected to attract PPP investments.

Yet again a developing country sees merit in using private capital to build and run highways and to charge directly for use, funny how so many developed countries find this a big challenge.

14 December day of decision on San Francisco congestion pricing

San Francisco Business Times notes that the San Francisco County Transportation Authority board will decide 14 December whether to commission further studies for a congestion pricing pilot.  The pilot is  expected to last up to 12 months, but not start till 2015.

Saturday, 4 December 2010

Will Taiwan be first with mandatory OBUs for national freeways?

Taiwan has had barrier controlled toll highways for some years, with its own bespoke developed Electronic Toll Collection (ETC) system (although not electronic free flow).   Now it is moving to make it compulsory  to have OBUs by 2012 as it moves towards a distance charging system.   It is understood that this means distance measured by segment, similar to the LKW-Maut in Germany.  However, unlike the LKW-Maut it will be a DSRC (dedicated short range communication, otherwise know as tag and beacon) based measurement of distance.

The proposal is controversial, because the bespoke tags are expensive and Automatic Number Plate Recognition (ANPR) is still to be used and available.  In principle, the key benefit is to get rid of toll stations and the congestion they can create, but beyond that charging by distance will be closer to usage than ever before.  

If Taiwan achieves conversion to full electronic free flow on a nationwide freeway network for cars it will be a world first, as the only free flow network systems that exist are for heavy vehicles only.

(In the context of this post I am treating Taiwan, Republic of China as a sovereign state distinct from the People's Republic of China, acknowledging that there are two sovereign governments on the territory known as China.  So as a result I am using the convention that Taiwan is, de facto, a sovereign state).

London Congestion Charge to offer detection based accounts

Until 4 January 2011, the only way individual motorists could pay for the London congestion charge was to prepay - in effect a declaration based model whereby one paid (either online, by phone or over the counter) for a day or more use of the roads within the congestion charge zone.   If you didn't drive on that day, it didn't matter.  This prepayment meant that money was collected regardless of usage, and meant that earlier inaccuracies with Automatic Number Plate Recognition (ANPR) technology did not weaken overall revenues.  

You see one of the earlier issues was that the cameras originally introduced in 2003 only reliably detected and read a number plate around 60% of the time.  Given the average trip usually saw a vehicle pass by 2.5 cameras, this wasn't much of a problem, but by requiring everyone to prepay it eliminated the issue except for enforcement purposes.  However, since then the cameras have been replaced and the accuracy levels have significantly improved (I believe around 75%-80% on average but cannot confirm). 

One of the pledges of the current London Mayor, Boris Johnson, on being elected was to make it easier to comply with the congestion charge.  So from 4 January 2011 for a £10 registration fee, motorists will be able to set up detection based accounts which will charge based purely on usage.   In other words if your vehicle is detected within the charging zone during charging hours (and you are registered) you will be charged automatically with a £1 discount (reason presumably being because the payment details already exist, and automatic debits are cheaper to process than individual one off payments).

This change is one of several occurring on that date which includes:
- An increase in the base charge to £10 (£9 for detection based accounts);
- Termination of the Western extension charging zone, reducing the congestion charge to its original size.

No doubt this will reduce compliance costs for users, and will be of great benefit to motorists.  However, the financials wont add up unless the savings from automatic direct debits are more than enough to make up the losses from the handful of vehicles that wont be detected on their trips.  Even 75% accuracy of ANPR cameras (and I would have thought London should be pushing 85% nowadays) with average 2.5 readings should be enough.

I will write more about the other London changes later.

Details of these changes are in this leaflet.

Ohio next major toll road privatisation?

Associated Press is reporting that the newly elected Ohio Governor, John Kasich (Republican) has said he is interested in privatising the Ohio Turnpike Commission, which is responsible for the 388km long Ohio Turnpike toll road.   The road runs east-west from Indiana to Pennsylvania, and is the I-76, I-80 and I-90. 

The privatisation is being investigated, with one concern being whether the price obtained in current market conditions would be worth it - although given the size and scale there is little doubt it would raise well over US$1 billion.   The toll road fully funds its own operation and maintenance and is so successful that the previous Governor diverted surplus revenue from the road to fund other road improvements in the state.

Hopefully if sold the new owners will be able to invest in new capacity and to vary charges to manage congestion.  Such privatisations should enable owners to optimise utilisation of their assets.

In any case, privatising the Ohio Turnpike would be an enormous transaction, rivalling the Chicago Skyway and Indiana Toll Roads, and showing once again, that government need not finance or manage highways.

UPDATE:  One report states that a sale is unlikely according to a spokesman for the Governor elect, because the state would not get a good price in the current investment climate.

San Francisco congestion pricing debate heats up

As reported on 17 November, one of the most significant road pricing proposals in the USA today are the two options presented by the San Francisco County Transportation Authority to introduce cordon pricing.  

One is the central city cordon (right), which would see an AM peak (0600-0900) charge of US$3 with a PM peak (1500-1900) charge of US$3.  The charge would be capped at US$6 and those who pay tolls on the Bay and Golden Gate Bridges would get a US$1 discount.   Residents, the disabled and "low income" drivers would get 50% discounts.  For what it is worth, it is my preference although I'd want to be sure that roads to bypass this cordon were clearly marked and capable of handling through traffic.  Indeed the appraisal done of this option indicates it is better, although I am not fully convinced of those results.

The second option is the southern cordon (right) which imposes charges at the Golden Gate and Bay Bridges, and more controversially one at the administrative boundary of San Francisco County at the southern end.  The charges would be the same.  

Now I have a few problems with the concepts, in particular I don't think you win motorists over by spending the majority of the money raised on modes other than roads (public transit needs serious structural and governance reform in San Francisco so I would prefer it was reformed before it got more subsidies), but in principle this is a significant leap forward.

San Francisco Streetsblog outlines some of the more irrational arguments, but also the media coverage that evades the facts around the proposals.   

One that I wanted to highlight is that by Adrienne Tissler who bizarrely argued that the proposals would increase congestion because of peak spreading (she didn't call it that because she doesn't actually understand it).  She made this astonishing contradictory assertion:

Drivers who can will adjust their drive times to avoid the toll hours, creating congestion during nontoll hours. This just means bad traffic all day, at all hours.

So she figures, correctly, that some drivers will change drive times, but she claims there will be "bad traffic all day at all hours".  However, what does she think happens when people change driving times?  There is less traffic at the most congested times.   Presumably the charging hours have been set because at other times there is capacity in the road network that can be used without creating significant delays.   Otherwise, Adrienne Tissler, 2010 vice chair of the Metropolitan Transportation Commission, doesn't understand basic economics because she thinks increasing the price of a basic commodity INCREASES demand.

In NO case where congestion charging has been introduced has congestion suddenly worsened at other times or on bypass routes (that will be the next argument - the quaint notion that when faced with a charge, motorists will avoid the place they were intending to go to in the first place, clogging up other roads).

As I mentioned before, if you want all of the publicly available information about the San Francisco congestion charging proposals it is here.

I firmly believe that the county line proposal is not worth pursuing, but it will be the one argued by most opponents because it doesn't really match where congestion is, rather it is simply an administrative boundary.   If it gets dropped then the San Mateo County opposition may be diluted as one report indicated there wont be opposition to a central city focused charge.

However, the conventional arguments will come out.  The fear it will damage retail (when the charge doesn't cover the daytime interpeak).  The fear it will hurt the poor (some of whom don't drive, and it ignores the proposed discounts for residents and the low income).  The fear it is just another tax (which it arguably is, but for which the revenue will be put into a cash starved transport system). 

Yes a lot of detail needs to be ironed out, including how and whether all the discounts can be affordably introduced (I have designed a low income discount scheme for road pricing and it is far from cheap if it isn't to become an easy source of fraud), and how the roads adjacent to a cordon (and through it) will be managed.  However, San Francisco has an opportunity to show the rest of the USA how basic fundamental free market principles of pricing can be used for the greater economic and environmental good of a city, when applied to roads.