Monday, 25 July 2011

Weekend shorts: India, London and Transurban


In Thane District, Mumbai, India, there is a political problem with tolls. People don’t know what they are paid for. So, according to the Times of India, the State Excise Minister, Ganesh Naik, has decided that at every toll plaza electronic signs should be installed to tell people where the money is going. He accepted the suggestion by MP Eknath Shinde who said:

I suggest that toll operators must put up computerized display boards listing out the total cost of the project, the toll collected till date, and the number of vehicles passing through the toll plaza and their daily collection data

This is intended to give people confidence that the tolls aren’t being wasted, and I suggest provide an audit to ensure toll plazas are collecting what they should.

The report continued:

Thane district has a total of 14 toll plazas and residents of Thane, Navi Mumbai, Kalyan have to pay anywhere between Rs 30(US$0.68) to Rs 50 (US$1.13) towards toll every time they drive in or out of the city.

The Minister asked for an investigation into whether any toll plazas might be eliminated. Now if ever there was a country crying out for more up to date tolling, it would be India. Manual tolls always carry risks of corruption and theft, and there are relatively easy ways of addressing this.


Guardian journalist Dave Hill asked Transport for London for a breakdown of the estimated £55 million p.a. net loss in revenue from the closure at the end of 2010 of the Western extension to the London Congestion Charge zone. It replied that it would lose £65 million gross and save £10 million p.a. in operating costs. Of the gross revenue, one third is from enforcement revenue. Yes, about £21 million p.a. was made from the Western extension in fines through Penalty Charge Notices. In other words, the money is made from people not complying with the law. Now it doesn’t take too many people to make that much money. Given the fine is £60 if you pay within 14 days (£120 if you pay within 28 days), compared to what was an £8 charge, you need 9 times as many law-abiding users to make as much money as one violator (operating costs for pursuing violators are higher, and let’s assume quite a few don’t pay in time). Any urban road pricing scheme ought not to be THAT dependent on violation revenue, but it should be a gentle notice to those considering it. The real money can be made from enforcement, as the fines have to be high to deter people, and you need few violators to make a lot of money. I gather non-compliance with the London scheme is less than 5%, so less than 1 in 20 vehicles that should pay, don’t pay. That is about right, but from that 5% one can make over a third of revenue.

AND just to show you shouldn't believe everything you read, a website called Ars technica (!) claimed this:

"the government built an extensive network of surveillance cameras with license-plate-reading technology as a way to fight car bombings by the Irish Republican Army. The network proved useful a decade later when London introduced a congestion charge (now £10) for entry into central London. The cameras snap pictures of all vehicles entering and leaving the congestion zone and match their license plates against government records."

Except that it wasn't the same network. A bespoke network of cameras were introduced that would take two images - a context one, and an ANPR one - were introduced.

Then it makes another mistake saying:

We've already mentioned the London congestion tolling system, and Singapore has had a similar system, known as cordon tolling, in place since the 1970s.

No, Singapore had a paper based system called Area Licencing Scheme since the 1970s, and replaced it with a non-cordon system called Electronic Road Pricing, using quite different technology (involving prepaid smartcards) that applies varying prices on different roads at different times. Similar? Barely.

Then it concludes:

Unfortunately, the people building these systems don't seem to be making privacy a priority.

I guess if you don't bother looking at how Singapore DOES make privacy a priority (prepaid anonymous smartcards), or Eroads in New Zealand does (measuring distance only against a prepaid licence), or the Swiss system (which only measures distance), then you'll make this mistake. However, if you only talk to people in your own country, then it's hardly surprising you'll get a rather distorted view.


Australian toll road investor Transurban is a shining star in a world of toll road investors that have been burnt by the poor economic conditions in Spain, Portugal, Ireland and the US. According to The Australian, just under half of Transurban’s revenues come from one road – Melbourne Citylink. It isn’t difficult to understand why. Citylink includes the main highway from Melbourne’s main airport to the city (and there is no parallel rail link), as a result is a north-south bypass of the city, and an east-west one as well, providing connections from the south and east to the airport. It is in such a strategic position it is bound to do well, and its revenues grew 15.4% in the 6 months to December 2010. It bought Sydney’s Lane Cove Tunnel, which has tremendous potential as Sydney’s primary artery north. The company has been wise to not jump on more questionable assets, like Brisbane’s Clem 7 tunnel, but will have its eyes on roads with potential for growth. In that respect, I’d have thought it would have been disappointed that the British Government is not now selling the Dartford Crossing. Its share price is A$5.15 as of last quote, and it has been trading within a range of A$5.07-$A5.50 during the last 6 months.

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