Monday, 11 June 2012

Budapest congestion charge in 2013?

Hungarian financial paper, Napi Gazdaság, leaked a draft budget last week suggesting that the Budapest owned public transport company, BKV, is to cease receiving central government subsidies from next year. The speculation is that the city of Budapest will be expected to make up the difference with a congestion charge. Budapest is already required to have a congestion charge as part of a deal it struck in receiving European Commission funding for new metro line M4.

According to the Budapest Times, Mayor István Tarlós said that around 15 Billion Hungarian Forints (about US$64 million) is needed to make up the difference, and options for congestion pricing for the city are likely to raise between 20 and 40 billion Forints (US$85 million and US$170 million) per annum. Budapest does have chronic traffic congestion, as car ownership has increased significantly in the past 20 years, road capacity in the city has not. Although the public transport network is to a good standard, the simple point is that with car ownership, people prefer to drive even if they face considerable delays. A congestion charge for Budapest intrinsically makes sense, the primary issue (as always) is what sort of system should be installed, where and what the structure of a charge should be. The Mayor suggests the cordon should be the one identified below, following one of Budapest’s inner ring routes. 


However, I suggest it may be more worthwhile to have lower charges for crossing a wider number of zones, to better target congestion by spread the charge equitably according to time of day, location and direction of travel. 


However, if it is intended that something be operational in a year’s time, it is already too late to get started. Even if an option was selected today, it should take no less than two years to get installed, tested and operating a reliable system for users, including providing the necessary information and publicity (and enforcement systems) so that it operates in a way that is most acceptable to users. Given rumours that the Hungarian government is highly resistant to the use of overseas consultants and contractors, it seems unlikely that Hungarian only companies could do this quickly, given that road pricing experience in Hungary of this nature is limited to the (admittedly reliable, efficient and well functioning) motorway only electronic vignette system. 

Work is apparently underway on the “limits” to a congestion charge, suggesting that it has already been decided that it will be a single cordon based scheme, although decisions on whether it is an area charge, whether it will charge inbound AND outbound traffic, and at what times and rates, do not appear to have been made. 

 For Budapest congestion pricing to proceed, it needs work done not just on traffic flow (which will change in multiple ways once pricing is introduced), public transport capacity and technology, but also customer service, enforcement/compliance and business rules necessary when dealing with people who have little exposure to paying to use roads that were previously uncharged. 

 If it can do it well, it will not only help provide funds for public transport, but also the city’s road network, significantly reduce congestion, improve the attractiveness of walking, cycling, river, metro, tram and bus services, and improve air quality. It also would be the first large city in the east of Europe to have taken such a bold step forward. Given that it has to happen, the city and the national government need to move fast to make sure it can happen in a way that delivers the greatest gains for the city in terms of congestion reduction, improve air quality and generating net revenue. At present, there is not much evidence of the right amount of action needed to ensure this will happen. 

In my previous article on Budapest congestion pricing around a year ago, I noted the city does not have legal authority to introducing pricing in itself – there needs to be national legislation to permit it. Until that is passed, nothing much is likely to be able to happen beyond planning. 

Local support?

Curiously, a website has been set up by economist Szilárd Erhart, which appears to be promoting the idea (the English sections appear to not have been updated for a few years, but Hungarian is kept up to date). It isn’t common to find private citizens advocating for road pricing, but good on him.

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