Thursday 31 May 2018

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.

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?

It's probably fair to say that the lead interest is likely to come from South Australia, which has already been embarking on developing heavy vehicle pilots for this purpose, after the previous South Australian Premier - Jay Weatherill - announced nearly three years that he wanted to pilot heavy vehicle charging in the state (his party lost the State election earlier this year, but road charging wasn't a political issue).   

At one point I would have said Western Australia would have been keenly interested, in part because of the tiny trial of charging a subset of heavy vehicles on a very short stretch of road in Kwinana.  A trial of 36.5 metre long road train access was conducted in collaboration with the City of Kwinana from April 2016 to May 2017 to improve heavy vehicle access to Kwinana Industrial Area. Telematics devices were used to monitor heavy vehicle movements.  It essentially piloted allowing these longer vehicles to use a small segment of road, while charging for the costs of that road use.  Albeit, it was a segment measured in metres not kilometres.  There was subsequent interest in considering location based trials for this purpose, but since the change of state government in March 2017, interest has waned.  

In part this is due to the high-profile cancellation of the Perth Freight Link highway project (which the incoming Labour Government had promised to cancel, due to environmental concerns over the route of the road).  Perth Freight Link was planned to include what was effectively a pilot application of heavy vehicle road user charging, to help pay for the project.  The road would have been open to all traffic, but the intention was to only charge heavy vehicles for using it, because the key benefits would be for those vehicles.  With the cancellation of Perth Freight Link came a lack of interest in using road user charging which has persisted.  Having said that, it would seem likely that if Western Australia were interested, there would appear to be considerable scope to apply location based charges.

Beyond those states, there is a low level of interest, with a possibility of interest in an area in Victoria.  I hope that the business case program generates much interest, not only to help inform future policy and design choices and generate interest and engagement with heavy vehicle users, but also to build institutional experience at the state and territory levels of government with heavy vehicle charging.

It is always more difficult to build support for new charging linked to improving service, but if it can deliver obvious improvements in productivity and lower overall costs for heavy vehicle operators by facilitating infrastructure improvements, it should be possible to develop "win-win" proposals that will support the Heavy Vehicle Road Reform project policy objectives and the transition towards full network heavy vehicle charging over the medium term.

A recently closed tender from the Department of Infrastructure, Regional Development and the Cities included in its scope (among many other items) development of an evaluation framework and implementation plan"for the Business Case Program for Location-based trials and assessment of the suitability of relevant road pricing specifications for the required pricing applications of trials under the Business Case Program for Location-based trials.  Such work is planned to be completed by the end of September 2018.  It might be anticipated that progress on the Business Case Program will be expected beyond that date.  

Given that schedule, I'd hope that states and territories interested in the Business Case Program for Location Based Trials might be able to proceed to procure and commence such on-road trials no later than 2020.  This should complement the National Heavy Vehicle Charging Pilot program.

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