Tuesday 25 September 2012

Transurban advocating network wide urban road pricing

TransUrban CEO Scott Charlton, at a conference in Melbourne, called for network road pricing in Australian cities to better manage network utilisation.  He suggested that full network pricing might include discounts for trucks travelling at night, and mean a simplified charging structure with peak and off peak charges, which could also facilitate efficient use of corridors for both public transport and other vehicles (which to me sounds a lot like, well, roads).  He also suggested that toll lanes parallel to untolled lanes may work in certain contexts in Australia, although he did not suggest any specific examples.

In the Sydney Morning Herald it was reported that he said that some studies suggest that as much as 40% of afternoon peak journeys are discretionary, indicating considerable scope to change demand patterns and substantially reduce congestion.

The report said:

"Whether it's corridor charges, congestion charges, demand pricing or distance-based tolling - network pricing will have to be introduced to fund infrastructure, manage demand and promote public transport alternatives," said Mr Charlton, whose company operates the M2, M5, the Eastern Distributor, the M7 and the Lane Cove Tunnel.

"Just take a look at our major motorways and it's obvious: we need new capacity – and we have to find better ways to utilise our existing assets."

So he is advocating wider pricing not just to fund more infrastructure, but to better manage existing highways.  This shows a wider interest than that traditionally expressed by toll road concessionaires, who typically look little further than the demand/revenue of their roads against debt.   Could it be that TransUrban would be interested in having more responsibility for traffic management and highway management in cities than just the roads it manages now?

The report noted support from the New South Wales Premier, Barry Farrell, for reform of tolling in Sydney to have charges on a distance basis on existing tolled motorways, but not charging by time of day.  There is a strong intention to make the charges, at least in the first instance, revenue neutral (but of course this cannot be guaranteed over the longer term if demand increases).

Yet this approach, whilst welcome, is insufficient according to Charlton, as it deliberately avoids peak charges (which already exist on the Sydney Harbour Bridge).

He makes the point eloquently, arguing effectively that Australia cannot keep building new capacity that is only fully utilised for a few hours a day:

"If you look at just one of our Sydney motorways – the Eastern Distributor – you can see the peaks in the am and pm periods," Mr Charlton said.

"You can also clearly see the motorway has excess capacity during other parts of the day. The question is – could peak pricing change this profile? Or could discounts during the off periods produce a better transport outcome?," he said.

"One key fact in the road pricing debate is that a significant number of motorists do have an option of when they travel. Some studies suggest as much as 40 per cent of travel in the afternoon peak is discretionary.

"We are asking people to consider their travel more deliberately, and question the time of day they really need to travel or by what mode.

"Pricing restrictions on travel will be a bitter pill to swallow for a country that prides itself on high standards of living. Avoiding difficult initiatives will result in un-economical decisions on infrastructure delivery and the further build out of existing roadways that are only fully utilised for a small number of hours a day."

He's right.  One of the critical points about congestion charging is encouraging a time-shift of trips, not just a mode shift, and there need not be an alternative mode for every trip (which is not only impractical, but not economically viable).  

The chief executive of Infrastructure Partnerships Australia, Brendan Lyon, agreed with him, saying:

''Our historic approach has been to add new roads to address congestion, but there are natural limits to a supply-only approach,'' Mr Lyon said.

''Australia cannot endlessly build its way out of trouble, and that means we need to begin a national dialogue about how pricing can better manage congestion and help to fund the huge backlog of public transport and road infrastructure.''


This view was echoed again by Infrastructure Australia chairman Sir Rod Eddington, who once led a detailed inquiry into transport policy for the last UK government (which was swiftly, and wrongly, ignored by that and the current government).  According to The Age, Eddington said there should be "Mature and dispassionate" discussion about pricing and that congestion cost the state of Victoria A$4 billion per annum (US$4.2 billion).

He believes the first step should be a a road charging system for trucks, as congestion charging for cars is far more difficult.

He's right of course.  For road pricing will only actually be accepted if motorists see value in it, which will come from effectively reducing congestion, ensuring existing networks are well maintained and some offsetting of existing non-motoring taxes.

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