Congestion pricing floated for Sri Lanka

Following on from a similar reference in Bangladesh, the Daily News of Sri Lanka reports that Private Transport Services Minister C B Ratnayake advocates congestion charging as part of an overall integrated transport strategy. 

He said: "In general, Sri Lankan cities have not made much progress in implementing the demand side transport management measures, such as congestion pricing, restraints on parking etc. Although policy measures that involve restraining the use of private cars and two-wheelers are likely to be unpopular, a gradualist approach of progressively introducing restraints on road use, while at the same time improving public transport, is more likely to lead to greater acceptance. It is believed that improved public transport and more efficient management of demand would help to combat the trend away from public transport vehicles towards greater use of personalized modes.” 

 In other words, congestion pricing can be part of the toolbox of a developing country as car ownership increases, to ensure the inevitable drift from public to private transport is constrained efficiently in ways that manage congestion and help maintain the relative competitiveness of public transport, particularly where road space is scarce. 

Of course, the challenges to introduce this in Sri Lanka are enormous. Some basic infrastructure to identify vehicles reliably, and pursue and penalise non-payment is the biggest issue. However, it is heartening to see such a positive view being taken in Sri Lanka on this. Mr Ratnayake appears to have fairly sound economics behind many of his views, including the need to have strict appraisal procedures for large capital projects, so that scarce resources are spent on the highest value projects first (avoiding politically driven projects with poor returns). If he can institute reforms that can lead to more tolls and eventually congestion charging in Sri Lanka, then he will be a leader in development of such systems in South Asia.

Sri Lanka's first toll expressway finally opens

According to Colombo Page, Sri Lanka's first toll expressway has finally been opened for traffic by Sri Lankan President Mahinda Rajapaksa. The E-01 Southern Expressway has been controversial, as I wrote earlier this year with a full profile of the road.

The fears being that the road would create bottlenecks and induce fraud, with concerns exacerbated by the ongoing delays to its completion.

The toll for the whole length of the 126km road (from Colombo to Galle) is US$3.50, and the construction cost has been about US$650 million. The expressway is two lanes in each direction, but has been built to be a full service operation by the Sri Lanka Road Development Authority which owns the road. A dedicated Police unit (Special Task Force) will be employed for traffic management along the road, with monitoring of conditions, including breakdowns and accidents by CCTV. The Special Task Force will also have first aid medical capabilities to respond to accidents, while a dedicated fire brigade unit will also be on hand. There are plans for further extensions.

The toll is to be collected manually using a closed system, whereby a driver receives a ticket from the entry point on the expressway (at any interchange) and then pays according to distance travelled at an exit point. 

All the best for all Sri Lankans using this new expressway, and also for those towns and villages that will now see through traffic removed from their roads, which is surely one of the major benefits of building such a major new route.

News Briefs - Israel, South Africa, Tajikistan, Sri Lanka, Indonesia, New Zealand, Texas

Israel

Sale of stake in Cross Israel Highway:  The Cross Israel Highway (Route 6) is Israel's great north-south highway corridor extending from the outskirts of Haifa, to be nestled between Tel Aviv and Jerusalem, towards Beersheva.  The road is owned by concessionaire Derech Eretz Highways Ltd.  Globes reports that Shikun u'Binui Holdings has sold 24.6% of Derech Eretz to private equity company Israel Infrastructure Fund for NIS773 million (US$212 million). The sale reduces Shikun u'Binui's shareholding in the company to 25.5%, and the company reports a return on the sale of 8%.

Globes says:

Shikun u'Binui did not sell its 24.5% stake in Derech Eretz Highways Management Ltd., which operates the Road 6 toll road, and is waiting for permission to increase its stake to 35%. The deal reflects a company value of NIS 3 billion  (US$824 million) for Derech Eretz. The sale is part of IIF's effort to block rival Noy Infrastructures and Energy Fund's acquisition of 49% of the government's rights in Derech Eretz for NIS 1.39 billion (US$382 million). Shikun u'Binui said that the price tag was based on Derech Eretz's value in the Noy Fund deal. 

Price schedule is here in Hebrew

South Africa

Toll road success:  For all of the controversy over the Gauteng tolling project, it is clear that toll roads have already proven profitable for private investors in South Africa. The Financial Mail reports on the success of the N3 PPP between Heidelburg and Cedara (the complete N3 connects Johannesburg and Durban). N3 Toll Concession (Pty) Ltd won the concession in 1999 for a 30 year period, so is nearly halfway through the concession to design, construct, finance, operate and maintain the highway.   The concession has quite diverse ownership.   The article contains comments from Old Mutual Life Assurance Company Infrastructure, Development and Environmental Assets Ideas Fund manager Jurie Swart, who says 25% of the fund is invested in toll roads (other roads include the N4 between Pretoria and the Mozambique border, and the N1/N4 toll road).

Swart claims there are benefits beyond simply financing and building the road:"Each road has a pavement management system that has to conform to national road specifications. It has a dedicated engineering team, and a maintenance programme that must be audited independently. Toll toads like the N3 to Durban are also involved in local tourism efforts. " Certainly there is transparency about the contracts, and they do appear to help ensure a high standard of service.

Investors are keen to follow this with the controversial N1-N2 Winelands toll road. 

For all of the controversy over tolling in South Africa, it has worked to develop a lot of new highways, and most of all the PPPs have delivered world class standards of service.

Prices for the N3 toll road, per toll plaza, are here.

Tajikistan

A report from Trend notes that one of Tajikistan's major highways (M34) is a 354-kilometre toll road from Dushanbe to Chinaz. It is state owned, financed through a $280 million loan from China, which the Tajik government is repaying through the toll which started on 1 April 2010.

It wasn't easy to find much information about this road, but it is encouraging that tolling has penetrated central Asia, and I can only hope Tajikistan is making sure it optimises its revenue from tolls.

Sri Lanka

Toll road opening delayed:  Sri Lanka's first toll road opening has been delayed till December 2011 according to Lanka Business.   I reported the details about the road in July, when it was about to open.  Tolls were already controversial then for risking essentially fraud, and creating potential bottlenecks.  Well the Sri Lanka Road Development Authority has created more controversy with the delay, which is due to failure to complete toll booths and fuel stations on the road.   A fibre optic network is to connect toll booths, and the expressway curiously will have its own fire brigade and police patrols to optimise response to incidents.  Tolls are meant to be collected manually with a closed system involving a ticket issued on entry, and used on exit to determine the price.   Yes, you read correctly, and this is in 2011.

Indonesia

Astratel expands toll road portfolio:  The Jakarta Globe reports that Astratel Nusantara, the highway construction unit of Astra International, has bought 95% of the 40.5-km toll-road linking Kertosono and Mojokerto, in East Java (outside Surabaya) for Rp750 billion ($88 million). 

Astratel also owns:

- 79.3% of PT Marga Mandalasakti which owns the 72.5-km toll road linking Merak (Banten province) and Serpong (outer Jakarta); and

- 40% of PT Marga Trans Nusantara, part of a joint venture building the 12.5-kilometer Jakarta Outer Ring Road II project which will link Serpong and Kunciran in Jakarta.

The total value of its toll road assets will be Rp3.4 trillion(US$384 million).

New Zealand

Hapless toll road debt grows: I've written before about the financial disaster that is the Route K toll road in Tauranga.  The bad story continues.  The Bay of Plenty Times reports that debt from the road is now NZ$60 million (US$48 million) on a road that cost NZ$45 million, and daily traffic count is 5,000.  Revenue needs to double for the road to be viable, and at present trucks form 13% of users, but 38% of revenue.  Annual losses just go on debt.  How long can this continue?

Texas, USA

Indra wins contract: 4 Traders reports that Spanish company Indra has won a €10.6 million (US$14.7 million) contract with TexToll services in Texas (itself a subsidiary of Cintra, the subsidiary of Spanish infrastructure investor firm Ferrovial).  The contract is to implement electronic toll collection back office services on the SH-130 toll road near Austin, the LBJ Express project and the North Tarrant Express Highway project.  It reportedly makes a big impact on the firm's presence in the USA.

Spam

I moderate comments for one reason - spam.  If you attempt to post spam you will be blocked, and you will fail.  I have so far allowed one comment with a spam link, and it wont happen again.  This blog does not exist to promote your business.  It exists to publish articles I find of interest that I hope others find of interest as well.  Spam at best wastes time and is a nuisance, at worst it can spread malware.

Sri Lanka's first toll road about to open, but already criticised

The first stage of Sri Lanka's Southern Expressway is due to open in the next week and will be the country's first toll road.

It runs from Pinnaduwa in Galle to Kottawa in Colombo district, with details on the Sri Lanka Road Development Authority (RDA) website here.  It is essentially the main highway south from outer Colombo to the southern tip of the country.  

Slow vehicles (tractor and rickshaws) will be banned on the 126 km expressway, which will include strict enforcement of speeds (100km/h) and overloading to ensure it is a safe route. 

The latest report (from Lanka Business Online) is that the tolls are to be collected manually, using tickets so that there is a ticket given at the start of the trip and used at the end to pay the toll.  It is noted that electronic tolling will be introduced later, which may reflect the low cost of manual tolls in the country, although the other point made by the article is that in India up to 20% of revenue is reportedly lost due to "leakage" (people not paying) with manual tolls.

Lanka Business Online suggests that the decision to introduce manual tolls was foolish, because it feeds the black economy.  It also notes the inevitable congestion with manual tolls saying:

A traditional staffed toll lane typically processes 300- 350 vehicles per hour whereas an electronic toll lane can handle from 1,000 vehicles per hour in a dedicated toll lane within a conventional toll plaza and even as high as 1,800 vehicles per hour in an open highway configuration.

The ticket system is damned as being slow and inefficient, when it would be preferable to have electronic tolls, or at least a flat rate charge to pay to speed up throughput.  

I wouldn't be surprised if the thought of electronic tolls, and the cost of equipment, and systems to detect offenders caused fear at the RDA.  However, there is little reason to not introduce barrier based electronic tolls as a starter, to accelerate throughput and provide a mechanism to detect and count throughput efficiently (to reduce leakage).   There are plenty of international experts who could have helped with this, and saved much money in the longer term.

Electronic free flow would require the number plate and vehicle databases to be fit for purpose, and I have no idea if they are or not.   However, that would be a future step.  For now, it would be nice if Sri Lanka did the basics right.  Maybe an audit of the manual toll system and business rules would be a start?