UK road pricing could halve congestion but not feasible until 2015 - report

July 20, 2004

A major report commissioned by the UK Government says that comprehensive pricing of roads in the UK could cut congestion in half and provide major air quality and other benefits, but that it isn't technically feasible for ten years. Actual traffic would be reduced only 3 to 4%, according to modeling. Net benefits would be about $17b to $20b/yr (10 to 12b pd).

Road pricing at optimum levels would actually generate more revenue than present fuel taxes, but because motorists already 'overpay' and the government is committed to revenue neutrality, tolls would be set slightly below optimum. The modeling was based on marginal social cost pricing, an EU favorite. 88% of this is congestion cost.

The "Feasibility study of road pricing in the UK report" was produced under the direction of representatives of motoring organizations, transport policy professionals, environmental and independent groups, with the help of consultants, and paid for by the UK Government. A Department for Transport (DfT) official chaired the steering group meetings.

The report sums up:

"Road pricing would help unblock roads to the overall benefit of the economy and the environment. The time savings and reliability benefits that we would get in return for the prices we pay are potentially large - analysis suggests as much as $20b (12b pd) a year... If road pricing was implemented nationwide, we would all face different prices for the trips we make. When we travelled on uncongested roads we would generally pay less, but on congested roads we would generally pay more. Paying the family road bill would probably be like paying the phone bill.

"While there would be overall benefits, national road pricing would have impacts on all our lives, and on all businesses, which are difficult to predict. It would make us think more about the way we travel and the way we organise our lives. At busy areas and times, there would be a financial incentive to share a car or to travel earlier or later. Bus operators could improve their service frequency with less congestion and higher demand. Where road charges were high, that would signal that road improvements should be considered; and with pricing, expensive road infrastructure, like tunnels in environmentally sensitive areas, could make economic sense."

They report nationwide road pricing would "probably become technologically feasible in ten years time," and that even then implementation would be a "massive and complex task, requiring concerted action and cooperation at all levels of government over a number of years."

Greater public understanding and support would also be needed than exists now, they said.

"The benefits of road pricing come not so much from the overall cost, but from the differentiation in cost that it makes possible. Major benefits could be obtained without road users overall paying more than they otherwise would in fuel (tax). But additional revenue could fund more transport infrastructure or services, as well as providing higher environmental benefits."

They suggest meanwhile building on the London congestion toll and M6Toll to "turn the discussion of road pricing from the abstract to the practical."

The report puts much stress on public support stating: "To put it bluntly, if the benefits are so good, and the technology can deliver, why aren't more public authorities around the world implementing road pricing to improve their competitiveness, protect their environment and promote social inclusion? The simple answer is that any form of road pricing will bring about change. Explaining the benefits so that people understand that change will be for the better is difficult. Most studies also concentrate on the overall net benefits to road users and others, neglecting the fact that road users are every bit as diverse a community as society at large. We all use roads, either as pedestrians, cyclists, drivers, or as passengers in cars or buses. Even if we never left our homes we would consume goods that needed to be delivered to us by road. We recognise that congestion is a growing problem, but we want to understand the implications of change as it will affect us personally."

Road pricing must not be seen as a new tax if it is to be accepted: "People need to be confident that road pricing is designed to deliver transport and other benefits, rather than as a means of raising more revenue."

Public attitudes crucial

Studies commissioned by the group found that there is majority support for the general principle of paying for road use more directly than the fuel tax with only 11% supportive of the status quo. At the same time they found great suspicion that toll charges would end up costing them more than the present system. There is 60% public support for road pricing so long as overall costs of motoring are not increased. The majority rises 66% if there are good alternatives to driving. The study found no significant differences of attitude among different income groups. Greatest support for road pricing is in London and Scotland.

The report repeatedly emphasizes the importance of "trust" among the public in government to deliver on promises.

It has good summaries of the experience of California road pricing (91X and I-15 San Diego) but no reference to the world's largest road pricing operation on the Hudson River crossings in New York.

It notes that Brits are traveling a 17% greater distance to work, doing 5% more vehicle-miles of leisure travel than ten years ago, and that truck traffic is up 40% over 20 years. 70% of journey to work in the UK is by car and the proportion is rising. There has been a sharp rise in average journey to shop - apparently in spite of strong planning powers deployed to to keep shopping local. The fastest rising category of traffic in the UK is the light van, perhaps as internet and catalog purchases rise in importance and quick deliveries are emphasized over inventory.

"Many urban areas are already seeing the peak hours spreading, as drivers travel later or earlier to try to beat the traffic, with main routes and urban centres already at or close to capacity at peak hours. Government statistics show that urban traffic growth is currently faster on minor urban roads than on major ones, and the continuing projected growth in congestion is principally focused in outer rather than inner urban areas. In terms of journey patterns, many cities are predicting high levels of growth in orbital journeys, especially associated with new developments on the fringes of cities. These typically have fewer public transport (transit) alternatives than radial routes into city centres."

The report discusses the non-linear relationship of road loading and congestion - how modest changes in traffic can have major impacts on congestion levels. It is this which gives power to variable pricing to help reduce congestion. Relatively small movements of traffic by time of day or route can have significant effects on the amount of free flow in the network.

The report cautions against exaggeration: "However bad some parts of the network are, the country is not grinding to a halt."

Market-based pricing has many benefits

The report argues the case for properly priced increases in capacity:

"There will continue to be a case for expanding road capacity where necessary. But it has to be accepted that this will not always be feasible. This is most obviously the case in urban areas, but there are also well known constraints and sensitivities in the countryside, where Government policy has a strong presumption against schemes that would affect significantly environmentally sensitive sites, or important species, habitats or landscape. But, even in such areas, there may be an overriding need to expand road capacity while limiting environmental damage. Road pricing would help in two ways. If a price is high, it acts as a signal for investment - drawing attention to a need. It also provides a potential source of funds for the investment. And in an area where there was general pricing, there could well be a case for a tunnel providing a premium service to those prepared to pay more, on similar lines to the California 'HOT' lanes... Tunnels enable traffic to be routed under cities or sensitive natural environments (though they are not without environmental effect), and it is possible to 'scrub' exhaust emissions in tunnels to clean them up before they are released into the wider atmosphere. Tunnels are expensive, but charging has made it possible for them to be constructed in cities in

Norway, in Melbourne and, currently under construction, in Versailles in the Paris suburbs."

The report says about 20% of car commuter in peak hours might be persuaded by road pricing and transit availability to switch to a bus or train. The report stresses the local nature of congestion, and varying causes based on different make-ups of traffic.

Cordon and area charging schemes are described as "blunt" because they don't take account of distance traveled. And they are also limited in their coverage. More precise pricing is needed which takes account of of time, place and distance in charging.

It argues that DSRC - which it terms 'microwave' - would be too expensive and visually intrusive to be acceptable as the basis of comprehensive pricing, though it is well suited to charging on motorway style highways with relatively few entry and exit points.

Cars do not have any reliable equivalent to the European trucks 'tachograph' or electronic distance meter (odometer in US usage). Therefore the Swiss truck tachograph won't fly.

Therefore location finding equipment will be needed, the report argues. This might use some terrestrial wireless network such as cellular, but satellite location finding is most likely to be the primary technology.

But it argues against heavy reliance on any single technology of the kind the Germans are attempting with GPS for truck tolling.

"There is still a question regarding the reliability, integrity and availability of satellite positioning technologies for use in charging applications."

The report notes that existing US-provided GPS while usually accurate has serious problems near high buildings, in mountainous terrain and in forests. Moreover it says accuracy is not yet sufficient to be confident of a vehicle's position where two roads run close together.

"If the charges on the two roads are different, the vehicle may be wrongly charged. Where such error is possible, the legal enforceability of one charge rather than the other could be in doubt."

If reliance on any one technology is unwise, the report says, getting the different technologies to work together in an on board 'box' becomes the major challenge.

"On the basis of expert advice, we estimate that the equipment necessary to deliver a full positionbased charging scheme using satellite technology will not be available in a mass market, low cost form, until at least 2014."

Pricing as envisaged will require the unit to be built into new vehicles in the factory making it necessary to develop a European-based standard, producing a 'Vehicle Directive' from the EU.

Toll rates

The modelling produced tolls as high as 80p/km ($2.25/mi) about a third the peak tolls paid every day on 91X in Calif. Only 0.5% of trips would pay the peak toll. Caps of 50p/km ($1.40/mi) could be imposed without significant losses in congestion relief but after that the modeling suggests major losses develop. Cordon tolls as in Norway and Singapore produce benefits but significantly lower benefits than distance-related tolling.

The report guesses the cost of on-board units would be $175 each (100pd) and some $5b (3b pd) to fit the whole UK vehicle fleet. Annual operating costs could be $3b to $5b (2b to 3b pd). This sounds expensive but British motorists spend about $100b (60b pd) a year on their cars.

Enviro-puritanism rejected

    Alastair Darling, the transport minister had a shot at the popular environmentalist view that transport should be restrained by government policy - vehicle-miles travelled curbed. He said: "Our job is to help people travel, not to stop them. The challenge for us is how to meet people's need and wish to travel whilst meeting environmental aims. As the economy continues to grow, and with increased prosperity, we will want to travel more and the demand for goods from all over the world will grow."

The program assumes an increase in the UK population of only 7.6% or 4.5m to 64m in 2025.

" Looking ahead over 20-30 years we can't try to build our way out of the problem - the cost environmentally and financially is unacceptable. Nor can we accept eventual gridlock - the inevitable consequence of doing nothing. Therefore Mr Speaker, we have to examine whether we can make use of new technology as it becomes available to make more efficient use of roads... (I)n the next 4 years, we will be introducing charging for all (trucks) using UK roads based on the distance they travel. Accompanied by a reduction in fuel duty, overall the UK haulage industry won't pay more. And this would allow us in the future, for example by varying charges, to encourage lorries to use motorways at off peak times."

In response to the Road Pricing Feasibility Study, Darling said that government would lead a "national debate" on road pricing, working with relevant agencies to examine how and when pricing might work. A detailed response to the Study will be published in due course.

"There is still a lot of work to be done before we could be sure if this could work. But one thing is clear, doing nothing would be the worst possible option. Of course we need to invest in public transport - and we are - but that won't be enough on its own. There needs to be debate about what would make pricing acceptable to motorists. We must build a public consensus around the objectives for road pricing and how to use the revenues".

Transport secretary Darling also announced withdrawal of central government for a number of rail projects - light rail in Manchester and Leeds and Crossrail in London- saying they have gotten too expensive to justify government support.

Existing tolling

The UK has three local schemes they call road pricing (variable tolls):

* the Central london Congestion Charge of $8.50 (5pd) covering 8 square miles 7am to 6.30pm weekdays, free other times

* the Dartford Crossing of the Thames on the eastern portion of the M25 Orbital or beltway operated by the Le Crossing Company daytime charges are graduated for different vehicle classes but at night 10pm to 6am) all vehiicle classes are charged the car toll of $1.75 (1pd)

* pricing on the medieval era main street of Durham by the famous castle and cathedral

A Lorry (truck) Road User Charge (LRUC) by the Customs & Excise agency will begin in 2007/8. Darling said: "The intention is that the charge payable under the scheme may vary according to lorry size, road type, and possibly time of day. Because UK hauliers already pay towards the costs they impose in the UK (through fuel and vehicle excise duties), the Government will introduce offsetting tax cuts through a reduction in hauliers' fuel duty at the same time as introducing the charge."

The procurement process has begun and the project has little opposition. It is supported by major UK trucking organizations.

The report lists other toll projects in the UK:

(1) Non-statutory tolled undertakings - a number of private ancient bridges and roads that charge tolls for the right to cross private land. The owners/operators set their own tolls and are not regulated in any way. Examples are College Road in Dulwich, the Batheaston Bridge nr. Bath and Roydon Road in Stanstead Abbots.

(2) Privately owned statutory tolled undertakings - eight small ancient bridges built and tolled under Private Acts of Parliament, (some going back to the 18th Century. Examples are the Clifton Suspension Bridge in Bristol, the Aldwark Bridge in Yorkshire and the Dunham Bridge in Lincolnshire). Although these undertakings are all on the public highway they are either privately owned or operated by a private trust. They can only charge tolls that meet the costs of operating the undertaking. Some undertakings are allowed to make a reasonable return upon investment. (That's big of them! TRnews) An application has to be made to the Secretary of State for Transport to revise toll charges at these undertakings; a process that can include an independent public inquiry.

(3) Local authority statutory tolled undertakings - five larger local authority crossings of river estuaries promoted since the 1920s consisting of the Humber, Itchen and Tamar Bridges and the Mersey and Tyne Tunnels. Except for the Itchen Bridge (where the tolls are effectively a congestion charge) and the Mersey Tunnels (where increases in line with the retail price index) the undertakings have to apply to the Secretary of State for Transport to revise their tolls. They can only charge tolls that meet the costs of building and operating the undertaking.

(4) Central Government promoted tolled undertakings - currently this group* consists of the Severn Bridges and the M6 Toll Road. These are large undertakings that have been designed, built, financed and are being operated by private consortiums under concession let by central government.

REFERENCE: Feasibility of Road Pricing in the UK: a report to the Secretary of State can be downloaded at TOLLROADSnews 2004-07-20

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