For successful implementation of a road pricing program, strive for simplicity in policy goals and strong championing of the program by the executive and legislative leaders.

Experience from road pricing programs in Europe and Asia

London; England; Stockholm; Sweden; Singapore; Czech Republic; Germany; The Hague; Netherlands

Background (Show)

Lesson Learned

Congestion pricing programs face political, institutional, and public acceptance concerns everywhere in the world. Many of these concerns can be solved or overcome when the road pricing policy and implementation is led by a strong program manager and championed by powerful leaders in government, particularly at the legislative levels. Over a 12-day period, from December 7 to 18, 2009, a multidisciplinary scan team from the United States interacted with the experts in Europe and Asia to develop an understanding of factors that contributed to the successful implementation of road pricing. Based on their international experience, the scan team offered the following lessons learned on addressing political and policy considerations.

Strive for simplicity in identifying policy goals, public messaging, business rules, and technology solutions.
  • Stockholm Experience. Stockholm’s Lidingö Rule was created to provide an exemption from the congestion tax to Lidingö Island residents, who must cross the Stockholm charging zone to access the national road network. The rule allows free passage for any vehicle that exits the charging zone within 30 minutes of entering the zone at the Lidingö Island control point or vice versa. This exemption maintained a policy of free access to the national highway network, but added more than US$20 million in capital and operating costs. It also added considerable system complexity to toll operations because every vehicle needs to be tracked to verify if it is making a qualifying trip for this exemption. If one gantry fails to operate properly, all vehicles during that period must be assumed to qualify for the Lidingö Rule and are exempt from the congestion charge.

    Stockholm advanced simplicity in its permanent system implementation through a number of revisions during the 11 months between the referendum and the activation of the permanent system. The first was a conversion to fully video-based transactions using automated number plate recognition (ANPR), eliminating the cost of transponders, DSRC (dedicated short-range communications) field equipment, and operations to support a second payment method. Second, a rule requiring that congestion taxes be paid by the day after the charge was incurred was revoked. This allowed the elimination of a costly system of payment channels, including Internet, retail locations, and stand-alone kiosks. Instead, drivers receive a monthly billing statement from the state for their congestion tax transactions, which saves significant operating costs and simplifies the system for drivers. Finally, these changes were accommodated by an alignment that placed the congestion tax program and the national vehicle registry under the same organizational oversight, creating efficiencies in data sharing and invoicing.
  • Germany Experience. To comply with European Union (EU) Directive 2004/52/EC, which requires equal treatment of foreign vehicles in domestic road pricing programs, the German truck tolling system was required to establish a manual payment option for trucks that did not acquire an in-vehicle unit. While only 10 percent of truck transactions are paid via the manual system, manual transaction processing represents over one-third of the total operational costs.

    Although simplicity in use remains a key goal, the technical design of the pricing system can get complex. German business objectives for the truck tolling system included the ability to have a flexible road network for expansion and scalability, as well as a flexible tariff schedule. These objectives were achieved through a complex remote device management process by which changes in the road network and pricing are centrally propagated to all users’ onboard units (OBU) in a seamless and consistent manner. The system’s sophistication requires maintenance of a complex network of geographic data in five distinct layers to detail roadway links, distances, locations, and related tariffs and decision analytics. System maintenance requires regular updates of 640,000 OBUs with 600 geographic data changes per year and 400 annual tariff changes. While the system meets the goals established, it requires a high level of technical input and system administration to ensure accuracy of OBU functionality in a secure manner.
  • London Experience. London began its congestion charging program with a simple set of policy objectives that prioritized reductions in traffic volumes and related congestion. The program’s well-documented success in both the original charging zone and the western extension created roadway capacity. This newfound capacity provided an opportunity to address a larger set of urban needs, including new bicycle and pedestrian uses of streets in the city center and infrastructure modernization such as water supply. These actions have consumed street capacity to the extent that traffic congestion in central London is reportedly back to levels experienced before congestion charging. By attempting to address a broader set of objectives after successes in congestion reduction, the London system has lost ground in its simple origin of congestion reduction.
Understand that strong champions are critical to implementation of road pricing, and successful programs are characterized by executive and legislative leaders serving as program champions.
  • London and Stockholm Experience. Executive champions, such as former London Mayor Ken Livingstone and Stockholm Mayor Annika Billstrom, led the charge to implement road pricing to improve livability and sustainability in their capital cities, despite fervent opposition and divided public support. Their vision, understanding, and political aptitude created the executive mandate for road pricing and laid the framework for the political coalitions and legislative changes required to institute congestion pricing. In Stockholm, a strong city manager directed the congestion pricing program implementation, and the London program management benefited from key leadership appointments at Transport for London (TfL). In both cases, agency leaders worked in concert with elected city executives to ensure implementation aligned with overall objectives of the pricing program.
  • The Netherlands Experience. After the scan team’s visit to the Netherlands, the ruling government coalition dissolved and the Dutch champion of road pricing, Transport Minister Camiel Eurlings, resigned. Eurlings set road pricing as a national priority, so his departure created a vacuum in leadership, project guidance, and legislative action in early 2010. A number of political parties still support the distance-based road pricing system, and the leading party in the former government coalition, the Christian Democratic Alliance, has said it will recommend a revised version of the distance-based charge in an upcoming proposal. Nonetheless, the Netherlands’ comprehensive, multidisciplinary approach to guiding implementation has suffered a setback because of changes in leadership and champions.
  • Singapore Experience. In contrast to the Netherlands experience, the consistency of Singapore’s governmental leadership and singleness of purpose at Land Transport Authority (LTA) to strive for a sustainable and effective transportation system has been a hallmark of the road pricing program’s success.
Road pricing programs in Europe and Asia offer important lessons on exploring the use of market-based approaches to address traffic congestion and improve mobility. Simplicity in program goals and strong championing of the program by the government and in particular by executive and legislative leadership are critical to the successful implementation of road pricing initiatives.

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Reducing Congestion and Funding Transportation Using Road Pricing In Europe and Singapore

Author: Robert Arnold, Vance C. Smith, John Q. Doan, Rodney N. Barry, Jayme L. Blakesley, Patrick T. DeCorla-Souza, Mark F. Muriello, Gummada N. Murthy, Patty K. Rubstello, Nick A. Thompson

Published By: Federal Highway Administration, U.S. DOT

Source Date: 12/01/2010

URL: http://international.fhwa.dot.gov/pubs/pl10030/pl10030.pdf

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Lesson of the Month for May, 2011 !

Benefits From This Source

After implementation of the congestion charge in London, the number of vehicles entering the charging zone decreased by 25 percent, travel speeds increased by 30 percent, trip times decreased by 14 percent, and traffic delays plummeted by 25 percent.

In Germany, vehicle-miles traveled using cleaner trucks (Euro 4 and 5) rose 60 percent from 2 percent in 2005 to over 62 percent in 2009 because of the nationwide heavy-goods-vehicle tolling program.

In Singapore, the Electronic Road Pricing program has enabled maintaining target speeds of 45 to 65 kilometers per hour on expressways and 20 to 30 kilometers per hour on arterials.

The Stockholm congestion tax project reduced traffic congestion by 20 percent and vehicle emissions by 10 to 14 percent in the Central Business District.

Lessons From This Source

Be prepared to face the opportunities and challenges posed by political timetables, project deadlines, as well as pricing-equity issues for road pricing procurement and implementation.

Beware that schedule and costs of road pricing projects are affected by various factors including legislative outcomes, clarity and specificity of scope, and contracting methods.

Consider advantages of open-source designs and beware of legal challenges in road pricing systems procurement.

Consider stakeholder outreach and education, transport modes that offer an alternative to driving, performance measurement, and area geography with high importance in the planning phase for road pricing programs.

Create performance standards for operational effectiveness of a pricing program, define business rules for back-office operations, and refine operations practices based on needs.

Define clear goals and pay attention to key institutional and technical factors for successful implementation of road pricing programs.

Develop a statutory and legal framework for as a foundational step for levying road pricing fees and utilizing revenues.

Develop public outreach programs based on the cultural and political context of the project location and provide clear, salient, and timely messages about the purpose and benefits of congestion pricing.

Enforce congestion toll collection and create integration linkages between pricing system and motor vehicle registries to process violations.

For successful implementation of a road pricing program, strive for simplicity in policy goals and strong championing of the program by the executive and legislative leaders.

Understand that while the viability of pricing programs is impacted by political actions, pricing signal is a potential tool for developing a sustainable transportation system.

Use business and functional requirements to guide technology selection for a road pricing program and understand that the technology selected initially evolves over time.

Lesson ID: 2011-00565