News Briefs - Australia, Canada, Ireland, South Africa, USA

Australia – Survey says distance based congestion charge would change behaviour

According to AAP, reported by Perth Now, a survey from the University of Sydney has indicated that a distance based congestion charge of A$0.05/km (US$0.08 mile) at peak times could see 22% of peak commuters driving at different times (assuming a charge between 0700-0930 and 1630-1830) and 13% to shift to public transport.

The survey comprised 1000 adults. 66% said they had no flexibility to change travel times for commuting, but the other 34% said they did.

Obviously a survey isn’t a wholly reliable measure of behaviour, but what I find telling is the potential for time shift. Far too many think congestion pricing is about mode shift, when there is as much (if not more) to gain from changing time of travel to periods when there remains spare road capacity, which means getting optimal use of the network.

Canada - British Columbia debates road pricing

According to Straight.com, British Columbian Green Party leader, Jane Sterk, has come out in favour of "pay-as-you-drive" road pricing for Vancouver, to reduce congestion and raise revenue to pay for public transport.  The same article notes that the current Minister of Transportation and Infrastructure for the province, Mary Polak (Liberal), says the issue is up to the cities to come up with a proposal and convince the provincial government that it has public support, whilst the Opposition spokesman Harry Bains prefers to consider other measures first.  The general election for British Columbia is on 14 May.

Meanwhile, the Delta Optimist has published an opinion piece by Ted Murphy who says that road pricing is likely to be the best option:

It stands to reason those who put the greatest strain on the system, and those who are most likely to benefit from any improvements, should be the ones that pay the largest share of the tab.

Conversely, it doesn't make much sense for homeowners, who are an easy mark but don't necessarily tax the transportation network, to continually be gouged every time TransLink is in need of more cash.

There's much to be worked out when it comes to road pricing, and there will undoubtedly be resistance to the idea of paying to traverse roads that up to now have been free, but at the end of the day I suspect it will be the favoured option.

It's not a question of if, but how, they're going to extract more money from us, so they might as well do it in the fairest way possible.

It isn't clear as to whether British Columbia voters think the same way.

Ireland - manual toll booths add costs to trucking firms

The Independent in Ireland reports that toll booth barriers cost them on average an extra (Euro) 0.99c each time (US$1.30) in wasted fuel.  This is with DSRC toll tags that enable automatic payment, but require trucks to slow down to a crawl to trigger the lift of the barrier.

This is crazy of course. The M50 toll road in Ireland was converted to electronic free flow a few years ago, largely because of congestion (it being the ring road for Dublin).  There ought to be a transition towards at least a mix of free flow lanes and barrier lanes.

South Africa - 24 years to repay debts for Gauteng Freeway Improvement Project

Eyewitness News reports that the South African National Roads Authority Ltd has said that it will take 24 years of toll revenues to repay the debts incurred to build the Gauteng Freeway Improvement Project. This is based on the (R)30c/km (US$0.05 per mile) rate agreed by the Government.  The maximum monthly that can be charged is R550 (around US$61).

USA - Maryland - Intercounty Connector exceeds forecasts

At a time when there are more than a few examples of toll roads that have demand well below forecasts, it is perhaps good news to report on the InterCounty Connector in Maryland (Maryland Route 200), a fully electronic toll road that opened in 2011.  According to the Washington Examiner, estimates of 30,000 daily users by June 2012 have been exceeded on the western end of the road by September 2012 (to 35,000) and not far behind on the eastern end (26,000).  The road raised US$19.7 in the year ended June 2012 compared to projections of US$18.7 million.

Maryland's toll enforcement inadequate says report

The Washington Post has reported that the state of Maryland has been inadequate in enforcing tolls against motorists who drive through free flow toll lanes without EZ Pass transponders.  The story is a damnable indictment on poor legislation and policy.  15,000 motorists owe over $500 each in unpaid tolls and nine rental car companies also owe tolls ranging from $80,000 to $209,000, with violations dating back up to eight years.  A total of nearly 650,000 vehicle owners owe the state $6.7 million in unpaid tolls and fees.   

Maryland toll roads

A table produced by the newspaper indicates violations have increased substantially in the past year, from 386,000 in 2011 to 692,000 in 2012, with a $2 million increase in the value of violations.

The Maryland Transportation Authority threatens to suspend vehicle registrations of violators, but hasn't done so for two years because it has failed to issue $50 citations which it must do in advance of suspension.

What does it do?

the authority, which operates the state’s eight toll facilities, mails vehicle owners a “notice of toll due.” After 30 days of nonpayment, the authority tacks on a $25 fee. Repeat violators are referred to the state’s central collection unit, which continues to send periodic letters requesting payment. But unlike its practice with other types of debt owed to the state, the unit never reports chronic toll violators to credit-rating agencies.

Tony Fugett, the unit’s director, said toll violators receive two letters and an occasional automated phone call requesting payment. After that, they receive a letter once a year. The state can deduct money owed from lottery winnings, contractor payments or state income tax refunds, Fugett said. If none of those is applicable, he said, “I guess there’s nothing we’d have in our arsenal other than continuing to contact people.”

So the letters are toothless.  Yet the Maryland Transportation Authority regards this level as manageable as violations only cost 0.2% of total revenues.  Manageable until now, because why would anyone continue to pay when the state doesn't actually do anything beyond negotiate for payment?

It has become more of an issue because toll rates are planned to rise in July 2013, and those that do pay are less than happy that "being good" seems a bit unfair, when those who don't pay face few consequences.  The Authority's reason for not issuing the $50 citation is that it wants to be more "customer friendly", but at what point is being customer friendly letting violations accumulate over years whilst seeking to put up prices for those who do pay?  A quarter of unpaid tolls are out of state and the state has no reciprocal enforcement agreements with other states.

A bill had been drafted to allow the Authority to suspend registrations and to allow for interstate agreements, but it went nowhere.

The article claims that the Authority sends details of vehicle owners who incur debts of over $30 to the state debt collection unit, referring 700 to it in the 2012/2011 fiscal year. 

The article is interesting in reporting violation rates of toll roads in neighbouring states:

New Jersey 1.4%

Virginia  1.7%

Delaware 3.4%

It also describes the enforcement procedures in other states:

New Jersey has arrested some of its most flagrant toll cheats on ­theft-of-services charges and recently posted a “Wall of Shame” on the Internet listing toll scofflaws by name and home town. Three states — Massachusetts, Maine and New Hampshire — recently entered the first-ever reciprocity agreement to pursue vehicle registrations of out-of-state toll violators.

In Virginia, vehicle owners with three or more unpaid violations are summoned to a court hearing, where a judge may impose a civil penalty of up to $500 for multiple violations. If an owner ignores the court-ordered fines, the state puts a hold on the vehicle’s registration renewal.

Conclusion

The primary blame for this appears to lie in two places.  First, the state legislature which has refused to change the law to make it easier to enforce tolls and to enable more efficient enforcement of out of state violations.  Secondly, the Authority seems unwilling or unable to issue citations, and wanting to appear "customer friendly" doesn't seem like a good enough reason.  If it is legal, then the laws needs changing.

Compared to free flow tolling elsewhere, this practice simply seems absurd.  Fines should recover more than the cost of enforcement and be a deterrent, and the state should be able to recover debt like any other.   Not having a robust enforcement process will undermine future revenues as more and more realise that they are unlikely to face serious consequences if they don't pay ( the state can take the tolls and fines out of lottery winnings and tax refunds, but this affects few).  It is core to any robust electronic tolling system to have serious sanctions for not paying.   Maryland oddly seems unable and the legislature unwilling to address it.

News briefs: UK, Canada, Maryland, New Jersey

UK

Parliamentary Under Secretary of State for Transport, Mike Penning has announced that the UK government will not be proceeding with its proposed 33% increase in toll charges this year (or 25% next year) on the busy Dartford Crossing, according to the Essex Enquirer.  The increase proposal resulted in a flurry of submissions to the government opposing it, given the underlying economic conditions.  The government has delayed decisions on increases until 2012, and there is speculation that increases may follow the proposed conversion of the crossing to a fully electronic free flow system to relieve the chronic congestion at the toll booths.  The government is also considering options to build a fourth crossing (it currently consists of two tunnels northbound and one bridge southbound), which would be funded by the tolls.  I previously reported on the Dartford Crossing issue late last year.  Trucking lobby group the Freight Transport Association supports the decision and is calling for the introduction of free flow tolls as soon as possible and any future toll revenue to go into additional capacity.

Toronto

The Star (Toronto) reported some interesting comments from former head of Metrolinx (the Toronto transport authority) at a conference on road pricing:

-  Most citizens believe governments already have the funds they need for transportation. (true)

-  Don't ask people to do things that are against human nature. (true)

-  Transportation agencies need to approach their industry as if it were a consumer product and sell convenience and availability. Transportation should be a lifestyle product, something the customer wants to be associated with. (true)

- You can make a regional case for road pricing but you have to remember to sell it locally. A lot of things come down to the individual and neighbourhoods. (true)

- Make sure you are getting the best capacity out of existing infrastructure. The Ontario government invested more than $300 million in high occupancy vehicle lanes but doesn’t charge for them. (true)

- The only thing people detest more than sprawl is density. (quite!)

- When it comes to pricing structures, it's all about choice. You have to provide people with alternatives. (the question is whether this is mode, route and time of day or part of these)

- Generally the public supports funding for capital — new vehicles, new transit lines or new roads. It is less enthusiastic about paying to operate and maintain those things.(obviously)

I wrote before that Toronto, which already has a free flow toll road, is debating adding a toll lane to an existing road.  However, the debate needs to be had for it to go further.

New Jersey

Bloomberg Businessweek is reporting that New Jersey Turnpike Authority toll roads are forecasting a $45 million shortfall for the year to September, 6% below target.  Part of the decrease is due to snowstorms and Hurricane Irene, but most is attributed to the economy suppressing demand.  This is not expected to cause major problems for the roads, as revenue is adequate to cover opex, capital expenditure and service debts.  Meanwhile, plans to increase tolls on two major turnpikes in New Jersey are proceeding, with the main intention being to general significant net revenues for the state.

New Jersey Turnpike tolls due to rise 53% in January 2012 on the 148 mile highway.

Garden State Parkway tolls due to rise 50% in January 2012 on the 173 mile highway.

Maryland

Website of radio station WTOP reports that the new Inter County Connector (profiled here) toll road will have a 50% surcharge for users without an EZPass, as Maryland's first fully electronic free flow toll road.

Maryland's toll increases highlight risks of political interference

The Baltimore Sun reports on an issue stressing some in Maryland – a proposal by the Maryland Transportation Authority to increase tolls on a wide range of roads, including 100% increases (and most controversially an extra 220% on the Chesapeake Bay Bridge). The article highlights that the State needs the money, the problem being that tolls have not kept pace with the debt raised to pay for major road projects. In short, politicians took a short term approach to such debt, to the point that the current administrators have to take steps to address a growing deficit.

Fair on current users? No. These costs should have been spread among users for the last decade or so, but it is more fair to require motorists today to pay than to raise other taxes. However, should this not be a wider lesson in underpricing toll roads? Some fear privatisation or private roads because of concern that private owners will extract rents from motorists using such toll roads, or in other words, monopoly profits. However, there is at least an equal issue with politicians cross-subsidising constituencies they seek support from to maintain power. A longer term solution to Maryland’s toll road debacle could be greater private ownership, which could mean tolls are maintained at sustainable levels and there is little incentive to subsidise private owners if their own investments prove problematic. In addition, private ownership may raise efficiencies that could offset such increases.

The lessons are obvious. Short-term political expediency in reducing tolls has long term consequences. It can be avoided by greater use of the private sector, or keeping politicians from being able to alter tolls without countervailing revenue to cover debt associated with roads. It is a lesson in governance, ownership and procurement that politicians have imperatives not associated usually with economic efficiency.

UPDATE: More on toll increase proposal from the Washington Times.  The State Transportation Secretary argues that Maryland has the steepest discounts in the US.  It simply reinforces how scandalous it is that tolls do not currently cover maintenance costs.

Maryland's new toll road a step forward in two ways

The Maryland Intercounty Connector is a new 7.2 mile toll road opening on 22 February between Interstate 270 in Gaithersburg and Georgia Avenue in northern Silver Spring according to the Washington Post.

The new road is the first stage in what will be called Route 200, which will be an 18.8 mile 6-lane highway which will ultimately connect Interstate 270 with Interstate 95 at Laurel. Yet it is still half the length of the original project conceived for this corridor.   Travel time along the corridor will be 70% reduced compared to using existing roads.

One significant step forward will be the use of all electronic free flow tolling. Technology well established over a decade ago in Toronto, Canada (Route 407) and Melbourne, Australia (Citylink) and used in multiple toll roads across the world.  This will avoid congestion at toll booths and will mean drivers paying either using an on board tag with an account (EZ Pass) or billed according to their number plates. The latter will include a US$3 service fee, incentivising users to establish EZ Pass accounts.

More important from an economics point of view is that tolls will vary according to demand. There will be three tolling periods:

Peak 0600-0900, 1600-1900 (weekdays only)

Offpeak 0500-0600, 0900-1600, 1900-2300, (0500-2300 weekends)

Overnight 2300-0500 (all days)

Charges vary considerably according to the schedule by time of day, with peak times having a 26% surcharge over off peak, and overnight being a nearly 48% discount on offpeak for cars. Similar variations exist for heavier vehicles.  The full toll schedule is here.

However, the intention is to change pricing periods dynamically. This means any charging period could start or finish up to one hour earlier or later depending on demand, with that variation happening with 10 days notice. So it wont be real time dynamic changes, but rather monitored changes in performance.   It has parallels to Singapore's Electronic Road Pricing system which regularly changes prices to maintain free flow conditions.

The difference that makes should be dramatic. Though it will be interesting to see if at times of low demand, peak periods shrink significantly, and overnight periods also increases to respond. Conversely, some motorists will not be happy if they choose to drive at off peak periods near the peak and find within a month or two they are paying the peak price because of congestion at those times.

Of course without increases in prices, there may still be congestion if the peak charge remains too low to manage demand.

Yet this is a really important display of applying market oriented pricing signals to the supply of road capacity. It both helps to manage congestion, but also should mean motorists notice the discounts they get from travelling at different times.  So overall, a valuable piece of new infrastructure, with modern tolling technology and the application of efficient pricing principles to help manage congestion.

May it be an example to future projects in the US.