Will Jakarta get congestion pricing?

The Jakarta Globe claimed that Electronic Road Pricing (ERP) will be operational on some roads in Jakarta by March 2019, but clearly this hasn't happened. What has gone wrong?

I've written a lot about Jakarta's attempts to introduce congestion pricing in recent years.  In order from 2010 to 2016:

-Is Jakarta about to introduce congestion charging?

-Jakarta to be first of five Indonesian cities to introduce congestion pricing

-Jakarta congestion pricing - what might it look like?

-Jakarta moving forward with congestion pricing

-Jakarta proceeding with congestion charging system UPDATE: May go for a simpler approach

-Jakarta finally proceeding with urban congestion charging

-Jakarta ERP (congestion charging) update: GPS under consideration

-Jakarta congestion pricing facing problems by charging only main roads

-Jakarta's congestion pricing programme is further delayed

Coconut Jakarta said Inrix's most recent report indicated Jakarta has the world's 12th worst traffic.

Jakarta Deputy Governor Sandiaga Uno now says it will be implemented after the Mass Rapid Transit (MRT - metro) line along Jalan Jenderal Sudirman to Jalan Medan Merdeka Barat is opened.  Coconut Jakarta also reports that Greater Jakarta Area Transportation Management Agency (BPTJ) head Bambang Prihartono has suggested charging for non-Jakarta registered vehicles to enter the city.  That may have some obvious appeal, although it would encourage commercial vehicles to register in Jakarta to avoid this (and provide a possible path for avoidance of private individuals registering vehicles through Jakarta based companies).  However, he is right to talk of ERP as the long term solution, that would enable mode shift to public transport if it is expanded sufficiently.

Where now?

Singapore's Straits Times says that 50% of vehicles in Jakarta come from outside the city, and that the first phase of the ERP scheme will be to charge for use on one road between two roundabouts - Jalan Jenderal Sudirman.  Phase Two would be an extension north along Jalan MH Thamrin.  Jalan Jenderal Sudirman already has bus rapid transit lane along much its length, and the MRT line is also under construction following that route.

Phase One (blue) Phase Two (orange) of Jakarta ERP (2018)

The choice of this route appears to be because it will parallel public transport options, as well as being a particularly congested corridor.  Care may need to be taken to ensure charging points minimise opportunities for diversion, otherwise nearby routes.    

However

The last report on the plan was to await installation of congestion pricing until Jakarta's metro system opens. The first phase opened on 24 March 2019 (the Red Line), but there are wider problems with implementing congestion pricing in Jakarta.

Jakarta's MRT (metro)

The main issue is that the tendering process for the system has been undermined by two of the three shortlisted bidders withdrawing (namely QFree and Kapsch, both well known for their experience in installing tolling systems) leaving only the Indonesian firm PT Bali Towerindo Sentra remaining.  One can only speculate about their reasons for withdrawing, but in doing so there is clearly insufficient confidence from the authorities to proceed.

The Governor of Jakarta has since indicated that it is "more important" to upgrade public transport than to introduce ERP, yet it is fairly obvious that the latter could help the former.  Even just introducing the single ERP corridor charge would make it much easier to introduce more rapid and frequent bus services on that corridor, and raise revenue to to improve transport infrastructure more widely.  The public transport goal is to get 90% of residents able to access either the metro (MRT) or bus rapid transit, with the current position being around 20%, but they could be introduced hand in hand.

There is another issue which is not getting much publicity, but is more fundamental to the success or failure of congestion pricing - the quality and reliability of automatic number plate detection to enforce ERP.

False number plates, and poor data linking vehicles to owners' addresses is a problem in Indonesia, which would make enforcement of ERP in Jakarta difficult.  This is a responsibility of the Police, who understandably are less enthused about addressing a problem which is more about traffic management than crime.

If the fundamental problem of fake number plates and an unreliable database are not addressed, then congestion pricing can't be implemented.  Simple as that.  As I've said before, if Jakarta can't implement free flow tolls on its existing tolled road network, it is not going to reliably introduce congestion pricing. 

No doubt reforming and upgrading both the number plate system, the enforcement of number plates and the database and processes for changing data on vehicle number plates is not easy in Jakarta, but it is going to be key to moving forward.  Whilst Jakarta embarks on upgrading its public transport network, it should move ahead on reforming this, use it to replace manual tolls on existing toll roads (which in itself will ease congestion on and approaching those roads), giving it a modern vehicle management infrastructure to introduce ERP.

Australia's National Heavy Vehicle Charging Pilot : Small-scale on-road trial of heavy vehicle charging is launched

Last Thursday (25 July 2019), Australia's Deputy Prime Minister and Minister for Transport, Infrastructure and Regional Development, The Hon. Michael McCormack along with The Hon Scott Buchholz MP, Assistant Minister for Road Safety and Freight Transport formally launched Australia's first nationwide on-road trial of heavy vehicle road user charging.

The press release is here, with more details on the Department of Infrastructure, Transport, Cities and Regional Development ("the Department") website here.

In short, it involves:

• Up to eleven heavy vehicle operators (truck and bus) using on-board telematics systems that they were already using in their vehicles (commercial telematic systems used for fleet management purposes);
• Up to 111 vehicles will be included (so an average of a maximum of ten vehicles per fleet);
• A trial of six months duration;
• Operators to use existing systems to report vehicle configuration;
• Each operator will receive mock invoices generated by measurement of road use using the telematics systems on each participating vehicle, which will enable comparison of hypothetical charges with current charges

The trial will assess the experience of heavy vehicle users in receiving mock invoices to compare what they might pay under distance/mass/configuration based charging compared to the current mix of annual registration fees and fuel tax.  The idea being that charging by distance could replace such charges.  The diagram below from the Department indicates its plan to follow the small-scale trial with a large-scale trial next year on a much bigger scale and complexity. 

Australia's heavy vehicle charging trial programme

The small scale trial will use only one technology - existing telematics systems (which by necessity are all GNSS based On-Board Units (OBUs). The large scale trial could also include manual options to report distance, and an option to report actual mass.  However, further details of the large scale trial will be developed in the coming months, and is likely to be informed by the progress and evaluation of the small scale trial, and engagement with stakeholders (including heavy vehicle user representative organisations).

The operators participating in the small-scale trial are:

• Bridgestone Australia Ltd  
• Buslines Group Pty Ltd 
• Conroy Removals Pty Ltd 
• Coolibah Quarries 
• De Bruyn's Transport 
• John West Logistics Pty Ltd 
• J R Bulk Liquid Transport (Blu Logistics) 
• Nuline Charter Pty Ltd
• Simon National Carriers 
• D & S Smith Haulage Pty Ltd
• Toll Group 

This is quite a range including local and national operators, with operators based in several states.  Telematics providers supporting the trial (providing the systems used by those operators) are:

• EROAD (well known for providing heavy vehicle RUC services in New Zealand and Oregon)
• Volvo Buses (telematics)
• Volvo Trucks (telematics)

The trials are part of a wider programme of reform of the provision of roads for heavy vehicles in Australia called Heavy Vehicle Road Reform.  The first phase of this is set out here, and involves improving transparency about spending, asset management and the levels of service provided to heavy vehicle road users. 

Other reforms as part of this include consideration of independent price regulation of the setting of heavy vehicle charges (including existing registration fees and the fuel-based charge), and measures to more closely link revenue collected from heavy vehicles to road managers for investment in their networks.

It is clear that it is early days and no decision has been made by the Australian Government to change how heavy vehicles are charged in Australia, and any decision to do so is likely to be some years away. 

It will be interesting to watch the small scale trial with interest, particularly what the responses of participants are and the lessons that the Department will learn from the trial to develop the larger scale trial and inform wider reforms. 

Disclosure:  D'Artagnan has been providing technical advice to the Department of Infrastructure, Transport, Cities and Regional Development on heavy vehicle charging trials.

Congestion pricing - the United States awakens

Singapore pioneered a basic form of urban congestion pricing in 1975, and introduced what is still the most sophisticated, economically rational and effective congestion pricing in the world in 1998, called ERP (Electronic Road Pricing).  In 2020 it is transitioning its operating technology to GNSS On Board Units (albeit to initially apply the same mix of corridor and cordon charging as applies today, but with the focus on delivering more information about pricing, traffic, parking and alternative modes through the system).

However, if you've been following the recent very public debates and commentaries about congestion pricing in the USA you'd be excused for thinking it is new and innovative.  Innovative it is, it is just that the US has come a bit late to the concept, but what is driving it is not so much congestion, but the desire to use congestion pricing to raise revenue - typically not for roads.

For many years congestion pricing in the USA has largely been referred to in the context of express/HOT/toll lanes. Although such lanes offer options to pay to bypass congestion on some highways, they are not "comprehensive" in addressing congestion and more importantly are not technically able to be implementing except on roads with limited access. In most cases they have been implemented by converting high occupancy vehicle lanes to HOT/toll lanes. It is rarely economic to build new lanes and charge just for them (because there is insufficient willingness to pay for the capital costs of new capacity, particularly when such capacity may only be utilised for short periods during weekdays), so HOT/toll lanes are rarely seen outside the USA.

The positive example of toll lanes is that they demonstrate that the instrument of price is effective in managing demand so that a road can operate in free flow conditions, but of course such lanes are not practical on most roads and they always have an unpriced alternative.  At best they offer an option in some cases, and demonstrate the concept.

So full congestion pricing has not been seen in the US to date. By that I don't mean having peak pricing on an existing toll road to spread demand on that road (this is seen on many crossings, such as the Golden Gate Bridge, E-407 Toronto and the Sydney Harbour Crossings), but rather pricing of a network or placing a cordon (either on its own or as an area charge) on a zone, with priced access at set times/days.

This isn't common as all. Although there are many low emission zones in European cities (which prohibit or heavily charge vehicles that don't meet low or ultra-low emission standards) and restricted access zones to cities (this is seen in many Italian cities, keen to preserve historic centres of cities ill suited to large volumes of vehicle traffic), the only cities that charge a network or a zone for access on a significant scale are:

- Singapore

- London

- Stockholm

- Gothenburg

- Milan

- Dubai

- Tehran.

There are a handful of smaller examples, Oslo transitioned from a cordon set up for revenue raising to one that has a congestion management purpose now, but by and large congestion pricing is hard to implement.  It's been investigated in multiple cities in the UK (Bristol, Cambridge, Leeds, Manchester, Edinburgh) and elsewhere in Europe (Dublin, Amsterdam, Copenhagen, Helsinki), but has always come up against one major issue - public opposition.


What has woken up the US?

How about the US then? Suddenly cities, states and the media have discovered congestion pricing because of one simple reason - New York is going to do it. This follows previous attempts to introduce it, most notably by former Mayor Michael Bloomberg, who had his proposal for a cordon on lower Manhattan vetoed by the State Legislature.

The New York Senate and Assembly have approved it, along with the State Governor. The details are to be worked out by a new Traffic Mobility Review Board, but it is essentially a cordon that starts at 60th St, excluding FDR Drive and the West Side Highway. All of the net revenue is to spent on the public transport network, specifically the subway, bus network, the Long Island RailRoad and Metro-North. Private cars are only to be charged once a day, whereas ridehailing/sharing and taxi services are already subject to a surcharge of between US$0.75-US$2.75 per trip, depending on the service since 2 February 2019.  Although Charles Komanoff indicates that the effects will be much less than promised (still a 2.5% increase in average traffic speeds is worthwhile).

Some of the details to be worked out include:

· Charge rates (will they vary by vehicle type)

· Area charge (will vehicles be charged for circulating within the cordon as well as or separately from crossing the cordon)

· Direction of charge (will there be a charge for entering AND exiting the cordon)

· Time of operation

· Variation of charge by time of day

· Discounts and exemptions (it might be fair to assume that emergency vehicles and NYC transit vehicles might be exempt, but will the ride hail/share surcharge liable vehicles be exempt too)

· How those entering lower Manhattan on tolled crossings will be treated

New York is basically implementing a simple charge, primarily to raise revenue for other modes, so it will be interesting to see what impact it has and whether it is designed to spread demand by time of day, as much as it is to raise revenue. It will clearly be a trailblazer, although it is unlikely that other US city has either the density of public transport or geography to lend itself to a relatively simple cordon as the solution.

What about the rest of the US?

San Francisco has studied charging before, and looks like pursuing it again. The San Francisco County Transportation Board Authority voted earlier this year to spend US$0.5m on a study of downtown congestion pricing, suggesting that it has already decided that a downtown cordon is worth pursuing. It will be interesting to see what impacts that might have, and particularly how boundary issues are addressed. The San Francisco Mobility Trends report indicated that "vehicular traffic entering San Francisco grew 27% since 2010, although public transport use also rose 5% and cycling by 6%, on a 9% population increase (indicating that the growth in population is pushing a big increase in driving), with a decrease in private car travel speeds by 23%. It's hardly surprising that pricing access to downtown is a priority, although hopefully it will mean pricing that varies by time of day.

Los Angeles has already had a study released by Southern California Association of Governments (SCAG) which proposed a pilot cordon at Westside LA, for a number of reasons (see page 94 of the below report).

Proposed Westside LA cordon from SCAG study

 The Mobility Go Zone and Pricing Feasibility Study indicated that it could result in a 19% drop in private cars entering charged zones, and a 9% mode shift to public transit, with 7% each to walking and cycling. Whilst this might be a good place to start, LA is going to need a much more comprehensive solution to address congestion across the region. LA Metro is about to launch a study that looks more widely at options, with the intention that pricing would support a package of improvements to public transport and active modes.

Boston, Portland, Seattle and Washington DC are all considering congestion pricing, which has to be welcome. The US has gone through a couple of eras in urban transport policy, from the 1940s to the 1970s the focus was almost entirely on building roads to meet demand. That has tailed off, with a focus from the 1970s of building (mostly rail-based) public transport infrastructure to try to attract motorists from their cars, in other words supplying alternatives. More recently, cycling has had a boost in some cities, but the primary argument in all cities is one of what to supply, rather than how to manage existing demand and supply.

Australia's National Heavy Vehicle Charging Pilot: The National Pilot Program Stage Two

The Stage One report of the National Pilot should essentially be a set of three groups of work:

1. Strategic, technical design and implementation advice on progressing with on-road pilots of heavy vehicle road charging.
2. Results of desktop simulation modelling, which should indicate the financial impacts on different groups of heavy vehicle users, based on a series of charging structure scenarios.  This will provide an indication of the distributional effects (excluding behaviour change) of existing heavy vehicle road users changing how they pay for roads, and so help to inform possible transitional and longer term pricing scenarios for pilots and implementation of heavy vehicle charging.
3. Input from the heavy vehicle road user sector, but also road managers and other relevant government and private sector stakeholders of their views and understanding of heavy vehicle charging.

Stage Two will be the delivery of an on-road heavy vehicle road charging pilot, with actual road users "paying" a simulated road user charge with their own accounts, and invoicing, as a demonstration of what heavy vehicle road charging could mean for the day-to-day operations of heavy vehicle users, state/territory and local road managers, federal, state/territory treasuries and the providers of road charging services.   It should not primarily be about technology, but about how services are delivered, with the possibility of testing a range of solutions for identifying, measuring and reporting distance travelled (GNSS based ones, application of existing telematics systems both built into vehicles and commercial sservices, and the use of odometers and hubodometers), and options for different elements of charging to be included in both pricing and charging products available to users.   In practice, all participants in the pilot will continue to pay registration and fuel excise through the current PAYGO system (as well as tolls where relevant), but it will show what it would mean to have road charging operating in real life.

Part of the Stage Two pilot will be about testing policy and operational options for proceeding further, with issues such as the treatment of mass and location, the complexity of vehicle configurations (for charging purposes) and exploring the identification of fraud and evasion issues.  One of the biggest benefits of this pilot will be feedback from road users about their user experiences including what information is of use to them.  It changes road user charging from being theory (and occasional discussion of what happens overseas) to being what it might look like in practice.  Furthermore, it also presents an opportunity for the often ignored issue of what charging means from a government perspective to be explored.

It ought to mean establishment of notional hypothecated road fund accounts (although the question of how many there any, whether by geography or jurisdiction is a moot point), and the management of the data that is collected to enable sufficient assurance to be carried out about individual vehicles having valid accounts that are paid.  

The Stage Two pilot should be designed to test the critical elements that would allow for road charging to be able to replace the PAYGO system. Careshould be taken as to how much complexity will be mandated for the Stage Two pilot, bearing in mind that it wont be actually collecting revenue, and the key dimension iy must test is sufficient assurance to enable the Stage Three pilot to proceed (which actually does collect revenue, and offset this with refunds or supplementary payments to offset road charges).

Most of the pilots that have operated in the United States to date have been simulated charging pilots, so there should not be difficulty in developing a pilot for heavy vehicles, across Australia, that replicates the best elements of those, but also tests policy and governance elements that are relevant to Heavy Vehicle Road Reform.

Assuming Stage Two can be successful, then the programme can move onto Stage Three - a real money pilot, where heavy vehicle users can opt into paying by road charging instead of the PAYGO system.  That is when the real leap forward will happen.

Australia's National Heavy Vehicle Charging Pilot: Part Two - The National Pilot Program Stage One

The announcement of a National Heavy Vehicle Charging Pilot by the Australian Minister of Urban Infrastructure and Cities in December 2017 was designed to break what has been some years of inertia in progressing heavy vehicle road user charging in Australia.

As I have written before, there is no shortage of reports or studies about the merits  and possible approaches to transitioning from fuel tax and registration fees to direct road user charging for heavy vehicles in Australia, but there have been a series of key issues that have hindered progress, which in part reflect the constitutional and governance arrangements for roads and charging of road use in Australia.

The previous project, (which lasted seven years) called the Heavy Vehicle Charging and Investment project, floundered for a host of reasons.  It was too focused on charging, and not the funding or supply of roads.  Although many reports were prepared on a host of elements of charging policy, insufficient attention was paid to issues around transition.  How to get from the current charging system to feasible and user acceptable steps to direct user charges wasn't adequately addressed.  As such, the proposals focused on the costs of implementing heavy vehicle charging, in the context of a single or limited competition for supplying such systems, which raised questions as to the costs and economic viability of charging. It did not sufficiently engage with Treasuries at Commonwealth and state/territory levels, furthermore its complexity was such that it was difficult to get political traction and with that stakeholder support for the project.  It wasn't helped by a complex project governance structure that saw it lose momentum.

Given it is clearly possible to reform the supply side of roads, without reforming charging, and that reforming the supply side can help address key issues that arise in charging (especially how to set charge rates and convincing road users that revenue collected is spent wisely and in their interests), it made sense to adopt the Heavy Vehicle Road Reform approach. 

What makes road charging complicated in Australia?

1.  Registration fees are charged at the state/territory level (and motor vehicle registers are state managed, except for one for interstate heavy vehicles), but fuel tax is charged at the federal level as it is an excise duty.  This adds a complication in terms of co-ordination, but also institutional responsibility for refunds.  A state/territory level road user charge could not refund fuel duty, without a specific arrangement with the Commonwealth.  If a state/territory applied road user charging on its own roads, without fuel duty refunds, then it is only likely that its own heavy vehicles would pay road user charges, as out of state heavy vehicles would still be paying registration and fuel duty (so could not be expected to pay a state level road user charge on top). 

2. All road managers are at the state/territory or local level of government, but a significant proportion (23%) of spending on roads come from the federal (Commonwealth) level of government.  However, two thirds of revenue raised from heavy vehicles come from fuel tax (levied at the federal level).  The Commonwealth government doesn't manage any roads, but it does manage the primary means of charging for road use.

3. With a couple of exceptions, none of the revenue collected from heavy vehicles is hypothecated into funds for road capital or maintenance spending purposes.  All funding is allocated through politically led processes at Commonwealth, state/territory and ultimately local levels, on an annual basis.

4. Heavy vehicle configurations in Australia are complex, and some of the largest heavy vehicles allowed on public roads anywhere in the world. 

In essence, because the Commonwealth is not a road manager, is not the primary funder of roads and doesn't register or maintain registers of motor vehicles (with one exception), there was always some sense in encouraging states and territories to take the initiative on road user charging.  It seemed appropriate for the Commonwealth to have oversight and guidance, to ensure interoperability between road charging systems and to address interstate/cross border issues of charging, as well as being the regulator for price setting to deter the setting of "monopoly" charge levels and discriminatory behaviour with charging.  Ultimately, the ideal of land transport market reform that turns the provision of roads for heavy vehicles into an economic service, would see the providers of that service (road managers) leading the setting of road charging rates, and managing the provision of road charging services for their customers (albeit that such services may be operated at the state/territory level rather than the local).

However, it has appeared that there are two main risks with leaving it all to states and territories. Firstly, states and territories that seek "first mover advantage" could risk adopting practices in rate setting, governance and scheme design that are sub-optimal for other states and territories.  They might suit the policy objectives at the state/territory level, but not at the wider Commonwealth level. One example could be adopting a rate setting approach that lowers costs for heavy vehicles on the roads in that state, which may be appropriate for recovering the costs of those roads, but which implies that lower costs would apply on similar roads in other states.

Secondly, there is a risk that states and territories adopt approaches that do not work, and so undermine the chances of success elsewhere.  At worst, if a state or territory introducing heavy vehicle charging in a way that proves unpopular with road users, it could create opposition elsewhere in Australia, putting at risk wider deployment of heavy vehicle charging, potentially for some years.  

Finally, states and territories may simply do nothing without leadership from the Commonwealth. Without access to money from fuel duty, it may simply be seen as too difficult for states and territories to progress road user charging.   Although they can refund registration fees for vehicles in their state, they can't refund fuel duty.  This adds a complication for out of state heavy vehicles, which would all be paying under the current system, but either would have to be exempt from a state level road user charge, or effectively pay twice.  For heavy vehicles paying the road user charge in their own state or territory, when they enter another state or territory they would not pay the road user charge.

Stages of the National Heavy Vehicle Charging Pilot

Stage 1 of the Pilot is intended to start mid June 2018 and will effectively conclude in November 2018 (although some elements may run till  June 2019).  It has three major strands of work:

• Development of design, and planning on the implementation and evaluation of on-road heavy vehicle trials for future stages of the National Pilot.
• Modelling of the spatial and distributional impacts of direct user charging scenarios  that could replace current charges under reform  
• Market research and surveys to obtain baseline information on the views of industry, supply chains, road managers and the wider community on direct user charging for heavy vehicles.

The first workstream will focus on the preparation for Stages 2-4 of the National Pilot, including project planning, design of concepts of operation and development of an appropriate evaluation framework for all three stages.

The second workstream is effectively the first pilot, as it will seek to model the impacts of charging scenarios on different groups of heavy vehicle users.  Datasets on different types of heavy vehicle users (by geography, type of haulage, fleet size, vehicle size, routes and trip patterns, freight and passenger services) will be used to model how much such users would pay under four different road user charging rate scenarios. All these scenarios presume revenue neutrality (although it is unclear if that means neutrality after taking into account the costs of collecting revenue).

Those scenarios are:

1. A flat national mass-distance charge, applicable to all routes. This could be seen as akin to both the Oregon and New Zealand heavy vehicle charging schemes (albeit with mass as a static measure of average loading.

2. Mass-distance charge that varies by state/territory: Similar to Scenario 1, but with charges that vary by state/territory, presumably to reflect average spending (or forward looking costs) attributable to heavy vehicles by each state/territory.  Interstate trips would change in price at the state/territory borders. This would appear to be a relatively simple variation on Scenario 1, although it would expose cross-subsidies between states and territories.

3. Mass-distance charge that varies by road type, based on marginal cost: Prices would vary by road type, nationally, based on the marginal costs heavy vehicles impose, by mass. This assumes a road type classification that reflects differential costs. However, it does raise a question as to how fixed costs are recovered (still with registration fees, or charged at a flat rate by distance).<

4. Mass-distance charge that varies by road type, based on level of service: As in 3, with national charges by road type, but varying on a defined "level of service". This could range from multi-lane grade separated roads, to unsealed tracks.  This is contrary to Scenario 3, as it implies paying more for a higher level of service, but this typically means lower marginal costs. 

The third workstream appears to be strategic engagement with road users, road managers and other interested stakeholders about their views on road charging, and will presumably be the foundation for further engagement with such stakeholders through Stages 2 to 4.

The final report of Stage 1 will be submitted to the Transport and Infrastructure Council (TIC) (Transport Ministers under the Council of Australian Governments, covering both the Commonwealth and State/Territory Ministers) in November 2018.  The expectation and hope is that the TIC will approve moving to Stage 2, an on-road pilot of heavy vehicles "paying" a simulated road user charge.

Australia's National Heavy Vehicle Charging Pilot: Part One - Location-based trials

Australia's (Federal) Minister for Urban Infrastructure and Cities announced in his speech to the Roads Australia Annual Luncheon on 15 December 2017 that Australia will be launching a National Heavy Vehicle Charging Pilot.

The main part of the pilot is a program to investigate and design an on-road pilot for heavy vehicles across Australia, to trial replacing the existing registration/fuel tax based system of charging heavy vehicles for road use.  It has distinct stages starting with a desktop modelling simulation through to a phased transition away from the current charging system.

More on that in a later post.  An Information Sheet about the principles and objectives for Heavy Vehicle Charging Trials (PDF) explains more.

In parallel, the Minister also announced funding for a business case program for location based trials (the so-called "Business Case Program"). Under this program, state and territory governments will be eligible to apply for Commonwealth Government funding support to develop business cases to undertake their own trials of heavy vehicle charging, to generate additional revenue for infrastructure improvements that specifically benefit heavy vehicle users.

The Department of Infrastructure, Regional Development and the Cities released this Information Sheet about the Business Case Program (PDF)

The focus is on:

- Trials for heavy vehicle charging in specific locations, to pay (on a per kilometre basis) additionally to support road improvements that could deliver productivity benefits to heavy vehicle users;

- The additional revenue that it could raise would be specifically for such road improvements, and would not be about replacing the current registration/fuel tax based charging system;

- Funding support would be to support business case development not the trials themselves (it is presumably thought that the trials, being revenue generators, should be able to self-fund, although I am not sure that this support would necessarily be seen as sufficient incentive for interest from states and territories).

The Minister said in his speech:

The benefit might be using high productivity vehicles on routes where they cannot presently be used. Or the benefit might be a targeted program of investments to upgrade roads in a particular area which is of benefit to heavy vehicle operators—for example, livestock or grain transporters in a particular rural area.

Whatever the benefit—be it improved access, faster travel times or more flexible operating arrangements—it would clearly need to outweigh the costs of the additional charge so that heavy vehicle operators would find it worth their while to participate.

These trials could allow us to test such matters as particular technologies to record distance and location travelled; or the willingness to pay of operators; or the development of service level standards.

Again, we will be keen to work with the heavy vehicle industry—as well as state and territory governments—to see if we can work up such trials in different locations around the country. Through funding the development of business cases for trials we hope to catalyse a number of such trials over the next few years.

It should be possible for states and territories to identify gaps in their freight corridors that could be supported, over a forward-looking lifecycle cost basis, by infrastructure improvements paid for by the vehicles that benefit from them.  

Additionally, actual on-road trials could complement the proposed National pilot, by having trucks actually paying for road use, on a distance, location (and presumably some vehicle configuration and mass basis).  It also encourages road managers to take a more commercial, user-oriented approach to infrastructure development for heavy vehicles.

Which states and territories might be interested?

Australia's Heavy Vehicle Road Reform programme: An integrated, sound approach to road charging and funding

Although much attention is often given to toll roads in Australia, almost all road distance in Australia does not involve toll roads. As an economy dominated by extraction industries primarily around mining, but with agriculture also important, heavy vehicle use of a large and in many cases, sparsely used road network, is critical to the country's economic progress.  Australia is, after all, a continent, the sixth largest country by area (Russia, Canada, China, USA and Brazil are only bigger), but for its size it is the third least densely populated country (only Namibia and Mongolia have fewer people per square km).  That sparse population explains little when you note that over two thirds of the population live in the eight state and territory capitals, and another 22% live in the remaining urban areas, most of which are located along the coast in the eastern states.  Australia also has some of the largest trucks ever seen in regular use on public roads, with vehicles up to 60 metres long allowed on some routes, and total vehicle mass configurations of well over 100 tonnes. 

So Australia has taken heavy vehicle use of the road network seriously, because the productivity of both heavy vehicle use and the provision of the roads they use, has a direct impact on the economy.

Today, Australia charges heavy vehicles (excluding toll roads) through two means:

- Registration fees collected at the state and territory level (excluding some registered for interstate only traffic);

- Fuel excise duty known as the Road User Charge (which is fuel excise duty minus a refund to reduce it the "Road User Charge" rate), collected by the Commonwealth.  Currently at A$0.258 per litre (US$0.74/US gallon) of diesel.

The National Transport Commission annually reviews the levels of these, based on its cost allocation model, which uses data on recent spending on roads, allocates a proportion of those costs to heavy vehicles, which informs the

A Cost Allocation Model is used, based on historic spending on roads, to inform the setting of both registration fees (which escalate based on the mass/configuration of the vehicles) and the amount of the refund on fuel duty to set the road user charge rate.

For some years it has been acknowledged that this system is far from optimal.  Multiple reports have proposed a shift away from registration and fuel taxes towards direct user charging.

There is a relatively poor relationship between what is paid and the costs that heavy vehicles impose on the roads that they use. Most of the revenue collected through this system is treated as general revenue at the Commonwealth, state/territory levels, so is not dedicated for spending on roads. Numerous studies have noted the scope for reform, and a major reform programme was embarked upon, called the Heavy Vehicle Charging and Investment (HVCI) project, that sought to introduce heavy vehicle road charging. It was abandoned for several reasons, not least the complexity of the proposed programme, and the sequence of reforms, which effectively sought to reform charging before reforming the funding and governance structures for roads.  It also struggled to gain sufficient heavy vehicle user support.

Heavy Vehicle Road Reform

The current Commonwealth Government, under Minister for Urban Infrastructure and Cities, Paul Fletcher, has embarked on a new reform programme that is more holistic and integrated than HVCI.  It is notable in that it seeks to reform funding and management of roads, and how existing charges are set and used first, before replacing the current charging system with direct user charges.

Heavy Vehicle Road Reform seeks to not only reform how heavy vehicles pay for road use, but also to reform the funding and management of roads.

The current system is very much a political command and control model, and is depicted in the image below. Funding for roads is traded off with public spending for other activities, and decisions on priorities for road spending although informed by benefit/cost appraisal, is fundamentally a political call. Road managers primarily operate as engineering bodies, building and maintaining roads, with limited relationship with road users. The money that is spent on the roads is used to inform the charges that heavy vehicles pay, as the National Transport Commission uses data on previous spending (and forecasts of heavy vehicle demand) to inform rate setting of registration and the fuel excise "road user charge". 

The image below from the Department of Infrastructure, Regional Development and Cities is a fair summary of the current situation.

Australia's current system of charging and supplying roads for heavy vehicles

It shows a very limited relationship between road managers and road users, and in the use of revenue collected from road charges and money spent on roads.

The reform steps

The reform agenda comprises four key stages as seen below:

Heavy Vehicle Road Reform stages

 

New York's latest interest in congestion pricing

Some might say it took long enough, but for New York Governor Andrew Cuomo it might just be in the nick of time as he is reported in the New York Times as saying that "Congestion pricing is an idea whose time has come".

Well I'd say its time had come years ago, after all the technology to do it has been proven since the 1990s, and the actual results of implementing it have been seen in Singapore, London, Stockholm and Gothenburg (although London's success has not been sustained for multiple reasons and Gothenburg's scheme is too big and was focused on revenue collection).

Few need to be reminded of the severity of New York's congestion, and also the enormous funding problem for the city's road and public transport networks.  Although much could be written on how it could improve its planning, contracting and management of its road network, in terms of maintenance (i.e. apply world class asset manegement systems, introduce predictive maintenance and fund it on an asset lifecycle), let alone its public transport system, and why it appears to cost more than anywhere else.  

It remains that there is a huge backlog in renewals for both the roads and the subway network. 

Previous plans

I've written before about the two past attempts to introduce either congestion charging or toll reforms that would have had some of the same effects.

New York has been here before, with the first attempt to introduce congestion charging seen by Mayor Bloomberg.  It failed because the state legislature was uninterested in granting him the powers to charge on state highways.  In 2012, a different proposal was floated by former senior NYC DOT official Sam Schwartz, essentially introducing tolls on untolled East River crossings, but reducing tolls on outer New York tolled routes, which would generate new revenue and be more equitable.

However, the whole idea of charging fell dead in 2013, with Mayoral candidates uninterested.

In 2014, the Sam Schwartz plan became known as the Move NY proposal, as a group of interested organisations backed it.   However, it didn't seem to get traction, as Mayor Bill de Blasio was lukewarm and at the time, state politicians were similarly so.

Indeed, they are all summarised well in the report discussed below, as seen here:

Previous New York congestion pricing proposals

FixNYC

In January 2018, another plan was released from the Fix NYC Advisory Panel, set up by the Governor.   Full report here (PDF).  See the bottom of this post for some thoughts on some of the "information" contained within it.

Proposed New York congestion pricing area

It recommends a series of measures in three phases. 

Update on Germany's heavy (and light) vehicle charging systems

On 1 January 2005, Germany introduced the world's first full GNSS based road user charging system, applying only to trucks with a Gross Vehicle Weight (GVW) of 12 tonnes and above. Unlike the Swiss system (LSVA), which used GNSS technology to supplement the tachograph (primarily for verification and compliance purposes) as a means of measuring distance, the LKW-Maut (as the German system is called) uses an On Board Unit (OBU) with GNSS technology to map match to measure distance for chargeable purposes. A consortium known as Toll Collect won the PPP contract to finance, design, build and operate the system. 

From motorways to all highways

The system has expanded from the original network of around 12,500km of motorways by around 2,300km in recent years (mainly by adding segments of Federal highways that were used by trucks diverting from motorways to avoid charges), but will be expanded again on 1 July 2018 to ALL Federal highways. The charged network will then consist of over 40,000km of roads (see below)

Map of all Germany Federal Highways and Motorways

There are further discussions about expanding the scope of the system to include buses and coaches, and all vehicles with a GVW of at least 3.5 tonnes (which is the widely used definition of "heavy vehicles" in the European Union).   I expect that once the system has expanded to Federal Highways, there will be a need to further expand the chargeable network to include regional and local roads.

As part of the expansion to the whole Federal highway network, the process of charging trucks is to change.  At present, OBUs measure distance and calculate the charge applicable for the vehicle, then transmitting the charging data to the back office to bill the operator.  Charging rate table data is transmitted to each OBU as it is updated, so that all trip data is retained in the OBU.  All that is transmitted is data that a truck with a specific identity travelled X number of kilometres on charged highways over a set period of dates.   This is to change.  All trip data is to be transmitted to the back office, with the calculation of charges undertaken centrally, rather than on each OBU.

It is explained as follows by Toll Collect:

This is necessary because the very large route network will give rise to changes much more frequently in the future, especially on the federal trunk road – e.g. construction sites or traffic blockades. Therefore, route information that determines the toll calculations must be adjusted much quicker than before.

In other words, with some routes likely to be closed at some times (and trucks diverted onto alternative, longer routes), it will be easier to apply exceptions to the current system by calculating charges centrally, than by applying such temporary changes through updates to over 1.1 million vehicle OBUs. 

In the early days of discussions about GNSS OBU technology, options were discussed as to whether OBUs would be a "thick" client or a "thin" client.

A thick client would have all processing undertaken in the OBU, which would then only transmit the calculated charge data to the back office for billing purposes.  There are advantages in reducing communications costs, higher protection of privacy (due to a lack of trip data being transmitted) and reducing the risk of the system not being functional due to breakdown of the centralised system (as OBUs could record trips and store charging data until the back office is ready to receive it).  However, the main disadvantage is the need for updates of charging table and maps needing to be transmitted to all OBUs, which risks updates not being made in a timely manner or not being able to be made swiftly in the event of the need for changes due to roadworks or accidents.

A thin client simply measures the chargeable events and transmits that data to the back office, which collects the data and uses the trip information against maps with charge rates to calculate the charges for each OBU.  The advantages are that the OBU can be less complex and cheaper, with it being much easier to amend change maps and rates for charging, including discounts and exemptions by location and time of day.  Unsurprisingly, the key disadvantage is the need for regular communication of charging data and that transmission of such data may be seen as tracking movements of vehicles.

Alongside this change, new enforcement infrastructure is to be installed on Federal highways.  600 poles will be installed with enforcement equipment (four metres high) to classify vehicles, read number plates and check that vehicles subject to the charge have operating OBUs (or prepaid trip passes).

Use of revenues

The net revenues from the system were originally used to fund maintenance on the motorway network and also contribute towards railway and inland waterway infrastructure improvements, but this was changed in 2011 to be fully hypothecated for Federal motorways and highways. €4.63b in gross revenue was raised from the system in 2016, with an estimate €4.66b in 2017.  About €1.45b is spent on managing and operating the system, and "harmonisation measures", and another €150m is diverted to the Federal Ministry of Finance to makeup for a "shortfall in vehicle tax revenue".  That leaves €3.2b net revenue for expenditure on the Federal motorways and highways per annum.  All net revenues are spent by a dedicated agency, VIFG (Verkehrsinfrastrukturfinanzierungsgesellschaft).  VIFG - the transport infrastructure finance company - is a Federal Government owned company which was set up to implement the heavy vehicle charge and to use the funds collected, as well as manage public-private partnerships.  It now has the function of managing the payment transactions for all expenditure on the construction, maintenance and operation of all Federal highways (and motorways) since 2016.  A total of €7.7b was spent on Germany Federal highways in 2017, so the LKW-Maut contributed to just over 40% of that spending.

€5b in revenue is estimated to be collected in 2018, but expected to reach just under €8b by 2022, due to the expansion of the charged network and growth in freight traffic.

The current tariff rates are shown here.

Change of operator and temporary nationalisation

The Federal Government is also to nationalise the encumbent operator (Toll Collect) of the country's heavy vehicle charging system (LKW-Maut) in order to resolve a 12 year old dispute as the single supplier PPP contract ends in August 2018. The Federal Government has been seeking compensation for lost revenues (worth €7 billion) due to delays in the system commencing, and has been in arbitration since 2006. Furthermore, there are concerns that as Toll Collect is the sole provider of accounts in Germany (with 1.1 million vehicles with registered accounts), that any transfer to a replacement operator could be complex if Toll Collect is not selected for the next contract.  The plan is that on 1 September (the day after the contract expires), the Toll Collect LKW-Maut business will be nationalised, and will then be transferred to the new contractor in due course.

Tenders were called for a new operator from that date with four consortia shortlisted:

• Autostrade, which had won the bid for the cancelled French Ecotaxe system (which would have charged trucks on the national state highway network which competes with France's extensive network of private/commercial toll motorways)

• Skytoll. Operator of Slovakia’s GNSS heavy vehicle charging system.

• Toll Collect (T-Systems, Daimler), the encumbent operator (as a new operator).

• IBM/Continental/Abertis, a new consortium.

Whatever operator is selected should expect to share the market in Germany with new European Electronic Toll Service (EETS) operators.

Further expansion and charges for light vehicles

The German Federal Government is also examining expanding the scope of the charge to include buses and coaches, and all vehicles down to 3.5 tonne GVW. 

In parallel, Germany is developing the PKW-Maut, a time based charge for car use of ALL public roads. It has yet to be implemented due to legal challenges (including concerns from neighbouring countries about discrimination), but when implemented will apply a prepaid charge for access to those roads. Vehicle owners will be required to purchase one year, two months or 10 days of access. Prices will be dependent on a vehicle's emissions rating, ranging from €2.50 for 10 days to €130 for one year.  In parallel with its implementation, the Federal Government plans to reduce annual registration fees by approximately the same proportion.   I wrote extensively about the proposal two years ago.    It now appears this system is to be delayed until 2020 according to Berliner Morganpost (German) having previously been promised for 2019.  The light vehicle charge (known as the "car toll") is expected to raise €481m in revenue in 2020 (almost entirely from foreign users, given German car owners are expected to receive offsetting reductions in ownership based taxes).

Congestion pricing for Delhi?

Delhi's congestion is chronic, as incomes have risen, car ownership has risen and by no means has Delhi been able to increase road capacity to meet this demand. Neither TomTom nor Inrix have data for congestion in Delhi, but the Centre for Science and Environment in India reports:

Average traffic speed on 13 arterial roads 50-60 per cent lower than their design speed and 35-48 per cent lower than the regulated speed of 40-50 km/hour 

No non-peak hour now on main arterial roads -- virtually no difference in time taken to travel between peak and non-peak hours 

The Hindustan Times claims that Delhi needs to replicate the success of Singapore in charging for road use.  This is a fair assessment, although I would caution simply thinking that what Singapore did could be replicated in Delhi.  For a start, Delhi needs to have a reliable motor vehicle registration database correlated to number plates for enforcement purposes.  It isn't clear that it does.  Without that, there simply cannot be a congestion pricing system at all. Secondly, there would need to be effort made to ensure that basic steps are made to ensure alternative modes are able to function appropriately.  That means making it easier to walk and cycle, as well as bus priority measures which are rigorously enforced.  Finally, there is a need to ensure that the solution for Delhi is implemented incrementally.  Don't try to replicate any other city's ideas wholesale, but look at charging a handful of locations initially at the most seriously congested periods, to see what the results are.

Yet Delhi has a network of toll roads, which use manual as well as electronic tolling.  The obvious first step ought to be conversion of all existing toll roads in Delhi to fully electronic free flow operation.  India has already mandated the National Electronic Toll Collection programme for national highway, so this provides a good starting point.  That's not to mean that the same system should be used.   There are sound reasons for thinking about competitive service delivery in terms of accounts, but if Delhi wants to move quickly, its existing toll roads provide a starting point to test charging without any barriers, and to also test charging higher at congested periods.

Delhi has tried demand management of road use

The odd-even number plate test in January 2016 was a success according to The News Minute.  This pilot meant that from 1 January-15 January, from 0800-2000 only odd-numbered cars could drive 

Delhi's Odd-Even number plate tria

Indian Express reports speeds went up 5.4%, particulate pollution decreased by a relative 10-13% on average, with notable results either side of the period the test was in force.  In other words, pollution declined after 0800, and increased again after midnight (because a new rule on truck traffic restricts much of that traffic to the midnight-0800 period).  

An odd-even policy isn't a very good idea though, primarily because it rewards those who can afford two cars and can encourage those with one car to buy a cheap, old, more highly polluting vehicle to avoid the restriction.  However, the policy did prove that influencing traffic demand in Delhi can improve results.  (More details on the results of the test are available here PDF). 

Criticisms need to be addressed

An article in Outlook India by Dinesh Mohan (Honorary Professor at IIT Delhi) basically indicates scepticism that it is the solution for Delhi.

quotes a number of academics to put some doubt about the efficacy of congestion pricing, yet none of these offer any evidence.  He quotes Professor Peter R. Stopher of the University of Sydney as saying “that charging motorists a politically acceptable amount will probably still not make significant impact on overall system congestion, while the potential for serious impacts on the economy become large if the charges are made sufficiently high or the area covered is made sufficiently large.”  Yet this seems to presume that charging means some sort of cordon or area charge.  There has never been a scheme to date that charges congestion on a system-wide basis.  Singapore is the closest, but is still far from being a network charging system.  What IS clear is that there are positive results where charging has been applied appropriately, such as in Singapore and Stockholm.

He then quotes Brian Taylor from UCLA as saying congestion is a "sign of success", which is not what many road users think.  The analogy with restaurants is hardly appropriate when people have choices between thousands of restaurants in a city, and the restaurants that are most successful can either raise prices to increase profits, or expand locations to cope with demand.

Mohan's claim that "there has been little consensus among thinking traffic experts on how to think about urban traffic congestion and how to deal with it. This is why there are very few cities the world that had the courage to experiment with the concept of congestion charging" is quite wrong.  There is widespread consensus that pricing of road use would reduce congestion, the reason pricing has been applied in few cases is a mix of political will, lack of innovation in the development of options for pricing and the inability to communicate to a sceptical and untrusting public that paying to drive on some roads at peak times will improve conditions for them.

Certainly Delhi is different from all other cities that have introduced congestion charging, but the claim that it is very expensive to implement is simply wrong. The costs of Automatic Number Plate Recognition (ANPR) technology have dropped significantly in the past 15 years and improved in reliability.

Delhi needs a congestion management strategy

I don't doubt that there are many other ways to address congestion in Delhi that need to be explored as well.  Enforcement against illegal parking and considerable work to improve the design of existing roads could help ease congestion, along with enforcement of behaviour that promotes congestion (such as poor lane behaviour).  Delhi needs a congestion management strategy, this would consider a wide range of measures including:

• Design of existing road infrastructure, including traffic signals, roundabouts, intersections, lanes, parking restrictions. 
• Enforcement of traffic and parking offences.
• Provision of adequate facilities to ensure walking and cycling can be undertaken safely and easily for short trips.
• Public transport provision, including priority for public transport.
• New road capacity where appropriate.
• Road pricing.

Road pricing should be a part of this, but objectives need to be clear. Delhi still has a significant population that does not drive, but may be expected to want to own a car in the next 10-20 years. Although it's unreasonable to expect this desire in owning a car to be curtailed, that isn't a reason to not ensure that low cost alternatives are not made as reasonably attractive as they can be (walking and cycling), and that corridor space is set aside for bus transit to be developed (as Delhi also grows its underground metro system).  Delhi may also seek to wrestle control of its commuter railway system from Indian Railways, so that money can go into enhancing system capacity, whether by track, signalling or rolling stock (and to try to capture the growth in fare revenue to pay for these improvements).

For road pricing, Delhi should get its road management right more generally, and after converting existing toll roads to free flow tolling, with peak charges to help spread demand, pilot charging on critical parts of the highway network where diversion can be minimised.  Singapore does have an effective approach to reviewing and updating charges, and incrementally Delhi can develop a network of charging, that generates revenue that will be needed to fix intersections, corridors and other parts of the road network that need modernisation.