Saturday, 27 November 2010

Consult Australia promotes Brisbane congestion charge to subsidise rail

The Brisbane Times reports that Consult Australia (formerly the Association of Consulting Engineers) is proposing a congestion charge for central Brisbane, in the form of a cordon, with the surplus revenue used to subsidise the proposed Cross River Rail project.   The A$8.2 billion (US$7.9 billion) project involves an 18km underground railway tunnel to shift suburban rail services from existing lines, but is itself financially nonviable. 

The principle is not wrong, and certainly there are strong merits in using pricing to manage congestion and provide a new source of revenue.  The wider report itself is strong on economic efficiency and is a valuable contribution to promoting debate on financing transport improvements and achieving better outcomes for mobility, environmental and financial sustainability.  The principles and idea are worthy.  So should form guidance for future policy.

However, from the point of view of detail it is far from clear to me that such a charge could ever remotely cover more than even a tenth of the cost of the rail project over the long term, given the likely price range viable for Brisbane and the sort of revenue that could be expected.  My estimate is that it would be lucky to get more than A$50 million - A$80 million per annum after costs, depending on location, timing and pricing of a central Brisbane cordon.

More importantly, could it be politically saleable to motorists to be forced to pay an additional charge for driving to downtown Brisbane and for the money to go into an extraordinarily expensive rail scheme.  Once motorists are paying more efficient prices for road use, the case for subsidising parallel rail corridors deteriorates significantly.   It would be far more reasonable to use such charges to fund other road improvements, or offset other charges.   Indeed, the impacts on land use patterns should be assessed, as such a charge will reduce the attractiveness of the Brisbane CBD for some businesses, a point which the rail project is unlikely to fully offset (but which changes in taxes could).

Naturally, any congestion charge will actually benefit any rail operations because the relative price difference will increase patronage by rail.  Yet, the principle of congestion pricing, which is to match peak demand with pricing to ensure efficient utilisation of resources, should also be applied to rail. 

It is also worth noting the mistakes in the Brisbane Times article which said:

"Similar schemes have been trialled in London, Singapore, The Netherlands and tried and rejected in Manchester, Stockholm and New York."

London and Singapore schemes are hardly trialled, being in place since 2003 and 1998 (or 1975 if you take the original Singapore area pricing scheme).  The Netherlands has no scheme and no trial (but a series of attempts thwarted at the last moment due to political imperatives).  Manchester rejected it.  Stockholm DID trial and now has a congestion charge.  New York had proposals, but they too have not withstood political pressure.

How hard is it for journalists to accurately research congestion charging?

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