Durham updates UK's first congestion charge scheme

It is widely assumed that London implemented the UK's first congestion charging scheme, but that honour actually goes to Durham.  Durham County Council implemented the scheme on the tiny historic centre of the city, on Saddler Street on the peninsula in the River Wear.   The charge has been £2 between 1000 and 1600 Monday to Saturday and has been policed using a raised bollard in the centre of the street.  It is specifically designed to protect the historic centre of the city, which includes Durham Cathedral and Durham Castle, from hoards of tourists in cars, by encouraging them to park elsewhere and walk.    It is a road that typically had only 3,000 vehicles a day, but 17,000 pedestrians (and only one lane), so is truly a charge on a very small scale.   It is credited with reducing traffic on the road by a staggering 85%, indicating how little real benefit was gained from most motorists driving on the road (and with vehicle numbers cut to less than 600).

All the details of the scheme are here, on the Durham County website.

Charging zone, (courtesy of the BBC)

However, changes have just been implemented to update it.  In January, Journal Live reported that the Durham County Council was considering two changes to the scheme.  One to increase the price to £5, which has been slammed by the Automobile Association.  There has been no report since of whether the increase will occur.

The other change (which has been implemented), has been to replace the bollard based cash system with ANPR (Automatic Number Plate Recognition) based charging, similar to what exists in London.   This will avoid complaints about vehicles being damaged by driving over the bollard, which then is forced up into the car!  Though frankly, if people are so stupid as to want to evade bollards, they get what they deserve.  The key benefit will not only be avoiding damage from bollards (which means a vehicle is blocking the road until it can be removed), but also the delays of vehicles having to slow down to pay the charge and await the lowering of the bollard.  It will then be the UK's third fully electronic free flow road pricing system (after the London Congestion Charge and the London Low Emission Zone).

4WD vs bollard - see who wins

The charge is currently suspended, whilst a major upgrade of the area is underway, but it will recommence on 29 August according to the Northern Echo.  The charge will be £2 payable until 6pm the following day.  Failure to pay will result in a £30 fine. 

Automatically exempt vehicles include motorcycles, postal delivery vehicles and emergency vehicles.  Vehicles eligible for exemption (but requiring registration) include Blue Badge (disabled) holders, specific NHS (National Health Service) vehicles,  taxis, roadside recovery vehicles, registered local bus services and the Mayor's official vehicles.  A limited number of vehicles owned by residents and businesses within the area can also register for an exemption.

Durham's scheme is, of course, tiny and quaint, but does show how pricing can be used to manage demand even on a small scale, and be quite successful.   Total gross revenues are obviously small, being around £300,000 p.a. (excluding enforcement revenue).  So this is clearly NOT about money.

Further steps to revive "traffic pricing" idea for New York

As was reported here in January, discussions have emerged once more about introducing a form of congestion pricing in New York.  I wrote extensively back then about how I thought New York should proceed, with something easy to understand, which can target congestion effectively (that means different tolls at different crossings), focuses on achieving minimum standards of service for motorists (in terms of customer service, maintaining free flow conditions and fixing poorly maintained roads) and in using net revenues to at least in part benefit those paying, but also those disadvantaged (e.g. offsetting tax cuts or discounts for disabled drivers or vouchers for those priced out of jobs).  I don't intend to repeat these points here.   

The idea is no longer called congestion charging/pricing, but "traffic pricing" (as if this sector didn't have enough overlapping terms).

To reiterate, this time the general proposal is to toll the untolled East River bridges (several crossings are already tolled). The money is intended to be used to improve public transport, reduce the hated payroll tax and possibly reduce fares. Whilst public transport improvements can be seen as an understandable corollary, and certainly reducing other taxes would be a big step forward, reducing public transport fares would be foolish, especially as users don’t pay the cost of services now (and with increased demand, overcrowding would increase too).

However, comments on the CBS local website at the time indicated disdain for the idea, and Republican Senator Skelos is opposed to it as being a new tax.  Obviously unless motorists see value, both in reduced congestion and improved road maintenance, they are unlikely to support it.

The counter from advocates is that the city has forgone US$31 billion in lost revenue by not maintaining tolls on all of the East River bridges which were abolished a century ago. This CBS report quotes a former chief engineer for the city Department of Transportation concerned about the need for maintenance of the bridges, which of course begs the obvious point that the revenue should be used first and foremost for the sustainable long term maintenance of the bridges themselves. Streetsblog has a video about what could be done with that money, which of course raises the hackles of those opposed to new taxes, and another article making the same point.  The revenue potential is obviously significant.  Opposition to it is rooted in a strong objection to new taxes.

Another question could be, what if the payroll tax was partly replaced by it? The benefits from reduced congestion and emissions would be clear, and those paying the payroll tax who don’t drive into Manhatten would all be winners. It could be a simple replacement of taxes and generate benefits from that, but this is unlikely to be supported by the environmentalists and public transport advocates who want to spend new money.   A compromise may well see a partial tax cut, with new money used on the roads (and I'd suggest facilities for cyclists, pedestrians and buses, all being road users) to offset existing spending from elsewhere that could then be used on public transport.

However, while the laudable motivation is to rescue the crumbling New York MTA infrastructure, its problems are more as a result of its dinosaur like procurement, contracting, governance and funding framework. These wont be fixed by congestion pricing, which will only pour good money after bad into something that needs more fundamental reform.

If it were up to me, I’d try to get the tolls introduced with a broad consensus of support to replace the payroll tax, by using the money to finance long term maintenance and renewals of the bridges and Manhatten’s roads, particularly resurfacing, serious long term performance based maintenance, which would also benefit cyclists by allowing for simple cycle lanes to be established.  

The MTA problems are more fundamental, and New York needs to look outside the state, and possibly outside the country for solutions to its problems. The model of city/state owned monopolies for public transit is one closer to that of Moscow than that of a modern thriving capitalist democracy. It is increasingly seen as archaic in Europe and Australasia. In other words, it is time to break up the bus system, privatise it, introduce competitive tendering and realise enormous efficiencies that private commercial management can bring. For the subway and rail systems, long term franchising may be the answer, bringing private capital in and paying it over long periods to deliver performance. When some New York politicians claim congestion pricing is more akin to something you’d see in Cuba than the USA, they might note that the MTA is more akin to something you’d see in Minsk.

UPDATE:  City Hall assesses the chances of success, as the Democrat Governor Andrew Cuomo persists in fence-sitting on the issue.  At some point he will have to fear splinters and come out one way or another.

Malaysian government seeks toll cuts prior to election

Reuters reports that the Malaysian Prime Minister has announced that he is “soliciting industry views” on freezing, cutting or abolishing tolls on privately owned toll roads in the country.

He has also called for no extensions to concessions and no compensation for any reduction. In short, it looks like a measure to gain favour with voters in advance of the election.

It followed the announcement by operator, MTD Capital, that it was freezing tolls without any government compensation. The other major operator, PLUS Expressways has since supported another toll freeze proposal. Both companies are currently subject to takeover bids by their own major shareholders (plus being taken over by an employees’ fund and Khazanah Nasional). It is thought that the offers by MTD and PLUS to freeze tolls are intended to improve their chances of winning future concessions, as the government intends to build five major new highways (but also announced a freeze on tolls on four PLUS highways).

What does this all show? It is that the line between government, private enterprise and the transparency of decisions on concessions in Malaysia is very blurred indeed.

Consider this. PLUS Expressways is being “privatised”. It is Southeast Asia’s largest toll concessionaire and the eight largest in the world according to Wikipedia. It is owned by UEM Group (United Engineers Malaysia). UEM Group is a fully owned subsidiary of Khazanah Nasional. Khazanah is the government’s investment company. Khazanah owns just under 15% of PLUS Expressways, whereas it owns the rest via UEM Group.

Yes, this is state capitalism on a grand scale. So in any case, it is hardly surprising that the Prime Minister can tell a state owned toll concessionaire to freeze tolls!

Budapest mulling congestion charging

According to two reports from Budapest Business Journal (BBJ), there is an increased likelihood that the City of Budapest will implement some form of congestion charging in the next few years, primarily for budgetary reasons.

In January, it was reported by BBJ that the Mayor's chief financial advisor, János Atkári, said urgent steps would need to be taken to avoid the city becoming bankrupt by 2012. This included congestion charging. The key financial problem being the ongoing heavy losses for the city's public transport system, and the financial commitment to expand its metro.  In June, BBJ reported that when the Metro 4 line starts operation, Budapest is legally obliged by the EU to commence a congestion charging system.   With the Metro expected to be completed no later than 2015, a charge would start at the same time.  Work undertaken for the city previously indicated that revenue could be HUF13 billion (US$68.7 million) p.a., presumably based on a modelled charge of between US$2 and US$4 per vehicle.

The Mayor has also indicated (according to ITS International) that:

New park-and-ride (P+R) car parks will need to be opened, the number 1 and 3 tram lines will need to be extended and the city's parking system will need to be unified.

Certainly Budapest does get severe congestion, as car ownership has soared and people have preferred the freedom of driving to the city's albeit well developed public transport network.   The dramatic decline in patronage for the public transport system due to increased car ownership has been accelerated by the increase in congestion slowing down buses and trams (where they do not have exclusive right of way).  In effect, charging for driving into Budapest should boost patronage and help ease revenues for the public transport system.

My question is whether Budapest is best served by a small cordon/area charge, by having charges on vehicles transiting the city (but not using motorways), or in a wider approach to be taken to charge vehicles by distance across the country.   There have been firm proposals in the past to charge heavy vehicles by distance (they are now charged by the day on motorways only, along with cars), which have been stymied by government indecision and reluctance to use international consultants.  I can hope that Budapest thinks carefully about any new system to avoid boundary distortions, minimise operating costs, maximise economic benefits and be able to be integrated into any wider road pricing options.   However, it is clear that Budapest is further ahead on its thinking in road pricing than other capitals in the former socialist bloc countries.

The biggest barrier for Budapest is that national law does not give the city the legal authority to introduce a congestion charge, so the matter will be up to central government first.  However, I would have thought concerns over the potential bankruptcy of the capital would be a strong motivator (along with the clear issue of high levels of congestion in downtown Budapest, with pre-existing good public transport alternatives).

Tehran is proud of its congestion charge

For readers in the United States who advocate congestion pricing, pointing out Tehran as a working example is probably not going to fill you with enthusiasm.  Yet it is true, Tehran does have what it calls a Limited Traffic Zone, which is essentially a large area charging zone around downtown Tehran that motorists must purchase a permit to access or travel within.

Details of the Tehran system are available at its own website in English, with Youtube videos (2 in Persian, 1 in English below).  However, for the sake of brevity I will summarise the details I have managed to obtain here:

High resolution map of cordon (click map)

- The system came into operation in April 2010;

- It is entirely Automatic Number Plate Recognition (ANPR) based, taking images of the number plates of every vehicle crossing the cordon;

- The number plates are matched to lists of exempt vehicle and those that have purchased permits, with those that have not getting sent a fine by matching the number plate to the owner's address;

- It replaces a manual "restricted traffic zone" that involved paper permits, enforced by Police inspections of vehicles, somewhat akin to Singapore's original Area Licencing Scheme.  This existed since 1979.

- The previous manual system had around a 30% violation rate;

- 104 entrancepoints are equipped with ANPR cameras;

- Mobile enforcement units operate within the zone to capture vehicles travelling within the area that have no permit;

- Motorists can purchase single day, week long or annual passes to access the Zone;

- Payment can be online or by phone;

- The maximum fine appears to be US$6500!

-  Emergency vehicles, buses, public taxis and diplomatic vehicles automatically have permits.

-  There are discounts for disabled motorists (100% for those more than 70% disabled);

-  "Private local taxis" are discounted too.

-  Commercial vehicles pay more, including vehicles registered to companies. 

-  Government vehicles all pay as well.

The price for a daypass is 123,000 Iranian Rial (about US$11.60), a week long pass is 738,000 Rial (U$69.50), an annual pass is around 1,850,000 Rial (US$174).  In other words, regular users get a considerable discount if the pay in advance.

The hours of operation were not explicit on the website, but it alludes to counting vehicles between 0630 and 1700, which would seem logical, but is unclear if certain days are uncharged (e.g. Fridays and Saturdays being the weekend).

Most curiously, the system has copied the London congestion charging signage, which should be a compliment to Transport for London.  Using the "C" logo was hardly mandatory for the Islamic Republic of Iran, but it clearly was thought of as being valuable.

 

The Youtube video in English is below, more are available in Persian on TehranTraffic's channel.

Overall, I say good on Tehran for taking the initiative in implement a form of pricing.  Certainly the breakdown of vehicle classes seems very complex when you see the price schedule, and the annual passes seem like a major discount on quite a punitive charge schedule.  However, Tehran's traffic IS chronically bad, and whilst money has been poured into a metro and upgrading public transport, getting the roads to move at all is the greatest challenge. 

What I'd like to see is whether any work has been done on the results to determine how successful the system is, in terms of reducing traffic and what net revenue is generated.  I would have thought there could be potential to take it further, having annual passes only for certain public vehicles, and leave the rest to weekly passes to incentivise changes in behaviour.  In addition, there may be benefits in targeting certain crossing points at different times, although this complicates enforcement and charging, especially using number plates alone.  Still, it would appear that one of the greatest challenges - having a reliable number plate database for owners and their addresses, has not been a barrier to Tehran.  I suspect that more authoritarian governments have the incentive to get this right, although its complexity and scope for human error are enormous. 

What this proves is that developing countries can implement congestion charging, and do it rather well.  This appears to be more advanced than Dubai's rather abysmal Salek system, in terms of its potential to create positive impacts on transport.   However, it shouldn't be neglected that Tehran had been running a permit based system for downtown since 1979, what this system has done is to update it for the 21st century.

100th post

I started this blog primarily to be a website where anyone interested in tolls and road pricing could find a comprehensive list of links to all sorts of pricing systems from around the world. This covers not just conventional tolls, but HOT lanes, urban congestion charging systems and network tolling and distance charging systems for heavy vehicles (and all vehicles).

I perceived a “gap in the market”, between what is offered by the only other similar website, as I sought news on road pricing from around the world, not just the US.

Of course, having adequate time to do this is a challenge that I have failed to deliver consistently in the past few months, but it is my hope to improve this and to be a reliable central source for news on the road pricing/toll sector worldwide. My focus is on major developments, which means steps forward in terms of policy, technology and the introduction of new road pricing systems. It means I am not covering minutiae or minor local issues, or specifically, whether or not a road should be built, but rather strategically interesting issues around tolls.

My hope is that you find it interesting enough as a reference point, and as a place to come for such information, with a little commentary added in from my perspective. I also intend to occasionally feature articles which are not simply reporting news, but taking a more incisive view of recent developments.

I don’t want this blog to be specifically political, but it will reflect an outcome based approach. I am interested in results, in outcomes for road users and those who live and work adjacent to roads (which is largely everyone!). I am interested in economic efficiency, safety and efficiently minimising the negative externalities from transport. I don’t believe that transport, as a sector, should be subsidised as of right, but do believe that the public policy goals for transport should be transparent, and policies implemented based on achieving clear objectives, not because the policies themselves are seen to have merit in themselves.

I firmly believe that the levels and extent of road pricing around the world will increase, in part because technology will make it ever easier and cheaper, in part because the economic and environmental benefits from better pricing a scarce resource (road space) are abundantly clear and finally because the tolerance of motorists and taxpayers in charging other activities (or proxies for road use, such as fuel) is continuing to be pressed. People are typically willing to pay for what they use, they are less tolerant of paying for one thing, and finding the money is used elsewhere.

So, please continue to read, and gain insights into developments around the world, as interest in road pricing continues to grow.

Irish toll road case goes to Supreme Court

The National Roads Authority, Ireland’s government highways agency, initially took Celtic Roads Group (Dundalk) Ltd to court, for overcharging motorists paying tolls on Ireland’s M1 tolled motorway. The M1 connects Dublin from the north to the border with the UK (Northern Ireland). The Irish Times reported that the claim was that around 26,000 Euro a week in additional tolls was being collected above that which was legal under the PPP agreement.

The key point being that the bylaw regarding PPP tolls allows for toll operators to vary tolls according to inflation to maximum levels, but the NRA claims this means that at times of deflation, tolls should be reduced. As the consumer price index in 2009 in Ireland was negative, the NRA claims the toll of 1.90 Euro per car should have dropped to 1.80 according to TV3 Ireland.

Noting that it was acknowledged that it is impossible to reimburse the difference, the Commercial Court in Ireland agreed with the NRA. As a result, Celtic Roads dropped the toll immediately on the M1, as did the owners of three other Irish toll roads with similar PPP contractual conditions.

The Irish Times has since reported that Celtic Roads is now appealing the decision to the Supreme Court. Part of the motivation is that toll roads in Ireland are now in dire financial straits because of the recession and collapse of the property and banking sectors in Ireland. With demand down, toll revenues are down, and the owners are facing significant difficulties in meeting their debt management obligations.

Irish taxpayers are saved this risk of course, because it isn’t their debt, the roads were built (and to a high standard), so regardless if the owners go bankrupt, the roads will still be there for use. Meanwhile, the projections of investors in toll road PPPs may take a pause for breath before investing so quickly in new roads in economies that so clearly are subject to an inexplicable bubble of growth. Celtic Roads Group will be hoping its Supreme Court appeal is successful, as it is likely to want as much revenue as possible in the current economic climate.

Tel Aviv's private HOT lane shows signs of success

In January 2011, as reported here, the first HOT lane in Israel was opened, effectively providing additional lane capacity between Ben Gurion Airport and downtown Tel Aviv. The lane has been built by a private company, and offers the following options for users:

- Registering to pay, verified by Automatic Number Plate Recognition (ANPR) technology. The current price being 6 Shekels (U$1.75);

- Paying at toll booths manually;

- Vehicles with four or more occupants at peak times (three offpeak), have free access once verified at a toll booth (occupants are manually counted);

- Park and ride service, with a carpark at Shafirim Interchange and frequent free shuttles into the city (15 minute intervals typically, 5 minutes at peak times).

Buses and taxis have free access to the HOT lane.

According to the Jerusalem Post, the HOT lane is having some success, given it is running at near 80% capacity on average.   The HOT lane is able to introduce dynamic pricing, so that anyone about to select the lane will know in advance the price.  The intention being to maintain a minimum speed of 70 km/h.  The owner, Shafir Engineering, not only expects to use price to maintain free flow conditions, but actively monitor the lanes so that any breakdowns, accidents or other incidents can be swiftly cleared.  Indeed, its business depends on providing such reliability for its customers.

There are a wide range of interesting points about this HOT lane.

First is its quaint use of toll booths as a manual payment option, but more importantly to check vehicle occupancy! One of the problems of HOV and HOT lanes is checking vehicle occupancy, given the report indicates it takes up to three minutes to do that, surely the point must come whereby it is simply better value to scrap the occupancy exemption.

Secondly, the park and ride shuttle is an interesting adjunct. It presumably does not compete with pre-existing public transport on any great scale, but what it does do is offer an alternative for users that may not otherwise exist. Door to door shuttle bus services are capable of offering the convenience of taxis at a relatively low cost, and if this helps deliver better road pricing, then maybe such options (paid for by the toll) may be worth considering.

Thirdly, the electronic toll component is free flow, but using ANPR technology, not tag and beacon (otherwise known as DSRC). This is notable for the rarity in using such technology (without DSRC) for tolls, with only the congestion charging schemes in London and Stockholm, and the Northern Gateway toll road in New Zealand being ones I am aware of. 

Finally, it isn't simply a HOT lane, but a dynamic HOT lane.  As with several other global examples, such as the 91 Express Lanes in California, pricing can vary in real time based on demand.  In other words, a basic level of service is guaranteed, a notion virtually unknown in the road sector.

What the Tel Aviv Highway 1 HOT lane demonstrates it how new highway capacity, particularly on congested routes, can be viable built using private capital and tolling that specific capacity (in the form of lanes). Without detailed capital, operating revenues and cost figures, I can’t make an informed judgment as to its complete viability. However, it is offering choice, providing relief for the untolled route, and improving mobility. Perhaps its greatest limitation, beyond the odd use of toll booth checking for HOVs, is the issue with merging with the existing highway, which may require an engineering based solution (junctions must always have more capacity than the roads either side of them).

Golden Gate Bridge to go fully electronic free flow in 2012

According to SF Gate, in a significant move to reduce congestion, the Golden Gate District Board of Directors voted in January to eliminate toll booths and manual toll collection on the Golden Gate Bridge by September 2012. 

The move is expected to save US$19.2 million over 10 years, as manual toll collection has become increasingly more expensive than electronic collection through the local "Fastrak" DSRC system.  Two-thirds of users already use the Fastrak system.  There is also already a discount for Fastrak of U$1 for cars

It was delayed by concerns about the employment of the 34 people employed as toll collectors and how cash payers would be accommodated.  Indeed, the article above has multiple quotes from people who actually LIKED the human contact with toll collectors, and trade unions who shudder at the idea that an entire category of employment can disappear in the name of - "efficiency".   Presumably, stagecoach drivers, telex operators and cockpit engineers should never have gone, and machinery should all be assembled by hand in a North Korean style approach to employment.

A more critical issue is to cover those who are cash dependent, with the article claiming around 15% of Bay Area residents are.  They will need to have options to go into stores and pay for access passes in advance (having post payment bills effectively means issuing credit that has a high risk of being unpaid).   Prepaid options are a low cost solution to addressing

Presumably the main step forward in the next year should be an active campaign to encourage as many users as possible to have Fastrak tags, but also to communicate how the Automatic Number Plate Recognition (ANPR) system will work for payment and enforcement.  US experience in electronic free flow tolling is not extensive, with the long standing experience coming from Canada (Toronto 407), Australia (tolling in Melbourne and Sydney), Singapore (Electronic road pricing) and London (congestion charge).  San Francisco would do well to spend time developing the business rules and processes necessary to covered those without tags, those without bank accounts and free flow enforcement.   It is worth noting that highway engineers are typically not expert in developing systems or business rules for handling customers.  

Bay Bridge congestion pricing is working

According to Ami Cholia at Alttransport, the peak charges implemented on the Bay Bridge at San Francisco from July 2010 are working. This was reported previously in the context of San Francisco seriously considering a downtown cordon based congestion charge.

The Bay Bridge toll (full schedule here) is usually US$4, but from 0500-1000 and 1500-1900 weekdays it has been increased to US$6. Interestingly it is US$5 all weekend, implying that weekend volumes are a bigger issue than the inter-peak. High occupancy vehicles (defined as 3+) are eligible for a discount rate of US$2.50 only if they have a “Fastrak” DSRC tag account. Previously HOVs had free access (vehicles with three or more axles pay significantly more).

San Francisco-Oakland Bay Bridge

Apparently, this single move has reduced travel time by 4 minutes westbound (citybound) in the AM peak. It was also reported that patronage on the BART rapid rail transit line that parallels the bridge route increased by 4,000 at that time. Interestingly, HOV vehicle usage dropped by 29%, which indicates time shift and mode shift in travel by groups in cars.

Introducing variable peak charges on already tolled bridges is proving to be increasingly popular. One can only hope that this relatively simple step (which could be paralleled with lower charges during low periods of use if there were concerns about revenue maximisation) can be observed more widely and more seriously considered elsewhere.