Apologies again

Serious family illness has taken me away from work for an undefined time.

News Briefs - Hungary, India, USA

Hungary - Budapest unlikely to introduce congestion charge in short term

Following on from the report last year that the Hungarian Government had suspended development of a congestion pricing scheme for Budapest (which had received money for its metro system from the European Commission contingent on introduction of such a scheme), Caboodle reports that the Budapest Public Transport Centre, CEO David Vitezy, says that it wont happen in the next two to three years.

He says that until there is more public transport capacity, it can't be done.  He wants the fourth metro line (under construction) and some new tram lines built first.  I'm slightly curious about this, given Budapest functioned for many years with the existing public transport network and much less car traffic, and has had relatively static/declining public transport usage for some years.

However, I suspect the politics around this are too difficult for now.

India - Andhra Pradesh state may establish hypothecated roads fund

According to The Hindu, the Andhra Pradesh Road Development Corporation (APRDC) is considering replicating what has been done in four states (Assam, Kerala, Maharashtra and Uttar Pradesh), by setting up a dedicated roads fund which would receive revenue from motoring specific taxes.  The primary reason being to allow for better quality and longer term funding decisions on road infrastructure, than ad hoc annual funding decisions competing with other public spending.   In addition, it is intended to support the autonomy and accountability of the APRDC in delivering improvements to the network.   Taxes on motor vehicle ownership and fuel, tolls, and other revenue sources may be dedicated to the roads fund.  A key priority is to fund major safety improvements to reduce the high accident and road fatality rate on the state's roads.

USA - Texas - article on tolling

The Texas Tribune has an excellent four part series of articles on toll roads in the state.

- Part One. Includes an interactive map of toll roads in Texas, which looks like not much given the size of the state, but are clustered around major cities.

- Part Two.  Describing the rise of tolling in Texas.  Noting that fuel taxes have not risen in Texas in 20 years, that more than 150 miles of toll roads have been built in the past six years and the growth in private sector interest in building, owning and operating such roads.

- Part Three. Focusing on HOT and other toll lanes in Texas.

- Part Four.  On the failed Trans-Texas Corridor proposal and what came after.

Vancouver road pricing debate continued right up to the election

I wrote last year a couple of times about debate in Vancouver about road pricing.

Given it is the British Columbia Provincial Elections on 14 May, I thought I should outline some of the latest developments in debate over the past six months.

The NowNewspaper reports on how Surrey Mayor Dianne Watts thinks road pricing would be a fair and equitable way to raise revenue for public transport in Vancouver.  She suggests to radio station CKNW that it could replace property tax and reduce fuel tax.

Delta Mayor Lois Jackson also says it might be fairer than property taxes, but it hasn't been researched enough.  The Delta Optimist reports that she is less than impressed by proposals for more property taxes to pay for Vancouver public transport.

The Globe and Mail reports that Richard Walton, the chairman of the TransLink mayors’ council, says that road pricing has to be a new way of funding, not an additional tax.  

The Vancouver Sun reported on how the Mayors of Vancouver's boroughs rejected a property tax increase to pay for public transport.

I will report shortly about the outcome and what lies ahead for British Columbia in road pricing.

Normal service will resume shortly

Apologies for those who follow this blog, I have been unable to produce any content in the past few weeks due to a number of factors including being extremely busy with work, a severe family illness and a bereavement, as well as some travel (and my birthday).   As a result I have also been unable to present a paper I submitted to the 9th ITS European Congress in Dublin, which I should have been talking to today.

My friend Steve Morello, from D'Artagnan Consulting LLP, is presenting on my behalf today.

I hope to resume regular service within the next week or so, in the meantime I will publish a few posts I had nearly finished before the recent interruptions.

Ohio Turnpike not to be privatised

As has been previously reported, there had been a lot of debate as to whether it was worthwhile to privatise the Ohio Turnpike.  

According to an article on Cleveland.Com, the revenues for the 241 mile long Ohio Turnpike for 2012 were at a record US$270 million (with an expected profit of US$15 million).

Governor John Kasich is keen to utilise the value of the toll road to support other transport infrastructure projects in the state.  The law currently restricts the net revenues to being spent on transport projects within one mile of the road.

Tolls increased by 10% in January 2012 and traffic volumes have increased, making the toll road a lucrative asset for the state.  It has been reducing staff and consequential costs.

So the decision has been made not to privatise the road, but instead have it issue bonds which will essentially mean the state is borrowing against future revenues from the Turnpike to pay for other transport projects.  US$1.5 billion in bonds will be issued.  

A website called Ohio Turnpike Analysis contains more details. With a specific report of more in-depth analysis here, supported by Big Four accountancy firm, KPMG.  Indeed that report had been commissioned to specifically restrict options to those that exclude privatisation, but could include a lease to a concessionaire for the revenues.

In announcing the decision on the Turnpike the website states:

While the state could have realized more money by leasing the Turnpike, maintaining public control of the Turnpike and keeping the Turnpike Commission independent helps keep tolls low and workers on the job. Better coordination with ODOT keeps virtually all Turnpike revenue in Northern Ohio.

The Ohio Turnpike Commission is to be expanded into the Ohio Turnpike and Infrastructure Commission, which will have new "expanded authority" over major transportation projects in Ohio.

In addition, there will be a cap on tolls as follows:

Tolls for local passenger trips that are paid with EZ Pass will be frozen at current levels for the next 10 years. For all other tolls (longer passenger trips and all truck trips) any increases will be capped at the rate of inflation, or approximately 2.7 percent annually, assuming sustained traffic growth at the historic 1 percent rate. This low, stable rate will be less than half the rate of increase that passenger tolls have seen over the past 20 years and almost a full percentage point less than past increases to truck tolls.

Comment

It is always curious to see how reluctant authorities in the United States are to embrace private enterprise, capitalism and free markets when it comes to roads, especially when compared with countries that many Americans would consider to be more regulated and pejoratively, socialist (e.g. France, which has had little hesitation to have a large network of privately owned highways).   The rhetoric around it is remarkably parochial (with the implication that only people from Ohio could run the road "properly").  

What is almost completely absent is this analysis is any idea of the capital value of the Turnpike. The private sector has to account for its assets, but the public sector should as well.  It should make a return on that capital value, because taxpayers' money is tied up in it.  They should understand why their money is making more than a market return or less than that, otherwise it isn't clear whether the asset is being well managed or not.  Of course the only way to get a market capital value would be to talk to the market.  What would it be worth if it was sold, unencumbered (or encumbered by specific legislation)?  It would be dependent on revenue forecasts and expected costs, then the analysis can be done as to whether the surplus, after renewals and depreciation is worth more than the expected sale price.

There is a reasonable case to be made for reducing the risk of monopolistic pricing of the Turnpike, but beyond that if pricing can be efficient, and also reflect demand, there is scope for it to improve utilisation and get better value out of the asset.

In short, it appears that retaining the asset in state ownership is a political decision based on parochial and  long term financial grounds (better for the money to stay in Ohio, and better for the state to spend the revenues rather than monetise the asset, and let the private sector enjoy the revenues).  

The estimated value of a lease was a net NPV of US$1.8 billion, but I would have liked there to be some consideration of the most radical option - selling it.  Not that this is what should be done, but that it would provide a benchmark of value, to measure others against it.  The value of the sale money can then be treated on its own merits.

What I hope is that the new Ohio Turnpike and Infrastructure Commission efficiently transitions to fully electronic free flow tolling, adopts international best practice in asset management and customer management, and so replicates as much as is possible the efficiencies the private sector would bring to its operations.  It should also apply this to how it will supervise and manage other infrastructure projects financed through the forthcoming bond issue.

However, I also hope that the broader issues of sustainable revenues for Ohio are looked at more widely.  The Ohio Turnpike is not enough in itself to generate revenues to replace declining fuel tax yields.  Moreover,  Ohio should look at how it can leverage revenues from transit traffic and improve pricing overall to get better network utilisation, and better distribution of charges across users.  

The Ohio Turnpike may not be privatised now, or in the near future, but it should raise the debate for others. Why should states own roads, especially toll roads?  What are the deadweight unseen costs of maintaining that ownership?

The problems of measuring traffic congestion

Reuters has published an interesting article by Felix Salmon where he examines more closely the basis for the data behind TomTom's congestion indices.

Some of his points:

- TomTom's data comes from people who have its devices in their cars when they are turned on and being used.  Most peak time commuters are far less likely to be using satellite navigation services for their daily commute compared to occasional users of the road.  As such, both the driving habits, the speeds and the weighting of traffic volumes based on the presence of such devices will be skewed away from regular users.  

Now I think that over time, this may change as these systems also advise on traffic conditions more reliably.   Anything that encourages people to always have the system on will help, but for now it is at least questionable as to whether the sampling of peak users is representative.

- TomTom doesn't have any measure of confidence levels in its data, because it hasn't actually measured the congestion by any other means.  That makes the indices curious, but hardly a sound basis for major public policy decisions.

- Measures of congestion on a percentage basis distorts delays for short trips relative to longer ones.  A half hour delay on a one hour journey would be seen as less of a delay than a 10 minute delay on a 15 minute journey, which it is, in one sense.  Yet, 10,000 people enduring a half hour delay is more significant than a 10 minute delay.

What this all means is that, beyond individual corridors, it is astonishingly difficult to generalise about cities accurately, comparing performance between cities.  That doesn't mean TomTom should be pilloried for what it has done.  It is interesting what it has compiled, but it isn't much more than that.

Florida advisory panel proposes distance based road pricing

Columnist Kingsley Guy in the South Florida Sun Sentinel has commented on the proposal from the Florida Metropolitan Planning Organization Advisory Council (take a breath) that the state introduce a 2/c mile tax on road use.

The proposal comes simply from concerns that fuel taxation is becoming increasingly less reliable as a source of revenue to fund the state's transportation expenditure.

The state has 12 different fuel/vehicle ownership taxes (plus two Federal fuel taxes), two of these taxes haven't been increased since 1941 and 1943 respectively (meaning they are now worth 7-8% of what they originally were set at).  3 are inflation adjusted.

Sources of Florida state transportation trust fund revenues

Black line shows where revenues have to be to remain constant in real terms

FMPOAC concludes that six options should be looked at.  These are:

- Index all fuel taxes to inflation;
- 1c optional Municipal sales tax;
- Increase State Highways fuel tax by 2c a year, above inflation;
- Vehicle Mileage Tax;
- 5c local Diesel tax for counties;
- Redirect part of fees that were shifted from transport funding to the State Transportation Trust Fund.

On VMT it said:


This recommendation is to have the Legislature commission and fund an extensive effort to deal with the systemic issues of fuel taxes becoming less sustainable as a primary surrogate for a transportation user fee. While fuel taxes served as an adequate substitute for a true user fee for decades, significant increases in mandated vehicle fuel efficiency and the introduction of all electric and plug‐in hybrid vehicles are eroding transportation revenues. It is recognized that there are significant concerns over the concept of charging users of the highway system based on each mile traveled. These include privacy of citizens, the cost of implementing such a system, and institutional issues associated with revenue sharing. This effort is intended to address these issues at a minimum, deploy a demonstration of the concept and develop a business plan and implementation roadmap to move Florida to a VMT‐based system.

Guy rightly rejects Virginia's bizarre hypothecation of a new sales tax to pay for transport, as if people who rarely drive should pay more for potholes (through their shopping) than a trucking firm does.  May as well pay for electricity through general taxation, or telecommunications.   

He notes that tolling in Florida has had a distance dimension to it, and that is widely accepted.

However, he also notes some important concerns:

- Privacy.  Suggesting an odometer only option.  Which is fair enough, as long as it cannot be defrauded.  However, privacy does need to be respected, not dismissed.  Too many wingnuts think distance based road pricing is part of a conspiracy  (one that would be far better implemented if done in cahoots with mobile phone operators!);

- Fraud.  He expresses concern about people cheating a distance based system, which is fair enough, but this can be addressed and has been elsewhere.  Enforcement is a key part to any such system;

- Visitors.  A big issue for any state only system is covering those from out of state quickly and efficiently.  I'd suggest some sort of vignette (time based charge), but there are other options too.

- Heavy vehicles.  He notes that fuel tax charges heavier vehicles more, and that there needs to be a reflection of weight as well.  He's right, and fuel tax does this very poorly, as it tends to charge the smaller trucks too much, and the heaviest ones not enough.  Notice that the trucking sector can often be very unhappy about better pricing of roads, partly for this reason.

- Transition.  He wonders if there may still be a fuel tax as well as distance charging.

He also notes that there remains an issue of poorly spent money, which is separate from that.

I'm encouraged that Florida is starting to look at this issue more seriously.  The state has done well to use tolls to a wide extent, which has helped it a great deal and will help it with any transition to more direct user charging.  However, it could do worse than look at progress in Oregon, and the lessons learned from distance charging in other countries as well.

Jakarta moving forward with congestion pricing

The Jakarta Post reported that Jakarta Governor Joko “Jokowi” Widodo, has said that the Government Regulation regarding the financial and taxation status of electronic road pricing (ERP - the term being used in Indonesia to describe urban congestion charging) has been signed.

In 2011, a regulation on traffic management and engineering was signed to facilitate ERP, now with there being legal approval at the financial level, there are no legal barriers to implementation. 

The Jakarta Transportation Agency (which has an almost impenetrable website) has said that work will start on the design and concept, including establishing where and by how much motorists will pay.  The current talk is of implementation in 2014 according to the Jakarta Globe.

Electronic Road Pricing will replace blunt HOV rule at peak times

The intention is that ERP will replace the current vehicle rationing system in place in parts of Jakarta, this is essentially a peak time HOV system that requires all cars to have 3 or more occupants.   It applies to specific roads between 0700-1000 and 1630-1900 on weekdays.

This has resulted in entrepreneurial Jakartans standing beside the roads approaching the "3-in-1" zone charging a small fee for hitching with motorists.  The Jakarta Globe has an article about the "Jakarta Jockeys" as they are called, typically charge Rp.15000 (US$1.54) each to be the third (or even second and third) occupants of cars driving into the restricted zone.  Police officers currently enforce the HOV system on sight, issuing fines of up to Rp.1 million (around US$103) for violations.   The roads the system applies to get revised regularly, but the whole system will disappear when ERP is introduced.

The scheme will also replace the odd/even vehicle demand management system that was just introduced in March 2013.  That system restricts vehicles with odd or even number plates from entering certain areas at peak times on specific days, essentially alternating access during weekdays to reduce congestion.  

ERP will contribute to major reduction in congestion

ERP is intended to be the major contributor to a target of reducing traffic delays by 40% by 2014 according to the Jakarta Post.  Apparently only 40% of time spent on the roads by commuters is spent moving.  56.8% of trips into Jakarta are undertaken by car.  Traffic has been increasing by 11% per annum, but road capacity by 0.01%.  

Beyond the urban congestion charge, tough enforcement of illegal on-street parking and on-street vendors on major routes will increase the usable capacity of those roads.  The city and Indonesia itself is loathe to ban people from buying vehicles, but may also consider other measures to restrict vehicles (e.g. banning even or odd numbered licence plated vehicles from certain days).

I wrote previously about where I thought it might be implemented.

Possible first stage of Jakarta Electronic Road Pricing

Blue is Phase 1, Yellow Phase 2 and Red Phase 3 of proposed Jakarta congestion pricing

The city has stated that the prices would likely be in the range of Rp. 6500 (US$0.67) and Rp. 21000 (US$2.16) would be adequate to make a meaningful difference to congestion, prices would vary according to time of day, size of vehicles and location, with higher prices for the most congested routes and crossing points.  The expectation is that a mix of individual routes and cordons will be charged, it is worth bearing in mind that Jakarta has quite a few (manual) toll roads, so is not unfamiliar with road pricing.  There are separate concepts to adapt Jakarta's toll roads towards fully electronic free flow technology, both to address toll plaza congestion and to allow for more dynamic, peak pricing.

"The administration said that the provisional trip charge reflected inflation and economic growth and was based on a survey of motorists and the tolls charged by turnpikes and ERP systems in other countries."

The expectation is that the system will resemble the Singaporean one, with a DSRC type system with on-board units required for all vehicles driving on the charged roads, and prepaid smartcards inserted in them that can be topped up at various retail outlets.  Of course it will also require extensive number plate recognition based enforcement.  

Decisions on exact implementation have yet to be announced.

News Briefs - Australia, Canada, Ireland, South Africa, USA

Australia – Survey says distance based congestion charge would change behaviour

According to AAP, reported by Perth Now, a survey from the University of Sydney has indicated that a distance based congestion charge of A$0.05/km (US$0.08 mile) at peak times could see 22% of peak commuters driving at different times (assuming a charge between 0700-0930 and 1630-1830) and 13% to shift to public transport.

The survey comprised 1000 adults. 66% said they had no flexibility to change travel times for commuting, but the other 34% said they did.

Obviously a survey isn’t a wholly reliable measure of behaviour, but what I find telling is the potential for time shift. Far too many think congestion pricing is about mode shift, when there is as much (if not more) to gain from changing time of travel to periods when there remains spare road capacity, which means getting optimal use of the network.

Canada - British Columbia debates road pricing

According to Straight.com, British Columbian Green Party leader, Jane Sterk, has come out in favour of "pay-as-you-drive" road pricing for Vancouver, to reduce congestion and raise revenue to pay for public transport.  The same article notes that the current Minister of Transportation and Infrastructure for the province, Mary Polak (Liberal), says the issue is up to the cities to come up with a proposal and convince the provincial government that it has public support, whilst the Opposition spokesman Harry Bains prefers to consider other measures first.  The general election for British Columbia is on 14 May.

Meanwhile, the Delta Optimist has published an opinion piece by Ted Murphy who says that road pricing is likely to be the best option:

It stands to reason those who put the greatest strain on the system, and those who are most likely to benefit from any improvements, should be the ones that pay the largest share of the tab.

Conversely, it doesn't make much sense for homeowners, who are an easy mark but don't necessarily tax the transportation network, to continually be gouged every time TransLink is in need of more cash.

There's much to be worked out when it comes to road pricing, and there will undoubtedly be resistance to the idea of paying to traverse roads that up to now have been free, but at the end of the day I suspect it will be the favoured option.

It's not a question of if, but how, they're going to extract more money from us, so they might as well do it in the fairest way possible.

It isn't clear as to whether British Columbia voters think the same way.

Ireland - manual toll booths add costs to trucking firms

The Independent in Ireland reports that toll booth barriers cost them on average an extra (Euro) 0.99c each time (US$1.30) in wasted fuel.  This is with DSRC toll tags that enable automatic payment, but require trucks to slow down to a crawl to trigger the lift of the barrier.

This is crazy of course. The M50 toll road in Ireland was converted to electronic free flow a few years ago, largely because of congestion (it being the ring road for Dublin).  There ought to be a transition towards at least a mix of free flow lanes and barrier lanes.

South Africa - 24 years to repay debts for Gauteng Freeway Improvement Project

Eyewitness News reports that the South African National Roads Authority Ltd has said that it will take 24 years of toll revenues to repay the debts incurred to build the Gauteng Freeway Improvement Project. This is based on the (R)30c/km (US$0.05 per mile) rate agreed by the Government.  The maximum monthly that can be charged is R550 (around US$61).

USA - Maryland - Intercounty Connector exceeds forecasts

At a time when there are more than a few examples of toll roads that have demand well below forecasts, it is perhaps good news to report on the InterCounty Connector in Maryland (Maryland Route 200), a fully electronic toll road that opened in 2011.  According to the Washington Examiner, estimates of 30,000 daily users by June 2012 have been exceeded on the western end of the road by September 2012 (to 35,000) and not far behind on the eastern end (26,000).  The road raised US$19.7 in the year ended June 2012 compared to projections of US$18.7 million.

Singapore assessing GPS based urban congestion charging

The Star Online reports that the Singapore Land Transport Authority has been trialling a GPS based electronic road pricing system on one road for a year, with the intention being that such a system might replace the existing gantry based electronic road pricing scheme.

According to Yahoo:

"Kapsch TrafficCom, MHI Engine System Asia and NCS, ST Electronics (Info-Comm Systems) and IBM Singapore, and Watchdata Technologies and Beijing Watchdata System were awarded the tender" in 2012 to develop a system within 18 months as replacements for the ERP system, each getting S$1 million (US$812,000) to do so.

Singapore's existing system has been the benchmark for urban congestion charging since it was introduced in 1997.  It charges different prices by location and time of day at all of the charging points, enabling differentiated pricing.  Prices are reviewed regularly up or down, depending on congestion levels, with the intention being to maintain minimal levels of service speeds.  As a result, congestion on Singaporean roads is relatively rare for a city of its size.   It is efficient pricing par excellence, and a far cry from the very blunt charge in London, and the slightly less blunt charge in Stockholm.  Revenue is not a relevant influence on prices.

If successful, the GPS trial could mean 80 gantries currently used for Singapore's congestion charging system would be replaced, and vehicles equipped with the existing prepaid card based tag system would need new charging equipment installed.

However, the report doesn't include good news for those with concerns about privacy, as it says it will be used to enforce other laws:

like catching speeding vehicles and those which beat red lights, spotting illegal parking or tracking hit-and-run drivers.  It can help find stolen cars, assist police in solving certain types of crimes, and aid in tracking offenders.

Singapore's authoritarian reputation appears to be the chief concern.

Some bigger questions arise, as such an all pervasive system that would charge for every kilometre travelled could replace the punitive ownership taxes, by focusing on usage.  Singaporeans seem to treat the ownership taxes as just another cost for owning a car, although the other deterrent to ownership is the limit on the number of cars that are registered - people buy and sell and bid for a limited number of permits to own a car that can double the cost of owning a car.  The result, according to the article, is only 12 in 100 own a car in Singapore, compared to 24 in 100 in Hong Kong, a similar city "state", which does not have restrictions on car ownership and punitive taxes (but car parking is largely provided by the market, which prices parking at a premium in this territory with land scarcity in its inner city areas).

Odds are that Singapore will transition to distance, time and location based urban congestion pricing within the next few years.

In the meantime, the Singapore Land Transport Authority is now assessing the outcomes of the trials to consider the next stage, which may be a tender for full implementation.  However, there is currently no deadline for implementation of a next generation ERP system.