Hong Kong report proposes electronic road pricing

Congestion pricing in Hong Kong seems like a no-brainer, and the authorities in Hong Kong, both before and since the "hand-over" back to China, have acknowledged this formally and informally. Both the north side of Hong Kong Island and Kowloon (the parts of Hong Kong that weren't formally part of the lease from China, but were acquired by the UK effectively through conquest) have such high-densities of people (and public transport usage) that pricing those roads would appear to deliver enormous benefits from reduced congestion and pollution, with alternatives (certainly for people movement) obvious.  The added benefit in Hong Kong is that most public transport does not require subsidy, as the network of bus and mini-bus services operates commercially, all with integrated smartcard ticketing, so growth in demand is met by operators investing themselves.  Even the metro system pays for itself, and there has been ongoing investment to expand it, supported by revenue from the property development at station sites.

Options for road pricing in Hong Kong were comprehensively considered in the late 1990s, to the point that the closed Kai Tak Airport site was used for technology trials including GPS for distance, time and location based road pricing.  Options were revisited twice since then, but on both occasions the Hong Kong Government has rejected the idea for political reasons.  New roads and metro lines have continued to be built, but a report in December 2014 from the Transport Advisory Committee recommends that road pricing be looked at again.

The full report is available here (PDF) and states that average road traffic speeds have fallen by 11% in 10 years and air quality has worsened, which is partly attributable to congestion.

The report concluded that traffic congestion has five recurrent causes in Hong Kong:

- Physical and spatial constraints to expanding road infrastructure make it impossible to add capacity to meet demand, with scope for additional capacity becoming severely limited (expecting around 0.4% per annum expansion in road length by 2020);

- Size of the vehicle fleet continues to grow, at a rate of around 3.4% per annum in recent years;

- Competing use of road space generates network delays, such as the loading/unloading of trucks, pick up/set down of buses, taxis and cars, and vehicles circulating for kerbside parking.  All of these activities interfere with smooth traffic flow;

- Illegal parking and stopping, exacerbated by parking fine penalties not increasing by inflation;

- Road works, whether to maintain the highway or in relation to infrastructure underneath the highway.

Measures proposed to address it run across the whole range of road pricing measures, including ownership taxes, fuel tax, parking charges and road pricing itself:

- Increase the First Registration Tax (for all newly registered vehicles) and Annual Licence Fee, including for "Environmentally Friendly Petrol Private Cars"(which have a concession) to reduce the growth in vehicle ownership.

- Tighten up the category for "Environmentally Friendly Petrol Private Cars" reflecting that they still contribute to congestion (this can be done by continually lifting the standard to reflect the latest technology);

- Fuel tax on diesel should be reintroduced, as diesel is tax free, but petrol taxed at HK$6.06 per litre (US$0.78 per litre).   This incentivises a shift to diesel, which should be removed.

- Increased parking meter charges (as these have not increased in 20 years, but inflation in that time would have added 40% to them) as they are significantly underpriced compared to commercial parking facilities, and encourage circulation of vehicles seeking for parks.  

- Central District of Hong Kong should be a pilot site for a congestion charge pilot scheme, following completion of the Central-Wan Chai Bypass, with early public engagement on how it should be implemented.

Longer term it proposes a more technology led approach to parking, including real time information on parking space vacancies to minimise time spent looking for parks.  The report also proposes incentivising on-street loading and unloading of freight during off peak hours, through electronic road pricing, and more park and ride facilities at stations. 

The Standard (of Hong Kong) reports that the Financial Secretary is unlikely to support increasing the taxes on owning cars, as the issuing of the report in December has apparently meant new car sales have increased 10% as motorists seek to avoid the higher First Registration Tax.  

However, it would be interesting to see Hong Kong pilot congestion pricing at Central, and progressively expand it, perhaps through zonal charging and ultimately distance based charging. Central has intensive provision of public transport both underground, numerous bus services and the iconic trams (operating on an average frequency of 90 seconds during weekdays!).  As such, it is not difficult to find public transport options to travel especially on the northern side of Hong Kong Island and in Kowloon (although cars are much more convenient for the other side of the island and much of the New Territories).  

The report itself justifies charging a Central zone as follows:

(a) Central District is the central business district of Hong Kong. It plays a strategic and symbolic function in our society;

(b) severe road congestion often occurs on the main road sections in Central, sometimes causing grid-lock in the surrounding road networks, affecting neighbouring districts; and

(c) the commissioning of Central-Wanchai Bypass will provide an alternative route for motorists to bypass the charging zone.

The geography and conditions seem ideal for an intelligent, and dynamic form of electronic road pricing, it will remain to see if the Hong Kong Government is willing this time to proceed.

The tunnelled bypass highway under construction is depicted below:

Central-Wan Chai Bypass

That would have an effect of bypassing the area below, bearing in mind that what I have depicted is very rough, and is not indicative of what the charging area would be.  Careful design would need to be made as to where a charging zone would be located to the south along the base of the peak, but certainly would be expected to include Connaught Road/Gloucester Road through to Queens Road.

The area bypassed by the Central-Wan Chai Bypass

A survey of 9010 people was carried out as part of the study, of whom 3010 were drivers of some description (car, taxi, goods vehicle or bus).  The results indicated that 62.7% of those surveyed supported the idea of electronic road pricing,  but for vehicle drivers (including bus, truck and taxi drivers) support is 51.9%.  Yet a more detailed breakdown of that survey is interesting, as it shows that those most opposed are taxi drivers and goods vehicle drivers, whereas bus drivers are most supportive (and private car drivers remain more supportive than opposed).

Source: Report on Study of Road Traffic Congestion in Hong Kong, Transport Advisory Committee, December 2014,  pg xvi

So it would appear that the politics around road pricing in Hong Kong may not be too difficult, but that a lot of effort will be needed to get taxi drivers and goods vehicle drivers onside.  For them, it could mean selling reductions in delays, it could mean better provision of taxi stands and loading zones at appropriate times, and making sure that any pricing differentiates by time of day to encourage more off peak driving.  Using some of the net revenue for some road improvements would also not go amiss.

I've seen a couple of the past reports on Hong Kong road pricing, which suggests one option is to go further and have multiple charging zones or even to charge by distance, time and location.  The latter has the potential to be more nuanced and fair, but the whole package needs to be considered.  Just charging more without recycling some of that money back to users of the network through improvements or offsetting other taxes, may be the trick that is missing to get widespread acceptance of a measure that should significantly improve traffic conditions, and pollution, in Hong Kong.