Tuesday, 27 November 2012

Dartford Crossing tolling policy is a public relations disaster

I don't believe tolls at the Dartford Crossing should be abolished, quite simply because the Crossing does cost a lot of money to maintain and there is a crying need for more capacity, which the toll can help fund.  The toll also could manage damage at peak times, also funding the next crossing.

I believe that Dartford Crossing needs three key policy measures:
- The replacement of manual toll booths with fully electronic free flow tolls;
- Charging that varies according to demand, with peak, interpeak and offpeak rates, which vary by direction;
- Financing and funding of substantial new capacity.

Now the first and third of these is underway, but what has actually happened first is a series of toll increases, without any improvement in service.

This is a disaster that adds to the overall public hatred of tolls and lack of trust about how highways are managed and charged for.

Dartford Crossing toll booth bottleneck

On October 7 tolls on the Dartford Crossing increased, with news reports indicating that it was to pay for the conversion to electronic free flow tolls.  I have never encountered a toll road anywhere else in the world where a price increase was sold on the basis that users paying now were paying for a future benefit that hasn't happened yet.  

Surely the cost to convert to electronic tolls should have been borrowed and then recovered through the tolls collected, once motorists had the benefit of the elimination of toll booths.

The Dartford Crossing is congested on a regular basis, in part because there simply isn't enough capacity to handle the demand (because there are no other fixed road crossings of the Thames for another 14 miles), but also because the toll booths create queues.  Eliminating the toll booths will make a big difference to the congestion.

According to the Highways Agency:

Evidence from the Highways Agency Traffic Information System over the past 5 years consistently shows average delays of between 7-11 minutes for the slowest 10% of journeys on  the M25 J30-7 section which includes the Crossing

Revenue is around £74 million per annum, of which £36 million is spent on maintaining the bridge, tunnels and approach roads, the rest is surplus.

Of course the conversion to electronic free flow has a capital cost, but there should be, after an initial bedding in period, operating cost savings resulting from this (although they are likely to be small). The current system costs £15.18 million to operate per annum according to the DfT. Yet the economic cost savings from eliminating one of the bottlenecks on this route should be considerable.

It's not that the DfT hasn't applied its own economic appraisal criteria correctly, it is just that options are blinkered towards Pay As You Go spending, rather than taking a commercial approach and treating the users as customers who pay for a service.

The narrow financial benefit to the state of this increase is more than offset by the increased resistance towards any future tolling.  That's why a radically different approach should have been taken:

1.  Electronic free flow tolling should have been announced as coming, with no increase in tolls in advance of the new system, in recognition that such technology has been available for over a decade and that the users of the Dartford Crossing have been contributing "above and beyond" that of other motorists for years.

2.  Openness about the Dartford Crossing tolls, making it explicit that around half the toll is needed to pay to keep the existing crossings and approach roads in good condition, and the other half is to be put into a dedicated fund now paying for the investigation and design (and reserves for future construction) of the next crossing.  That, of course, contradicts the point I made before that toll increases shouldn't fund the conversion to free flow tolls, but the other choice is to halve the toll until the new crossing is financed and needs the revenue to pay for it.  Far better for the public sector costs of investigating the options to be recovered from the users now.

3. After the electronic tolling system has been put in place, introduce a performance based set of charges based on congestion.  Have bands for peak, interpeak and off-peak charges that get reviewed every six months, with increases or reductions based on maintaining a minimum level of service level on the crossings.  The toll free overnight period can remain.   This should mean future increases are based on maintaining free flow conditions instead of increases for the sake of inflation.  It should also allow decreases or changes in the peak periods, including directional based variations over time.   By introducing congestion pricing, it may even offset the need for inflation based increases.

What a policy change would do

For a start it would cost the exchequer a few million pounds of deferred toll increases, but it would also start to stop the overwhelming slide of cynicism and opposition to tolls at Dartford.  There will also be politicians and lobbyists who will call for the toll to be removed, but the biggest gripes about the toll are clear:
1.  It causes congestion to collect the toll;
2.  "We've already paid for the road" we're just used as a cashcow for the government; and
3.  We pay to use a congested bottleneck of a route (service quality is poor).

Free flow tolls will eliminate the first gripe and go some way to addressing the third, and be a showcase as the first free flow open road toll system in the UK (London Congestion Charging does not count).  With reductions in delays will come some greater tolerance for the toll.

The second gripe needs transparency that the toll does pay for these crossings to be maintained, but also needs the funds directed towards new capacity.  That will make some sense to motorists, especially if they believe progress on new capacity will come sooner rather than later, which itself will deal to the third gripe.

However, finally, the use of congestion pricing (with offsetting decreases in off peak pricing) will help ensure the service on the route is maintained at a minimum level.  Albeit that this probably needs to be matched with an enhanced bus service or local residents' discount, as they will be aggrieved at peak charging.

The Dartford Crossing example is a clear case of the difference between how a political/bureaucratic framework for managing roads delivers results (which are about state revenue and monetised benefits for users) compared to a commercial customer based framework. 

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