Delhi congestion charge?

Delhi loses about 420 million work hours a month due to congestion.  As the Indian economy grows it faces ever increasing gridlock.  11.2 million vehicles exist in the "National Capital Region" (NCR) which is metropolitan Delhi and neighbouring states.   Delhi has built many large highways including tolled roads, as well as an expanding metro network and well established bus system.   However, discussion about congestion charging has been happening for some years.  It now appears the government is looking seriously at the idea following a report that a "Delhi High Court appointed Special Task Force (STF), headed by former Chief Secretary Rakesh Mehta, has reportedly recommended that it be implemented". 

According to Indian website Mid-Day, two concepts are being floated.

One would be a central Delhi congestion charge, being a cordon/area charge similar to London or Stockholm.  Another would be for vehicles not registered in Delhi (which would include those from other states in the NCR) to be subject to a charge, effectively regulating demand for those travelling towards the city (in the hope that some may timeshift and others use the rail system).    Clearly the latter concept could potentially have the greatest impact. 

Many vehicles use the city as a transit point but "once the western periphery expressway also known as Kundli-Manesar-Palwal Expressway (KMP) is ready, those vehicles which just use the city as transit point will not enter at all. So, those who enter the city for day-to-day work will be the only ones to be taxed".  

Hopefully if Delhi proceeds it uses an intelligent approach, aligned to Singapore more than London, but it will need to think of more options that just cordons.  It needs flexibility and to target congestion when and where it occurs, not adopt blunt tools.

Mid Day makes a few other useful points about Delhi traffic:

* Even as the national (India wide) average figure is eight private cars per 1,000 population, in Delhi the number is 85.
* During the past decade the city has added 3,500 km of road length, but the number of vehicles has increased from 3.37 million in 2000-01 to 6.8 million in 2010-11.
* A total of 1087 vehicles are registered every day In Delhi, of which 1021 are personal vehicles. Nearly 365,000 vehicles are registered annually.
* Around 45 million sq m of land is needed for parking of already registered vehicles in the Capital
* Traffic congestion in Delhi causes an overall loss of Rs 8,400,000,000 per month (US$190 million).

LA takes the first bold step towards congestion pricing

For those of us who have worked in the road pricing/tolling field for some time, the economics behind pricing road space to manage congestion are obvious. The tools to enable it to be done efficiently have long been in operation, when one wants to charge for individual points on the network (as in Singapore) or create inner city cordons or areas (like Stockholm and London). For higher density cities with intensive public transport and busy city centres, such approaches to congestion charging can deliver substantial benefits. However, for cities where employment and traffic patterns are far more dispersed, it is quite different. 

Such is Los Angeles. 3% of employment is located in the downtown CBD, so most commuting patterns involve people travelling by car in a criss cross of motions between residential and commercial locations across the metropolis. A LA has grown as a city, this has become the typical pattern of there NOT being patterns and dominant origin/destination pairs.  

Transport policy in Los Angeles has gone through several eras.  Of course it is the location of the so-called Great American Streetcar Scandal, which is itself controversial (as some say it was only a matter of time anyway).  Until the late 1970s, Los Angeles followed a "predict and provide" model for roads, building an extensive freeway network to connect the metropolis.  However, this could not keep pace with demand, and the second strategy - public funding of public transport came next, with LA Metro rail both in subway and light rail forms.  That also had next to no impact and suffered colossal budgetary overruns.  So the strategy now is HOT lanes.

LA HOT lane trial

Tollroadsnews has an excellent article summarising where this project has got to.  Two significant stretches of highway are involved.  The I-10 will use an existing HOV lane and the hard shoulder to create two lanes in each direction. The I-110 already has this as HOV lanes.   Pricing will be distance based, according to crossing set points on these highways, at prices ranging from 25c to $1.40 per mile.

The lanes will be dynamically priced in real time to maintain a minimum speed of 45 mph, with the use of a DSRC based tag system for ALL users of the lanes (including high occupancy vehicles).   It is curious that all those involved in the design and development seem rather new to this type of system, I wonder how they will manage the risks.

Buses will be free and trucks will not be allowed to access the lanes, which is a shame, but probably reflects the I-10 lanes being substandard for wider vehicles.

Full details of the project are on the official website here with maps.

Tollroadsnews is supportive of this step as "Fuel taxes have got us where we are today - wasting billions of hours and dollars sitting in traffic. The taxes as a a major financing mechanism are the problem.

The solution is in making highways self-financing, direct-charge operations, managed one by one for efficient operations by operators forced to make a living selling a road service. In a small but important way that's what LA's toll lanes are experimenting with".

However, another perspective is from Streetsblog Los Angeles, which tends to be a environmentalist/anti-car view.  It doesn't like it because " there is nothing in the congestion pricing plan that encourages people to drive less.  The plan removes no current drivers from the current car pool lane, even "HOV-2" vehicles at any point.  Then taking the "congestion" out of congestion pricing, the lane will actually be closed to paying vehicles during the most congested periods.  In other words, this plan will not effect traffic during the most congested periods."

Certainly this project wont fix LA's congestion, but it is seen as a pilot trial for something that could be extended across much of the LA freeway network.  HOV lanes have had their day and I've never been a strong supporter of them, as they do not reward much other than fortuitous multiple occupancy of vehicles (families etc).   My answer to Streetsblog is that the HOV component of this should be phased out over time.  If prices at the maximum level don't do the job, I'd argue that the HOV threshold should be raised to  3+ and 4+ (and progressively until it is effectively only giving buses a free ride).  The choice remains, and the benefits to users will be obvious.  It means those who value time can choose a fast trip, while others can take their chances with the existing route.  This will dissuade motorists and reduce congestion.  However it will disappoint Streetsblog LA because it isn't designed to discourage driving, but to get more efficient use of the road network.  That does mean rationing of HOV users in due course as the only ones not price sensitive.

Some Streetblog commentators think LA should have a London/Stockholm style congestion charge, which of course simply wouldn't work.  The long term solution is to shift from fuel tax to distance, time and place based charging.

What this project will demonstrate is how pricing can work.  Despite socialist and conservative critics, the untolled lanes remain as a choice.  The HOT lanes offer people a choice to avoid congestion either by having three passengers or paying, and it should guarantee a minimum level of service so for the first time, two LA highways will actually have trip reliability built into their operations.  That is a significant step forward.   

A network of toll lanes would be a major leap forward in changing how LA transport works, because the choice offered would be a premium service that will meet needs that will vary from day to day.  

It wont fix congestion, as this will remain on the parallel lanes and on roads that cannot be feasibly segregated, but that is for another day.  That is for a more widespread revolution in how Californians pay for road use.

For now, it is relieving congestion for those willing to pay on two key routes.  Let's hope it is a stunning success, as it provides one approach, particularly well suited to lower density new world cities, which have the space to build or convert lanes on major highways to tolled use.

France's Heavy Vehicle "Ecotax" to go to appeal

I reported some weeks ago here and here, that the tender for the proposed French heavy vehicle "ecotax" had been frozen because of a French court intervening regarding irregularities in the procurement.

The "Ecotax" is intended to be essentially a distance based toll system to apply to national highways in France - that being all major highways that are not currently tolled/owned by private concessionaires.  In effect, the proposed distance charge (which would also vary by vehicle size) would address issues of diversion from tolled routes to untolled routes, but was primarily intended to generate additional revenue whilst heavily incentivising a shift towards trucks with cleaner engines.  The "Ecotax" is intended to apply to all freight vehicles over 3.5 tonnes and 12,000 km of national highways (and 2,000 km of secondary highways that would otherwise face diversion from the national routes).  An estimated 600,000 French and 200,000 foreign trucks are expected to have accounts and the system is intended to be operational by 2013.

AFP reports that:

Thierry Mariani, Secretary of State for Transport has confirmed that the government has appealed the decision to the Conseil d'Etat, although it is understood this will delay development by some months.

The winning consortium was called Atlantia, on the basis of a 13 year contract worth 2 billion euros.  Atlantia comprises:

- Italian toll road owner/operator Autostrade (70%)

- French electronics manufacturer Thales (11%)

- French railway operator SNCF (10%) (which raises interesting issues of cross-modal competition)

- French Mobile phone operator SFR (6%) and

- French IT provider Steria (3%).

However, the issue was that one of Autostrade's past advisors - RAPP Trans - was acting as advisor to the French Government meaning the decision to award the tender to the consortium was against "the principle of transparency and the principle of inviolability of applications" according to the administrative court in Cergy-Pontoise.

A Dutch (language) website indicates that apparently the annual revenue estimated for the proposed "Ecotax" was 1.2 billion revenue of which two-thirds was intended to be hypothecated for the government infrastructure agency AFITF.   The average charge is intended to be 8-14 Euro cents per km, with discounts of up to 25% for more remote parts of the country.

One thing is for sure, Europe's likely second largest truck tolling system will be delayed and consultants will have to be particularly cautious about ensuring real and apparent conflicts of interest are addressed.  Certainly RAPP-Trans's activities around this project will be under the spotlight in the coming months.

UPDATE:  Appeal successful
SECOND UPDATE: More details on France's truck Ecotax here. 

Nevada prohibits toll roads!

Proposed Boulder City Bypass route

The Las Vegas Sun reports about a proposed Boulder City bypass and the point that while it could possibly be funded through tolls, toll roads are not allowed in Nevada. Nevada has a reputation for being quite free and open about businesses of many kinds, but obviously not for tolls. One website indicates that Nevada had many toll roads,  but this was in the era before the internal combustion engine. 

It appears that the Interstate Highway programme in the 1950s killed toll roads in Nevada. The report in the Las Vegas Sun indicates that perhaps the entire US$400 million cost of the Boulder City Bypass could be funded through tolls with a PPP.   I'm surprised Nevada has maintained such strong opposition to tolling.  Given the current economic climate (and that the road would still allow untolled use of the existing route), it seems timely for Nevada to reconsider its opposition to tolling.

Jamaica's toll concession vs railway reopening

Jamaica wisely decided some years ago that a major highway upgrade from Kingston to Montego Bay and Ocho Rios would be commissioned as a PPP concession using tolls. The resulting highway – Highway 2000 – has had 46km completed so far, with another 85km under construction or subject to land acquisition. The total project will be 233km long and form the backbone to the country. It is being tolled with DSRC technology and cash at toll plazas. Clearly, electronic free flow systems were not thought to be worthwhile for Jamaica, or perhaps Bouygues (with little experience) took a cheap, low risk approach.

The first phase has a very positive cost/benefit ratio, the second does not but is more about economic development. However, the Jamaican government has a problem. The concessionaire Bouygues included in its contract that no competing mode can be established to compete directly with the toll road. This, of course, should have been restricted to roads, as it may be seen to restrict aviation, but the issue is not that. It is rail.

Jamaica’s railways have been long neglected and mothballed. However, they are also being revitalised, with passenger services expected this year according to Go Jamaica. I’m not going to express a view on whether that is a good idea or not, but it does raise one issue toll concessionaires often want reassurances over – competition. My view is that as long as competition is not state subsidised, then it should not be restricted. Private roads shouldn’t be seen as a right to a perpetual monopoly. Nevertheless, it does seem that Jamaica’s government might want to have a more integrated approach to transport policy.

Gothenburg congestion tax

I have added a link to the small congestion tax page for the city of Gothenburg in Sweden.   Gothenburg plans to introduce congestion pricing as of 1 January 2013 closely following the approach taken by Stockholm, to the point that the concept and technology are nearly identical.   The only interesting variations are the inclusion of an internal cordon at Gota Alvbron, and an extension of the cordon west to cover a river crossing at Alvsborgbron.

It is planned to operate 0600-1829 weekdays, excluding July (which is deemed to be a holiday month).  Political approval for the tax was reported in January 2010.

Proposed Gothenburg cordon

The purpose is stated as being:

1. Reduce the impact of car traffic on the environment. Road traffic accounts for a large part of the climate-damaging carbon dioxide emissions, these emissions need to fall for us to meet our climate objectives. The tax is a financial incentive to reduce vehicle traffic and divert to public transport.

2. In a dense urban core, more road space is needed to increase usage of other modes (public transport, cycling and walking).

3. Enable the Gothenburg region to pay for major investments in public transport, rail and road. This is to implement costly but important infrastructure investments earlier than it would otherwise have been able to "regular" tax funding.

Already the Ministry of Finance is proposing inflation-proofing of the tax with another increase in 2015.

The tax is part of a large package of measures that includes new public transport infrastructure, a new road tunnel, and various road safety measures. (Full details in Swedish here, use Google Translate)

The intention is that charges be cheaper during the inter-peak period, and the technology used will be ANPR (Automatic Number Plate Recognition) as is used in Stockholm.  The tax will comprise a single cordon, which includes a river crossing boundary outside the cordon.  A map is available here (click the box Visa trängselskatteområde to get the cordon). 

Once again, congestion pricing should be proven to have a positive effect on congestion and be helping to finance improvements to both rail and road infrastructure, both are important as motorists need to get value not only from reduced travel times, but also some capital investment if other charges are not to be reduced.  It will be interesting to see whether this catalyses similar steps in more European cities.   In my view the move is rather adventurous at a time of significant economic downturn, but for practitioners of tolling and advocates of economically efficient road pricing it will add another real time case study to the mix, and I expect another argument to support the point that road pricing can work to reduce congestion.

Washington Times opposing VMT tolls for the wrong reasons

According to a Washington Times editorial, the Congressional Budget Office is claiming road users should pay more because of externalities, but it claims that the lack of funds for roads are not due to a lack of funds, but because of funds diverted into “mass-transit programs and grants to local police departments to run speed traps”.  The CBO supports VMT (Vehicle mileage tax) because of the need to protect revenue.

In other words, it is a bit of a rant. The hint of truth is that, yes funds are diverted to other purposes, and legitimate arguments can be made about that.

However, the best argument for VMT is not revenue protection.  For there can always be multiple ways of addressing that (although none of the others are particularly good), it is that VMT can far more effectively address congestion and be the platform to treat roads as an economic good and a service with revenue linked to investment, rather than a public good funded from politiclaly driven taxes.

While it is easy to get angry about the misuse of funds, the answer is not to oppose more efficient road pricing, but to support better governance mechanisms for the use of the revenue collected.

European Union pushes strong support for road pricing

While much publicity has been seen in the European Commission draft transport white paper calling for a ban on cars with internal combustion engines from cities, it is also strongly in favour of road pricing, albeit for purposes likely to be controversial to many road users.   I doubt there will be a 50% shift from road to rail and water for intercity passenger (and especially freight) trips, but this blog is about road pricing.  So what does it mean for the 27 EU Member States?

For a start it is a White Paper, which means it forms a strategic policy framework which provides guidance but is not to be legally enforced across all Member States in all forms.  Much implementation will be at the national and local level, so the EU role will be more limited.

I have found a few references to road pricing:

2.4 "Road pricing and the removal of distortions in taxation can also assist in encouraging the use of public transport and the gradual introduction of alternative propulsion."  So it is seen as a tool to penalise existing road users.

3.3.  Concern over the need for trucks to have multiple toll and vignette transactions to cross multiple borders, with interest in pursuing a single interoperable approach.  The key problem of course is that despite this goal, most truck operators do not have vehicles crossing so many borders, but rather just a few.  The market for this is not large.

It wants to encourage direct charges to raise revenue, but also "internalisation of externalities".  That means charging for pollution.  It also advocates users paying a greater proportion of costs, which is more of an issue for public transport than roads, although I doubt the EC would acknowledge that.  However, I have no issue with encouraging user pays. 

Yet, it becomes more specific here:

For passenger cars, road charges are increasingly considered as an alternative way to generate revenue and influence traffic and travel behaviour. The Commission will develop guidelines for the application of internalisation charges to all vehicles and for all main externalities. The long-term goal is to apply user charges to all vehicles and on the whole network to reflect at least the maintenance cost of infrastructure, congestion, air and noise pollution.

Noise? Somehow relieving property owners from their choices around location would seem to be far from economically efficient.  However, the goal is ambitious - full network pricing that recovers "at least" costs of infrastructure, congestion and pollution.  Why it could be more (other than a profit factor) is unclear.

The EC wants a leading role to revise vehicle taxation saying that by 2016:

• Revise motor fuel taxation with clear identification of the energy and CO2 component.

• Phase in a mandatory infrastructure charge for heavy-duty vehicles. The scheme would introduce a common tariff structure and cost components such as the recovery of wear and tear, noise and local pollution costs to replace the existing user charges.

• Evaluate existing car road charging schemes and their compatibility with the EU Treaties. Develop guidelines for the application of internalisation charges to road vehicles, covering the social costs of congestion, CO2 – if not included in fuel tax – local pollution, noise and accidents. Provide incentives to Member States who launch pilot projects for the implementation of schemes along such guidelines.

• Proceed with the internalisation of external costs for all modes of transport applying common principles while taking into account the specificity of each mode.

• Create a framework for earmarking revenues from transport for the development of an integrated and efficient transport system.

• Issue guidelines providing clarification concerning public funding to the different modes of transport and to transport infrastructure, where necessary.

• Reassess transport taxation where necessary, namely by linking vehicle taxation to environmental performance, reflecting on possible way forward to review the current VAT system concerning passenger transport, and revising company car taxation to eliminate distortions and favour the deployment of clean vehicles.

I understand fuel tax as a CO2 charge, but not beyond that if you have full road pricing.  The agenda for trucks is clear, all should pay a charge to reflect infrastructure and external costs by 2016.  For cars, there is interest in piloting congestion charges.  However, note that the system is meant to be used to subsidise other modes.  Quite why they should expect financial support if road transport is efficiently charged escapes me, as this is far from efficient.

It wants to subsidise toll systems and interoperable tolling saying "Provide EU support for developing and deploying technologies that improve  infrastructure use efficiency and decarbonisation (new road network pricing and tolling systems, ITS and capacity improvement programs)"

So in conclusion, it is ambitious. The EU wants full network road pricing, which reflects infrastructure costs and environmental costs, and it wants it now.  It wants to standardise systems across Europe and incentivise trials for congestion charging.  However, as much as this is interesting and positive, it also harbours a clear  anti-road transport agenda, wanting to use such charges in part to subsidise other modes, even though such pricing ought to eliminate any need for this.

The bigger question is how this will influence EU Member States.  The EU has supported pricing before, but it would be hard to say that the EU has effectively made much difference in promoting it.  Member States have pursued truck tolls, highway tolls and congestion charging based on domestic political considerations.  The useful EU role has been to ensure non-discrimination and transparency are applied to tolls so that they are not applied in ways to penalise foreign road users.   It would be unfortunate if it saw its role to be to unfairly and inefficiently penalise road transport once road pricing systems are in place.

The new European Union Transport White Paper (which has a far wider remit than roads) is available here as a PDF.

French court decision identifies RAPP Trans on Ecomouv conflict of interest

Further to the story from yesterday, French website Transport Logistique reports that the Swiss based consultancy firm RAPP Trans is the firm implicated in presenting a potential conflict of interest with the French heavy vehicle tolls project.

The report (in French) indicates the consortium ALVIA (comprising Sanef, Siemens and Atos) alleges "that the competitive dialogue did not obey "the principle of transparency and the principle of inviolability of applications".

The problem allegedly being that the French government relied on RAPP Trans to provide it with professional services.  RAPP Trans is a technical consultancy, best known for having designed the Swiss LSVA heavy vehicle distance based charging system that has been in place since 2001.  It has also undertaken other technical advice work in a number of European countries. 

RAPP Trans also allegedly has "close trade links" with Autostrade, the lead company in the winning bid for the French system, through work with the European Commission.

The fundamental legal question in the appeal will likely be whether those links are sufficient to overturn the tender. 

The appeal will be most interesting.  If the appeal does not succeed, it will raise questions about how transparent RAPP Trans was with the French government about its relationship with potential suppliers, it will possibly create a far higher standard of due diligence of separation of roles between advisors (if RAPP Trans had done work for Autostrade during the time of its work for the French government, it would appear to be a clear cut case of conflict, but if the relationship was beforehand it would seem less clear).   It could simply mean consultants have to choose more distinctly whether they want to advise governments or advise suppliers.  It is a decision that gets undertaken quite frequently - and it does not look good if any company is caught out appearing to be able to give unfair advantage to tenderers.

French truck toll system (ecotax) on hold

A French Court has suspended the contract offered to the Autostrade led consortium to develop, build, install and operate a distance based heavy vehicle toll system on untolled French highways, because of allegations of conflict of interest according to Le Monde.   The Ecotax contract had been won by a consortium called EcoMouv.

The issue appears to be that one of the companies associated with the winning consortium was also providing advice to the French government that issued the tender - a classic case of conflict of interest.   It is hardly appropriate or ethical business conduct if this is the case, as one cannot be seen to be providing advice to a government entity that issues a tender, whilst also being party to one of the tenderers.

More details will be reported as they come to hand, but the Autostrade led consortium  (Ecomouv) intends to appeal the decision.  If the decision holds, at the very least it will mean the tender will need to be started from scratch, and anyone that was a party to the alleged conflict of interest would be ruled out - which could be very costly for those involved.  However, regardless of the outcome of appeals, it would appear that the proposed heavy vehicle toll system for France is suspended.

UPDATE:  It's all go, appeal successful.

UPDATE 2:  More details here on the Ecotaxe.