Wednesday 14 August 2019

Abu Dhabi congestion pricing coming in October

Following over a decade after Dubai introduced tolls on existing roads called Salek, Abu Dhabi is about to introduce a more refined scheme which is arguably a form of congestion pricing.  It is officially called the Toll Gate System, and there is a good reason why, it effectively charges for all traffic entering and exiting Abu Dhabi 24/7.  The National has images of the first toll gantries installed.  I've put together a quick map, clearly showing that the four charging points create a cordon around most of urban Abu Dhabi. Charging points will be at the four bridges entering Abu Dhabi, with the stated aim of reducing congestion by encouraging car pooling and use of public transport.

Four charging points for congestion pricing in Abu Dhabi

The scheme will start on 15th October.  The Abu Dhabi Department of Transport Twitter account has a video (in English) summarising it.

Charge rates 

There is no variation by vehicle type

AED2 (~US$0.54) Between 0900-1700 and 1900-0700 Saturday to Thursday, all day Fridays and public holidays

AED4 (~US$1.09) 0700-0900 and 1700-1900 Saturday to Thursday

There will be a daily cap of AED16 (~US$4.36) with up to ten days to pay for vehicles unregistered with the scheme.  


After ten days, fines escalate by day with a AED100 (~US$27.22) fine for the first day, AED200 (~US$54.45) for the second day and then AED400 on the third day (~$108.90) with fines able to reach AED10000(~US$2722).  There will be a similar fine for a tampered number plate or vandalism of roadside equipment.


Payment is through an online account or a payment kiosk (which are to be located scattered across the emirate).  The online account has what is called an Integrated Electronic Payment Wallet which is required to have sufficient prepaid balance to cover any charges.  Failure to keep the balance positive (travelling and incurring a charge that places it into deficit) will result in a AED50 (~US$13.61) fine.

The charging technology is Automatic Number Plate Recognition (ANPR).

On 30 August all Abu Dhabi registered vehicles will automatically have accounts registered at no charge, which will then need to be set up.   The relevant press release states:

All Abu Dhabi registered vehicles on the official system registration launch, 30 August 2019, will have automatically registered accounts at no charge. Account holders will automatically receive an SMS message stating their user-name and password for that account, and can then add any additional vehicles to the registered account as required. For vehicles registered outside Abu Dhabi, the owner must be registered in the system before crossing the toll gates. In case a vehicle which is not registered in the toll gate system crosses under the toll gates, the user will be given a grace period of ten business days, starting from the crossing time, to register in the system, otherwise a fine applies.


Emergency vehicles (ambulance, civil defence, police), military, Ministry of Interior vehicles, public buses and school buses, and Abu Dhabi licensed taxis are all exempt, along with motorcycles. 

Electric vehicles get a two year exemption, to try to encourage greater use of such vehicles (it's worth noting that Abu Dhabi has phased out subsidies for petrol in recent years).


Abu Dhabi has learned from Dubai, because it isn't introducing a leaky corridor charge with options to get around it. ANPR technology has moved on a lot, so that the toll tags used in Dubai wont be needed for Abu Dhabi, saving money on road side technology and the costs of managing toll tag inventory.  It is obviously designed geographically to put a cordon around Abu Dhabi, notably with the airport excluded, so all trips by visitors in and out of Abu Dhabi by car (although not taxi) will be charged, whether they arrived by air, from other parts of the UAE or other countries.

The exemption list is understandable, although including Abu Dhabi licensed taxis will mean greater use of taxis as substitutes for private cars. I'd suggest three points for refinement:
  1. Don't charge all of the offpeak.  Yes, Abu Dhabi's climate means there is a lot of activity very late at night, but having a charge free period would encourage more time of day shift for travel.  It is understandable to charge an hour or two either side of the peaks and during the day, but Abu Dhabi's roads are not congested 24/7.  It would be efficient to encourage traffic that has no modal substitution (e.g deliveries) to move to other times.
  2. After the scheme is bedded in, consider more refined charging periods at the charging points.  Although only Sheikh Khalifa Bridge is sufficiently distant from the other three to justify different charging periods and rates (the other three bridges are adjacent), there may be sense in having shoulder periods to the peaks (AED3 one hour either side) and other moves to spread demand.
  3. With more refined charging, consider charging trucks more than cars.  Trucks occupy two to three times the road space of cars, so contribute similarly to congestion.  Although there is less flexibility to change behaviour (as it is only about time of day or consolidating trips), it is still an efficient approach to pricing the use of scarce road space.

Tuesday 6 August 2019

ACCC/AER Regulatory Conference presentation on road reform

Last Thursday I presented to the annual ACCC/AER Regulatory Conference in Brisbane, Australia.  The ACCC is the Australian Competition and Consumer Commission, which is Australia's anti-trust authority and consumer protection agency, the AER is the Australian Energy Regulator (which regulates the wholesale gas and electricity markets).  The presentation was about road reform, more specifically about whether roads could be transformed into regulated utilities, similar to energy and telecommunications networks.

The differences between roads and other networks are palpable, not least because roads are often funded directly by government, rather than from revenues collected from road users.  Even if road users pay taxes or fees related to road use (such as fuel tax), the relationship between what is charged and what is spent on the network is often weak.  Rarely are the road managers involved in setting the rates charged by those using the network they manage, nor is there much input from those who pay into what is spent on the network.

In some cases, road networks are managed by a very traditional government agency, which is primarily incentivised to lobby for more money, has budgets determined entirely by a political process, and is dominated by a culture of engineering and bureaucracy.  This is a vast contrast from utility networks, which are increasingly subject to competition, but more importantly bill their customers directly and decide themselves how to spend that money on maintaining, renewing and expanding network capacity.  Some use price to incentivise changes in demand, such as more off-peak utilisation.

In part this is historical, but it is also because roads are ubiquitous and such a dominant part of modern infrastructure.  Roads usually provide access to land, not just for motor vehicles, but for pedestrians and bicycles.  Roads range from having purely arterial to purely access functions, and some roads are not for motor vehicles at all.  They are also corridors for other utilities, such as pipelines and cables, and provide locations for street furniture ranging from postboxes to street lights to seating.  Yet none of that means that roads should just be treated as a public good that "everyone" pays for, not least because wear and tear is a function of the use of motor vehicles, particularly heavy vehicles.  Furthermore, there are often challenges around congestion, safety and route security and resilience due to external factors ranging from weather to earthquakes and flooding.  It isn't "everyone" generating demand for road capacity at peaks, or bridges that can withhold higher axle weights.  Roads are used by businesses to deliver goods, provide services and attract customers.

Road reform internationally

The result of a system that resembles that of other elements of government is that roads are often suffering from a lack of funding for basic maintenance let alone new capital spending, but also the political system tends to prioritise high profile, politically noticeable projects over mundane but essential maintenance.  The political system may be reluctant to increase charges on road users.  Rarely are politically rationed services seen as being exemplary in service to the public.  However, the big impacts of having an unreformed system are seen in systematic congestion (because prices mean demand exceeds supply), poor standards of maintenance in parts of the network and network gaps (such as mass restricted bridges) that hinder the efficiency of users.  Furthermore, the responses to these problems are often ad-hoc, or to focus on increasing the attractiveness or reducing the price to users of alternatives, rather than the problems of a network that isn't managed for users, paid for by users and priced to reflect cost.
So my presentation is here it runs through where others have embarked on major structural reform, with case studies of Austria, England (not the UK) and New Zealand.

In the context of road pricing, Austria's motorway network funds itself, through heavy vehicle charges based on distance and light vehicle charges based on buying access by a number of days.  England still has non-hypothecated charges on ownership and fuel, but will soon be hypothecating Vehicle Excise Duty (equivalent to registration fees elsewhere) to fund Highways England.  New Zealand has mass/distance road user charges for heavy vehicles and light diesel vehicles, fuel tax for petrol and LPG powered vehicles only and registration fees, all of which are hypothecated to fully fund state highways and on average, half fund local roads (and public transport subsidies).