Stockholm congestion charge after six years

I know this has been posted elsewhere (notably by Eric Jaffe at Atlantic Cities).

Jonas Eliasson,  Centre for Transport Studies at Sweden’s Royal Institute of Technology, describes what happened in Stockholm in this video published in late 2012.  It is nearly 9 minutes long, so isn't taxing on your time.

I like his reference to the Soviet planner who rang an official in London in 1989 asking what official was responsible for managing London's bread supply.  The answer being no one.

Perhaps some will take that analogy and wonder why the same can't be said for transport networks.  

On Stockholm his key points are (much of this is already known):

Stockholm congestion pricing has had long term effects on traffic levels

The European Commission DG Environment reports on a study that indicates that the congestion tax in Stockholm has managed to sustain and enhance benefits in congestion reduction over time.   The EC believes this has positive implications for the concept's application in other cities.

Stockholm congestion tax cordon map

The report says:

The results of this study suggest that congestion charging can work over the long-term, supporting plans to introduce such charges in other cities across Europe. The findings also demonstrate that some concerns about the charges, such as increased congestion on other routes, are not supported by the evidence, and that public acceptability may increase over time.

Non-exempt* traffic had reduced by 29% across the Stockholm cordon when the congestion charge was introduced in 2005, and that level of reduction has been sustained even though prices have not increased (so have reduced in real terms by around 2% per annum).  It appears that the charge has had a long term effect on changing driving patterns into central Stockholm.   However, researchers acknowledge that over time there will need to be real increases in prices.

Another criticism about congestion charging, that it increases traffic on roads adjacent to the charging zone, appears to have been without foundation, as there has been no significant increases in traffic or congestion on other routes, except that attributable to population increases.

Finally, public acceptability for the scheme is now 70%, up from 36% in 2006 (and a narrow majority in favour of the charge in a referendum), indicating that the benefits of permanent reductions in traffic volumes and improved mobility are now widely accepted.

In conclusion, the Stockholm scheme has not only worked, but sustained a step change in traffic patterns in the city and not distorted traffic movements outside the zone.  

It's worth noting that the Stockholm scheme is slightly more sophisticated than the London one, as it has higher charges at peaks compared to the interpeak period, and no longer has an exemption for so-called "green" vehicles, because the emphasis of the tax is to reduce congestion - and all cars contribute to that.  The other interesting dimension to the congestion tax is that most of the revenue is being used to support enhancements to roads outside the charging zone, which appears to be a key part of the charge gaining acceptance by people in Stockholm.

Finally, the official title of the charge is the "congestion tax" because under Swedish law, it is the only way the charge is enforceable.

* Exempt vehicles are only buses, emergency vehicles, motorcycles, diplomatic and foreign registered vehicles and those of holders of a disability parking permit.

News briefs: Ohio, San Diego, Stockholm, Philippines, South Africa, congestion charging helping car pooling

Ohio

Bloomberg Business Week has a good article reviewing the issues around the leasing of the Ohio Turnpike.  Some points include:

-  $600 million of any lease would be used to pay back turnpike bonds issued by the state;

-  Former Governor Ed Rendell (Democrat) said that "The bid for the 545-mile Pennsylvania Turnpike by Abertis and Citi Infrastructure Investors died because the Legislature didn’t want to lose patronage jobs at the Turnpike Commission...But could they get a good deal? I think probably yes"

- Ohio Turnpike collected $232.2 million of toll revenue in 2010;

- Fitch has a negative outlook on the debt, based in part on the need to replace the road’s original concrete base, “a project that could possibly result in significant capital or debt needs in future years that are beyond current expectations";

-  Ohio expects a lease term of about 40 years, compared with Indiana’s 75-year deal and Chicago’s 99-year agreement...It also would retain a percentage of the toll revenue over time, even if that reduces the upfront payment" said said Jerry Wray, director of the state transportation department.

- "it’s unlikely Ohio would get offers comparable to what was received by Indiana, Pennsylvania and Chicago’s $1.8 billion lease of its Skyway in 2005 because they were highly leveraged deals with an expectation of economic growth that didn’t materialize"

On balance, it still looks like a potentially good deal can be gained for Ohio, but key to all of this is price and ensuring the road is kept in a good condition throughout the life of the lease.

San Diego

Sign On San Diego has an editorial commending the "nationalisation" of the South Bay Expressway.  It says:

- "Jerome Stocks, chairman of the SANDAG board, says the agency may only have to come up with about $245 million of the purchase price because the remaining $100 million or so is owed to the federal government";

- "Purchase of the road would likely obviate the need to add four express lanes to Interstate 805 south of SR-54, scheduled for around 2030 and estimated to cost nearly $700 million, making more money available for other regional projects";

- "As a government agency, SANDAG would have no multimillion-dollar property tax bill to cover, it already has the employees to operate the toll road, and SANDAG would be looking only to maximize the movement of people and goods, while a private operator would be looking to maximize profit".

SANDAG surely has to factor in not receiving property tax revenue as well as not making the same money from the toll road.  The key public policy benefit must be in deferring other works, yet if they were tolled as well, would the case for the buy back still stack up?

Stockholm

Norwegian tolling equipment supplier QFree has won the contract to continue servicing and maintaining the Stockholm congestion charging infrastructure that it originally installed. The contract is only for 1 year started 1 January 2012 at a value of US$2.9 million.

Philippines

The Manila Standard reports that the Supreme Court of the Philippines has confirmed that toll operators must charge VAT of 12% on their tolls.  They have been resisting this on the basis that it is not akin to a "service", but of course because putting up the price will reduce demand (and revenue).

South Africa

Comments from the South African Transport Minister and the Energy Minister indicate a firm commitment by the government there to tolling. IOL News reports that Transport Minister Sibusiso Ndebele said "If there is an outcry and people say they won't pay tolls, then we can't put the freeway in...Freeways are not free." and Energy Minister Dipuo Peters said: “Those rejecting the tolls were the worst of people who spent their money on comforts and not on essential services such as electricity...People buy cellphones, they pay for airtime, but when it comes to water, electricity and transport, people complain about the user-pays principle, knowing quite well that we need resources to maintain and operate this infrastructure.” That was in response to dismay expressed by COSATU - the Congress of South African Trade Unions - which opposes the tolls as an imposition on car commuters who have "no other choice".

Car pooling

The New Zealand Herald reports comments by Ridesharing Institute spokesman Paul Minnett claiming that congestion charging could support growth in car pooling. Given the propensity of so many authorities to promote car sharing through HOV lanes, it is welcome to see someone note that road pricing is likely to be highly effective in promoting car pooling, without segregating special lanes for that traffic.