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

Delhi to focus on parking before congestion pricing

The Economic Times (of the Times of India) reports that the Delhi Government has decided to implement a number of measures short of congestion charging to address growing congestion in the city.

Parking fees are to be increased, and enforcement of minimum emissions and safety standards of vehicles will be toughened significantly.  The expectation is that this will remove a number of vehicles from the road, as well as having positive impacts on emissions and safety.  The only problem is that this will undoubtedly target the lowest income owners of motor vehicles (who by Delhi standards are still middle income households).  

Certainly this approach makes sense, as without the ability and willingness to effectively enforce laws against vehicle owners, it is doubtful that a Delhi congestion charge could be enforced either.   A sustained effort over six months to fine or remove vehicles that don't meet laws on safety or emissions would help stem the growth in traffic.

On parking, it is also reasonable and relatively low cost to adopt robust policies on restrictions and pricing that will help traffic to flow freely and to let parking pricing be market led.  Whilst Delhi may not yet be ready for the sort of radical parking pricing now seen on trial in San Francisco and Los Angeles, a focus on parking should be the key for the immediate future, although it will not be sufficient.

There are 6.5 million vehicles in Delhi today, a number that increases on average by about 1,000 a day (the report notes there were 562,000 vehicles in 1981).  Ownership will continue to increase, and whilst public transport can be enhanced (and walking and cycling should not be neglected) and parking addressed, the fundamental problem of traffic congestion is demand exceeding supply, without the price instrument to manage it.

If Delhi can demonstrate that it can effectively enforce laws against vehicle owners on safety, emissions and parking, it shouldn't be hesitant about more detailed consideration of congestion pricing, even if it is likely to be the last policy instrument taken to help relieve traffic in the city.

Slate "gets it" on road pricing

Matthew Yglesias, business and economics correspondent at Slate magazine makes the point, in a pithy and simple to understand article, that:

"slow progress in transportation quality isn't really a technological issue. The reason we have traffic jams is that road access isn't priced properly."

He says quite rightly, that both roads and parking being underpriced, means people go to congested central cities and circulate looking for parks, causing congestion.  It isn't because there is a lack of technology to do smart and intellligent pricing of roads or car parks, but because of a lack of political will to apply economic instruments.

News Briefs - Australia, Brazil, China, India

Australia - Melbourne's car park congestion tax to stay despite low impacts

Public broadcaster ABC reports that the Victorian Government is likely to keep the tax on inner city car park spaces intended to reduce congestion, despite a study that claims it has had little effect on congestion.

Inner city parking taxes are often cited as low cost alternatives to implementing congestion pricing.  50,000 car park spaces in downtown Melbourne are subject to such a tax which is either A$650 (US$682) or A$910 (US$956) a year depending on the location.  The tax was introduced in 2006 and raises A$46 million (US$48 million) a year in revenue for the Victorian State Government.

A Monash University study indicated that part of the tax was being absorbed by car park operators and that there was minimal impact on congestion, it suggested that a better option would be a cordon based congestion charge, although motorist lobby group the RACV (Royal Automobile Club of Victoria) rejected that in a report in the Herald-Sun newspaper claiming motorists are already over taxed, preferring more money to be spent on transport projects.

Brazil - Expiring toll road concessions to be retendered

Nasdaq reports that according to the Estado de S Paulo newspaper, the Brazilian government has decided that when the first toll road concessions expire in 2015 it will re-tender them with the intention that rates of return should be lower.   It will also specify that tolls can only be charged after a certain proportion of improvements to highways have been undertaken by a concessionaire.

"To ensure that 5,700 kilometers of two-lane highways are expanded into four-lane highways by 2018, the government will stipulate that operators start charging tolls only after 10% of the lane-duplication process is already executed" ..."As part of a package to improve transportation infrastructure, the federal government plans to license 7,500 kilometers of highways to private operators for a 25-year period".

Concessionaires have expressed concern that environmental licencing imposes a cost on development that will slow down the period between when they start work on a project and can start charging tolls.

China - Beijing traffic plan includes concept of congestion pricing

Global Times reports that Beijing is to get congestion charging included in its latest traffic plan, although there are no details about what congestion pricing will look like for the city.  The article has comments from an academic who says Beijing also needs more rail and congestion is inevitable with fast growth, but also a local resident who uses public transport and supports the idea.  I wrote some time ago about potential options for congestion charging in Beijing.

India - Macquarie SBI buys into Indian concessionaire

According to NetIndian News Network, Australian/Indian joint venture Macquarie SBI Investment Fund (MSIF) (comprising Macquarie Capital Group and the State Bank of India) has announced it is investing US$150 million into Ashoka Concessions Ltd (ACL) of India, along with SBI Macquarie Infrastructure Trust.  It would appear likely that the reason for the MSIF (and SBI Macquarie Infrastructure Trust) is that Macquarie Capital is restricted from investing in its own right in Indian infrastructure because of foreign ownership limit laws (and the State Bank of India is keen to use foreign capital and expertise).

ACL is a 100% subsidiary of Ashoka Buildcon Ltd (ABL), an Indian engineering and construction firm.  ACL reportedly owns 7 concession toll roads comprising 3,018 lane km (630 length km). ABL itself has a portfolio of 12 Build Own Transfer (BOT) road projects in India (with 6 under construction) excluding its portfolio of footbridges.  Not all of these projects are tolled.

ACL's projects have a construction cost of US$1.5 billion.  78% of the traffic is commercial.  Average remaining concession period is 22.7 years.  This is MSIF's first road investment and will comprise 13% of MSIF's portfolio value.

Macquarie SBI published a presentation with more detail about the investment.

LA follows San Francisco with variable parking pricing trial

I reported in July about San Francisco’s innovative intelligent parking trial called SF Park. It means that kerbside parking in a part of downtown San Francisco is now subject to a form of dynamic pricing whereby the prices are set to ensure that parking is always available on every block. As a result, prices at times of highest demand are set higher than at other times. Prices are not truly dynamic, but are varied monthly.

Los Angeles is about to trial the very same in downtown LA according to the LA Times and Streetsblog (which both have useful articles about the concept). It is to be called ExpressPark. 

The website says:

A 4.5-square-mile area in Downtown will support ExpressPark™, a one-year pilot program that will infuse technology and demand-based pricing into an innovative parking management strategy. Created with $15 million in grants from the U.S. Department of Transportation and $3.5 million in City funds, the project will test ways technology can help the City realize its goals to increase the availability of limited parking spaces, reduce traffic congestion and air pollution, and encourage use of alternative modes of transportation. ExpressPark™, one component of the Los Angeles Congestion Reduction Demonstration, is set to operate beginning Spring 2012.

The LA Times says it “will use not only new meters but also a network of wireless pavement sensors to keep track of parked vehicles in real time. The sensors will help transportation officials determine which meters are in use and which have expired. Eventually, roadside signs will guide motorists to empty spaces in municipal parking garages and lots.

In other words, when parking demand increases, meter rates increase; when demand drops, rates drop.” …"What we're striving for is pricing such that 85% of meters are occupied and 15% are open," said Peer Ghent, senior management analyst with the meter operations division of the city's Department of Transportation, or LADOT.

Good stuff, it combines maximising availability of parking for businesses located in the city and for those seeking a park, while reducing congestion because it eliminates those circulating for long periods looking for parks, as well as deterring those driving at times of peak demand. 

Area of LA parking pricing trial

5,500 on street metered spaces and 7,500 unmetered public spaces in off-street city owned parks are included in the trial. 

The LA Times continues:

Meter rates downtown now range from $1 to $4 an hour. Under the ExpressPark pilot, the prices would be adjusted, probably once a month, but would rise or fall no more than 50% at a time, officials say. Bruce Gillman, an LADOT spokesman, said the city took in $33 million from parking meters in the most recent fiscal year. What effect ExpressPark will have is unknown because revenue will rise in some areas and shrink in others.

The new pay stations and meters popping up throughout the city are harder to thwart. Even if the coin slot is clogged, motorists have the option of paying by credit card. It will no longer do to place a plastic bag over a broken meter and pray.

The interview with UCLA Professor Donald Shoup in Streetsblog about the project was most interesting.

Some of his points include:

- If ExpressPark is eventually extended to other parts of the city,I think many meter rates will go down. Two years ago the city doubled meter rates everywhere, and I’ve since seen entire blocks where there isn’t a single car parked at a meter. The prices should come down on these blocks. In other words, the city applying a purely administrative approach to setting prices has proven ineffective, this approach should be optimal for utilisation, and potentially revenue.

- Pasadena returns all of its meter revenue to pay for added public services in the metered neighborhoods, and Old Pasadena is a good example of the benefits. Old Pasadena was until the 1980s a commercial skid row and now it is one of the most popular shopping destinations in Southern California. Parking meter revenue helps to explain that success. The meters, which were installed in Old Pasadena in 1993, bring in $1 million a year to spend on in added public services in just that little shopping district. The meter money paid to replace all the sidewalks, streetlights, street trees, and street furniture. It paid to clean up the alleys and put electric wires underground. The meter money also pays to pressure wash the sidewalks twice a month and to provide added police services. If LA adopted Pasadena’s parking meter policy, all of our business districts would be much more prosperous. Residents of LA would not have to go to Pasadena or Santa Monica or Culver City to walk around in clean and safe environments.

Basically hypothecated parking revenue being recirculated into improving the entire road corridor environment for all users.  It can fix road surfaces, lines, signs, traffic signals, lighting, street furniture and facilities for pedestrians.  It is crucial in my view that if parking pricing is to be adopted, that those paying and those living and working in the zone should see direct benefits from the revenue raised.

- San Francisco started its program, called SFpark, this year and last month it made the first price adjustments based on occupancy rates. Prices stayed just the same for 37 percent of the meters, increased for 32 percent, and decreased for 31 percent.  Which simply indicates how difficult it is to predict demand accurately!

- The main problem we already have in L.A. is the widespread abuse of handicapped placards. A disabled placard in California is like a “free parking” pass for the entire state. One of our students just finished his Masters thesis on placard abuse in downtown. He surveyed one block on Flower Street where there are 14 metered parking spaces. Most of the spaces were filled most of the time with cars that had disabled placards. For five hours of the day, all fourteen spaces were occupied by cars with disabled placards. A problem not unknown elsewhere. In the UK it is the "blue badge" problem. Finding a solution to the holes in disabled parking schemes needs to be a parking policy priority.

- Shoud concludes "The poorest people can’t afford cars, and they won’t pay anything for Express Park. Their lives will improve because the city will have more money to pay for public services and the bus system will run better. The buses that they ride in won’t be mired in traffic caused by cars cruising for parking."

Quite.  It will be interesting to see if both San Francisco and LA encourage other cities to be cleverer about parking pricing and technology.  In the absence of congestion pricing (and indeed even with it), it provides a fascinating solution to the problem of optimising parking use, and reducing vehicle circulation by those seeking parking spaces.  The next step forward is surely pricing that is dynamic by the hour, not the month, with mobile phone applications that enable prices to be instantly available, or even for spaces to be booked?

San Francisco's innovative variable parking pricing scheme

It isn’t strictly road pricing in the usual sense of the word, but as it is pricing usage of the roads in one sense – parking – I thought I would write about it, particularly since the system in place in San Francisco is so revolutionary.

SFPark intelligent meter

It is called SFPark, and according to the New York Times it is intended to reduce congestion by managing parking (and information about parking) through varying pricing. It is a trial, but what it offers is the opportunity to transform how parking is managed in central cities.

Its website is comprehensive, with lots of useful information, and says:

SFpark is testing its new parking management system at 7,000 of San Francisco’s 28,800 metered spaces and 12,250 spaces in 15 of 20 City-owned parking garages. The pilot phase of SFpark will run until summer 2012. Federal funding through the Department of Transportation’s Urban Partnership Program pays for 80 percent of the SFpark project.

The NYT says:

The approach is twofold: to change the price of a parking space according to demand and thereby keep spaces open on every block, and to lead drivers to open spaces using an array of sensors, eliminating congestion caused by circling drivers

Prices are able to be varied from US$0.25 to US$6 an hour, with typical prices being between US$2 and US$3.50. The obvious implication is that when times are quiet, parking is cheap which may encourage people to enter the city by car. When busy, the price will be high, dissuading driving, but still managing congestion by ensuring there is always a space free.

The technology involved is for sensors at the car parks that detect when they are occupied. Motorists can use the website or the iPhone app to find parks and their prices. They pay using coins, credit or debit cards.

Prices are only to change once a month, by small increments, so it is not as if it is real time – although it could be. I’d suggest it may make a lot of sense to vary pricing on a daily basis, with algorithms developed to match days of the week, public holidays and special events.

If successful, it is possible to see this sort of trial being rolled out elsewhere.

Clearly it has the great benefit of actively managing the parking stock and optimising revenue by matching prices to usage. It also reduces congestion in two ways. Firstly, by matching pricing to demand, it means that demand to use the adjacent roads will be (in part, because private parking and use of roads as through routes is not affected) influenced by the pricing of the parking. Secondly, by guaranteeing a minimum level of availability, cars will not need to drive around searching for parks. If motorists are willing to pay the demand based priced, they will get parks and can go to them directly, saving them time and reducing usage of the roads.

It is not a substitute for full road pricing, because clearly this solution is only going to be effective in busy commercial districts, and it will not relieve busy highways or arterials of traffic in itself. However, it does have the potential to make a real difference. It has the added value of not penalising the businesses located in the area, because pricing matches demand. Presumably, if parking is expensive, there are lots of people seeking to go the commercial district, likewise if there are not, it will be cheap, making it more attractive.

Could this be an easier first step for many cities rather than congestion charging, in order to simply get better use and revenue out of their parking stock, as well as having positive effects on congestion?