Terminology: Road user charging, tolls... what do people mean?

I've written about this before, but I thought it was timely to repeat the point...

Early on with this blog I bemoaned the plethora of words that have been created to mean different ways of pricing for road use, and the willingness of different jurisdictions to mix and match these terms.

I tend to use the following three terms to mean separate pricing concepts:

• Tolls: A fee, which may or may not vary by vehicle type, direction of travel or time of day, for using a specific segment of road infrastructure. Commonly bridges or tunnels, but also frequently new sections of motorway, superhighway to provide a faster, more direct connection than the pre-existing route. Tolls typically charge fees for passing specific points on that section, either a single entry or exit point, or multiple points. Most tolls exist to recover the capital costs of construction and the maintenance/operating costs of the tolled infrastructure, but some persist beyond the “payback” period for the road, and are used for other purposes. 

• Road User Charge (RUC): A fee which charges for use of a road network, based on consumption of road space through distance. It typically varies by vehicle type and may vary by location and/or time of day (but not necessarily except by identifying being on the priced network).  In some jurisdictions fees may vary by emissions category of vehicles. Fees are typically metered or by prepayment of distance. RUC exists to recover network wide road costs, and to reflect differences in consumption of road use, and for heavy vehicles different costs generated from network use.

• Congestion charging/pricing: Fees set based on time of use and location for the use of a road, set of roads, or network of roads (or a lane or lanes on a road). These may range from a single all day pass to use the priced road, or metered use of the priced roads. There will be a variation by time of day, with higher prices at peak times of demand, and there may be variations based on direction of travel. Congestion pricing is usually designed to change behaviour, reducing congestion or emissions. However, many jurisdictions design them to raise revenue to pay for specific infrastructure projects, including non-road infrastructure.

There are variations which crossover between these. Toll lanes and HOT lanes, look a lot like toll roads (but not all lanes) and congestion pricing (because they don’t operate a single price 24/7).  However, I will fail in having a universal application of these definitions because….

In Europe, road user charging is called “tolls” usually. Why? Because EU Directive 1999/62/EC… defines tolls (Section 2(b))

means payment of a specified amount for a vehicle travelling the distance between two points on the infrastructures referred to in Article 7(2); the amount shall be based on the distance travelled and the type of the vehicle

European Commission Directives call distance-based road charging “tolls”. This is why when “truck tolls” are discussed in Germany, Poland, Bulgaria, Belgium etc, it isn’t meaning a handful of roads being tolled, but an entire network. Although most European countries don’t apply charges to all public roads (Switzerland and Iceland are notable exceptions), most of these systems resemble road user charging systems, not tolls.  Of course, Austria and Slovenia look a lot like toll systems, because they use toll technology (DSRC toll tags) to measure road use on motorways for heavy vehicles, with fees based by distance. That’s where tolling and RUC look similar, noting that the technology used in both systems is not scalable to the entire road network, unlike the GNSS telematics-based systems in Germany, Belgium, Denmark etc. 

What IS called a “road user charge” in the EU, is actually a “vignette”. It is defined as:

means payment of a specified amount conferring the right for a vehicle to use for a given period the infrastructures referred to in Article 7(2)

That is a time-based prepaid charge for access to a national highway network, based on purchasing a set number of days. The Eurovignette (which only applies in Sweden, Luxembourg and the Netherlands (until later this year)) is the most well known example. Vignettes are being phased out, but they are legally called a “road user charge”. Therefore if you talk about RUC with Europeans, they may think you are talking about vignettes. 

In the UK, congestion charging is legally called a “road user charge”. That being a fee imposed for using a specific road or area. Local authorities (and the Secretary of State for Transport) can set up such schemes. They might resemble tolls (the Dartford Crossing is a "road user charge”) or congestion charging (“Durham”), and could be distance based on the specific road or area, but that’s not quite network wide distance-based road user charging.

In the US, congestion pricing is often used to refer to managed toll lanes or high-occupancy toll (HOT) lanes, because there are around 40 of these, and only one actual congestion charging type scheme – New York.  That of course confusingly has been called the Lower Manhattan Toll but is now the Congestion Relief Zone.

Also in the US, there is RUC, which is called Road Usage Charging (not User), because that is what Oregon chose to call it. There are also five weight mileage taxes (WMT) which are essentially RUC systems for heavy vehicles. However, they are not related to what those states are doing on RUC, as in the US, RUC is almost always about light vehicles.

Just to add to the confusion, Australia has a Road User Charge, which is not a toll, congestion charge or distance based charge, but is the component of fuel tax that heavy vehicles are subject to pay (they are entitled to refunds of the remainder when travelling on public roads, and a full refund of fuel tax when travelling off public roads). Australia's Road User Charge is a fuel tax on heavy vehicles.  This is entirely separate from Australia's policy and political discussions about a distance based road user charge, whether for electric vehicles or heavy vehicles to replace the fuel based road user charge.

I could add the other confusion, which is that heavy vehicles in Australia cover any vehicles with a gross registered mass of more than 4.5 tonnes (whereas in Europe and New Zealand it is over 3.5 tonnes). In the United States heavy-duty vehicles are those over 26,000 US pounds (around 11.8 tonnes). Vehicles from 10,000 US pounds (around 4.5 tonnes) to 26,000 US pounds are medium-duty.  Medium duty vehicles are not a category in Europe or Australasia, which sees them all as heavy vehicles. 

Confused?

It would be easier to call everything the same.  RUC is a great term, except in the UK and Europe.  Tolling is a great term, except in the EU where it also means types of RUC.  What really matters is what is behind the title, meaning:

• What configuration of roads are being charged? (a single point or a whole network)
• What is the chargeable event?
• What is the basis of the fee?
• What is the purpose of the fee?
• How is the chargeable event measured?

Congestion pricing - the United States awakens

Singapore pioneered a basic form of urban congestion pricing in 1975, and introduced what is still the most sophisticated, economically rational and effective congestion pricing in the world in 1998, called ERP (Electronic Road Pricing).  In 2020 it is transitioning its operating technology to GNSS On Board Units (albeit to initially apply the same mix of corridor and cordon charging as applies today, but with the focus on delivering more information about pricing, traffic, parking and alternative modes through the system).

However, if you've been following the recent very public debates and commentaries about congestion pricing in the USA you'd be excused for thinking it is new and innovative.  Innovative it is, it is just that the US has come a bit late to the concept, but what is driving it is not so much congestion, but the desire to use congestion pricing to raise revenue - typically not for roads.

For many years congestion pricing in the USA has largely been referred to in the context of express/HOT/toll lanes. Although such lanes offer options to pay to bypass congestion on some highways, they are not "comprehensive" in addressing congestion and more importantly are not technically able to be implementing except on roads with limited access. In most cases they have been implemented by converting high occupancy vehicle lanes to HOT/toll lanes. It is rarely economic to build new lanes and charge just for them (because there is insufficient willingness to pay for the capital costs of new capacity, particularly when such capacity may only be utilised for short periods during weekdays), so HOT/toll lanes are rarely seen outside the USA.

The positive example of toll lanes is that they demonstrate that the instrument of price is effective in managing demand so that a road can operate in free flow conditions, but of course such lanes are not practical on most roads and they always have an unpriced alternative.  At best they offer an option in some cases, and demonstrate the concept.

So full congestion pricing has not been seen in the US to date. By that I don't mean having peak pricing on an existing toll road to spread demand on that road (this is seen on many crossings, such as the Golden Gate Bridge, E-407 Toronto and the Sydney Harbour Crossings), but rather pricing of a network or placing a cordon (either on its own or as an area charge) on a zone, with priced access at set times/days.

This isn't common as all. Although there are many low emission zones in European cities (which prohibit or heavily charge vehicles that don't meet low or ultra-low emission standards) and restricted access zones to cities (this is seen in many Italian cities, keen to preserve historic centres of cities ill suited to large volumes of vehicle traffic), the only cities that charge a network or a zone for access on a significant scale are:

- Singapore

- London

- Stockholm

- Gothenburg

- Milan

- Dubai

- Tehran.

There are a handful of smaller examples, Oslo transitioned from a cordon set up for revenue raising to one that has a congestion management purpose now, but by and large congestion pricing is hard to implement.  It's been investigated in multiple cities in the UK (Bristol, Cambridge, Leeds, Manchester, Edinburgh) and elsewhere in Europe (Dublin, Amsterdam, Copenhagen, Helsinki), but has always come up against one major issue - public opposition.


What has woken up the US?

How about the US then? Suddenly cities, states and the media have discovered congestion pricing because of one simple reason - New York is going to do it. This follows previous attempts to introduce it, most notably by former Mayor Michael Bloomberg, who had his proposal for a cordon on lower Manhattan vetoed by the State Legislature.

The New York Senate and Assembly have approved it, along with the State Governor. The details are to be worked out by a new Traffic Mobility Review Board, but it is essentially a cordon that starts at 60th St, excluding FDR Drive and the West Side Highway. All of the net revenue is to spent on the public transport network, specifically the subway, bus network, the Long Island RailRoad and Metro-North. Private cars are only to be charged once a day, whereas ridehailing/sharing and taxi services are already subject to a surcharge of between US$0.75-US$2.75 per trip, depending on the service since 2 February 2019.  Although Charles Komanoff indicates that the effects will be much less than promised (still a 2.5% increase in average traffic speeds is worthwhile).

Some of the details to be worked out include:

· Charge rates (will they vary by vehicle type)

· Area charge (will vehicles be charged for circulating within the cordon as well as or separately from crossing the cordon)

· Direction of charge (will there be a charge for entering AND exiting the cordon)

· Time of operation

· Variation of charge by time of day

· Discounts and exemptions (it might be fair to assume that emergency vehicles and NYC transit vehicles might be exempt, but will the ride hail/share surcharge liable vehicles be exempt too)

· How those entering lower Manhattan on tolled crossings will be treated

New York is basically implementing a simple charge, primarily to raise revenue for other modes, so it will be interesting to see what impact it has and whether it is designed to spread demand by time of day, as much as it is to raise revenue. It will clearly be a trailblazer, although it is unlikely that other US city has either the density of public transport or geography to lend itself to a relatively simple cordon as the solution.

What about the rest of the US?

San Francisco has studied charging before, and looks like pursuing it again. The San Francisco County Transportation Board Authority voted earlier this year to spend US$0.5m on a study of downtown congestion pricing, suggesting that it has already decided that a downtown cordon is worth pursuing. It will be interesting to see what impacts that might have, and particularly how boundary issues are addressed. The San Francisco Mobility Trends report indicated that "vehicular traffic entering San Francisco grew 27% since 2010, although public transport use also rose 5% and cycling by 6%, on a 9% population increase (indicating that the growth in population is pushing a big increase in driving), with a decrease in private car travel speeds by 23%. It's hardly surprising that pricing access to downtown is a priority, although hopefully it will mean pricing that varies by time of day.

Los Angeles has already had a study released by Southern California Association of Governments (SCAG) which proposed a pilot cordon at Westside LA, for a number of reasons (see page 94 of the below report).

Proposed Westside LA cordon from SCAG study

 The Mobility Go Zone and Pricing Feasibility Study indicated that it could result in a 19% drop in private cars entering charged zones, and a 9% mode shift to public transit, with 7% each to walking and cycling. Whilst this might be a good place to start, LA is going to need a much more comprehensive solution to address congestion across the region. LA Metro is about to launch a study that looks more widely at options, with the intention that pricing would support a package of improvements to public transport and active modes.

Boston, Portland, Seattle and Washington DC are all considering congestion pricing, which has to be welcome. The US has gone through a couple of eras in urban transport policy, from the 1940s to the 1970s the focus was almost entirely on building roads to meet demand. That has tailed off, with a focus from the 1970s of building (mostly rail-based) public transport infrastructure to try to attract motorists from their cars, in other words supplying alternatives. More recently, cycling has had a boost in some cities, but the primary argument in all cities is one of what to supply, rather than how to manage existing demand and supply.

News briefs - Brazil, UK, USA (California and Texas)

Brazil to let major private highway concession on existing road

Infranews reports that the ANTT (Agência Nacional de Transportes Terrestre - National Transportation Agency) has announced it will be auctioning a 30 year concession for a US$3.4 billion toll road. The route is a 817km section of federal highway BR-040 between Brasília and Juiz de Fora, Minas Gerais.

What the auction effectively means is that prospective concessionaires have to bid to finance, build, operate and toll the road, and the offer that will do so, with the lowest tolls, is more likely to win.  Studies on the project indicate it can more than generate enough toll revenue to pay for the upgrade of the highway.  The proposed maximum toll rate is BRL 0.0973 (US$ 0.041) per km, or BRL 9.73 (US$ 4.12) for 100km. The successful concessionaire will have to demonstrate it can operate, maintain and upgrade the road to the required standard at tolls with a discount on those rates.  Recent concessions have been awarded to groups that offered to do other routes with discounts of over 40% on the proposed rates.

This is quite some road, being roughly the distance from London to the top of Great Britain as the crow flies, and being most of the main highway from Brasilia to Rio.  Interesting of course, that it is to be tolled to fund the upgrade.  The section from Rio to Juiz de Fora is already tolled and subject to a concession held by the company Concer, since 1996.

BR-040 in red

Interesting that leasing out large stretches of highway to private companies to upgrade, using tolls, is being implemented by a leftwing government in Brazil.  A similar concept in the United States or the UK would provoke howls of outrage from some quarters.

UK- Vehicle Excise Duty to be made fully electronic

The BBC reports that as of October 2014, the annual (or 6 monthly) "tax disc" that is proof of payment of Vehicle Excise Duty (a tax on vehicle ownership), is to be scrapped.  Proof of payment will now be linked to number plates and Police checks of payment will be enforced by ANPR cameras.

Vehicle Excise Duty is rated on vehicle size (to charge trucks more to reflect wear and tear they impose on the network) and CO2 emissions.  It raises about £6 billion a year in revenue.  None of it is hypothecated for road spending.  The UK Government spends £9 billion a year on roads in England, funding for roads in Wales, Scotland and Northern Ireland is contained within the budgetary contribution to those devolved governments.   Of course, revenue from fuel tax exceeds £27 billion a year as well.

UK - Further comment on scrapping of toll plan for the A14

Guy Bentley at City AM argues for network road pricing to manage congestion and encourage more efficient investment in roads.

AutoExpress reports that the Labour Opposition blames the Government for a cost increase in the project due to delay, and called tolls "half-baked".

USA - California - Orange County debates free lanes over toll lanes

According to the LA Times, there is general agreement that there needs to be additional lanes on the San Diego Freeway (I-405) between Long Beach and Costa Mesa.   The debate is whether they should be HOT or untolled lanes.  Caltrans (the state entity responsible for managing the state highway network) wants toll lanes, on the basis that new capacity should be paid by those directly benefiting from it.  However, six of the boroughs that the freeway passes through want the lanes to be untolled.  

I-405 upgrade corridor

The report said, of a latter signed by the Mayors of the six cities:

"Constructing toll lanes is a breach of trust with Orange County residents," the letter stated, adding that residents agreed to a half-cent sales tax increase that would fund one additional general-purpose lane on the 405 Freeway.

One option is to add a free lane and a HOT lane, but that would seem ridiculous.   The HOT lane would have so little demand to make it not worthwhile.  Either there is money to widen the road or there isn't.

Now I consider sales taxes being used to pay for highways to be economic insanity.  Why should people shopping have to pay for an additional lane on a road many of them do not use regularly and most wont benefit from?  However, if it is there, in part, to pay for it, then it is difficult to argue against, unless of course, the sales tax is cut when the toll lanes open.

The report also says:

City leaders expressed worry that the project would push traffic onto their streets, or that motorists traveling in the toll lanes would find it too difficult to pull off the highway and patronize local businesses.

The first point makes no sense, as the lanes are additional capacity.  They will improve traffic conditions for those who pay, and a little for those who don't.  I also doubt whether those wishing to pay to use the toll lanes (who are more likely to be those on a time constrained trip) have any special interest in pulling off the highway.

If the lanes can be substantially funded by being tolled, they should be, and let sales taxes for transport be cut.

Orange County Transportation Authority website on the project.

USA - Texas - El Paso getting its first toll lanes 

I noted this proposal two years ago.

El Paso is getting its first toll lanes opening soon.  A 9 mile stretch of the I-10 will see one new lane each way from the interchange with US-54 to Zaragoza Road with a toll of US$0.10 per mile. The Camino Real Regional Mobility Authority encouraging "sticker tag" installation of users.  These lanes will be pure toll lanes, with no option for high occupancy vehicles to get a free trip.

Austin

An 11-mile stretch of Austin’s MoPac Boulevard will expand to eight lanes from six to accommodate a growing population.  Neither the Texas Department of Transportation nor any of the local entities involved in the $200 million project are predicting it will transform MoPac into a free-flowing thoroughfare.  The project is the responsibiilty of the Central Texas Regional Mobility Authority.  It is to accommodate population growth.  The key is the extra lanes are pure toll lanes, not HOT lanes.   Carpooling will not give you a free trip, the reason apparently being that the lanes are intended to maintain a minimum level of service.   By not allowing carpooling, it saves on enforcement and means that the lanes are purely managed by price.  

According to the Texas Tribune, the Capital Metropolitan Transportation Authority board is hoping it will boost bus patronage as buses will use the new lanes toll free.  Bus routes are to be revised to see how much they can usefully take advantage of the new lanes.  "Registered van pools" and emergency vehicles are also exempt.

The price will be set dynamically with the lowest price being US$0.25, and an average expected to be less than US$4 with trip lengths being a minimum of 5 miles.  However, unlike many toll systems elsewhere, there is no price ceiling.  The price will be as high as is necessary to maintain good free flow conditions.  Of course, those not liking that can use the parallel untolled lanes.

The payment system is a simple DSRC 915MHz system compatible with TxTag, TollTag or EZ-Tag.   Users without tags will be billed to their home address traced by ANPR cameras and accessing of motor vehicle registration databases.

Allied to the project are improved bicycle and pedestrian facilities ( US$5 million, including 3 miles of new path and 4 miles of footpaths).

The MoPac website says...

The project is being financed through a unique partnership with the Capital Area Metropolitan Planning Organization (CAMPO) and the Texas Department of Transportation (TxDOT). CAMPO and TxDOT have approved grants totaling $199.5 million to fund the project. As part of the partnership arrangement, the Mobility Authority has agreed to set up a Regional Infrastructure Fund, and over the next 25 years, will deposit $230 million into the fund. CAMPO can then allocate money from the fund to other transportation projects in the region.

So the lanes are taxpayer funded, but will they raise enough money to recoup that expenditure?

Georgia (USA) to introduce pure toll lanes as new capacity

Most "managed lanes" or "express lanes" in the USA are what I'd call pure HOT lanes.  They are tolled, but High Occupancy Vehicles (HOVs - cars with 2 or 3 or more occupants) are allowed to use them for free.  More often than not such lanes are conversions from HOV lanes (also called "transit" or "carpool" lanes).

Not Georgia's I-75 Express Lanes project, which I mentioned previously in an article about public attitudes to such lanes.

These are new build lanes.  Brand new capacity.  These are pure toll lanes (although local buses can use them for free), with all cars using them having to pay.  Trucks are not allowed to use them.

Atlanta Forward blog has published a debate on the pros and cons of the I-75 Express lanes project The project is a reversible Express toll lane (between 1 and 2 lanes) between SR 155 and SR 138 along an over 12 mile stretch of the Interstate. It is under development now and will be completed in 2016. 

The lanes will be northbound (towards Atlanta) in the AM peak and southbound in the PM peak. Tolls will be dynamic, so will vary in real time according to demand on the lanes. 

A DSRC transponder will be offered for those wishing to use the lanes, or they may choose to pay after usage with a bill sent to the vehicle owner’s address after the number plate has been captured by cameras. The latter option will be more expensive. All revenues from the lanes will be used to pay the capital costs of the lanes, which are estimated to be US$150 million. Trucks are curiously not allowed to use them. 

It will be interesting indeed to see if the lanes can pay for themselves, as this is rare (and explains why such lanes are rare outside the US – as most HOT/toll lanes are conversions, not new lanes). 

The arguments for the toll lane are: 

- They provide a new option; 

- The new capacity will not get congested as pricing will ensure that; 

- Some will use them every day, but most wont. Only when there is a time sensitive appointment, like a meeting; 

- The lanes benefit other travellers because they will reduce congestion on untolled lanes, and buses will have unhindered trips.

Arguments against tolls on the lanes are: 

- Untolled lanes would be used more; 

- Most users will be local, wealthy, extravagant or late; 

- It’s “UnAmerican” to pay (I actually though it was un-Soviet); 

- Gas tax is fairer because everyone will pay and then other road improvements can be built. 

Naturally I’m supportive of the lanes, because ignoring pricing is ignoring an opportunity for those who want new capacity to have to pay for it. It is also right that people pay for premium service when they need it. Unpriced roads risk congestion, the toll lanes promise a standard of service that the “free” egalitarian public domain roads can’t promise.   

Hopefully Georgians will come to see them as an asset, and that it provides a valuable option.  However, my other interest is whether the lanes will pay for themselves.

If so, they provide a new model for considering how new capacity can be paid for.

Auckland transport funding report promotes urban road pricing and tolls

Auckland has 1.4 million people, and its local politicians have ambitious aspirations for expanding the city's highway and public transport networks, but like many cities face a funding problem.  It can't raise enough money from existing funding sources to meet its aspirations for spending on transport. 

New Zealand has a comparatively efficient system for charging road users across the country and allocating the revenue, largely, on economically efficient grounds.  Fuel tax (notably on petrol only) of US$0.4285 a litre is all hypothecated into the National Land Transport Fund (NLTF), this is supplemented by a weight/distance charge on all diesel vehicles (and vehicles over 3.5 tonnes) which varies by vehicle tonnage, and a small ownership tax (motor vehicle registration and licensing fees).  That fund is used to fully fund state highways (the national highway network) and to part fund local roads and subsidies for urban public transport.   Local authorities submit bids for road maintenance and construction funding, and funding for public transport subsidies and capital works, and these get allocated according to a mix of benefit/cost criteria and reflection of overall government priorities (e.g. congestion reduction).  The NLTF funding provides between 40 and 75% of the cost of local authority transport activities, so local authorities usually fund the rest from rates - a tax on the value of land and properties on it. 

Local authorities have no powers to toll existing roads or raise taxes on fuel, but most do obtain some revenue from parking (there is a tiny historic tax on fuel dedicated to local authorities, which raises very little)

Tolls are in place on two roads.  One is a state highway north of Auckland (where it is being used to pay the debt of half of the construction cost of the road), another is a local road in Tauranga (which has received no NLTF funding because it had a poor benefit/cost ratio).  A third motorway under construction near Tauranga is also to be tolled to provide part of the funding for the road.  Tolling legislation means that any local authority and the NZ Transport Agency (which operates the state highways) can apply to the Executive for authorisation to toll any projects which involve new capacity only.  It provides a solid framework for more tolling within those grounds.

Auckland's problem is that the Mayor and the Council want to spend an additional NZ$400 million (US$339 million) annually over the next 30 years on transport in the city region on top of what is currently provided through that national funding system.  Given there is little need to boost spending elsewhere in the country (much of it simply needs continued road maintenance and minor improvements to networks), raising national fuel tax or road user charges appears inequitable.   

So Auckland Council set up the Alternative Transport Funding Group, which itself set up a Consensus Building Group of stakeholders to produce a report on funding options, which included representatives across business, social, motoring, public transport, cycling, construction and other sectors.  

Auckland has several times mulled over road pricing, so this report is the latest incarnation, and of course, it has sparked debate as it presents two options for the city (and central government, as legislation will be needed to allow for road pricing on existing roads).

What did it say?

The report considered many options including:

- tolls on specific roads;

- 6 "road pricing" options specified as being a single cordon, double cordon, area charging, motorway only charging, full distance charging and managed toll lanes.

I'm amused at "full distance charging", which ignores that there already is distance charging for heavy and diesel vehicles.  It would seem odd to consider layering another system on top of one that works.

"Managed toll lanes" were ruled out because they wouldn't raise enough revenue or were too expensive to administer for the revenue that could be raised.  That means they couldn't even fund additional lanes.  Curious when you consider how widespread they are in the US (although the policy goal in the US of providing a congestion free alternative does come into the fore).

Parking levies were also ruled out, which is significant as this is often seen as an alternative to congestion charging.

The options that got more consideration were:

- Fuel taxes 

- Public transport fares

- Rating-based sources

- Road pricing

- Tolls on new roads

Two packages of options were finally proposed for public consultation

1:  Increases in rates (NZ$90m US$76m additional per annum).  Increases in fuel taxes of 0.6c/l (US$0.51) nationally (regional fuel tax seen as complex as there is no diesel tax at present, and a significant proportion of diesel usage is off road, so that diesel tax would need to be refunded). Tolls on major new roads (two are listed as being eligible for tolls) and increases in public transport fares.

2. Road pricing charging motorways only, or a single cordon charge, to generate NZ$250 million a year (US$212 million) plus increases in rates and public transport fares.  

The tone of the report clearly indicates the second option is preferred, but that requires a law change the current government appears to not support.

Review of conclusions

News briefs - Florida, Pakistan, Virginia, Chile, Indonesia

Florida talks about tolling a flyover

Tolling a bridge, tunnel, new highway or new lanes is considered to be feasible and worth considering. What about a simple flyover over a junction? Well Florida DoT is considering just that between the I-95 and SR 202 according to WOKV. The idea is that it could be tolled with free flow electronic tolling, but this certainly would test willingness to pay for a relatively small time saving. Certainly outside peak periods I’d be surprised if many paid at all. However, it is consistent with Florida’s policy of resisting increases in fuel taxation in favour of tolling to the extent practically possible. The bigger question is the extent to which tolls could recover capital costs for such a project when the alternative is so readily available (and the price would have to be very low to attract users).

Pakistan isn't ready for congestion pricing yet

Ahmad Rafay Alam in The Tribune of Pakistan, writes about the chronic condition of traffic congestion in major cities in the country.  He notes how the surfeit of road building has not sustained reductions in congestion as vehicle numbers grow and more people drive.  He also notes the lack of support for pedestrians, cyclists and public transport.  Whilst slightly off topic for this blog, I'll particularly note that pedestrians are typically the poorest relation in urban transport policy in developing countries.  It can be a dominant "mode", but it is seen as a mode of the poor and a way of commuting that shouldn't be encouraged.  Wrong.  Since most trips in cities are short trips, it is a perfectly good way of getting around for distances of less than 1km.  It is a key to avoiding traffic congestion and tying up public transport networks with such trips.  It means ensuring footpaths are adequate and clear of too much obstruction. It means having crossing places on roads, including traffic signal crossings for pedestrians, that are enforced and clear.  Building roads or metro lines or bus rapid transit without recognising that everyone is a pedestrian, is going to start a trend that is harder to reverse.  A trend that major modern cities are now trying to reverse. 

The article notes that congestion charging could be a possible solution.  Indeed it could, but without good reliable means to enforce against vehicles that refuse to pay, it is impossible.  Pakistan is still some way away from having the basic information systems and regulatory requirements across vehicle (and vehicle owner) identification, before it can implement congestion pricing.  The first step should be a national vehicle ID programme., with reliable updates of ownership details and means to enforce failures to register or update details.

Virginia announces Transurban to extend I-95 toll lanes

The Washington Post reports that the state of Virginia "has made a formal agreement with private partners to build 29 miles of high-occupancy toll lanes along Interstate 95. Construction is scheduled to begin very soon and should be done by the end of 2014."

"the agreement with 95 Express Lanes LLC, a joint venture between Transurban DRIVe and Fluor Enterprises Inc., covers construction and operation of 29 miles of express lanes on I-95 from Garrisonville Road in Stafford County to Edsall Road in Fairfax County."

The full press release is here.   Key facts from the press release are:

The key components of construction include:

• Extending nine miles of existing HOV lanes from Dumfries to Garrisonville Road in Stafford County, which alleviate one of the region's worst traffic back ups
• Expanding existing HOV lanes from two to three lanes for 14 miles between Prince William Parkway to vicinity of Edsall Road on I-395
• Making operational improvements to the existing two HOV lanes for six miles from Route 234 to Prince William Parkway
• Adding eight new or improved access points to and from HOV/HOT network at key interchanges
• Expanding and adding commuter parking lots

Financial and tolling highlights:

• Project will cost $925 million with 95 Express providing $854 million in funding. This includes an anticipated TIFIA loan of $300 million, which is expected to be available in November 2012
• VDOT will provide $71 million in public funds, a lower amount than the original estimate of $97 million, due to lower-than-expected financing costs at closing.
• Tolls will be collected electronically using E-ZPass, including the new E-ZPass Flex, eliminating the need for toll booths
• HOV-3+, vanpools, motorcycles and buses travel free. Vehicles with one or two people will pay a toll to use the express lanes or ride the general purpose lanes for free. Tolls will vary based on real-time traffic conditions to manage the number of toll-paying customers who choose to enter the express lanes. Most customers are expected to pay to use express lanes only a couple of times a week when they need a faster trip, with a typical trip during rush hour costing between $5 and $6.
• Project will fund a safety and enforcement program including crews to assist disabled vehicles, incident detection technology and more Virginia State Police. The program is expected to significantly reduce HOV violators. 

 Maps are available here.

Brookfield Infrastructure buys part of Chilean toll road

Canadian Business reports that Canadian firm Brookfield Infrastructure  "and its institutional partners have signed a deal to pay C$590 million (US$589 million) for the 45 per cent stake in the Autopista Vespucio Norte toll road in Chile that they do not already own."  It raises the shareholding to 51%.

Commenting on the road, the firm said   "This Chilean toll road is a key artery in the ring road network surrounding Santiago, and it benefits from an attractive revenue framework whereby tolls escalate annually at inflation plus 3.5 per cent".  In addition it has had compounded annual growth in traffic of around 8% for each of the past three years.

The highway is essentially Santiago's primary northern ring route and is considered by tolling specialists to be very efficiently run, with electronic free flow tolling, and maintained to a very high standard.

RTT News claims that Brookfield is in discussions with Abertis to "create a joint venture to acquire a 60% interest in Obrascon Huarte Lain Brasil S.A. for approximately $1.7 billion, comprised of $1.1 billion of equity and $600 million of assumed liabilities."  Obrascon being a major Spanish toll road concession holder, with roads in Spain, Brazil, Mexico, Chile, Peru and Argentina.   Abertis and Brookfield are already bidding for Obrascon's Brazilian toll road assets. 

Bakrie wants out of toll road business in Indonesia.

Long standing Indonesian business consortium Bakrie Group has announced it is seeking to sell its toll roads business according to the Jakarta Post.

The report states the firm:

"wanted to sell its PT Bakrie Toll Road subsidiary for at least Rp 1.3 trillion (US$137.8 million), an amount equal to the subsidiary’s equity, to settle debts"

Its prime assets include the 35-km Kanci-Pejagan toll road between Cirebon, West Java, and Brebes, Central Java which has been criticised by the Public Works Minister Djoko Kirmanto for being of "poor quality".  Revenues are not particularly good, but the report concludes that this is largely an effort by the large investment firm, that has ties going well back into the Suharto era, to realise assets to pay down its debt burden and refocus the company (which is predominantly a property development firm) on its core business.

Indonesian state toll road company Jasa Marga has start to the year

The Jakarta Globe reports that state owned toll road operator Jasa Marga had a 30% increase in revenues in the 6 months to July 2012.   Part of this is due to an increase in traffic, with an over 11% increase compared to same period last year attributable to rising car ownership in Indonesia.  It also increased toll rates in Jakarta and Surabaya in response to inflation of around 5% per annum.  However, the result is distorted by Jasa Marga's sale of its shareholding in private toll road operator Citra Marga.  Jasa Marga is responsible for 13 toll roads listed here, plus another eight of which it has a partial shareholding.

Jasa Marga's corporate profile describes it as follows:

Founded on 01 March 1978, Jasa Marga is the pioneer in the development of toll road in Indonesia. With 32 years of experience, the Company remains the market leader in the country's toll road industry. Jagorawi (Jakarta-Bogor-Ciawi) Toll Road is the Company's toll road that marks the milestone in the historical development of Indonesian toll road industry. To date, the Company has operated 531 km toll road representing 72% of the total operating toll roads in the country.

Seattle's SR520 toll reduces overall traffic volumes

Famous US political journalist and commentator, Michael Kinsley, writes in the LA Times about the SR520 bridge toll that I reported on last year here (noting the congestion pricing that has since been applied), with this interesting statistic:

Since the toll was imposed, traffic on the toll bridge has dropped about 40%, while traffic on the free bridge has risen 10%. Overall traffic to and from the east side has dropped about 6%. 

Of course, the main point of his article isn’t about the traffic or economic implications about it, he’s being philosophical about it as an example, saying it makes society less egalitarian because people can pay to avoid congestion. I’m not going to engage on that, except to say that I’m sure he’s flown in premium cabins on airlines happily bypassing queues at airport check-in and boarding, and people pay for TV, pay for valet parking, pay for the best seats in theatres etc, and he doesn’t seem to mind that. Indeed, the SR520 toll is to help pay for the replacement bridge.

The interesting result is that a 40% drop of traffic on one bridge (with two lanes each way) has resulted in only a 10% increase on the other bridge (with three lanes each way excluding the reversible two HOT lanes on the I-90 bridge), resulting in a 6% overall reduction in crossings.  The report I blogged about last year predicted a 50% reduction.

What this demonstrates is that the toll has made more motorists think about whether driving is the correct option (I don’t have figures for public transit use) or whether people consolidate trips, travelling less when faced with paying the cost of the infrastructure they use. In either case, it shows that tolling one route whilst leaving another free does not just result in a 1 for 1 diversion, it does mean that there is some trip suppression and some mode shift. 

As I said before, what's particularly interesting is that congestion pricing has been introduced on the SR520 bridge.  The effect of this means different patterns of behaviour change, with more mode shift and trip suppression likely at peaks than other times (and no toll overnight).

For cities considering tolls on one crossing but not another, it may be an  interesting case study because the automatic concern will be gridlocking the other bridge.  In this case, the other bridge also has a tolled alternative in the form of express lanes. The simple response to congestion concerns is that users of either crossing have uncongested options, and a free one.   Washington State has introduced tolls on SR520 for financial reasons, but has cleverly designed it to also maximise efficient utility of the crossing as well.  

UK government announces feasibility study into highway privatisation options

In March 2012, British Prime Minister David Cameron announced that the Government is interested in greater private investment in England's national highway network.  Arising from that more recently has been an announcement by the Secretary of State for Transport, Justine Greening on both the Government's response to an earlier review it commissioned about the Highways Agency and the commissioning of a feasibility study into options for attracting greater private sector participation in the highways sector.

Bear in mind all of this is for England, not the United Kingdom as a whole, as responsibility for highways in Wales, Scotland and Northern Ireland was transferred to the devolved governments in those "countries" (as they are called, although there are not sovereign states).

So what bearing does this have on road pricing?

For now, not much.

The Cook Review of the Highways Agency, commissioned in late 2010 as part of the drive for greater cost efficiency by the Government, recommended a series of measures to improve the performance, efficiency, strategic direction and accountability of the organisation, including steps to commercialise its operations.

The Government response to the Cook Review of the Highways Agency is here and largely embraces measures that can be implemented in the shorter term, including having a strategic view of the future of the network, such as considering how tolling may be a viable option to help fund some improvements.

However, the more significant governance reform options proposed by Cook have been deferred in favour of the wider scoped review that is now underway.  This feasibility study on road reform is focused on how the highway network should be governed, the role of the private sector and new sources of finance, and whether it can more resemble a regulated utility, such as water, electricity or gas (not the railways!).  The terms of reference are here.

Of interest to those in the road pricing field, it makes it clear that government policy is not to allow tolls to be introduced on existing roads that are part of the strategic network (the Highways Agency network).   However, tolls can be introduced on new capacity.  New capacity can mean both new roads, and new lanes (which can mean a new crossing parallel to an existing bridge or tunnel, or new lanes on a highway).  

This would appear to limit scope somewhat, but the Government is interested in options for how it treats existing motoring taxation and how that can be leveraged to encourage private investment.  In short, if the private sector is to buy, lease or otherwise invest in England's highways, and cannot toll existing capacity, it would need to be assured of payments from the state in the form of shadow tolls, availability payments and the like.

It is thought that instead of relying on government budgeting processes and conventional contracts, that perhaps some ringfencing or hypothecation of a proportion of existing motoring taxes would provide a more direct link between use of the road network and payment for the capital consumed in using the road network.  In the UK, motor vehicles currently pay two main taxes - Vehicle Excise Duty (effectively an ownership tax, levied according to both vehicle size and emission class) and fuel excise duty.   Taxation receipts from both are several times in excess of the total expenditure on roads, so to apportion a set proportion of revenue from either or both sources to such payments would largely be an accounting exercise.  The proposed future heavy vehicle vignette could be included in the mix. 

The UK Treasury vehemently opposes any form of hypothecation of any taxes, in part because it restricts the flexibility of government to do as it wishes with future revenues, in part because of fear it will generate an avalanche of claims for new hypothecated taxes, but also because of experience in the 1930s when a motor tax fund became awash with revenues the government was unwilling to spend on roads (suggesting that either the money should have been spent on roads, or the tax was too high).   Overseas examples of hypothecation range from the highly successful (New Zealand) to the questionable (Japan).

The debate on this needs to be had, because the primary reason there are motoring taxes is to serve as a proxy for direct charging of road users.  If highways were privately owned or even publicly owned utilities operating like electricity, telecommunications or water companies, they would charge their customers directly.   Taxing ownership of vehicles and fuel could then only be justified to account for environmental externalities, which would increase transparency around justification for the levels of such taxes.

I see this as being a precursor to the inevitable debate in the medium term about the sustainability of fuel tax when up against ever increasing fuel efficiency of vehicles and those vehicles not powered by petrol or diesel.  Ultimately, revenue levels and equity issues will dictate the need to consider a shift to road pricing in some form.

What does this all mean?

1.   In the short term, not much.  The Highways Agency will be undertaking some minor reforms and scoping out where it thinks tolls could be used to fund new capacity.  Forthcoming route strategies should help inform where the Government sees the need for new roads, new lanes and other improvements.

2.   The feasibility study into road reform is being undertaken by the Treasury and Department for Transport.  Hopefully it will look into models introduced in other countries, such as Austria, South Africa and advanced in New Zealand (but thwarted by politics).  I expect it to support a commercialised Highways Agency with more autonomy, but it would take considerable bureaucratic altruism to wish to relinquish Departmental oversight of the Highways Agency or Treasury's rock solid opposition to hypothecated motoring taxes.

3.   Some major new highway projects are likely to be offered to the private sector as finance-build-own-operate schemes, a few with a toll component to it (obvious examples are the A14 upgrades and the next crossing parallel to the Dartford Crossings). 

4.   Some existing stretches of motorway may be leased to the private sector to have long term responsibility for, primarily focusing on maintenance and relatively minor upgrades.

5.    Vehicle Excise Duty may be partly hypothecated, but only if the Prime Minister and Chancellor of the Exchequer have the courage to reject Treasury's opposition and take advice on how to make it work.

6.    There may be one or two new toll roads on the English highway network in the next few years, but pressure will come from private investors to consider ways to swap existing motoring taxes for tolls.

This also leaves open the theoretical possibility of toll lanes/HOT lanes that are for new capacity, although my view is that the scope for this is almost zero, because for toll lanes to be viable, existing capacity has to be regularly and heavily congested.

Of course, none of this affects the rights of local authorities to introduce congestion charging schemes on their own networks, as they are permitted to do so by legislation that was enabled a decade or so ago by the previous government.   I see there being a similar scope to get local authorities to commercialise their highway networks and do very much the same thing, particularly in major urban conurbations such as London and Manchester.

Toronto debates adding toll lane to existing highway

Toronto is well known to tolling professionals as being the site of the highly successful 407-ETR toll road. Leased to a private consortium, it was the first fully electronic free flow toll road in the world. You may think that Toronto may be fairly open to more tolling, even tolling new lanes.

According to Inside Toronto, the Deputy Mayor of Toronto City, Doug Holyday has been promoting widening the Don Valley Parkway and tolling for the additional lanes.

“Holyday argued that if the city was going to toll a road, the Don Valley Parkway made the most sense because one would only do so by building additional capacity - and that the private sector might be able to cover the cost of widening the road.”

However, the proposal was rejected by the council.

What a pity. It at least deserved some investigation into whether it would be financially viable. Building new toll lanes could theoretically mean the lanes might pay for themselves, but most importantly, it means those benefiting the most, pay for it. An economic argument can be made for the lanes to not have to be fully funded by the toll, as other users of the road benefit from some users paying to use the toll lanes instead of the existing lanes. In fact, the principle is little different from a brand new road.

If a city can’t even agree to new capacity being tolled, it is difficult to see how it would even consider congestion pricing.

Washington State Initiative 1125 - good intentions marred by unrealistic complexity

According to The NewsPaper, there will be a vote in November in Washington State, USA, on Initiative 1125. The referendum will require a yes vote for a negative proposition that “no revenue in the motor vehicle fund or toll fund could be used for non-transportation purposes”. Now it looks on the face of it like a great initiative for motorists, particularly since it avoids diverting such revenues to top up other funds. However, when you get into the detail it contains some flaws.

The proposals are:

- “Prohibit state government from diverting gas taxes and toll revenues in the motor vehicle fund or other funds to the general fund or other funds and used for non-transportation purposes”. 

Now I can go along with that, given it is about specific funds and revenues from road users. The case for diverting such funds for non-transport purposes is weak in an environment of publicly owned conventional toll projects. Indeed, it might strengthen the case for tolls. 

- “Prohibit state government from transferring or using gastax-funded or toll-revenue-funded lanes on state highways for nonhighway purposes”. 

This is not exactly grammatical, but I infer from it that it means not allowing revenue raised from toll lanes or indeed gas tax on state highways to be spent for “non highway” purposes. If it means not spending on other roads, I wouldn’t be supportive of that because there are plenty of instances where it is sensible to cross subsidise parallel routes, feeder routes or bridges over major highways. This is clumsy and its objective isn’t clear.  I am unsure as to what it adds to the above provision, other than confusion.

- “Require tolls to be dedicated to the project they’re paying for, ending such tolls when the project is completed, and only allowing tolls to be used for purposes consistent with the 18th Amendment to the Washington Constitution. Tolls on a project must be spent on that project and may not be diverted and spent on other things (allowing tolls to be imposed on anyone and spent on anything stops them from being tolls and makes them into de facto taxes)”. 

This is where it really gets unstuck. The myth that a road is ever “paid for” and that after the initial capital expenditure has been recovered, no more capital ever need be put into the road. It’s nonsense. The surface, road furniture and the like regularly need replacing and renewal, the base layers will eventually need renewal, and bridges will as well. Only the land and the earthworks for the original right of way are “permanent”, the rest of the road needs regular injections of capital. So this doesn’t exactly reflect economic reality. If it said tolls should be based on recovering the long run costs of capital and operating costs of the road, I’d be more inclined to agree. However, to confine tolls in time does not make sense. The counter-factual is not that “tolls be imposed on anyone and spent on anything”, but that they be introduced on a network basis. 

How would a system like the German truck tolls manage under this? Revenue from the entire motorway network and some highways would need to be directed to the exact roads charged in proportion to the revenue raised? No other utility network is that precise. Rail, telecommunication and electricity network providers engage in pricing that reflects network costs and spend money across a network, not just revenue raised on individual components, although there may be some review of costs and revenues at such levels where it makes sense. I understand the purpose, but I don't think it is economically efficient or reflects economic reality, but rather a widely held misperception that treats roads unlike any other capital assets. 

It is tempting to stop politicians using tolls as an easy tax to divert from motorists, but it also doesn’t make sense to be ridiculously prescriptive in ways that don’t reflect good economic principles. I can understand imposing a restriction on a hypothecated fund to spend money on roads, and for tolling to be related to the costs of the roads tolled, and be spent on the network of the entity tolling. However, to restrict time and purpose of toll revenue spending is unduly restrictive. For example, toll revenue needs to be spent on running the toll system itself, or may be spent on a common toll system for multiple roads, which may be in breach of the third proposal. While I am no great fan of tolling be used to fund public transport, I am also not a fan of tolling being prescribed to specific conditions that would limit it scope inefficiently.

It’s a shame. It is good to have public engagement on these issues, but it would be wrong for this initiative to pass, because it is better to sacrifice improvements in one area to avoid a significant deterioration in the law on tolling in another.

Short items on the Philippines, El Paso and York

Philippines to build more toll roads

Agence-France Presse reports that Filipino President, Benigno Aquino wants the private sector to build three new major toll highways in the country. He listed them as:

- A link between North Luzon and South Luzon highways in Manila;

- Manila airport highway; and

- New access route to South Luzon tollway.

Of course the key problem faced by the Philippines is with congestion at toll booths near Manila.  Longer term it may want to relieve the congestion on parallel routes, but for now tolls are an effective way to help fund a major expansion of infrastructure.

El Paso to build new lanes as HOT lanes

The El Paso Times reports that El Paso County, Texas is intending to build HOT lanes parallel to the Border Highway.  It involves the construction of two new toll lanes, one in each direction, and an upgrade of the highway's four existing lanes, about 8.7 miles from U.S. 54 to Zaragoza Road.  The cost is estimated at US$80.2 million, with state bonds paying US$74 million and federal funds another US$6.2 million with the project expected to be completed in 2013.  No new land will be needed to build the extra lanes. What isn't clear is whether the revenue will be used to pay back the bonds, or be "free revenue" for the County, as it is claimed the "revenues raised here will stay in the region".   Nice deal for the County it would appear. The intention is that the lanes be fully electronic free flow and have peak and off peak charges.

A previous El Paso Times poll showed that most people did not plan to use the toll lanes, but motorists will have the option of using the express toll road or the non-toll part of the road.

It was also recommended that the toll lanes revert to non-toll lanes if the project does not pay for itself by 2028.  The proposed toll would be a base of US$0.10 per miles off peak US$0.13 per mile peak.

York rejects congestion charge

The Yorkshire Post reports that York Council has expressly rejected congestion charging for its Local Transport Plan. Executive Member for City Strategy, Steve Galloway said:

“The present council is very much opposed to congestion charging. It would impact on the city’s key economic drivers in the tourism and retail sectors. “If the Government does introduce a road pricing system across the country, then things could change. But as things stand, we do not want to be in competition with other cities with people perceiving York as somewhere that is more expensive to visit".

However, I don't think that the small congestion charge in Durham has had a negative effect. After all, York could well have a system that is targeted for its needs on a scale not much different from Durham. However, given the debacle of the last government’s mishandling of the issue of road pricing, it is hardly surprising it is seen as a poison pill by British councils outside London.

California toll roads hit by decline in demand

The LA Times reports that usage of Orange County’s toll road/toll lane network has dropped, apparently due to people being less willing to pay for the time savings that the roads offer. Comparing 2007 to 2010, usage of the San Joaquin toll road declined by 19%, whereas usage of the Foothill and Eastern toll roads declined by 17%. The 91 Express Lanes also had a decline in usage, but has had usage partly recover as of late. The most recent attempt to change this has been a “raffle” with prizes of credit to toll accounts, to attract users.

Whilst people are being more prudent about whether to spend money on saving time, compared to other expenditure, it is also likely that the time savings offered have reduced, because with declining travel patterns, congestion on untolled roads will have declined making them more attractive. When the economy recovers, and employment picks up, congestion will increase, as will the disposable incomes of motorists, so it would be reasonable to expect some recovery in demand. However, as long as there are untolled alternatives, toll roads and lanes will always be seen as a “premium” product, which is easy to surrender when times are tight.

Orange County toll roads and lanes see demand slump

Orange County California has two sets of toll roads, a 51 mile network run by transportation corridor agencies, and the well known 91 Express lanes.  Both were built as a response to congestion and ever growing demand, but according to the L.A. Times the recession has hit demand on both sets of routes.

Some former users are more concerned about saving money instead of time, preferring to use money to buy fuel and food, instead of time.  The report states:

From the beginning of the economic decline in 2007 through the fiscal year that ended in June 2010, trips were down 19% on the San Joaquin Toll Road, the portion of the 51-mile system known as California Highway 73. On the system's Foothill and Eastern toll roads, which include California Highways 241, 261 and 133, trips declined 17% in the same period, according to the Transportation Corridor Agencies.

Still none of this means that the roads are a failure, just that the value of time drops when both congestion on other routes declines and the need to save money offsets saving time.   It is like demand for other goods and services, but the key issue here is that there are untolled alternatives.

Subsidised toll roads and HOT lanes in Virginia

The Washington Examiner reports that the Governor of Virginia is proposing using taxpayers’ money to kickstart four toll road projects in the state, on the basis that it makes the projects viable for the private sector.

The projects are:

-       VA17 Dominion Boulevard;

-       US460 89km expressway;

-       Second Midtown Tunnel;

-       I-95/I-395 HOT Lanes.

The average subsidy per project is 25%, so that private concessionaires are expected to raise the remainder and charge tolls to recover the cost. 

The initial reaction may be that toll roads should be viable in their own right.  Yet if there remain other road related taxes (e.g. fuel taxes), it is quite legitimate to count state revenue from such taxes when such roads are being used as being able to contribute towards the project’s costs.  Nevertheless, I have yet to see such a deliberate “shadow toll” approach used that connects fuel taxation to particular projects.

However, as tolling is to be welcomed as a source of financing, the viability and economics of the projects may be questioned.

TollRoadsNews has more on the projects, and its own commentary.

Time Magazine writes on Atlanta's HOT Lane but

unfortunately doesn't link pricing roads to the effect of pricing other goods and services.  Toll lanes of any kind should not be controversial, as there is a free alternative and people are paying for priority.   To reject this concept you should also reject it elsewhere.  After all, people have been paying more to bypass queues at airports and theme parks for years.   The key point is that road space has value, it is a scarce resource, and when demand exceeds supply, queuing eventuates and its value and efficiency dramatically declines (with other external costs such as increased pollution).

The article, available online as Congestion Pricing: To Skip Congestion, Atlanta Pays Up writes about the proposal to convert HOV lanes in Atlanta  (on the I-85) to HOT lanes, and to increase the HOV threshold from 2 to 3 vehicle occupants.  It makes the good point that it gives users a choice, although gives a little too much credence to the argument that such lanes only "benefit the rich" (presumably wealthy people aren't entitled to pay for things that benefit them), which is not true.   I don't see Time Magazine arguing that because it is not free that it only "benefits the rich" when it could be offering free copies.  

The value is that toll lanes are now being discussed more widely in general news coverage, and the hope is that this reduces controversy about them.  

One argument put forward in the article, that HOT lanes will become congested because they will be too popular, neglects the tools available to prevent this.   The obvious one is to increase the price.  It would not have taken much effort for Mike Billips (the journalist for Time who wrote the article) to investigate dynamically priced toll lanes elsewhere, (such as Minnesota's I-35W express lanes)  which manage demand effectively.  The second one is to increase the HOV threshold, which at 2 is effectively a free ride for couples.  Increases to 3 or even 4 are more likely to capture conscious car-poolers (as a side point, it would be interesting to see if any economic analysis has been undertaken to value what such thresholds should be, compared to HOT lane tolls).

The article does go off key a couple of other times.  For starters, HOT lanes are unlikely to be serious money spinners.  US$7 million p.a. is useful, but hardly worth getting too excited about.  Certainly this is unlikely to pay for new lanes in many cases, but is not really enough to completely motivate the introduction of such lanes.   Secondly, I don't know who told Mike Billips that the London Congestion Charge is about "noise and pollution".   It was never about noise, and the pollution was seen as a positive, but not the driver.   The single biggest reason for the London Congestion Charge was to reduce car traffic in central London to enable road space to be reallocated, primarily for buses, but also taxis, cyclists and pedestrians.

What are the different types of road pricing?

The range of terms used to describe road pricing are vast and overlapping.   The main reason for such inconsistency is because road pricing terminology usually combines purpose (e.g. congestion charging), geography (e.g. urban, cordon, area), technology (e.g. electronic free flow, open) and vehicles charged (e.g. HGV only).  The separation I have made on the right hand column is based on geography, mainly because this tends to lend itself to the answers to the other issues as to purpose, likely technology and range of vehicles charged.  So my classification is as follows:

- Toll roads and toll lanes: Toll roads are the most common, familiar and oldest form of road pricing.   They are characterised as being single facilities with one or more tolling points.  Most often bridges or tunnels, but also motorways/grade separated highways.   In all cases the choice to users is to choose that road or crossing, or take an alternative route.   The tolls on these facilities are almost always about recovering the capital costs of the particular road.  Although in a few places such tolls are now being varied between peak and off peak times, to manage demand and reduce congestion, but also offering discounts at times of lower use.  This can be described as a form of congestion charging for that specific route only.  The Sydney Harbour Bridge and San Francisco-Oakland Bay Bridge both have higher peak charges to manage congestion.

Within this category I have included toll lanes, because they are about charging one facility.   This also includes High Occupancy Toll (HOT) lanes.  Toll lanes may be extra lanes added onto a highway, with the toll applied to help fund the new lanes, but also manage demand at peak times.  The Orange County 91 Express Lanes are in this category.

As such it is a form of congestion charging, but with the parallel uncharged lanes as a free alternative.   Toll lanes may also simply be tolls applied to existing lanes.  To date the only example of this are HOT lanes, with the existing lanes already set aside for buses and cars carrying usually 2 (or 3) or more people.  HOT lanes allow single occupancy vehicles to use such lanes at a charge, with the toll essentially managing demand so the lanes remain relatively uncongested.   The I-394 HOT lane in Minnesota is an example of this.

The common characteristic of toll roads, toll lanes and HOT lanes is that, generally speaking, motorists can choose other routes to make the trip (or other lanes).   The tolls are focused on the single facility, and are usually set to recover capital costs.  The alternatives may be slower or far more circuitous, but the road pricing component is the single trip on that road.   Some countries have extensive networks of toll roads that make up some of the best highways.  France, Italy, Spain, Japan and increasingly China have well developed national toll road networks.  Yet in all cases it still remains possible to drive long distances using other routes.   Some cities have extensive toll road networks, such as Sydney and Santiago, but still have alternative routes.   The chargeable event for such roads is passing a particular point on the road.

- Urban road pricing: Urban road pricing is distinguished from toll roads in that the tolls are not simply applied to individual routes or crossings.  In that sense, cities like New York (where crossings from Manhattan to New Jersey are tolled) or Sydney (where many main highways are tolled) do not have urban road pricing.   Urban road pricing is when there are no alternatives in driving to a certain part of a city at certain times without paying.   The best known examples of this are congestion charging in London, Stockholm and Singapore (although there are key differences between all three), but also the Oslo toll ring.  In most cases the road pricing is introduced to reduce congestion by managing demand.   In the Oslo case the road pricing was introduced to raise revenue to fund the road improvements and other transport infrastructure.   Cities typically consider forms of road pricing for these two objectives, reducing demand (and congestion) and generating revenue.  The chargeable event being crossing a certain point or movement within a zone.

- Network road pricing:  Network pricing is the unified charging of vehicles across a wide network that goes beyond a city.   Such pricing may only be heavy vehicles (e.g. Switzerland LSVA, German LKW-Maut), or all vehicles (e.g. electronic vignettes in Hungary).  It may be only on motorways (e.g. Austrian ASFINAG tolls), or on all roads (e.g. New Zealand Road User Charges).   Generally speaking, such pricing is about recovering infrastructure costs, but may also be about managing externalities such as congestion and pollution.   It does not include countries where large numbers of highways are tolled when such toll systems are discreet, run independently and unrelated to each other.  Chargeable events may be crossing multiple points, distance travelled or purchase of time to access a network.

The confusion can come from different terminology.  Road pricing can apply to all of these situations.  Tolls can be used to describe them all as well.  Road user charging would tend not to apply to individual toll roads or toll lanes.   Congestion pricing/charging is more about charging specifically to manage demand at peak times. 

So my point is this.  The key to understanding road pricing schemes is:

- Geography (what part of a network is being charged);

- Vehicles (what part of the vehicle fleet is being charged);

- Purpose (why does the charge exist); and

- Chargeable event (what triggers liability for a charge).

Look at that rather than the terminology used.