Thursday, 12 May 2016

Committee for Sydney says road pricing is the only way to address congestion

The Sydney Morning Herald reports on the Committee for Sydney's new report called A Fork in the Road (PDF), which advocates road pricing to address the city's traffic congestion problems.  The Committee for Sydney claims it is an independent think-tank that aims to champion the city.  Its executive board includes bank, law firm, consultancy and infrastructure representatives.  Although I broadly agree with the findings of the report, it isn't exactly new or ground breaking, some of the terminology used is odd (it talks about vehicle miles traveled charges charging for kilometres) and it fails to consider the wider strategic context of highway charging, funding and management.   It's a useful contribution to the debate about transport in Sydney, and its conclusions are largely sound, with its call for an inquiry into road pricing being welcome.  However, I think it could have gone much further and thought more strategically about how roads are managed, charged and funded.  It's lacking some context, which to me is the Infrastructure Australia, Australian Infrastructure Plan which called for road pricing on all roads for all vehicles within 10 years. Surely that should be relevant?

It repeats conclusions that are far from new or ground-breaking, such as how simply providing new capacity is insufficient, although it does seem to exaggerate the over generalised assertion of induced demand.   Induced demand is a valid assertion in conditions of continued growth, but is not applicable to all (or indeed much) new capacity in other situations and most importantly, when capacity is priced efficiently.  Almost all cases cited of induced demand involve the almost cost-free provision of new infrastructure.  It is also never claimed of public transport, although that do has an induced demand effect (and it too is rarely priced efficiently at peak times).  

The fundamental problem of ALL major cities is that peak travel demand is underpriced on all motorised modes.  This means that supply cannot efficiently match demand (as unless it is priced to pay for the peak supply cost, it has to be subsidised by non-users).  The answer is for peak demand to spread by time of day, route and location, and that means road and public transport use.  However, if all road users and public transport users faced those costs tomorrow, it would mean a significant economic dislocation, so transition needs to be gradual.

The report does note that simply increasing public transport supply (at someone else's cost, because urban public transport is typically not fully or even predominantly paid for by the users) is insufficient (and indeed nowhere has traffic congestion been addressed by this alone).   On page 9 it notes that TDP (Time, Distance, Place) based road pricing is the answer, curiously using a term I've only ever seen in the UK. 

It is critical of tolling in Sydney claiming such projects are promoted because they are fundable, rather than necessary or the "best way" of meeting an access need (although I'm wary of groups that claim they are best placed to know what projects are "necessary" if users are willing to pay for them).

It cites dated data about the London congestion charge (traffic congestion is now at levels before the charge was introduced), although the Stockholm, Milan and Singapore case studies are more robust (although I'm surprised there is no mention of Singapore's transition towards GNSS based charging that enables "TDP" charging).  

The big surprise to me is that not a word is uttered about the examples of distance charging extant already in Europe, the US and New Zealand, including the pilots underway in Oregon and soon California.  Nothing is said about the clear distortions and inefficiencies of vehicle registration fees and fuel taxes, and the longer term revenue and equity sustainability issues around those.   Furthermore, a shift towards road pricing raises the question as to what sort of entity should manage roads and set prices.  It is unlikely to be optimal to have an entity that requires legislative changes to alter prices and has a high degree of political direction.

It is likely that New South Wales will move in the next decade to having distance, weight and maybe even location and time of day charging for all heavy vehicles, which provides a platform that could also be used for light vehicles.    This may offer one path ahead, but meanwhile the conclusion of the report that there ought to be a public inquiry into road pricing in New South Wales is welcome.   The Committee for Sydney should be applauded for wading into an issue that could easily be unpopular and create a backlash among many, the key will be ensuring that public acceptability and perceptions of fairness are addressed.   

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