Japan planning introduce time and location based pricing on expressways nationwide

 Japan's nationwide expressway network is run by a series of private businesses. In 1956, the Japan Highway Public Corporation was formed to build and operate a national highway network, using tolls and accessing private financing. At the time, only 23% of Japan's national highway network was sealed including only two-thirds of the Tokyo-Osaka highway.  Tolling was extensively used, and for sections of highway that did not gain private finance, the government guaranteed the loans. Tolling revenue was pooled to cross-subsidise parts of the network that did not generate enough toll revenue to pay for construction (details on the history of highway in Japan is available here (PDF). 

In 2005, the Japan Highway Public Corporation was split and privatised into multiple companies, including the Japan Expressway Debt Repayment Agency (to use toll revenue to repay the considerable debt that remained for the development of the network) and six regional expressway companies. They are:

• East Nippon Expressway Company Limited;
• Central Nippon Expressway Company Limited;
• West Nippon Expressway Company Limited;
• Metropolitan Expressway Public Corporation (Tokyo);
• Hashin Expressway Public Corporation (Osaka-Kobe-Kyoto); and
• Honshu-Shikoku Bridge Authority.

Tolls were authorised to be collected until 2050, recently extended to 2065.  The privatisation was driven by several concerns, in particular:

• As Japan's network had essentially been completed, there was concern about public ownership enabling politicians to authorise new construction that favoured the construction industry, even if projects were not viable. 
• The pooling of toll revenue nationwide was seen to enable this cross-subsidisation where there was no need for new infrastructure. Residents objected to paying higher tolls in their area for projects that were far away from them and of dubious economic value.
• Interest in improving the efficiency of administration and encourage innovation in operations of the network.
• Interest in enabling comparisons between the performance of companies so encourage more productivity and lift standards across the sector.
• Concern about the levels of debt government was taking on for the expressway company, and privatisation was seen as a way to put discipline on costs, debt and the scale of capital spending.

Map of Japan's expressways and major highways

The national expressway network is 9050km long. Tolls in Japan are generally set to reflect distance travelled between interchanges, and vary by vehicle type. Most toll roads still have a mix of electronic and manual toll lanes.

So the announcement in the Japan Times in the past week that the Ministry of Land, Infrastructure, Transport and Tourism will be introducing the ability for expressway companies to introduce time-of-day varying tolls, based on location, to manage congestion, is a significant step for the history of expressways in Japan.  It was trialled during the 2021 Tokyo Olympics with a higher daytime charge, and discounts after midnight, but the idea is that time periods and variations in toll fees will depend upon the specific route and the conditions on it. This is NOT dynamic tolls, but rather targeted congestion pricing to enable more free flowing traffic and reduce pollution.

Also announced was the enabling of commuter passes for high frequency users of toll roads in particular areas, to encourage greater use of expressways to remove traffic from untolled parallel local roads.

What will be of interest is how congestion pricing (which is what it is) will be applied to urban tolled expressways as there is an obvious risk that it could divert some traffic onto parallel routes, and it would not take much of a diversion to severely impact such routes. Although most urban expressways offer significant improvements in travel time, there may be localised points of networks to avoid tolls that could cause worse congestion on the local network (which is not the responsibility of the expressway companies).