1. Topic

  Tolls and Road Pricing

2. Introduction

   

From the start of the process of integration of environmental concerns into transport policy, the EU shows a special interest in "Getting the Prices right policies". This principle is included in several important policy documents and decisions such as the Lisbon Process, the EU Sustainable Development Strategy,

To accomplish this, the EU mostly works through the harmonisation of taxes and recently with legislation on pricing of the use of transport infrastructure. Next to this more global pricing policy initiatives, local authorities also take initiatives to get the prices right. This happens mostly through parking restrictions and pricing, and, in some cases, through tolls and road pricing. The practice is well studied on the transport econometric side, but seldom implemented.

The econometric theory implies that a fair price is a price that resembles the social and environmental cost of the driven car kilometres. This would mean that cities have to develop schemes that enable differentiated pricing relating to vehicle type, moment of the day, day in the week, number of passengers.

These schemes are difficult to organise, to set up and to “sell” to customers and citizens.

As the econometric modelling is mostly put aside the moment the “real thing” is put in place, we go deeper into the good practice and leave the theory aside. Two cases are worth mentioning: London and Genoa.

This topic relates regarding the local scale to the Topic Taxation regimes.

3. Discussion

   

London congestion charging scheme

Since February 2003, the already famous congestion-charging scheme has been in operation. The scheme requires all drivers to pay £5 per day if they wish to continue driving in central London during the scheme’s hours of operation (Monday to Friday from 7am to 6.30pm).

1) Main objectives of the congestion-charging scheme

The primary objective of the central London congestion charging scheme is to reduce traffic congestion, since congestion and under-resourced public transport were identified as London’s most pressing problems. Congestion charging is aimed at deterring non-essential journeys into the congestion charging zone during charging hours, thereby making essential journeys easier, and reducing traffic and increasing journey time reliability in the congestion charging zone. Also, the scheme is designed to encourage Londoners to use alternative modes of transport if possible.

Whilst there are some secondary benefits arising from the congestion charge, such as notably raising revenue and some environmental benefits, these were not primary aims of the scheme.

2) Congestion-charging scheme as part of an integrated approach, complementing other measures in favour of sustainable mobility (i.e. promoting cycling and walking)

The Mayor published his Transport Strategy in July 2001 with the aim of reducing congestion and improving public transport. Congestion charging, however, is one of many integrated measures that have been introduced, or are in the process of being introduced in order to tackle these issues. Indeed, congestion charging was only implemented after the introduction of enhancements to public transport beforehand, and the subsequent freed road-space has allowed cycling and walking facilities to be improved.

3) Main results and impacts of this scheme

After one year, the main results of the charging scheme show that congestion charging was introduced successfully. Operation and enforcement are now working well. Congestion within the charging zone has reduced by 30 %, and the volume of traffic in the charging zone has reduced by 15 %. Bus services have improved, and public transport satisfies displaced car users. The impact of congestion charging on business is small and there are already benefits for the environment, with lower emissions and fuel consumption in the charging zone.

4) Major social, economic and environmental benefits of the London congestion-charging scheme

The initial environmental impacts in particular are encouraging. There have been reductions of approximately 12% in emissions of both NOx and fine particulates (PM10) from road traffic inside the charging zone. There is no evidence of significant change to the ambient noise climate, though Londoners already recognise the beneficial effects of congestion charging and other initiatives on environmental quality.

Accidents have also been reduced compared to 2002, although this is a continuation of a recent trend in central London. The number of accidents involving powered two-wheelers has not, however decreased disproportionately.

There have been a lot of claims regarding the effect of the congestion charge on business, in particular on the retail sector. However, statistics show that central London’s economy outperformed the rest of the country in the first quarter of 2004; therefore, the effect of the congestion charge on the business sector is benign.

Reduced traffic delays, improved journey time reliability, reduced waiting time at bus stops, better fuel consumption, less pollution and accidents and a more pleasant environment all have an economic value. TfL estimates that the congestion charge produces net transport benefits of £50m per annum.

5) Next steps in your congestion-charging scheme

All aspects of the scheme are constantly under review, the main focuses being the improvement of customer service and maintaining the effectiveness of the scheme.

During the first few months of the scheme, the quality of service provided by the main contractor was not to the required standard. An extensive programme of improvements across IT, management, process and staffing was implemented, along with a tougher quality performance management regime. The performance across a number of areas increased, in particular in relation to performance of the call centre, the number and quality of penalty charges being issued and the end-to-end enforcement process. Some of these changes are still being implemented.

TfL is also currently investigating methods to make payment easier. Improvements to the fleet operator scheme (for organisations with 25 or more vehicles) are being implemented and more are underway. In addition, TfL is considering the possibility of automatic pre-payment for members of the public.

In the future, in order to maintain the effectiveness of the congestion charge, it may be necessary to increase the charge, though there are no plans to do this in the short-term. TfL is also undertaking trials in new technologies such as ‘tag and beacon’ and GPS (Global Positioning Satellite) systems. These could shape the way the charge is collected, and even the structure of the charge in 10-15 years time.

Genoa activities in the road pricing research programme

Summary

With the EU PROGRESS project, Genoa has performed the test of a cordon-pricing scheme in the central area of the city: this area includes the old historical centre, the heart of commercial activities and the main pedestrian streets. The trial was run in 2003 divided into 2 phases in order to evaluate differences in drivers’ behaviour varying the fare. Data collected during the demo were used (with a statistical analysis to project the results to the overall city population) to calibrate the full-scale simulation model, so several scenarios were modelled varying fee level, public transport network, % of exemption, etc. The results of modelling were used to start the consultation phase with politicians, stakeholders and citizens.

The state of the art

Genoa is one of the most active cities in Europe in the field of sustainable mobility, with its participation in several EU projects concerning the research and the implementation of innovative techniques applied to transports. In this sense, road pricing is a groundbreaking measure for the management of private traffic demand and Genoa is one of the first cities having run a pilot demonstration.

Within the EU PROGRESS project, Genoa has performed the test of a cordon pricing scheme in the central area of the city (1 km2): this area includes the old historical centre, the heart of commercial activities and the main pedestrian streets and is subject daily to about 54500 entrances, of which 56% is made by cars.

The trial was run in 2003 in two phases: 3 months (March-May) with a fare of 2€ and 3 months (June-August) with a fare of 1€, in order to evaluate differences in behaviour varying the fare. Data collected during the demo were used (with a statistical analysis to project the results to the overall city population) to calibrate the full-scale simulation model, so several scenarios were modelled (starting from the one here presented) varying fee level, public transport network, % of exemption, etc. The results of modelling were used to start the consultation phase with politicians, stakeholders and citizens.

The road pricing trial

The aim of the trial was to evaluate the efficiency of urban road pricing in terms of congestion, pollution reductions and energy savings, to test the technological equipments and to analyse social and economical impacts of the road pricing schemes in the city centre.

The demonstration was run with the collaboration of 200 volunteers chosen between frequent users of city centre by car; the volunteers singed a contract with the Municipality that assigned them.

There was a virtual budget of 200€, delineated the trial forms (monitoring of the accession, reduction of the budget at every passage, privacy issues); it was foreseen to pay, at the end of the demo, the residuals.

In the pre-demo phase, volunteers were evaluated and the non-representative cases were discarded: 159 volunteers ended the demo; among them, 125 were closer to the requested requirements (to enter in the RP area at least 4 times a week) and were of a higher reliability.

At the end of the demo the volunteers filled in a questionnaire. The results were that:

  • 82,7% sometimes adopted a different behaviour (mode change, route change);
  • 50% used PT as an alternative to car (or in integration: park & ride, park & walk;
  • the alternative route / mode caused on average an extra travel time of 12 minutes (+30%);
  • 43% judged the applicability of RP in Genoa positively, but this opinion was strongly related to the existence of supporting measures (interventions on PT, road network and parking).

Full-scale modelling

A statistical analysis showed a reduction of entrance of 38% with a fare of 1.50 €. A curve describing the relationship between the reduction of passages and the fee paid was built up using modelling tools (taking into account the exemptions and the fact that, in the real case, citizens will be subjected to a real fare and not to a non profit): the reduction of 38% corresponds to a fee of 0,67 €; this result was very close to the expected value of 0,75 € (considering the ratio between a real sustained cost and a non profit being 1:2).

The fee of 0.67 € was used to model the main full-scale scenario. Four different scenarios were modelled: the base one (RP1, of which main results are reported) considers the outcomes of the demo with the present road network and public transport service. The inputs were: RP fee = 0.67€, motorbikes and 30% of cars exempted. Main results were:

Car reduction in RPA = -26%

  • Equivalent Vehicle reduction in Road Pricing Area (RPA) = -21%
  • Equivalent Vehicle increase in Cordon Area (COR) = +3%
  • CO emissions in RPA = -13%
  • CO emissions in COR = +1%
  • Global shift to public transport =0,4% (2000 pas*km)
  • Yearly revenues = 1.72 M€

Figure 1: Volunteers’ behaviour during the demo phase

Figure 2: Results of statistical analysis

Figure 3: Model relationship between reduction of passages and fee paid

Figure 4: Road Pricing Area (RPA) and Cordon Area (COR)

4. Recommendation / Conclusion

   

The two remarkable examples show the following:

· Strong political leadership is required.

· Keep stakeholders informed and on your side.

· Make the toll and road pricing part of an integrated transport strategy, with visible benefits for several road users.

· Equity is an issue in this regard.

· Make the use of funds acceptable for the public.

· Utilise proven technologies, nothing too fancy.

· Pick the right scale and pace for a measure.

· Focus on costumer relationship management.

Air quality improvement can be one of the concrete positive outcomes, but can never be the only driving force for a toll or road pricing scheme. The user approval for such measures would at this stage be un-existing.

5. Examples / Further Reading

   

Bristol has provided an example titled Tolls and Road Pricing in Bristol, while Birmingham has produced an example on The Use of A Toll Road in Birmingham, UK to Improve Air Quality.

6. Additional Documents / Web Links

   

· The full Impacts Monitoring Report of the London Congestion Charging can be downloaded from TfL’s website at http://www.tfl.gov.uk/congestioncharging.

· Urban Transport Pricing in Europe: http://www.transport-pricing.net/

· Progress project: http://www.progress-project.org/

· European Transport Pricing Initiative (CUPID): http://www.transport-pricing.net/cupid.html

· Europrice network: http://www.europrice-network.org/

· Deloitte, Combating Gridlock, How Pricing Road Use Can Ease Congestion

Last Updated


 

25th January 2005

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