Road pricing discussed in Vancouver - for revenue or for demand management?

Vancouver's problem is financial.  It wants more money, but it is also considering how best to sustainably improve the future of its transport networks.

Simon Fraser University's Moving in Metro page has a good collection of articles and presentations about the debate in Vancouver.

However, it appears the debate is moving towards proposals for a referendum on how to pay for public transport.  An option that appears to have a range of options, excluding one - that users might be asked to pay.

The Globe and Mail reports that there is now debate about whether to include road pricing and bridge tolls (a blunt option) to raise revenue for public transport.   The Provincial Government is apparently opposed to inclusion of "regional tolls" and "road pricing".

The report gives a good summary of the key issue:

The exchange is just the latest in what has been a five-year tussle between Lower Mainland mayors and the province in trying to figure out a way to pay for major transit improvements.

The two big projects on the horizon are a $3-billion subway line in Vancouver, from Commercial Drive to the University of B.C., and a $2-billion light-rail system in Surrey that would connect its city centre with three other important nodes.

Right now, TransLink, the regional agency that oversees transit, along with some roads and bridges in the region, pays for everything mainly through fares, property taxes and gas taxes.

That doesn’t provide the money to take on any more big construction projects, since the agency is already making payments for its hefty share of the recently built Canada Line and the Evergreen Line, currently under construction....

But the province has blown hot and cold on various suggestions, including tolls, road pricing, a vehicle levy, a regional sales tax and carbon-tax revenue.

The big mistake that could be made is that a solution is developed based on raising revenue rather than the impact on transport use and economic benefits.

It is clear that there could be reforms of taxation and funding of transport in Vancouver and the Province as a whole, and that there will be new pressures as Washington State progresses towards supplementing or replacing fuel taxation with road user charging based on distance.

However, the debate hasn't really gone far enough into focusing on how to treat road pricing.

Singapore confirming its shift to GNSS based urban road pricing

Singapore newspaper TODAY reports that the Singaporean government is going to replace the existing congestion pricing system (called ERP - Electronic Road Pricing) by 2020, implicitly with a GNSS based system that will allow more dynamic and variable pricing by individual road and time of day.

This follows trials that have occurred in the past few years, which included a number of prospective suppliers.

The report states:

The new system will allow the Government to calibrate the charging of motorists in proportion to the congested road segments that they use — “a fairer approach”, as Mrs Teo put it. It can also provide value-added services, such as navigation, payment for roadside parking in lieu of parking coupons and real-time traffic information.

It also explains a number of other measures to support car-sharing schemes, incentives to promote purchases of newer vehicles including discounts to the Certificates of Entitlement (permits to own motor vehicles) for those buying vehicles with the cleanest burning engines.

Whilst Singapore is different from many cities (not least being a city state, with a reputation for having quite strict laws), this move is significant.  

Singapore may be the first city in the world to introduce congestion pricing using GNSS technologies.   It will be able to set and vary charges on roads at little cost, and be able to be as flexible as it wishes in how it sets charges (and Singapore is already the world leader on this).  As such it is the holy grail of marginal road pricing, because it gets away from the need to install specialist equipment on every road, and means time and place based pricing can be implemented.

With six years to implement, Singapore has plenty of time to get it right.  What will be interesting is what other cities will follow, or if any dare to do so in advance of Singapore.

Meanwhile,  Senior Minister of State for Finance and Transport Josephine Teo insists that no new roads will be charged during the transition, and no new gantries will be introduced.  That's a relief, given the size of ERP gantries is enormous - partly due to the technology available at the time (1997) and because the system involves not just detection of a vehicle tag, but a read/write application to deduct funds from prepaid smartcards.  

Whilst some Singaporeans are concerned about privacy, I suspect others will be pleased to see the back of these gantries once the new system is in place.

Singapore ERP gantry

According to TODAY, tenders will be called in the coming months to develop and build the system.

A complete interactive map of all Singapore ERP gantries is available here, where you can click on each gantry, see its hours of operation and the different prices which in some cases vary on increments of five minutes.

City of Cupertino’s opposition to HOT lane misguided

According to the San Jose Mercury News, the City of Cupertino is opposing a proposed conversion of a HOV lane on California State Route 85 on grounds that unfortunately very misguided and seem to more of a kneejerk response to political polemic than being evidence based. The proposal is to convert existing HOV lanes on the highway to HOT lanes, extending them slightly to the south on route 101. Full details are given here. 

It includes adding a lane between SR80 and I-280 by using the median strip land, another auxiliary lane and some bridge widening. Santa Clara Valley Transportation Authority and Caltrans are pushing the project, which has yet to be approved for funding, to get better utilisation out of existing lanes, whilst preserving the lanes availability for HOVs included buses.  Cupertino appears almost ideologically opposed to the project.

The FAQs about the project and how the lanes will work from here, but I find Cupertino's concerns (detailed here) as worthy of a response.  I also think they miss my key criticism of HOT lane schemes - that they don't always appear to be based on financial or economic viability.

News briefs - Australia, Belarus, Israel

Australia - Queensland Government to privatise motorway company

Queensland Motorways is a company owned by the Queensland Investment Corporation, the Queensland State Government's holding company for commercial state owned enterprises.  It owns three key toll roads in Queensland, but also acquired from Brisbane City Council the Go Between Bridge, which I profiled over two years ago as being an unprofitable disaster.

Queensland Motorways have paid the Council A$112 (US$98) million for the 50 year tolling rights to the bridge.

Previously it acquired the disastrous Clem 7 toll tunnel motorway, which is subject to a lawsuit over demand and revenue forecasts.  It paid A$618 million (US$538 million) for the road, not bad given it cost A$3 billion to build.

So now the Queensland Government thinks it is a good time to divest itself of this investment.  The Australian reports it is worth about A$4 billion (US$3.5 billion)

The report says:

Groups likely to be interested in Queensland Motorways include superannuation heavyweight Industry Funds Management, Abertis/Hastings and groups out of Canada including the Canadian Pension Plan Investment Board or the Ontario Teachers Pension Plan.

Of the listed groups, Transurban could purchase the asset with partners, a source said.


Belarus - tolling of existing highways to be expanded

ITS International reports that the Belarus electronic toll system has been expanded to a network of 118km of highways as of January 2014.  This expands the extent of the network to 933km, with the whole system installed and operated by well-known Austrian toll systems provider, Kapsch.   The expanded network will include eleven new gantries for charging and enforcement. The report claims that customers are registered from Belarus, Ukraine, Russia, Poland and Lithuania.

The system uses DSRC, not GNSS technology, paralleling that which has long been in place in Austria, and similar systems on networks in the Czech Republic and Poland.

I wrote about the Belarus system a couple of years ago.   It is branded BelTol  and charges cars €0.04 (US$0.06)  and up to €0.12 (US$0.17)  per km for trucks. Both rates seem rather cheap.  Germany charges between €0.14 and €0.29 per km for trucks, Slovakia €0.08-€0.24 and Austria €0.16-€0.44 per km.   No toll system in Western Europe charges cars by distance across a network electronically.


Israel - New HOT lane being studied

According to Israeli business news website, GLOBES, Ayalon Highways Ltd (a central government owned company responsible for managing Israel's Highway 20) is investigating the value of introducing a HOT Lane on the highway between Roads 1 and 5.  

However, the report is contradictory, which some claiming that a lane will be taken from the existing road, and the Ministry of Transport claiming that discussions are about a new (additional lane).  

The road will connect with the privately owned H-1 HOT lane that was opened in 2011 between Ben Gurion Airport and Highway 20, which I noted at the time,  and is driven entirely by heavy congestion on the existing lanes.  

The proposed lane would offer toll free access for buses, but the "high occupancy" requirement would be 4 car passengers, suggesting that there is a real interest in ensuring the lane maintains a good level of service, although it is far too early to consider what the potential toll levels would be.

Proposed new HOT lane in blue, existing H1 lane in yellow

Intelligent parking in London and San Francisco, a future for market priced parking?

London smart parking

The City of Westminster, one of London's inner city boroughs (encompassing the West End and many of the locations in central London tourists are familiar with), is launching intelligent parking and Atlantic Cities has a good article about the upcoming system.

3000 sensors are being placed in parking bays (there are 10,000 in Westminster, which is rather low given the density of streets, reflecting the long standing policy to eliminate on street parking from many major roads and dedicate road space to bus and cycle lanes and expand footpaths. 

The report says the 3000 sensors are being installed at a cost of £650,000 (US$1.07 million).

It enables motorists to use mobile apps to check parking availability, including crucially disabled parking bays (often ignored in discussions about reducing motoring).  

Further details are on the Westminster City Council website here.  

Map of Westminster relative to the rest of London here.

USA- California - San Francisco intelligent parking

I reported over two years ago on San Francisco's intelligent parking trial.  According to SF Park the trial has come to a close, with the parking sensor devices having been switched off at the end of 2013.   SF Park says:

This means that the real-time information on parking space occupancy will not be available for mobile apps and similar uses. The SFpark data feed and app will continue to show meter parking rates, as well as real-time space availability and rates at parking garages. The SFMTA will continue to conduct demand-responsive rate changes to find the lowest rates possible to help ensure there is a minimum number of open parking spaces on each block to reduce circling and double-parking.

In other words, the system will no longer be useful for identifying occupancy on the kerbside, but it will be for parking garages.  Meanwhile, pricing at parking garages will appear to be variable, and there appears to be a continuation of some form of variable pricing for kerbside parks.

The results of the trial will be interesting, as dynamically priced kerbside parking has great potential to save time, fuel, reduce congestion and stress for those seeking to park, as well as pricing parking efficiently so that some may decide to drive at different times, use other modes of transport or (inevitably) go elsewhere (which is good for areas that have surplus capacity).

My opinion

London congestion charging contract changes hands again

Computerworld UK reports that Capita plc has won the contract to manage London's congestion charging system which it lost in 2009 to IBM.  Capita was originally responsible for the introduction of the charge in 2003 and was subject to accusations that it charged "over the odds" for the management of the congestion charge, because of the risks involved and the political imperative for then London Mayor Ken Livingstone to introduce the charge in 2003.  

Capita will take over the full contract in November 2015 for five years with a possible further extension of another five years.  The report notes that the original contract was worth around £60 (US$99) million per annum in revenues to the company, with the current contract closer to half that value.

Capita says the contract is worth about £145 million (US$241 million) in revenue in total, assuming that is for five years it suggests around £29 million (US$48 million) per annum.

The contract also includes the London Low Emission Zone and TfL's traffic enforcement notice processing system.

Of course there should be considerable economies over time with the contract, as the customer base is largely stable, and there are unlikely to be any significant changes over the next five years given the political appetite to expand the charge is next to zero, as is the political appetite to make it more disaggregated.

Any more interesting future for the London congestion charge will need to either await a profound change in the political environment or someone willing to offset new charges with reductions in other taxes (a suggestion some years ago was that a London wide charge could replace Council Tax (a flat tax on individuals based upon the historic value of the property they live in).

However, the wide-eyed views expressed by the Mayor and some others, that London could cover some major highways to put parks and buildings on top of them, would take a lot of money too.  Charging some London motorists to pay for better roads, both in capacity, performance and local impact, might get some traction, but for now London doesn't even have a highway network strategy - and anyone who uses the network regularly should expect that this ought to be a priority.

Capita's press release here.

Germany's car vignette: the problem is making it tax neutral for Germans

Nearly a year ago I wrote that Germany is considering introducing a vignette system for private cars using its motorways, primarily as a way of raising money from foreign motorists.

Now EurActiv reports that the newly agreed "grand" coalition government in Germany, between the centre-right CDU/CSU of Angela Merkel and the centre-left SPD, includes agreement to proceed with such a system.

For those unfamiliar with the vignette systems of Europe, the concept is relatively simple.  It involves prepaying for access to a highway network (typically all or most of the motorways of the country), and the pre-purchase can cover set periods that can range from 1 day to 1 year, with most systems offering three products (something between 4 and 10 days, another for 1 or 2 months and another for a year).   Traditionally, vignette systems have required vehicles to display a sticker on the windscreen proving payment has been made, but more recently systems in Hungary and Romania are electronic.  All that is needed is for the relevant authority to have a record of payment associated with a number plate, so that those without vignettes can be targeted and stopped by Police.

The decision to introduce vignettes for cars is driven by politics, as German motorists know only too well that if they drive into three of the countries that border Germany they face vignettes (Switzerland, Austria and the Czech Republic, with a fourth coming with Belgium), whilst in France they will pay tolls on the extensive tolled motorway network.  Beyond that, other countries in eastern Europe have vignettes, whilst those in southern Europe have extensive toll roads.   Whilst motorists from many countries drive through Germany, with the perception that they don't pay.

German autobahn network

Doesn't Germany already charge foreign vehicles?

Now it is well known that for trucks 12 tonnes and over, there is the LKW-Maut distance based truck tolling system, which recovers infrastructure costs from those vehicles.  For cars there is nothing (beyond a handful of toll roads), except of course, fuel taxation.  Whilst it is possible to drive across Germany without buying fuel, it is far less likely than driving across Slovenia.  However, it is commonplace in Europe to treat the taxation of motor fuels as not being in any way a tax on road transport, even though it is, in effect, so. The preference is to treat this as just another tax (even though it is levied exclusively on one source of energy, used primarily for one purpose).  

In Germany, petrol is taxed (as of July 2013) at up to €0.6698 per litre (less for lower sulphur content) and diesel at  €0.4857 per litre, none of which is hypothecated for transport spending.   Of course, the amount of fuel tax paid when using German roads will be dependent not only on the amount of driving on German roads, but how much a motorists fill their fuel tanks before and after a trip, making fuel tax a poor proxy for payment for road use (although it certainly is a tax collected because of road use).

Avoiding discrimination

The EU Treaty makes it clear that EU Member States should not discriminate against citizens from other EU Member States.  That means that any vignette in Germany must apply to cars registered in Germany as well as other countries.  Of course, on the face of it, that means an increase in taxation for Germans, which is not exactly what politicians are seeking.   So proposals so far have included the concept of a "discount" for German motorists.

Now the issue becomes rather subtle here, as EurActiv reports Siim Kallas, "the EU commissioner for transportation, has rejected new plans for tax rebates in Germany" in that German motorists cannot be exempt from the vignette nor can they get a rebate for it.

Yet other forms of taxation would appear to be able to be reduced.  Motor Vehicle Tax (a tax on ownership) could be reduced proportionately, so that most Germans do not pay more in tax.  Yet with one politician saying that he wants to raise something like  €800 million rather than  €100 million a year from the vignette, it seems unlikely that this could be possible, alongside reducing other taxes.   The Green Party seems to support introducing a vignette, but without any cut in other taxes (matching its antipathy towards private motoring).

What should Germany do?

If a vignette was introduced, similar to Austria, the key issue remains as to how to deal with other taxes.

Austrian car vignette

Do Washington State's proposed I-405 HOT lanes make sense?

The Herald Net reports that the State of Washington is planning to have HOT lanes either way on the entire length of I-405 between Lynnwood and the I-5, effectively meaning that Seattle's major western bypass will have an express lane capability.  All the details are in this report on the WSDOT website.

The northern portion is already under construction from Lynnwood to Bellevue, with US$334 million being spent converting existing "car pool" lanes (HOV lanes) into HOT lanes, with that project expected to be completed in 2015.  However, funding is yet to be approved from Bellevue to SR-167 (which already has dynamically priced HOT lanes), as this would require new lanes and would cost US$1.1 billion.

I-405 Washington HOT lanes

In the map image above, green depicts the lanes already under construction between Lynnwood and Bellevue, blue being the proposed new lanes, and yellow the SR-167 lanes.

There are several interesting dimensions to the report.  It recommends that the conventional two-person HOV requirement only entitle motorists to free access during off peak times, with a minimum three-person HOV during peaks.  That's an interesting, albeit complex for enforcement, way of rationing road space for the HOV component of users.

Pricing will be dependent on how many sectors are used, with an initial price of US$0.50 for each sector (Lynnwood to Bellevue being one, Bellevue to Renton being the next, followed by Renton-Pacific.  The expectation is that dynamic pricing would be introduced as well.

The automatic question is surely, why can't the lanes pay for themselves?  The report claims that only US$215 million of the US$1.1 billion capital cost can come from tolls, with the rest sought from the "gas tax".   

New York isn't pursuing congestion pricing/toll reform soon

So Michael Bloomberg is no longer Mayor of New York.  He was an advocate of congestion pricing, but got shot down by the New York State Legislature and plans were never revived again.  Given the city has a new Mayor, and the Governor said in 2012 he would consider the tolling reform plan put forward by Sam Schwartz, I thought it would be interesting to review where things have got to for New York.

The answer is, not very far.  

Stockholm congestion charge after six years

I know this has been posted elsewhere (notably by Eric Jaffe at Atlantic Cities).

Jonas Eliasson,  Centre for Transport Studies at Sweden’s Royal Institute of Technology, describes what happened in Stockholm in this video published in late 2012.  It is nearly 9 minutes long, so isn't taxing on your time.

I like his reference to the Soviet planner who rang an official in London in 1989 asking what official was responsible for managing London's bread supply.  The answer being no one.

Perhaps some will take that analogy and wonder why the same can't be said for transport networks.  

On Stockholm his key points are (much of this is already known):