Etc, Etc March 2008

Supplement to

THIN KING HIG HW AYS Volume 3 Issue 1 March 2008

The international road pricing and electronic toll collection review

Fabrizio Palenzona and Kallistratos Dionelis predict the future for Europe’s roads

Bern Grush on Toronto Bryan & Blythe on smartcards Miguel Angel Martinez on green tolling Andy Graham on Scotland Andreas Kossak on Germany Duncan Matheson on privacy the

INTELLIGENT

choice

Bob McQueen on urban pricing Steve Morello on Easytrip Simon Goodale on consumer issues Andrew Pickford on London Ondrej Pribyl on enforcement Mel Byrne on revenue assurance Policy • strategy • technology • finance • innovation • implementation • integration • interoperability

We did Stockholm

Traffic reduced with 15-20% Travel time reduced with 50% Air pollution significantly reduced

The city of Stockholm is a fast growing city, putting a big pressure on the city’s road infrastructure. As a response to this challenge the city council decided to deploy a congestion tax charging scheme using Q-Free´state of the art technology. Q-Free supplied the complete road side system, On Board Units (OBU) and operational services to the Stockholm Congestion tax Charging System. The system was a great success for all involved parties and after a year of service the results speak for themselves. Learn more about our success stories at www.q-free.com

Q-Free ASA, Thoning Owesensgt 35c, NO 7443 Trondheim, Norway, Tel +47 73826500, [email protected]

Foreword Thinking

Kevin Borras is publishing director of H3B Media and editor-in-chief of Thinking Highways and ETC, etc. To contact him email [email protected]

Two for the price of one The saying ‘you learn something new every day’ was only half right for me last week... I turn 40 shortly after this issue of ETC, etc “hits” the “streets” (I suppose flops onto your desk is a bit more accurate but a little less dramatic-sounding. I share this fact with you not so I’m showered with birthday cards (although I only got four last year so a few more would be nice) but to give the impression, that as I approach my fifth decade on the planet I should, at least, have accrued a fair amount of information both useful and useless, but every now and then I find something out that surprises me. Last week while watching the news on the BBC I learned two things, both of which succinctly met my “surprising” criteria. The first was that the UK has a Minister for Postal Affairs, and the second was the “they” are thinking of updating the Seven Deadly Sins. I really don’t mean to belittle the postal industry in any way. shape or form, but discovering

Editor-in-Chief Kevin Borras Sales and Marketing Luis Hill, Tim Guest Design and Layout Phoebe Bentley, Kevin Borras Sub-Editor and Proofreader Maria Vasconcelos Senior Editorial Advisors Bern Grush, Jack Opiola, Andrew Pickford, Harold Worrall Contributors to this issue Phil Blythe, Hannah Bryan, Mel Byrne, Kallistratos Dionelis, Simon Goodale, Bern Grush, Andreas Kossak, Miguel Angel Martinez Olague, Duncan Matheson, Bob McQueen, Steve Morello, Fabrizio Palenzola, Andrew Pickford, Ondrej Pribyl, Eric Wurmser

Web Design Code Liquid Visualisation Tom Waldschmidt Conferences and Events Odile Pignier Subscriptions and Circulation Pilarin Harvey-Granell Financial Director Martin Brookstein Editorial and Advertising H3B Media Ltd, 15 Onslow Gardens, Wallington, Surrey SM6 9QL, UK Tel +44 (0)208 254 9406 Fax +44 (0)208 647 0045 Email [email protected]

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that we have a member of the government whose job it is to look after the delivery of letters made me wonder why we don’t have a Minister for Road Pricing or Congestion Charging, or whatever we want to call it. We all send and receive mail, we all (well, most of us) drive cars and sit in traffic jams of our own making, so is that not enough of an equilibrium? A Minister for Road Pricing would, one could safely assume, have his work cut out trying to convince the good people of cities like Cambridge, Bristol, Edinburgh and Newcastle of the sociological, societal and environmental benefits (there’s one more - oh yes, financial) of implementing a scheme and it would certainly save a lot of other people who find that somewhat tricky task thrust upon them a lot of time and effort. The other seemingly unrelated news item, the one

concerning the “21st Centurification” of the Seven Deadly Sins is actually related if you think about it. The general public, it seems, are to be invited to suggest what new sins can be incorporated, although suggestions that the current lot aren’t relevant is clearly not true as I happily admitted to coveting my neighbour’s ox at the weekend. Updating the text is one thing (“thou shalt not covet they neighbour’s Lamborghini Gallardo”) but have the basics of the sins actually changed all that much? How about:“Thou shalt not sit in a traffic jam of thine own making, thereby slowly poisoning and polluting the environment with your noxious carbon emissions.” What would that come under? Sloth. Obviously. Our fourth ETC, etc focuses rather more on Europe than any other region, by the way. Still, it’s hardly a sin, is it. E

ETC etc,, a twice-yearly supplement to thinking by H3B Media Ltd in the UK.

Highways,

is published ISSN 1753 4348

Thinking Highways is published quarterly in two editions – North America and Europe/Rest of the World - and is available on subscription at £30/€40 (Europe/RoW) and US$50 (North America). Distributed in the USA by DSW, 75 Aberdeen Road, Emigsville PA 17318-0437. Periodicals postage paid at Emigsville PA. POSTMASTER: Send address changes to THINKING HIGHWAYS, 13705 North Ivy Lake Road, Chillicothe, IL 61523, USA.

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Although due care has been taken to ensure that the content of this publication is accurate and up-to-date, the publisher can accept no liability for errors and omissions. Unless otherwise stated, this publication has not tested products or services that are described herein, and their inclusion does not imply any form of endorsement. By accepting advertisements in this publication, the publisher does not warrant their accuracy, nor accept responsibility for their contents. The publisher welcomes unsolicited manuscripts and illustrations but can accept no liability for their safe return. © 2008 H3B Media Ltd. All rights reserved. The views and opinions of the authors are not necessarily those of H3B Media Ltd. Reproduction (in whole or in part) of any text, photograph or illustration contained in this publication without the written permission of the publisher is strictly prohibited. Printed in the UK by The Manson Group

ETCetc Vol 3 No 1

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CONTENTS 04

COVER STORY

ASECAP Secretary General Kallistratos Dionelis’s predictions for Europe’s road tolling future Europe

Europe A tempting piece in the Financial Times was the challenge for me to write this article on sustainable transport and the internalization of external transport costs. The FT story started by recognizing that a surfeit of buzz words can obscure the real meaning of sustainability and sustainable development. After the article makes reference to a number of alternative definitions of the term, it finally gets satisfaction accepting the Brundtlland Report from the of 1987 World Commission on Environment and Development as the definitive statement: “Humanity has the ability to make development sustainable – to ensure that it meets the needs of the present without compromising the ability of future generations to meet their needs”. So we have given a name and a definition to the mountain in front of us. Is it the end? Is it enough? Do we still need a map to climb it? Transport services play a central role in modern society and economy and are correlated to economic growth. Transport growth leads to the need to increase and better manage infrastructure capacity of several modes and continues to exert pressure on air quality – the climate and the land use. These costs imposed on society by infrastructure use are unequally shouldered by different actors in the transport system and society. Transport infrastructure generates costs and benefits related to land use which have different aspects in urban and non-urban areas. The costs and benefits of transport must be split into internal costs (and benefits) borne by the person’s transport activities and external costs (benefits) that do not affect the user and are imposed on - or offered to - others. These negative and positive externalities can only be vaguely assessed.

The analysis

From analysis to synthesis

The State can no longer play the role of the wise, benevolent strong monarch able to meet all the unlimited wishes of his subjects in the way that it could some decasdes ago. In the modern world the budgetary considerations become the key factor of defining the societal needs and preparing the phased approach to meet them. The new era of the modern State leads to new definitions and to new questions. On one hand we see the “State politician” in permanent pursuit of social targets and priorities, while on the other hand, there is the “State manager” knowing that the cash-cow period is over and efforts are urgently needed to move its balance sheet from the red. If we are to trust our political leaders, (Lisbon EU political strategy/commitment ) then, by 2010, the EU should be the most dynamic and competitive knowledge-based economy in the world, capable of sustainable economic growth, greater social cohesion and respect for the environment. One chapter of this policy covers the transport domain where the 27 EU member states have concluded that a sustainable transport policy should tackle rising volumes of traffic and levels of cohesion, noise and pollution, and achieve the internalization of the external

Is the transport service in Europe a public good or a market product, wonders ASECAP Secretary General, KALLISTRATOS DIONELIS. And, more to the point, where are the borders? 46

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TORONTO Has Canada’s biggest city finally woken up to the realities of congestion charging? If it has, says Bern Grush, then it’s not before time

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ITALY Fabrizio Palenzona’s Italian-flavoured picture of Europe

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CITY TOLLING Andreas Kossak on congestion pricing in cities - notably his home town of Berlin

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SCOTLAND Andy Graham laments the end of tolling in Scotland - and not just for personal reasons

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REVENUE COLLECTION Is your revenue leaking away somehow? Mel Byrne on Portugal’s first foray into revenue assurance. 60

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PRIVACY Duncan Matheson on the concerns generated by distance-charging policies

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SMARTCARDS Hannah Bryan and Phil Blythe investigate the slow take-up of smartcards in the UK

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LONDON As London “celebrates” the fifth anniversary of its Congestion Charging Zone, Andrew Pickford wonders which other cities are learning from its example ENVIRONMENTAL PRICING Congestion charging, intelligent transportation and the environment, all seamlessly linked together by Bob McQueen

Miguel Angel Martinez Olague wonders if approaching road pricing from an ostensibly environmental angle might just make it more publically acceptable INTEROPERABILITY Steve Morello and Eric Wurmser report on Easytrip - an innovative project in Ireland Interoperability

Interoperability

The art of the possible STEVE MORELLO and ERIC WURMSER on the future for road and driver services, using an innovative project in Ireland as a shining example

An efficient transport system is primordial for economic stability and development for all countries around the world. In many Central and Eastern European countries, and other EC and OECD countries, a significant portion of the roads including the main trunk road network are in relatively poor condition or only in fair condition, requiring major new investments to sustain economic growth of the country. This situation has led to the development and implementation of toll roads in countries like Croatia, Hungary, Ireland, Poland and Portugal, in addition to the traditional toll road countries in Europe, e.g., France, Italy, Spain and Norway. At a country-specific level and with the rising use of ETC (Electronic Toll Collection) the issue of interoperability across distinct toll roads in each country has become an increasing challenge. This article will review the Easytrip concept developed by Egis Projects, current trends in one country regarding interoperable toll (or fee) collection services and then draw some main conclusions.

Integrated services

The very notion of tolling, in general, is changing, extending the infrastructure business to include ETC, ORT (Open Road Tolling), congestion charging, road pricing and toll road interoperability. Since 2005, Egis Projects has embarked on the mission to provide fully integrated services for end users, toll road/congestion charging operators, HGV tolling companies, car park companies, etc with the development of a corresponding brand name called Easytrip Services. This business development strategy is based on managing customer relations across a range of tolling/road

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pricing sectors and stakeholders whereby Egis Projects brings to bear almost 20 years of experience in the development, launching, and operation and management of 16 toll operating companies worldwide. Based on our past PPP concession and turnkey toll projects and recent new projects (turn-key supply of an ORT system and operation for the Golden Ears Bridge in Vancouver, Dublin Port Tunnel operations, and a contract to design, build, finance and operate the first section of Vienna’s north-eastern bypass – Austria’s first PPP motorway project), Egis Projects is promoting and developing the establishment of an interoperable ETC or EFC (Electronic Fee Collection) framework within respective countries. The best example of the development and implementation of this strategy is Ireland.

ETC and EFC in Ireland

As part of its PPP programme, the National Roads Authority (NRA) developed an approach towards ETC interoperability in Ireland. The NRA imposed standard ETC encoding and processing rules and, in December 2004, launched a tender to establish an ETC clearinghouse organisation, the so-called Information Exchange Agent (IEA). In Ireland, all ETC systems implemented are interoperable from a technical point of view, allowing a tag user to cross any toll facility in the country with a single tag. The IEA aims at facilitating commercial interoperability through the mandatory exchange of both ETC

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ELECTRONIC PAYMENT Simon Goodale on putting the consumer first

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ENFORCEMENT Optimising the scope for EFC enforcement, by Ondrej Pribyl

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Advertisers Index

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Europe

From analysis to synthesis Is the transport service in Europe a public good or a market product, wonders ASECAP Secretary General, KALLISTRATOS DIONELIS. And, more to the point, where are the borders? 04

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www.h3bmedia.com

Europe A tempting piece in the Financial Times was the challenge for me to write this article on sustainable transport and the internalization of external transport costs. The FT story started by recognizing that a surfeit of buzz words can obscure the real meaning of sustainability and sustainable development. After the article makes reference to a number of alternative definitions of the term, it finally gets satisfaction accepting the Brundtlland Report from the 1987 World Commission on Environment and Development as the definitive statement: “Humanity has the ability to make development sustainable – to ensure that it meets the needs of the present without compromising the ability of future generations to meet their needs”. So we have given a name and a definition to the mountain in front of us. Is it the end? Is it enough? Do we still need a map to climb it? Transport services play a central role in modern society and economy and are correlated to economic growth. Transport growth leads to the need to increase and better manage infrastructure capacity of several modes and continues to exert pressure on air quality – the climate and the land use. These costs imposed on society by infrastructure use are unequally shouldered by different actors in the transport system and society. Transport infrastructure generates costs and benefits related to land use which have different aspects in urban and non-urban areas. The costs and benefits of transport must be split into internal costs (and benefits) borne by the person’s transport activities and external costs (benefits) that do not affect the user and are imposed on - or offered to - others. These negative and positive externalities can only be vaguely assessed.

The analysis

The State can no longer play the role of the wise, benevolent strong monarch able to meet all the unlimited wishes of his subjects in the way that it could some decades ago. In the modern world the budgetary considerations become the key factor of defining the societal needs and preparing the phased approach to meet them. The new era of the modern State leads to new definitions and to new questions. On one hand we see the “State politician” in permanent pursuit of social targets and priorities, while on the other hand, there is the “State manager” knowing that the cash-cow period is over and efforts are urgently needed to move its balance sheet from the red. If we are to trust our political leaders, (Lisbon EU political strategy/commitment ) then, by 2010, the EU should be the most dynamic and competitive knowledge-based economy in the world, capable of sustainable economic growth, greater social cohesion and respect for the environment. One chapter of this policy covers the transport domain where the 27 EU member states have concluded that a sustainable transport policy should tackle rising volumes of traffic and levels of cohesion, noise and pollution, and achieve the internalization of the external www.h3bmedia.com

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Europe environmental and social transport costs. At the heart of this targeted sustainable transport policy should be a fair transparent and efficient charging system for all modes of transport. This is a crucial political decision given that in the “conventional state” the supply side of the transport was covered by the “state” and the demand side was the “citizen”. Neither has well defined parameters in economic terms, mainly when interconnected by the “tax system” which, given its inefficiencies, is not the fairest way to organize a modern State. It is a really daring decision to move away from the simplified thinking of an (economically undefined) society which supports the State’s spending ever more for the “transport/public good” while the “citizen” should always ask for more “public transport services”.

Policy of truth

European societies and their leaders were not always clear when addressing transport matters whether growth or the environment were higher on their priority list.Without a fixed view on this the policy shapers were never sure how to apply the transport instrument and to which direction. As a result, the policy guidelines preferred to tackle the transport area in a fragmented manner with diverging views on Infrastructure, safety, Intelligent transport systems, taxation, charging policy, congestion, etc. Each European region had its own procedures for identifying and recovering costs by arbitrary charging, or by arbitrary taxation or by both. As long as the belief that “the State resources are unlimited” was the key factor, the above scenario was a functioning one. One of the enduring peculiarities of the road transport sector in this period was the fear of all the interested bodies to call the transport sector an “industry”. It is a fact that in the past the terms “public interest” and “private capital” were - in broad terms at least - mutually exclusive. Of course this dysfunction and mistrust helped us to recognize that diverse and differentiated charging policies did not encourage sustainable use of transport resources and a common framework was necessary to inject much greater consistency in the infrastructure charging. So, what is recognized under the term “transport” in modern times? Is transport a public good or a market product? Or is it both? And if it is so, then, where transport stops being a public good and becomes a product? Presently it is widely agreed that transport is a domain where under the regulating state one part (public or private entity) produces a transport product (with well defined quality and cost) and the other part consumes it. When addressing the road transport as an industry we already inject a realistic, market-oriented approach based on the eternal balance of power between the concrete and defined terms “supply” and “demand”. The commercial aspect of the road industry does not necessarily contradict the state’s priority to meet the

citizen’s concerns and requirements. On the contrary, under the new market approach, the previously obscure and undefined political messages are now translated as clear and concrete socio-economic objectives. The cumbersome, inexperienced and tardy public procedures accompanied by the absence of a legal framework were never attractive to the private industry which faced with great concern the absence of any realistic possibility to manage efficiently the political, economic and financial risks in the transport domain.

“Transport is a domain where one part produces a transport product and the other part consumes it”

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The synthesis

Within the European Union, parts of the transport infrastructure are overloaded, poor, or poorly maintained. In addition, many of the economic and social costs of transport, (air pollution, congestion, accidents, etc.) are not directly met by the users. In brief there are issues about how to fund in a competitive and transparent way major new transport infrastructures in Europe, how to define the mechanisms by which users should be charged for their use and how to agree on the ways in which the money raised by the various institutions involved, (public or private), are to be spent. All these have to be seen not as a code of fixed/static principles but as a dynamic roadmap. Interpreting wrongly the term “transport” in a simplistic and purely mechanistic way calls these fundamental principles into question. The policy makers recognize finally that the social stability, the economic growth, and the environwww.h3bmedia.com

Europe mental protection should be measurable parameters in the complex transport matrix which will have to prove its worth as a well coordinated mechanism, serving the citizen’s needs. To take action we must be clear about the potential instruments that are available. Better, commonly understood indicators need to be developed to really monitor progress towards sustainable cohesion. These indicators will assist society, states and industry to evaluate whether we are getting better at managing transport demand, adding the needed supply and at improving the modal split, based on the newly coined doctrine of “commodality”. All the actors involved should brush aside all these targets, visions and codes.We know them but they are not the solution to the establishment of a sustainable transport system. What we need is not so complicated.We need a clear and simple check list and tick all its boxes accordingly. We can always measure carbon in the environment but we can neither measure happiness nor satisfaction. Sustainable transport must be encouraged, but the structured society must be in the position to know and to measure whether the environmental performance of the transport sector is really improving and accordingly modify the list of incentives (political, economic, tax), encouraging the possible use of alternative scenarios. The policy makers and the stakeholders involved in the urban and interurban transport should recognize that packages “designed to match policy instruments to tackle externalities” perform much better than isolated instruments proposed. However, all these packages

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must be carefully evaluated by various studies which need to provide clear comparative assessments of the tools under examination. Analyses have shown that optimal policy packages combine and supplement marginal cost-based usage charges such as vehicle taxes, standards or other regulations. (An example often presented is that if a CO2 fuel charge provides insufficient incentives to develop and buy fuel efficient vehicles, then a differentiated vehicle tax related to CO2 emissions should be adopted too to offer an additional impetus.)

A matter of choice

Of course, finally, the choice between transport packages of instruments (incentives and alternative scenarios) depends not only on their relative efficiency but also on their equity impacts since in general the overall objective of the society concerns not only a maximization of total efficiency but also to achieve an equitable distribution of welfare. There are of course important issues to be examined related to the acceptability of different transport pricing measures and basically which are the factors influencing/affecting acceptability. In the areas of aviation, maritime, rail, even in the heavy goods sector, the answer is easy and immediate. In these domains, transport is easily recognized as a market product where a professional company (air carrier, ship-owner, railway company, haulage company) supplies a transport product of a certain quality/cost and the customer/passenger receives it by paying the price following the market rules. The question there is not related to the acceptability of the charging but on the realistic difficulty that pricing research in these domains has not reached the maturity stage of the road transport mode. The open issues start from the lack of common industrial agreements on the need of an action on pricing mechanisms, on the methodological alternatives, on the assessment of the benefits and the costs (which are the cost and/or benefits drivers). On the other hand, though, the road sector charging methodologies appear more mature, the issue in question related to the road charging acceptability appears more complicated given that the same persons/citizens (in the other sectors parts of a professional contract) become amateurs and reflect differently on the same questions . There are important issues to be examined related to the acceptability of different transport pricing measures and basically which are the factors influencing/ affecting acceptability. It is generally seen as acceptable amongst users if the charging regime tackles commonly recognized problems, is seen as fair, is based on the vehicle type and the emissions quality while a hot matter for the citizens is the use of the revenues which need to be earmarked in the transport area. The socially accepted charging system depends on the regulating and operating structures allowing the various states, when dealing with private sector questions, to create a legislative framework permitting a smooth market functioning. ETCetc Vol 3 No 1

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Europe

Conclusion

The social needs are not simplistic, mechanistic targets. In the modern era, the situation has become clear and growth and the environment go hand in hand. EU Institutions, based on common principles are in pursuit of a new set of principles and methods based on the internalization of the external cost, shaping a modern transport deal. An enhanced program of investment (designed, planned, financed, built and operated) should be the final policy target with evaluated plans and strategies of local, national and paneuropean dimension using the modern socially accepted fair charging principle, by internalizing the external cost. This charging method will create the necessary market pricing mechanisms where both the user pays the calculated internal cost to the transport service provider and the polluter pays the estimated external cost to the directly affected “external” society. In this second case the destination of the revenues collected is not always clear. The real urgent answer to be given is how the policy makers will decide to use the additional revenues from the charging of the external costs. So, should the revenues be spent as direct short term cheques to the directly affected regions/societies (lowering tax burden, tax incentives, etc) or should the state authorities choose a long term policy re-investing the externalities’ revenues in the transport domain affecting the region in question? After this important question gets answered other policy and/or technology oriented issues will surely appear. The questions will refer on how the modern road transport service providers (city, region, state, concession companies) will examine and follow their charging policies, applying of course diverging technologies in their dramatically different road environments. It should not be forgotten that in the EU environment there is never “a typical average road entity applying charging”. When talking about road charging, the pub-

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lic sector should always bear in mind a simple thing that the private sector always remembers: Never mix the ideas, visions, various alternatives using different, still experimental,video charging schemes, and realities identifying differently the urban road transport, the interurban secondary road network and the existing realities of the PanEuropean (although still not fully interoperable) charged and tolled motorway network. Different realities demand different answers and separate road maps. These maps must be supported by a social business model and rationale that will logically affect positively the objective of “an interoperable charging scheme” applied differently to all above the sectors involved, respecting their proper operational, legal, managerial and the technological specificities. In the following years it will be a common understanding that the guiding principle of the legislative framework will be the opening–up of the environmentally friendly and caring transport market. Transport will be generally recognized as the key “development hope and environmental question factor in the modern global world, the modern society and its regional diverging micro-systems. The role of the State will be crucial as a regulating machine, guaranteeing the rules of a fair, transparent and sustainable transport service for the user. If no action to these directions is taken, transport will remain a big obscure incognita creating permanent contradictions between the society (demanding ever more mobility), the economy (working for more and more growth), the public opinion (becoming increasingly intolerant of chronic delays) and the environment (tailspinning its way to who knows where). E Kallistratos Dionelis is Secretary General of ASECAP, the Association of European toll road operators and concessionaires. He can be contacted via email at k. [email protected] www.h3bmedia.com

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Toronto

Decision time The idea of road pricing has been floated in Toronto countless times over the past five years. Compared to cities that have gone before, says BERN GRUSH, it’s all the same and it’s all different...

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Toronto

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Toronto Early on, road pricing thinking in Toronto was predominantly congestion-related as it was during the 2003 and 2006 mayoral campaigns. There have been the obligatory comparisons with London, as dozens of other cities have made. Toronto’s Mayor David Miller even sent one of Toronto’s Councillors over to see London’s system first-hand. For a modest period it was environmentally related. In the summer of 2007 Toronto released its Climate Change, Clean Air and Sustainable Energy Action Plan, in which appeared a statement that “the city will work with the Province [and other local authorities] to investigate a road pricing regime for the GTA that will encourage people to use alternative modes of transportation, and dedicate any funds raised to transit improvements.” More recently it has been almost entirely funding related. On 21 February 2008, Toronto released a commission report entitled: Blueprint for Fiscal Stability and Economic Prosperity, which included a strong recommendation that the arterials around Toronto be tolled. Since many of these are under Provincial jurisdiction this cannot be undertaken without regional (i.e., provincial administration). The Mayor has been quoted several times as saying he favors the idea of road pricing as a last resort, but that it needs to be a wide-area mandate – essentially a provincially administered initiative. Since the Blueprint report was published, Ontario’s Minister of Transportation, Jim Bradley, has been quoted as saying the province has no intention of tolling its existing “400-series” highways, but that the Mayor of Toronto, who has been recently granted certain new taxation powers, is free to toll those under city jurisdiction, such as the two limited access congestionways: the Gardiner and the Don Valley Parkway. But tolling the roads you can toll for financial reasons instead of the ones that you should toll for demandmanagement reasons can have unintended effects. Network demand management requires at least some finesse. Attaching a toll to one small part disturbs the system unevenly.

Same old?

In some ways, traffic congestion is the same everywhere. It has similar causes and similar harms. Sandwiched between its minority advocates and its minority detractors is a majority of motorists who are against it – usually around 60-70 per cent. But no detractor, no local politician and certainly no effected motorist is interested in a general economic theory of the effect of market pricing on network efficiency. However much the common good may be harmed by congestion and emissions, most of us prize our purse more. Even Al Gore’s message fades in the face of a tax bill. And however much government may indeed be running out of money, a majority of citizens believe the money can be found elsewhere – certainly not from their entitled drive to work. But in other ways, no two cities’ political and urban landscapes are identical with respect to congestion and

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congestion pricing. One of the truisms that challenge advocates (and aids detractors) is that London, Stockholm and Singapore are not only not like each other, they are also not like any other city. More specifically, they are not like Toronto. So when cities like New York and now Toronto begin a public debate about road user charging or congestion pricing, they variously think they have everything or nothing to learn from the cities that have stumbled through this before us. The truth, as always, falls in between, and in this minefield of opinion the truth can be hard to tease out. No one has yet got it exactly right and there is merit to both sides of each argument. But there are a few things that I am sure will apply as much to Toronto, my city, as to any other. www.h3bmedia.com

Toronto

“Tolling the roads you can toll for financial reasons instead of the ones that you should toll for demandmanagement reasons can have unintended effects”

Toronto City Hall

1: We will argue that it is not acceptable

A majority of Toronto motorists will be against road pricing. This will change to a minority once a suitably designed scheme is in place. This has happened in London, Stockholm, and Singapore. It has not yet happened in Dubai where an incomplete scheme diverts rather than reduces traffic. A suitably designed scheme has to be fair. Tolling just two major arteries (the Gardiner feeding in from the southwest and the DVP feeding in from the north-east), forces a minority subset of motorists to shoulder the whole road-tolling bill. This means some will possibly overpay for driving their vehicle while others will continue to underpay. In fact, elasticity effects will encourage more driving from those who are not paying,because the roads will be somewhat less congested and parking www.h3bmedia.com

will be somewhat more available. This compounds the unfairness, while diminishing the desired congestion effects. Every road-pricing scheme has three potential components: reducing congestion, raising money, and easing emissions. London’s scheme, which does a very modest job of raising money, was designed to reduce congestion and emissions and measurably succeeds at that. The Singapore and Stockholm schemes were similarly designed. The Mayor’s Commission’s recommendation of tolling a couple Toronto arterials is biased toward raising money. This will delay its acceptance. Indeed, if it does not noticeably ease congestion, it will never be accepted. A further problem will occur with tolling these two roadways. Each has parallel secondary roadways that ETCetc Vol 3 No 1

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Toronto will be subjected to more traffic from toll evaders (just 5% off the highways is a lot for these secondary roads). Some of these traverse neighbourhoods, which has implications for safety, local pollution, and property values. While this may only affect local acceptability, it is still unfair. Tolling needs to be graduated and wider-spread rather than in a few corridors or in a small cordon. A congestion-pricing program has to be, and be perceived as being, socially beneficial, not just a correction for a financial problem. Rather than road pricing, it would be better if the Mayor of Toronto saw and promoted congestion pricing as does San Francisco’s Mayor Gavin Newsom, who said in his inaugural address on January 8, 2008: “A sensible congestion pricing plan is the single greatest step we can take to protect our environment and improve our quality of life.”

2:We will argue over why to do it

Because of the recent report from a commission charged by the Mayor with making recommendations regarding Toronto’s fiscal dilemma,the current motivation is access to funds. In the past both congestion and emissions have been the drivers of the Toronto debate. While it is nice to have three good reasons for a congestion-pricing program – and Toronto does – each reason on its own has other solutions. Congestion pricing is best designed to address all three. If you stress only funding there are other ways to raise money and the argument that “we are picking on drivers” can be made and requires a long-winded argument to diffuse it. If you stress only emissions, it is possible to argue that cleaner engines are starting to come on line, and that governments should pressure automobile manufacturers and rely on innovation. If you stress only congestion, demands for improvement to our deteriorating transit system will be made in its stead. The truth is we pay for road use the wrong way. Fuel taxes are losing their ability to fund roads in the face of more efficient engines, they are weak in addressing emissions, especially in North America, and they are

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completely silent about congestion. We need to move away from fuel taxes and toward pay-for-use. This means that tolling needs to be graduated and wide-spread rather than in a few corridors or in a small cordon. Road pricing should become the new fuel tax, not remain as a surcharge. The Mayor of Toronto is right in theory that the province should take the lead, but he should move forward anyway. If he did what he could the province would have to follow his lead. The Ontario Minister, while right about the original mandate of his stewardship of the 400-series roads, needs to start looking to guidance from the Feds who do encourage the application of pricing programs. The mid-20th century era of Big Free Roads in North America has played out long ago.

3: We will argue over how to do it

We are on the cusp of a dramatic technology change. There will be advocates for the older, more familiar short-range radio technology (the kind used on the 407, the only tolled highway in Ontario) and yet other advocates for the newer and more flexible technology based on GPS. The older technology while limited is adequate for tolling the DVP and the Gardiner, but it is hyperexpensive for tolling a central business district. This and the inconvenient urban-clutter of gantries in the downtown core is why the New York proposal to blanket Manhattan in 340 E ZPass gantries was rejected in favour of a simpler, but less comprehensive system. If Toronto were to toll the DVP and Gardiner and no other roadway or cordon, then Toronto could simply extend what is being used on the 407. But most planners realize that the jig is up on free road access. They know that whatever Toronto does with road pricing, it will only be the beginning. For this reason, the newer infrastructure-free, GPS technology should be used. It will allow gradual pricing by distance throughout Toronto and eventually North America so that the financial burden is fairly spread, so that traffic is reduced rather than rerouted, so that prices can be set to offset emissions and so that pay-per-use can gradually supplant the fuel tax.

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Toronto The Netherlands believes that GPS technology is ready and intends to deploy it countrywide over the next 8 years. It would be wise to follow that lead rather than London’s (look where that took Mayor Bloomberg).

4:We will argue that it harms the poor

Many argue that road pricing harms those with lower incomes. But advocating a policy of unfettered road access is actually detrimental to low-income earners. Lower-income commuters are generally captives of transit – often buses. These buses are delayed in traffic that is generated more by motorists of middle to higher incomes than by transit users. According to Todd Litman of the Victoria Transport Policy Institute (a world-leading transport think-tank based in British Columbia): “In virtually every congestion pricing project analyzed, low-income people represent a very small portion of total users. When revenues are spent to improve transit services or in other ways to help lower-income people, congestion pricing is almost certainly progressive.” Professor Harry Kitchen makes the identical point in his essential but much maligned, January 2008 report, Financing Public Transit and Transportation in the Greater Toronto Area and Hamilton:“...if some of the road pricing revenues are used to subsidize public transit, the poor will benefit because they use public transit much more than the rich.” New York City’s recent Kheel Report, suggests combining congestion charging with free public transit for New York City. In Toronto, public transport is not only underfunded, it is overpriced and there is no accounting for distance travelled making short trips overpriced – especially for people of lower income who may not have a vehicle for short distances nor the money to pay for parking. Money to improve transit and to lower fares would be of dramatic value to those with lower incomes

as well as to our environment. Unfortunately, there is another terrible bit of social logic afoot in the myth that road-pricing automatically harms the poor. Most us agree that human activity is harming the planet. We also generally agree that the transportation sector is a major contributor in that harm. In turn, we have singled out the single-occupant vehicle commuting to work daily as the single most offensive component of that. Finally, we argue that with proper pricing signals we could have a significant portion of commuters choose a different modality. Given all that, some then make the argument that road-pricing should be avoided to prevent (unsubstantiated) harm to the poor. This implies that we should choose between poverty and our planet. Why not raise the minimum wage rather than eschew market pricing of our roads? To do otherwise this unfounded logic would keep poverty and congestion locked in together. There is not a lot of difference between how we treat our planet and how we treat our fellow humans.

“Why not raise the minimum wage rather than eschew market pricing of our roads?”

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5:We will argue that it is not environmentally friendly.

Because most congestion schemes are proposed as cordons around central business districts or, worse, proposed as tolls on selected arterial segments, many people warn that a significant portion of vehicles will simply use other streets, moving emissions to another place, and generating parking problems including idling and circling at the cordon boundaries. While these effects do occur they are not necessarily as bad as their worst predictions. But there is enough truth to this to look closely at it for Toronto. If the DVP were tolled, what would happen on Don Mills or Victoria Park or Yonge Street? If this were modeled it would raise questions, and that, in turn, would reduce the likelihood of acceptance for such a tolling program. Why not, instead, consider Nobel winner William

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Toronto and streets adds both environment and safety risks. So while not quantified for any Toronto circumstance one can imagine that some Toronto streets may be less safe if tolling were instituted on nearby roads. Again the solution is easy: toll modestly, toll gradually, and toll the entire network, not just a few segments or a ring-road around Toronto. New liability-critical and privacy-assured GPS technology can do this already.

7: We will argue that we already pay too many taxes

Vickrey’s advice to avoid sharp pricing shoulders – charging something significant on one road and nothing on the next – if we believe that will risk harm to the neighborhoods along the free road? Why not toll more broadly and more gradually, since the technology to do that is now available and can be deployed at a far lower cost of ownership than current technology? What if we tolled a central business district at C$0.30/ km, a wider area at C$0.15/km, and a wider area still at C$0.07, etc., we’d have no abrupt boundaries. Short trips would be quite affordable – perhaps little more than a dollar. Longer trips from Pickering to Mississauga would cost more – C$9 at 15 cents/km. And there is no reason to have a simple tiered scheme like that, because the CBD of Mississauga could be priced higher that the comparably lower price of the less congested area in between it and Toronto. Basically, Southern Ontario could rebate the fuel tax and deploy end-to end congestion pricing with relative pricing peaks in all densely populated areas and times. The important issue is to turn back congestion by shifting travel times and modalities and without spilling it into new places – a problem that is prone to occur with many current schemes.

6:We will argue that it is unsafe

There are studies that demonstrate that tolling increases accidents and accident severity. One released in November 2007 by Peter Swan and Michael Belzer makes the case readily: Depending how toll rates are set it is possible to “introduce substantial inefficiencies in the overall road transportation network and actually increase congestion and safety hazards in other parts of the system”. Swan and Belzer “showed that as the [Ohio] Turnpike toll increased, truck traffic increased on alternate, free routes as truckers balanced the monetary savings with the cost of the extra time needed to take an indirect route.” It has several times been argued in Toronto that tolls on limited access roadways such as the DVP will cause some traffic to be deflected. The argument is reasonable. Surely, each additional vehicle added to city roads

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No one wants to pay more taxes. And very few of us think we pay too little. But we are paying the wrong taxes. Fuel taxes are insensitive to congestion, only a charge related to the level of congestion, or a time, distance and place charge can address that. Mary Peters, US Secretary of Transport said it best in January 2008:“It is a virtual economic certainty that congestion and system unreliability will worsen if we continue to rely on a tax-based financing system that has little or nothing to do with the true costs of using or providing transportation infrastructure. Today, a fundamentally new transportation policy must focus on system performance…” The only way we can make the requisite tax shift from fuel consumption to road use is to take those steps necessary to toll everywhere and, at first, to find tax rebate or payment exclusion methods until such time that the fuel tax and or other regressive automotive taxes can be replaced.

8: We will argue that transit is not ready

It is almost certain that if we took 10 or 15 per cent of peak-hour cars off of Toronto’s roads and a large portion of those commuters decided to use peak-hour transit that our transit system would strain and possibly fail us. However, we can add buses and train cars prior to the onset of a tolling program. London and Stockholm did this and did it successfully. One of the effects of more buses and less cars is that buses arrive more frequently, and they get to their destinations more quickly. So what was a dreaded bus commute before becomes more attractive after. Note, as well, that transit demographics predicts that this generally benefits those with lower incomes who had previously been using the less-frequent and slower buses, or the less frequent and more crowded trains. Not only can transit easily be made ready, but the result benefits both the tolled (faster journeys) and the transit users (faster journeys). Since this correlates with income, a properly designed congestion-pricing program benefits both high and low income earners. And there are many modalities besides peak-hour transit, including time shifting, telework, car pooling, biking, walking, and, for some, moving closer.

9:We will argue that it is too expensive to implement

The minority that understand that Toronto really does need to solve its financial woes and who also understand that we currently underpay for gas often suggest that www.h3bmedia.com

Toronto tolling is terribly complex and expensive. They suggest that if we must raise more money, just raise gas taxes. If it were not the case that congestion is largely unaddressed by fuel tax, I would agree. Some may note that London and Stockholm spent US$600m and US$300m, respectively to set up their programs and that they each spend about 40 per cent of their revenues on operations. If Toronto were to spend that much for the sole purpose of raising funds I think we should all complain. I certainly will. London and Stockholm were less concerned about the optics of cost because both cities were squarely addressing congestion. If that were our only agenda, just breaking-even would work well enough. But it is not our only agenda. In fact, the most recent recommendation in front of the Mayor is to raise money and the roads recommended for tolling are simply the handiest to meter with current technology. That puts the debate on a bad footing from the start. This is one of the problems with being unclear about whether we are being green, addressing congestion or raising money. Congestion pricing should be about congestion cessation. It should be designed primarily to maximize congestion reduction (which can be automatically aligned with reducing emissions) and only secondarily to raise revenue. Obviously, to be careless about the financial aspects of the system would be a dereliction of duties, so we’ll need to maximize retained revenues – which we can do by minimizing both capital and operating expenses.

The new generation of tolling technology does that. The current generation does not.

10: We will argue that our city is different

We will argue that our congestion is not nearly as bad as London’s so that we should not copy that. We will point out that we are not a peninsular island as is Stockholm, so that we cannot copy that. We will observe that our natural democratic entitlements are different from those in Singapore, and that we cannot copy their approach. That’s all true. And we shouldn’t copy any of them. Until federal and state/provincial governments address congestion management from a fuel-tax reform perspective, each city must find its own way. Fortunately, there is a way to spread tolls gradually and fairly, to introduce new transit at the outset, to save the poor from financial harm, to address congestion and emissions while raising funds for better roads and transit, to protect motorists’ privacy, and to minimize system costs. A dozen companies worldwide, including at least one here in Canada, are developing the next-generation technology that enables these progressive policies. In the end, Toronto – or the Greater Toronto Area – will have to find its own way, but hopefully with the understanding, guidance and collaboration from the Province of Ontario. E Bern Grush is Chief Scientist at Skymeter Corporation, based in Toronto. He can be contacted via email at [email protected]

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Italy

FABRIZIO PALENZONA, president of ASECAP, theEuropean toll road concessionaires association, and AISCAT, the Italian national version, gave a stirring address at ASECAP’s recent Venice summit.This is a summary of his thoughts and opinions, focusing mainly on his home country’s position 18

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Italy

A picture of Europe

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Italy

“No competitive economies may exist without valid transport networks… The creation and smooth operating of the trans-European transportation network…are essential conditions for the success of the Internal Market and to guarantee sustainable mobility in a wider Union.” These are the words of the European Commission in 2003 in its Communication on the development of the trans-European transportation network; words which are as relevant and pertinent today as they were five years ago. But the Commission added: “However, the network is still challenged by a strong but unbalanced growth of traffic… Transport infrastructure continues to be utilised poorly and funds are missing due to the non transparency of the costs paid by users, the financial resources available with the Union and the lack of a favourable investment climate. The chances that public funds towards such projects may increase significantly in the short-term are scarce. “For certain projects the use of public-private partnership funding may be expected…but there are too many unknown factors concerning the projects to be built and decisions on transport policies ”. In just a few words it had clearly outlined its objectives, accurate analysis of structural problems and definition of the instruments required. In other words, a plan, an operating plan, to be implemented through close coordination among Member States. The plan for the creation of a single currency led to the introduction of the Euro in 1999. But this is not the case for the trans-European transport network, which is proceeding at a far slower pace – this is always the case when the building of large infrastructure is involved. Furthermore, we must note that progress is slower in certain States compared to others.

Europe united

A European motorway network, guaranteeing free movement and preparing Europe for the challenge of globalisation is the long-term goal. To understand what is needed in order to effectively achieve the free movement of people and goods we may compare market operating requirements with those of a living organism, which needs four essential elements: a blood circulation system (the transportation infrastructure), a central nervous system (telecommunication infrastructure), a muscular system (energy infrastructure), and a brain system (training infrastructure) together all known as “trans-European networks”. The aim is to “connect” all economic operators and all European citizens (including those residing on islands and the territory’s outskirts) to each other, so that all may benefit from the advantages of a space having no internal borders. Therefore, it is through these large networks that the European Union’s (as well as individual countries’) possibilities for growth and competitiveness run.

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Italy

Indeed, in a global economy characterised by the deregulation of exchanges, companies set up where they find the best conditions to become more competitive. In such a framework, the availability of infrastructure and in particular transportation infrastructure is unanimously considered by economists to be a parameter of a country’s economic and social development. The European Union is one of the richest areas in the world, but there are great differences within its Member States as well as among Member States. It is clear that the ability of equipping Europe with a standard and shared infrastructure system, is a requirement to avoid that the gap between different regions of the European Union increases further. The trans-European networks, together with the single market, are therefore an essential element to strengthen the European economy and prepare individual countries and Europe to meet the globalisation challenge.

Italy: hit and myth

“The European Union is one of the richest areas in the world, but there are great differences within each of its Member States, let alone among them”

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As an Italian I feel compelled to summarise the current situation in my home country, if only for the sake of denying or confirming what is being widely published in the popular press with particular regard to the motorway sector. Italy is not proving to be pro-European in the way it is applying EC laws that apply to motorways under concession. Italy continues to be plagued by critical areas and elements of risk which do not encourage private investment in public works. These may be broken-down and looked at as follows: • Concession rules, and in particular rules for motorway concessions, are much more stringent compared to EC rules, discriminate on the basis of nationality, fall into conflict with the most elementary principles of harmonisation of rules - a prerequisite for a truly competitive market. • The constraints posed on motorway concessionaires with regard to the organisation of “Groups” in Italy are one of the most evident proofs of such discriminating practice, given that they are factually discriminated with respect to the rest of Europe and with respect to other industrial sectors; Italian motorway concessionaires are forced to reorganise themselves according to rules that are so rigid that we may actually describe them as having to compete with their hands tied. • The uncertainty of the “rules of the game” discourages investors, given the danger of potentially arbitrary and discriminating interference by the authorities, as underlined by the very same European Commission in connection with our new “reform” of motorway concessions. The failure to harmonise rules – EC and national – therefore weighs more heavily if financing is the trailer, because the movement of capital does not like national fences. • The “administrative risk” in Italy has grown due to particularly long and cumbersome procedures which guarantee no certainty with regard to the times, and ETCetc Vol 3 No 1

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Italy therefore the costs of the construction of the works; to this we need to add the uncertainty deriving from an unclear juridical status of the Granting Authority and its rights and obligations vis-à-vis concessionaires. Italy is an important component of Europe, it is a founding state, a fundamental ring in Europe’s connection with the Mediterranean basin and the economies of the area. If, by not respecting the rules, Italy halts European policies for transport networks, and with these growth policies too, then it is not only hurting itself but it is hurting all of Europe.

Public address

Another issue widely analysed by the national press in Italy is the creation of public law entities – for the realization of Motorways infrastructures – expressly built like companies and with the participation of ANAS (i.e. by the company that has received from the State, by law, the concession of the Motorway network and to which the realization and the management of the road network of National interest is also given. We are talking about a reality which has already produced in 2007 a company composed by ANAS and Lombardia Region, called CAL and which has later received a generalised legislative recognition with the Italian Budgetary Law for 2008, whose provisions have already brought to the February 2008 creation of a company composed by ANAS and Molise Region, another composed by ANAS and Veneto Region and in early March we saw the creation of a company composed by ANAS and Lazio Region. The subject being always and only the realization of motorway infrastructures, either as grantor either as direct operator for the execution and maintenance of the infrastructures. I will not go any deeper for now, - I could analyse the Constitutional consistency of these legislative provisions, for example but I will just briefly say that they do not seem to contain real indications of social utility goals or criteria to which the law itself should be referred to: consequently the absence of these criteria could lead to believe that the principle of legal reserve has not been respected. Neither do I intend to analyse the issue of how many resources it is possible to get from the toll revenues of newly public motorway infrastructures: I can understand that the local Government are looking for these revenues in order to invest them in new regional infrastructures.

gestion and environmental damages, or the need of realizing alternative infrastructures in specific mountainous regions. I feel also compelled to underline a reality with a strong political meaning, I am talking about the structural choice made by the Italian legislator and also the “reversion” of that choice occurred in few months: in 2006, with the Motorway system reform, the Roads public company - ANAS - has been identified by the Italian Government as the subject supposed to replace the operational management, without any tender and temporarily, those motorway concessionaires that did not intend to accept the new contractual agreements. In 2007, with the Budgetary Law, the role of ANAS, which was a replacing and transitional role, has on the contrary become direct and permanent, with the only modification that today the management is shared by ANAS and the Regions.

A truly European marketplace

The final “political” aspect of the issue, the real line of demarcation lies on the fact that no democracy can exist without a market: political democracy and market economy are the two sides of the same coin. Moreover, nowadays competition is a fundamental principle of the European Union, to which Italy belongs, therefore competition is a fundamental principle for Italy too. However, as it was said in 1996 by the former President of the Italian Antitrust Authority, Giuliano Amato, “…. competition does not exist in the market itself; competition represents a legal order in which all the operators supposed to respect competition are obliged to move ... a system is able to develop and deploy all its dynamism only if the entrepreneur cannot live in peace, only if he is afraid of another competitor in front of him, behind him, at his right, at his left. But this is not the logic that leads our legislation (the National one) … Our problem is to make entrepreneur’s life very difficult concerning competition and less complicated concerning costs and rules”. Unfortunately, 12 years later, a Government whoseMr. Amato is also a Minister, has issued the above mentioned legislation that is going to make public (coming back to the past) the first Motorways infrastructures. I underline the “first”, provided that ANAS aims at managing also the other motorways, whose concession contracts will expire in the following years. Nevertheless it is indisputable, in the economic literature, that the expansion of the public involvement in a country’s economy presents limits that cannot be crossed over without negative consequences for the country’s overall development. E

“If, by not respecting the rules, Italy halts European policies for transport networks then it is not only hurting itself but it is hurting all of Europe”

What I will say is...

However, I will restrict myself to just further reflect on the new Community legislation about toll tariffs, which is based on a strict connection between costs – of construction, maintenance and operation – and tolls and which foresees exceptions to these rules only for specific and limited cases, such as the need of tackling con-

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For more information on ASECAP and AISCAT go to www.asecap.com and www.aiscat.it www.h3bmedia.com

Sponsors of the GNSS In The Road Transport Sector Think Tank, Intertraffic Amsterdam 2008, Amsterdam RAI, 2-3 April

City Tolling The idea to use tolls as a means of managing automobile traffic on modern roads is already more than 85 years old. It was first recommended by the British economist Arthur Pigou in 1920 - explicitly with regard to congestion pricing by way of varying the amount of toll depending on the time of day, part of the network and distance travelled. Almost 40 years ago (when I was a student at Berlin’s Technical University) we discussed and expected road pricing to soon be introduced and to be the only efficient instrument for solving the traffic-problems in the inner districts of all major German cities. Back then we did not discuss road pricing as an instrument for financing and operating roads. In those days the prediction for the saturation level of private car ownership was 200 per 1000 inhabitants. Based on that the General Transport Plan for Berlin contained a dense network of City Autobahns with seven lanes in each direction. Today the level of car ownership is above 600 per 1000 inhabitants and is still increasing – and we have no city-pricing in Berlin or in any other city in Germany yet. But that may change in the near future for various reasons. Back then the Government and the German communities made a different choice. Following the recommendations of the Expert Commission on “Community Traffic” regarding the “Improve-

ment of the traffic conditions in Communities,” government and communities concentrated on: • improving public transit (especially light-railand heavy-rail-systems), • improving the road network, • improving traffic management, • managing parking space, • introducing and expanding park + ride, • introducing pedestrian areas, • flexible working hours etc. Based on the “Community traffic financing law” (Gemeindeverkehrsfinanzierungsgesetz in German), the public transit systems in German cities have been improved substantially and reached a comparatively high (and internationally renowned) standard. As a result it was not really necessary (or urgent) to think about City Tolls (and Road Pricing in cities respectively) for mitigating congestion and/or for financing transport infrastructure to date.

The debate rolls on

Worldwide, however, the discussion about city pricing continued. Singapore started in the middle of the 1970s with it’s so-called “area licence scheme” – a vignette system, which was substituted by an electronic toll collection system in 1998. In Europe, several Norwegian

An interesting For whom perspective the road

tolls

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City Tolling cities followed suit from 1986 for different reasons: Bergen (in 1986), Oslo (in 1990), Trondheim (in 1991) and Kristiansand (in 1992). More recently Stavanger (in 2001), Namsos (in 2003) and the small town of Tönsberg near Oslo (in 2004) have instigated “city” pricing schemes of one kind or another. The reasons for introducing the toll in the respective cities were increasing congestion, increasing environmental problems, decreasing road safety and a lack of available funds to make necessary improvements to the transport infrastructure. Because of the difficult topographical conditions major infrastructure projects are comparatively expensive in most Norwegian cities. The so-called “Norwegian urban road packages” explicitly aim at: • better use of the available road capacity: • improving traffic safety: and • improving the environmental conditions. The packages include road infrastructure projects, improvements of public transit and of the facilities for pedestrians and cyclists. The toll is collected from drivers through “toll rings” covering all roads leading into the central part of the cities. In general there is a direct context between the costs of the infrastructure projects of a package, the amount of the tolls and the time period of tolling. At the end of this time period a formal decision

has to be made on the continuation of tolling based on a new package; otherwise the tolling ends. The tolling technology in use is primarily based on microwave communication between electronic tags and controlbridges, commonly called Dedicated Short Range Communications or DSRC.

Supporting structure

In the mid-1990s the European Commission started to support city pricing activities. The first project was called EURoPrice. It sponsored and coordinated a political network of cities interested in the topic. EURoPrice stands for “European Urban Pricing Network” and was scheduled for 1998–2000. Mmember cities were: Amsterdam, Belfast, Bristol, Edinburgh, Genoa, Leeds and Rome. EURoPrice was followed by the “European Transport Pricing Initiative Progress (2000–2004), Progress being an acronym for “Pricing road use for greater responsibility, efficiency and sustainability in Cities”. Member cities were: Bristol, Copenhagen, Edinburgh, Genoa, Gothenburg, Helsinki, Rome and Trondheim. The objective of the Progress project was: “to demonstrate and evaluate the effectiveness and acceptance of integrated transport pricing schemes to achieve transport goals and raise revenue”.

DR ANDREAS KOSSAK looks at Germany’s take on the notion of road pricing in cities

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City Tolling To research this, one existing road pricing scheme was extended (Trondheim - cordon and zonal charging using DSRC), one was newly introduced (Rome - cordon charging using Automatic Number Plate Recognition ANPR), and five trials of different pricing technologies were carried out: • in Bristol (distance and cordon charging using GPS and ANPR), • in Copenhagen (distance and zonal charging using GPS), • in Edinburgh (cordon charging using ANPR), • in Genoa (cordon charging using ANPR) and • in Gothenburg (distance-based charging using GPS). Supporting this, detailed modelling work was done, the social and political acceptance of such schemes was examined, and their effectiveness was evaluated - especially in Helsinki. Parallel to Progress the European Commission supported the thematic network CUPID (Coordinating Urban Pricing Integrated Demonstration). It was the basis for a coordinated assessment of the results of the single Progress projects. Progress and Cupid ended as scheduled in 2004. Regarding the effectiveness of city pricing the following main lessons learned have been stated: • Legal issues: Delays to scheme implementation can be caused by the need to work within existing legal frameworks or await specific legislation • Package: pricing is considered most effective if introduced as part of a package of transport measures, although this can also cause delays, especially if complementary public transport is controversial or experiences delays • Three main technology options: DSRC, ANPR, and GPS. Results indicated: • Accuracy DSRC: 99.5 per cent in Trondheim. • Accuracy ANPR: 74 per cent in Rome, 85-95 per cent in Bristol. • Accuracy GPS: signals easily lost in urban areas due to street canyons, • Other issues - DSRC: robust and reliable technology, but can be affected by metalised windscreens and have a relatively short battery life. • Other issues - ANPR: placement and number of cameras, especially on 2-lane roads, can increase accuracy, as can use of a triggering device to increase vehicle detection. • Other issues - GPS: advanced technology, but more flexible than practical at this stage; coordinate accuracy often low enough to necessitate further analysis. The statements regarding the reliability or accuracy of GPS and ANPR are no longer valid. GPS has met all requirements in the meantime based on tests for example in London and Berlin. ANPR met all the requirements, for example, in Stockholm. • Traffic impacts: Reductions in private car trips

and increases in public transport use have been measured or modelled at every site. The scheme in Rome saw a 10 per cent decrease in daily traffic and 6 per cent increase in public transport use in the first year; 50 per cent of participants changed their driving behaviour in the Copenhagen trial, mostly for non- commuting trips. • Environmental impacts: any reductions in traffic levels and congestion will have a positive impact on air quality. The Gothenburg environmental charging scheme would see traffic in the city centre reduced by 13 per cent by 2010; modelling in Bristol estimated that a charging scheme running for 10 years could reduce particulate emissions by 24 per cent. • Economic impacts: the tolling scheme in Trondheim started in 1991 and the long-term analysis has shown no distortion in trade competition or damage to retail in the city centre. • Raising revenue: modelling of the preferred scheme for Edinburgh estimates that €78m could be raised per year by 2011; Trondheim‘s toll raised €l25m in its first 12 years, all reinvested in transport and environmental measures. • Scheme design: will vary greatly depending on the individual city and the aims of the scheme. Regarding the “Acceptance of Pricing” it was stated: • Developing a long-term strategy for communication is vital, with concerns such as exemptions and privacy considered in scheme design. • Providing examples of similar schemes, such as London, can aid acceptance, as can proving the benefits of pricing by running a demonstration. • A Political champion can greatly help the acceptance of a road pricing scheme, although timing of decisions can be limited by elections. • Key stakeholders are to be consulted, including politicians, businesses, retailers, and the general public, and should be involved from an early stage. • The public will need to be kept informed about a pro-active campaign and the scheme‘s objectives, operation, and likely impacts. • To achieve higher levels of acceptance, road pricing should be considered as part of a larger strategy that includes other transport improvements. • Privacy was not found to be a major concern with the GPS systems. • The reinvestment of revenues in transport system is vital for gaining user acceptance, especially with complementary measures in place before pricing.

“The statements regarding the reliability or accuracy of GPS and ANPR are no longer valid”

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If information was currency...

A number of conclusions can be drawn from the project and the analysis of its results, namely: • Traffic and congestion reduction can be achieved through pricing road use, and revenue can be raised to reinvest in transport measures. • Public acceptance can be maximized with a package of supporting measures alongside the pricing and with thorough consultation. www.h3bmedia.com

City Tolling

Toll rings in Norway City

Plazas

Start

End

8

1986

2004

300’

16/5

60’

-

Oslo

19

1990

2012

900’

24/7

250’

83

Trondheim

12 17 23

1991 1998 2003

250’

11/5 12/5

100’

95

2005

5

1997

2007

100’

24/7

55’

84

21

2001

2011

230’

12/5

150’

91

Namsos

3

2003

2017

15’

12/5

7’

89

Tønsberg

6

2004

2019

50’

24/7

50’

86

Bergen 2

8

2004

2014

300’

24/6

100’

87

Bergen 1

Kristiansand Stavanger

Source: statens vägvesen Dr.-Ing. Andreas Kossak, Hamburg • There is technology available to run an urban road pricing scheme. • A variety of schemes are possible but simplicity improves support and understanding. In summary, a wealth of valuable information on a broad range of aspects of urban road pricing could be drawn from the projects. In detail some 60 “Lessons Learned” were identified and recommendations were made on how future roadpricing implementations in European cities could take account of those lessons. They cover: • Consultation and information • Legal and institutional issues • Transportation policy • Technology and transaction • Enforcement and • User Acceptance Overall conclusion of the projects was stated to be: “Tolling road use varied by time of day, location and distance travelled is an efficient instrument for reducing urban traffic. The benefits are cleaner and safer cities with more efficient transport networks for all travellers.”

Pop. in ar.

In op.* AADT **

EFC %

* Hours a day and days a week ** During hours of operation ‘ in thousands research and monitoring results of road user charging schemes. The aim of the project is to answer the following questions: • What barriers are stopping cities from moving forward with road pricing implementation? • What support do cities need in order to overcome these barriers? Project Partners are 15 consortiums (including Deutscher Städtetag). The scheduled duration is April 2006 to March 2009. The work to be done within the project is defined as: research, best practice monitoring, coordination and dissemination (but with no demonstrations). And finally regarding the activities of the European Commission. Dated 25 September 2007 it published a Green Paper for City Traffic for consultation. In compliance with the activities mentioned before it recommends road pricing as an efficient instrument to improve mobility and the environmental conditions in the central districts of European cities. All these activities on the institutional European level (except the last one) have gained only little attention in Germany to date. Above all, London’s Congestion Charging scheme, operational since February 2003 and the Stockholm Congestion tax trial in 2006 have been noticed and discussed much more - primarily in context with the EU-Regulations regarding the particulate emissions. In Germany the revival of discussions concerning city tolls caused immediate reactions by lobbyist organisations. The retail lobby condemned it as the “death of the

“In Germany the revival of discussions concerning city tolls caused immediate reactions by lobbyist organisations”

Progress after Progress

Progress and Cupid were followed by a project titled Curacao (Coordination of urban road-user charging organisational issues). Official objectives of the project are: To support and promote fairer and more efficient pricing of road usage in urban areas by coordinating www.h3bmedia.com

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City Tolling city centre” in favour of large shopping malls on greenfield sites. The lobby uses exactly the same arguments against tolling as it used 30-40 years ago against the introduction of pedestrian areas. Later on it called for pedestrian areas even in those cities, where it would truly not have been appropriate. Other arguments in this context include: • Shift of traffic to other highly occupied elements of the infrastructure and/or sensible housing areas; • Further increase of the tax/cost-burden for road-user; • Increase of costs of city centre-related services • Detriment of lower social classes (two class society); • No substantial contribution to solve environmental problems; • Too high transactions costs; • Misuse of revenue to be expected (by experience); • More efficient traditional instruments available to solve the same problems; • Structure and Conditions of German cities are not comparable to those cities, where tolling has been introduced; • Only relevant for Mega-cities; • No legal basis; • The public is against tolling.

Food for thought

Some of these arguments have already proven to be untrue in the tolling reality - or at least more than questionable. Others should be taken into consideration, while thinking about (or planning) a tolling scheme. They all are appropriate anchors for a generally highly important communication strategy to be properly defined and executed, if the introduction of city tolling is prepared. Thanks to the lobbyists and the attitude of the German public, tolling is still broadly seen as a threat and not as a valuable complement to the conventional instruments of financing and managing transport systems.Tolling is not an end in itself. It is an efficient solution to problems - problems of traffic management, of congestion, of traffic safety, of environment and of financing transport infrastructure - or of all aspects combined. The structure of Germany’s cities is not that different compared to that of other European countries which have already implemented a city-tolling scheme or plan to do so in the near future. The level of problems (in particular congestion) may be lower to date, because of the facts mentioned previously. However that may change in the near future for various reasons, including: • Reaching a level of congestion, which cannot be accepted any more – for example as the result of ever more maintenance and reconstruction needs of the technical infrastructure in inner cities. • Lack of money to finance maintenance, recon-

struction and improvements; the general budgets are increasingly burdened by other needs – not least in the social sector. • Increasing environmental problems which cannot be accepted any longer or must not be accepted as the result of more rigid regulations. • Changing boundary conditions and requirements to be met by the inner cities – for example along with the so-called Mega-trend (in particular sociographic change, re-urbanization, scarcity of energy, public safety). • Improvements and decreasing costs in the tolling-technology-sector and • Changes of the aims and concepts of town- and traffic-planning in reaction on the factors previously mentioned.

No time like the present

Politicians, as well as town- and traffic-planners in Germany tend to wait until a certain level of problems (or a level of pain) is reached before actions are taken or even only taken into consideration. A general paradigm shift in financing the transport infrastructure from financing based on the general budgets to financing by the user is not yet “on the political agenda” (according to the stereotypical answer of our Secretary of Transport, whenever he is asked about an expansion of tolling in compliance with the recommendations of the Pällmann Commission). From my point of view city tolling should be taken into consideration, whenever severe problems connected to traffic in the inner cities occur or are foreseeable. I recommend the following approach: • If the identified problems are to be solved satisfactorily by conventional means, it should be done. • If they can be solved better by implementing city tolling, city tolling should be taken into consideration. • If a satisfactory solution or settlement is only possible by way of introducing city-tolling (permanent or for a limited period of time), an appropriate tolling scheme should be defined, prepared and introduced. If a tolling scheme ever comes into question, it should be investigated and designed taking all relevant aspects, conditions and options into consideration – while also taking into account the special local situation and handling it as an integrative part of a comprehensive strategy including complementary measures. Academic model-calculations regarding tolling as an isolated measure, based on selected factors, assessed with regard to selected (and more or less questionable) cost-benefit components are generally more discriminating city-tolling than leading to usable adequate results. E

“Thanks to the lobbyists and the attitude of the German public, tolling is still broadly seen as a threat”

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Dr Andreas Kossak is principal of Dr Kossak Consulting, based in Hamburg, Germany. He can be contacted via email at [email protected] www.h3bmedia.com

Sustainability is vital to Transurban Group’s vision for the future. As an international toll road developer, the Group’s success depends on its commitments to its local communities, customers, the environment and employees.

In 2006 and 2007, the Group made the Dow Jones Sustainability Index World list of high performing companies.

TUCM1431

"5),$).'!3534!).!",%&5452% It also appeared in the Climate Leaders List for Australia and New Zealand in the Carbon Disclosure Project.

Transurban’s approach to sustainability in its projects and operations has earned international recognition.

www.transurban.com

Scotland ANDY GRAHAM (pictured here on the Knoybart ferry in a remote part of Scotland) examines the rationale behind Scotland’s decision to scrap tolling and ponders the longer-term ramifications

Now I know how Michaelangelo would feel if they painted over the Sistine Chapel with whitewash. “My” toll plaza at the Forth Road Bridge has now gone. For those of you not experts in geography, this is the road bridge that links Edinburgh, Scotland’s capital, with Fife over the Firth of Forth. At one time it was the longest suspension bridge in Europe. Scotland became toll free on 11 February 2008 and there is now free passage on every previous toll bridge in Scotland. Along with the Skye Bridge Tolls removed in 2004 and the Erskine Bridge in 2006, the Tay Bridge is also no longer tolled. Now much to my disappointment, the toll plaza was not immediately taken to the Science Museum as an icon of past technology but simply pulverized. I would not claim to have been more than loosely involved in these systems but they were a feature of my early career in Scotland with a long since swallowed-up company called TPA.With the keen support of the bridge Authorities, our team put together some innovative ideas in vehicle classification, video enforcement, use of VMS and communications for tolling …. all now gone to the great toll junkyard in the sky.

Go Forth and multiply

Since opening in 1964, almost 500m drivers have paid to use the Forth Road Bridge (always referred to as the Road Bridge so it is not confused with the iconic railway bridge next door). It was opened to replace a vehicle ferry or a long detour. Since then, more than £225m (€300m) of revenue has been collected. Some critics point out that this is over 11 times the initial cost of building the Bridge. They also remember that initially, tolling was planned to cease once the cost of construction plus interest had been repaid. This balance was achieved in 1993 but the

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Scotland

Scotland the brave? www.h3bmedia.com

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Scotland tolls were never removed. A key reason for this was that the structure costs so much to maintain and operate. The bridge was designed for about 11m vehicles a year but now carries around twice that, often heavier vehicles than allowed for in its 1950s design. The wires that when spun together make up the suspension cables have started to corrode and even snap, meaning costly additional maintenance. Other investment has been on the bases of the main towers to mitigate ship collisions, strengthening the towers and replacing all the bolts. Like the famous railway bridge next door, a new paint system was needed, as the original method was no longer environmentally acceptable. In addition, “my” toll plaza and booths were updated to allow safer working conditions and to support electronic tolling. The £1 two-way toll from 11m users a year made a significant fund for these projects. So why has the Scottish Government taken this major step, at a cost of £16m a year in lost toll revenue? It is simple – to meet public pressure for free passage. Scrapping of the tolls was a major commitment by the Scottish National Party during last year’s national elections and Members of the Scottish Parliament voted on 20 December 2007 to pass this law by 122 votes to three.

Theory of devolution

The devolved Government structure in Scotland means that relatively rapid decisions like this can be made, not linked to the “British” parliament in London.Yet interestingly the Member of Parliament for Dunfermline at the northern end of the bridge is a certain Mr Gordon Brown MP – the current UK Prime Minister. It is interesting to look at the impact for scrapping tolls on maintaining the crossings. Many people assume they are now generators of cash with a surplus – construction and upgrades having long been paid for. Yet interestingly, a Government payment of £14.8m is being made to the Tay Bridge Board to pay off its outstanding final debts – the tolls collected having not been enough to keep this crossing debt free. The bridges’ maintenance will now be directly funded by the Scottish Government. There is an interesting argument there about where exactly that money comes from, which I will not enflame by taking a nationalist stance. Suffice to say though, a historic “Barnett formula” was used to rightly make sure Scotland and Wales get an enhanced share of infrastructure spending - they have fewer taxpayers so disproportional investment needs. Unfortunately this old rule doesn’t fit the mega schemes of today’s transport world, so when London receives £5bn for its Crossrail railway scheme, Scotland will get an automatic £500m bonus for its budget. That is quite handy for paying off toll schemes. Therefore, it could be argued that these maintenance funds will come from central UK taxation, not Scottish bridge users. This is not in line with the “polluter pays” approach core of transport policy. And being a central tax not a toll, the maintenance fund is also far further from the influence of those who actually need it to operate and maintain these structures, unlike toll revenue. The tolling regime was one reason for a successful

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“So why has the Scottish Government taken this major step, at a cost of £16m a year in lost toll revenue?”

The William Wallace Monument in Stirlingshire, testament to a true relic of Scotttish bravery

www.h3bmedia.com

Scotland and sustainable park-and-ride service.What will be the incentive for commuters to continue to use this, beyond perhaps the congestion from extra traffic? The real heart of the problem is that Joe Public (not just in Scotland but the UK generally) cannot see a clear difference anymore between charges, to cover the actual cost of something (like maintaining a bridge) and taxes which are the Government’s way of using their money to buy things (like hospitals, schools and tanks). In short, tolls are now being seen simply as taxes. So abolishing them, and so quickly too, is a great move, politically.

Short-term thinking?

This is where short-term actions will have implications for funding future transport. The corroding cables on the current Forth Road Bridge cannot be repaired forever, so the same Scottish Parliament has decided to fund a new bridge, costing £3.2 to £4.2 billion.They have not actually said it will not be tolled, but following the logic of all crossings now being free, people will surely expect this to be so. As a result Scotland will need to use taxation to pay for this, meaning users may not cover the direct cost of building the bridge but they will still pay for a new bridge somewhere, somehow, as taxes. An implication for the tolling industry if this happens is the end of the well-proven package of a traditional design, build, operate toll crossing put together by banks and concessionaires. It may be replaced by the Government paying for an asset as it is built, from tax funds. So interesting times are ahead for the construction industry in Scotland but not perhaps for those in tolling.

A bridge too far

Is this the beginning of the end for all toll bridges in the rest of the UK? Well, no. Dartford Crossing near London is going to retain its tolls, even though it too has now reached the end of its payback concession. There will be a reduced fee for local traffic. Some might argue that this is a handy way of congestion pricing the M25 Orbital Motorway and having tollbooths at a tunnel portal provides a handy way of managing traffic to meet EU Directives on tunnel safety. But a final thought. Scotland is a very smart nation (Scots have invented far more useful things per head of the population than the English have), so we may still see new and innovative ways of funding transport investment. These need public support that do not rely on taxes. Alternatively, maybe we might just see a sale of some second-hand toll equipment – one careful owner only. And maybe, just maybe, a national charging system for Scotland becomes much easier once the double charging of tolled crossings is removed… and easier to sell to Scots voters once a shiny new Forth Road Bridge is in place, one that cost them “nothing.” E Andy Graham is principal of White Willow Consulting based in Redhill (which was in England, the last time we looked). He can be contacted via email at [email protected] www.h3bmedia.com

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Revenue Collection

Rest assured How can companies that collect revenue from tolling schemes ensure that the revenue stays collected? MEL BYRNE explains what Revenue Assurance is and how it’s having the desired effect in Portugal

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Revenue Collection Firms that deliver services to clients in return for a fee spend a good deal of time and money ensuring that the revenues owed as a result of services delivered are billed and collected in a timely, accurate and complete manner. However, firms and industry analysts recognize that it is commonplace for potential revenues to remain unbilled and/or uncollected. These unbilled and/or uncollected revenues are called revenue leaks. The process of measuring, reducing and, if possible, eliminating revenue leaks in a firm’s business processes is called Revenue Assurance, abbreviated to RA. Industry analysts estimate that revenue leaks exist in all major industry sectors. They acknowledge that the extent of these revenue leaks varies considerably by industry sector. In the Telecoms and Utilities sectors the consensus among analysts is that revenue leaks routinely amount to 2 per cent to 4 per cent of the operating firm’s total revenue. Therefore, an efficient RA process supported by a tried-and-tested RA solution has the potential to recover 2 per cent to 4 per cent of a firm’s revenues that would otherwise remain unaccounted, unbilled and uncollected. Clearly, most Chief Financial Officers (CFO) and company boards would acknowledge that this statistic alone constitutes the basis of a sound business case for investing in RA processes and solutions. In addition to the RA business case and its effect on the bottom line, firms have started to implement RA as they find that RA processes and solutions allow them to comply with the provisions of the Sarbanes-Oxley Act. The Sarbanes-Oxley act applies to all firms either quoted on a US stock exchange or with more than 300 US-based share holders. In a nutshell, the act was introduced in the aftermath of high-profile accounting scandals in the US and elsewhere and makes CFOs and CEOs personally responsible for the accuracy of the firm’s financial reports. Telecoms firms, in particular, were quick to appreciate the role of RA systems in demonstrating Sarbanes-Oxley compliance and have been particularly aggressive in implementing RA solutions so that they can demonstrate that all billed items derive from the delivery of contracted services and that they are therefore legitimate.

This is what we do

WeDo Technologies is the world leader at delivering industry-proven RA expertise and solutions to over 60 clients worldwide in the Utilities and Telecoms sectors. This article provides an overview of RA in general and of the experiences of Portugal’s largest toll-roads operator, Brisa, in implementing a state-of-the-art RA solution from WeDo Technologies. Brisa was founded in 1972 and operates a network of 15 motorways in Portugal, with a total length of around 1,500 km constituting the main Portuguese road links. Brisa is a pioneer in electronic toll collection systems and enjoys annual revenues in excess of €500m from automatic and manual tolls. Annual traffic levels include 8m transits on the manually controlled lanes and 12m transits on the On-Board Unit (OBU)-controlled lanes. www.h3bmedia.com

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Revenue Collection In addition, Brisa is a leading player in the sector in Europe and worldwide with share-holdings in toll-road operators in Brazil, Spain, Austria and the US. WeDo’s RA solution allowed Brisa to measure revenue leaks due to the errant behaviour of both motorists and internal fraudsters and to reduce the extent of these revenue leaks, providing a return-on-investment that meant the RA solution paid for itself within three months. As a result of the success of the initial phase, Brisa and WeDo are currently extending the scope of the RA solution to provide additional coverage and assurance of Brisa’s revenue generation and collection processes.

Revenue Assurance techniques

So, given the potential of an efficient RA process to contribute positively to the bottom line and to ensure regulatory compliance, the question arises of how, exactly, is a firm to undertake RA? Fortunately the principles and techniques of RA are almost as old as business itself and can be summarized under just three headings: Reconciliation; Trend Analysis and Reporting. The origins of reconciliation in business can be traced back to the 15th Century when mathematician Luca Pacioli described the double-entry bookkeeping methods used by Venetian merchants to keep their books of account. As described by Pacioli, the essence of the double-entry system is the cross-referencing or reconciliation of two different views of the same underlying information to ensure that both views are accurate and complete. In RA, cross-referencing or reconciliation of two different views of the same underlying data is a fundamental technique that is used to ensure that both views are correct. Prior to the advent of digital computers, this reconciliation was performed by accounting staff on financial information gleaned from the bookkeeper’s records of the day’s transactions. With the advent of digital computers and the record processing power that they provide, business began to reconcile the underlying transactions directly with financial records, to ensure the accuracy of both.

ness application on the world’s first business computer was a classic RA application. Trend analysis is a powerful technique and relies on the fact that most transaction processing systems in mature businesses reach a steady state of transactions and revenues per unit time, other things being equal. In the absence of any change in the business environment, one would not expect any significant change in the number of transactions or the amount of revenues being generated from those transactions. The transaction processing power of today’s digital computers allows sophisticated, automatic trend analysis techniques to be implemented across transaction and financial processing systems. The trend analysis techniques will detect even the most subtle changes in the levels of transactions being generated and recorded and will alert the revenue analyst to undertake investigations and corrective actions, if necessary. Finally, RA reporting functions can be divided into three categories, as follows: Alarms, Dashboards and End-of-period Management Reports. Alarms are generated by the RA system to alert operations staff that a potential revenue leak condition has occurred and requires investigation and possibly remediation. Dashboards are used to provide operations staff and others with an up-to-the-minute view of the current status of the RA system and the revenue processes under its control. End-of-period management reports are used by management to assess the efficiency (or otherwise) of the firm’s revenue generation and collection processes over the reporting period and to allow management to plan for any required improvements to those processes.

“The trend analysis techniques will detect even the most subtle changes in the levels of transactions being generated”

RA down to a T

For example, in the UK in the 1950s, J. Lyons & Co. operated a nationwide chain of hundreds of tea shops that served tea, cakes and light meals. At the close of each day of business, each shop would report information from the waiting staff’s notebooks to head office in London. These reports were fed into the Lyons Electronic Office or LEO, the world’s first business computer. At the end of each reporting period, LEO would run an application that reconciled each shop’s report of unit sales with the cash lodgements taken from the shop’s bank statement. This allowed Lyons’ management to directly measure the reconciliation between the cake count and the cash for each tea shop on each day and to ensure that all revenues that ought to be collected, were being collected. Thanks to J. Lyons & Co., the first busi-

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Brisa and RA

Brisa contracted WeDo to deploy RAID, WeDo’s RA software platform for reconciliation, trend analysis and reporting. Brisa’s main driver in deciding to deploy an RA solution was to allow for the full detection and measurement of revenue losses associated with certain modes of internal and external fraudulent activity. The RA solution was also configured to report on unpredictable and intermittent hardware faults, software faults, configuration errors and collection errors and to alert operations staff to these conditions as and when they occurred. Each entry and exit toll booth includes a range of sensors that provides a rich data set on each transit, including digital camera images, automatic vehicle classification data and toll records from manual and OBU toll units. By gathering, reconciling, trending and reporting these data for each transit, the RAID solution enabled Brisa to detect and measure anomalous revenue leak situations in real time. RAID was deployed to collect records from 10 www.h3bmedia.com

Revenue Collection control points on each manual lane and seven control points on each OBU lane. This resulted in a tally of some 50m records per month to be reconciled, trendanalysed and reported. The system provided end-toend visibility and control, from the toll booth to the customer debit, and implemented 26 separate validation rules on the manual and automatic lanes generating six different types of alarms. In addition to the routine RA validation functions outlined above, the RAID deployment includes reconciliation rules to detect fraudulent activity among motorists. These usually involve the misuse of OBU lanes. Some examples of such activity include: • Motorists with no OBU or an invalid OBU entering or exiting using OBU lanes; • Placing an OBU from a motorcycle into a truck to avoid paying the full and appropriate tariff; • Motorists entering the motorway on a manual lane and exiting the motorway using an OBU lane In each of these situations, the real-time reconciliation facilities provided by RAID allows the detection of the fraud as it happens and the capture and storage of an image of the offending vehicle from the toll booth’s digital cameras. The image and the records associated with the fraudulent transit are then used to support collection processes by the appropriate agency. A common mode of fraudulent activity among toll operations staff involves the misreporting of the vehicle’s classification. For example, the toll operator could collect the toll from a truck and report it as a car. The operator would then pocket the difference between the car toll and the truck toll. Initially, this activity was detected by RAID’s trend analysis functions as the profile of traffic for certain shifts would not match the expected profile for that day of the week or time of day. In response to this activity, additional reconciliation rules were implemented that reconcile the toll operator’s payment record with the automatic vehicle classification record in real-time.

Conclusion

To conclude, the RAID deployment has provided the following benefits to Brisa: • Detailed end-to-end visibility of the revenue chain across multiple control points; • Details on any operational deviation, revenue leakage and risk exposure as and when they arise; • Daily automatic assurance of multiple information systems; • Proactive initiation of corrective actions through a system of automatic validations and alerts; and • Operational business intelligence for ongoing planning and analyses. As a result of these benefits and RAID’s contribution to the bottom-line, Brisa and WeDo are currently planning to extend the scope of the RAID deployment to provide additional coverage of Brisa’s revenue generation and collection processes. E Mel Byrne is Global Partner Manager for WeDo Technologies, based in Dublin, Ireland. He can be emailed at [email protected] www.h3bmedia.com

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Privacy

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Privacy

A very private function ETC etc presents DUNCAN MATHESON’s approach to overcoming privacy concerns around distance-charging policies Around the world, a number of Governments have been looking into satellite positioning-based road charging systems as a means of tackling congestion or raising revenues. For some, the more challenging concepts being considered incorporate the concept of Time Distance Place (TDP) charging – making users pay according to their vehicle class, the time of day, where and how far they drive. To date, the German Lorry Charge represents the first major deployment of satellite positioning solutions for charging the motorway network. In a more indirect manner, the Swiss system also incorporates this technology to support its tachograph-based distance charging lorry scheme that applies countrywide. More recently, the Netherlands government has made a positive commitment to the introduction of TDP solutions over the next few years and the Swedish and French authorities are also looking into satellite positioning solutions for national distance charging schemes for lorries. Closer to home, the UK Department for Transport (DfT) has launched a Demonstrations Project to investigate the feasibility of TDP charging and compliance determination.

Positive negativity

However, the myriad range of policy options that satellite charging solutions offer can lead to requirements that could have a marked negative impact upon user acceptability. In particular, the UK press, and more overtly the tabloids, often mistakenly (and it has to be www.h3bmedia.com

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Privacy said, lazily) refer to ‘satellite tracking’ and ‘spy in the sky’ type charging. Whilst this is not technically possible, the data that On-Board Units (OBUs) installed in vehicles collect about the position of a vehicle as it travels clearly has the potential to undermine the ‘privacy’ of the vehicle’s driver – where the two can be linked. This requires policy makers to understand the impacts, and potential for perverse outcomes, inherent in the process of setting the key objectives for charging schemes. It also needs implementers to approach system design in a manner that will minimise concerns from users. So, how can meaningful policy objectives be developed that can deliver win-win outcomes for government, industry and private users?

It’s good to talk

The only way to really understand the concerns of the public is to actively engage with them to assess their legitimate concerns for privacy in all circumstances when they act compliantly. This will include setting out the charging policy and objectives, tariff options, and their implications upon scheme organisation, system design, and data management. If this is not done the risk is that privacy will become the Achilles heel of road pricing in the future. To implement this engagement process there are four specific actions that need to be undertaken: • Consider the real policy needs and the associated objectives, in the form of requirement options for scheme rules (tariff approaches), and how these will impact users; • Identify the candidate system and technology requirements that are likely to be necessary to implement the policy options and understand the data design and management choices; • Explore the implications of the outline solutions with a representative set of users covering a broad spectrum of the public; and • Take user’s feedback on solution acceptance and data privacy concerns, to develop and refine policy options that meet the needs of government and the user.

Let’s look briefly at each one in turn.

Consider the real policy needs and the associated objectives

At the outset, it is important to formulate the range of options for who and/or what is to be charged and where, when and how charges are to apply. Examples could include: • Charging at specific points of entry into or exit from schemes; • Charging for distance travelled within a zone or area; • Charging by individual road types; • Charging by road lane; • Identifying the tariff options and times when they might apply.

Identify the corresponding system and technology requirements

The next step in the process is to build upon the policy needs and set out a range of candidate options for how systems might be implemented by way of illustration. This could encompass the following plan of action: • Consider the relevant business models that could deliver the policy; • Set out how the end to end system should perform in terms of its accuracy and the minimum service requirements to Scheme Owners and Users; and • Formulate a range of related supporting data designs and the implications for what data could be held, where it might be held, the level of detail to be captured and retained, and who would have access to it. This would need to address both the charging regime and to support checking for compliance and enforcement.

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Explore the implications of the outline solutions with users

Thirdly, there is a need to engage with a wide cross section of users in a manner that gives them a simple explanation of each option. This is so that they can understand them in the broadest terms and provide their reactions to the implications upon their travel choices, impact upon personal privacy and so on. An approach to this could: • Set out the policy and implementation objectives in a clear and concise manner that can be presented to as broad a set of potential users as possible; • Articulate the cost/price trade-offs for the different business models and technical options incorporating aspects of any personal data to be capture, how this is used and who has access to it, charge computation processes, data location and the role of the user; • Capture and quantify/qualify their levels of comfort or explicit concerns, and preferences; and • Draw out and seek to understand where the key sensitivities lie and confirm these with participants and possible ways in which these might be mitigated.

Take user’s feedback to develop and refine policy options

Lastly, present the user feedback to policy makers in a way that clearly sets out the key sensitivities around: • Solution options; • Privacy concerns on data, computation and presentation; • The perceived intrusiveness of the possible implementation options and the role of the user; and • Users’ minimum ‘acceptance criteria’ and critical success factors. This information would then be used to help refine policy requirements to provide the basis for a mutually acceptable approach. In summary, this article has suggested that to minimise the concerns of the public about distance charging schemes and their effect upon personal privacy, that a four stage approach should be adopted: developing and presenting options for the future, capturing feedback from a wide constituency of possible users, and building upon this to develop policy requirements that seek to deliver a win-win for Scheme Owners and road users. Failure to give appropriate prominence to the public as key stakeholders in the creation of policies that, if implemented inappropriately, could have a marked impact on personal privacy and hence acceptability could lead to failure. Consequently, now is the time for such investigations before any irrevocable decisions are taken. E Duncan Matheson is a Managing Consultant in PA Consulting’s Government Practice. He provides support to a number of governments on road charging policy and related research and regularly presents and writes articles on this subject. He can be contacted by email at [email protected] www.h3bmedia.com

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Smartcards HANNAH BRYAN and PHIL BLYTHE examine the slow take-up of smartcards in the UK, despite their obvious benefits and success elsewhere

The use of smartcards as ticketing for transport services is not uncommon in many countries around the world. However, for a technology that has been in use for more than two decades, the take-up in UK is fairly low when considering the benefits and the apparent commitment to it from the UK government. Smartcard technology and applications are continuously developing. The device will almost certainly get smaller and be cheaper to make and a natural progression will lead to changes in its appearance. As a result of increased memory capacity and flexibility of use, new applications are being tested and developed, the result of which will be a dynamic and useful tool that transport services can take advantage of. We will examine here the use of smartcards in the UK to date, including the issues surrounding interoperability, data collection and privacy, and will discuss how the technology may evolve for the benefit of transport.

What are smartcards?

A smartcard is a credit card-sized piece of plastic with a chip that gains power from an external source. The chip performs all functions for the card and is available in two main varieties: memory-only, with storage space for data; and microprocessor, with memory and a processor to deal with small programs. The reusable card is able to hold datasets which can be compartmentalised securely. This means the card can be used for numerous unrelated applications, such as holding credit or subscription rights to access a range

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of services and applications, and is a highly suitable solution for public transport ticketing. The operator can collect fares from an e-purse, verify access rights, and differentiate between complex fare products and price structures, for example, for loyalty incentives. The in-built security ensures different datasets are owned by separate parties and protected from copying or alteration by third-parties. The card could store both high- (e.g. annual rail pass or airline tickets) and lowvalue ticketing (bus/metro day or single tickets), alongside other applications, e.g. local authority ‘citizen-card’ or private sector applications (e.g. payment for parking or employee access to offices). www.h3bmedia.com

Smartcards

When the chips are down...

Smartcards in the UK

The success for smartcards in the UK was only evident after the emergence of successful world-class schemes, such as in Singapore, Hong Kong, Tokyo and Seoul (to name but a few), and research which suggested that smartcards could have a positive impact on fraud. For example, when Singapore migrated to public transport smartcards fraud decreased from 1 in 6,000 to 1 in 200,000, while average boarding increased from 35 to 50 people per minute.(1) Some small-scale smartcard schemes were deployed in the UK for passenger access to public transport in the late 1990s and early 2000s and were mainly for conceswww.h3bmedia.com

sionary travel on bus networks. Nottinghamshire County Council (NCC) was amongst the first of the County Councils to introduce their smartcard scheme, called freedom, in 1998/99. Other early UK schemes include Edinburgh’s Ridacard in 2001 and Cheshire County Council’s Travelcard in 2002.

Interoperability

During early deployment it became obvious that a patchwork of different smartcard standards were emerging across the country; one person would need multiple cards to travel in adjacent counties, detracting from one of the major benefits of smartcards: interoperETCetc Vol 3 No 1

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Smartcards able travel.Without this it would be more convenient for passengers to pay with cash! When A New Deal for Transport stated in 1999 that smartcards would be essential for transport if the UK is to have good quality and “integrated ticketing”, ITSO (Integrated Transport Smartcard Organisation) was formed to develop a framework that would provide multimodal technical, procedural and contractual interoperability in UK. Unfortunately, the ITSO standard was not complete when the largest scheme in the UK to date was rolled out in 2004; the ‘Oystercard’ scheme in London that currently has over 10m cards in circulation. Nationwide ITSO-compliant schemes have been rolled-out in, for example, Scotland, Cheshire, Merseytravel and Wales. Further schemes are expected later this year and other existing schemes are migrating. Furthermore, a large scheme is expected this year which may determine the fate of ITSO. In 2006 the government announced that off-peak local travel for concessionary people (e.g. over-60s) would be free in England from 1 April 2008. In Consultation on a national concessionary bus travel pass for older and disabled people in England DfT (Department for Transport) proposed that an ITSO smartcard should be used, either as a smartcard in areas with existing ITSO schemes or a flash pass until compliant schemes are in place. See Figure 1 for an example of the card.

Road User Charging (RUC) in 2007, citing privacy as a major concern:“The idea of tracking every vehicle at all times is sinister and wrong”(2). The concern for many transport users is that their whereabouts will be stored quickly and surreptitiously. However, the Data Protection Act (DPA) limits personal data use to the purpose it was collected. Movement data can be used but personal data is restricted unless the user has given permission. Supermarkets are successfully obtaining and using personal information as they offer incentives that users want; the storecard. Shoppers trade their personal information to save money, often without realising. The result: supermarkets can closely monitor their customers; what they buy, spend, etc. This privacy trade-off could be utilised by transport providers to encourage public transport use, however, research would need to be carried out to determine what level of service people would trade their personal information for and what the implications would be.

“The privacy trade-off could be utilised by transport providers to encourage public transport use”

Demand management versus privacy

As with many Intelligent Transport Systems (ITS), the computing capabilities of smartcards generates an immense amount of data; essentially every transaction is captured. This could be used to better manage the transport system and meet the customer needs. As with any personal data storage, it also poses concerns in terms of personal privacy and the effects still need to be investigated. At Newcastle University we have found that the data can be used to compile individual passenger journey histories; you know who the customer is (if not individually, then as part of a user group), where and when they use the network, and how frequently. The data also offer geographical locations for events so results can be transposed to visualise profiles using GIS (Geographical Information Systems) and identify demand on the network (see Figure 2). With a large dataset, e.g. covering an entire city, analysis could illicit thorough customer knowledge to compliment traditional survey techniques. Despite the benefits of using smartcard data, there are obvious repercussions to consider.Privacy is a particularly contentious issue for ITS; almost two million people signed a petition lobbying

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Technological advances in transport

When interoperability issues have been resolved, smartcards could be highly convenient and used for many applications anywhere in UK or even the world. As W. Meyer said, “Travellers in the future should be able to use ticketing technology interoperably throughout the world to obtain the fares most appropriate to them wherever they may wish to use local transport”. Although Oyster is not interoperable with the rest of UK it is now available as a multi-application card which is both travel and credit card (with Barclays Bank), and offers an incentive of automatically topping up the travel e-purse whenever it dips below £5 (€8). Combining smartcards with devices and other applications is a natural progression, benefitting in shared infrastructure and development costs, and an increased customer

Figure 1: English National Concessionary Bus Travel Pass, courtesy of DfT

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Smartcards

Figure 2: GIS display of disabled passenger demand derived smartcard data

base. One card can accommodate multiple uses: personal identity storage, such as biometrics and medical information; smart passports; ID cards; and small and large purchases. Furthermore, multi-application devices, such as Near Field Communication (NFC) enabled mobile phones or smart-watches, offer convenience and ease of use to the customer. In the future techniques to monitor customer boarding and alighting (without the need to present the card to the reader), such as Be in/Be out, will seamlessly capture more customer information. Devices are also miniaturising and become cheaper. Newcastle University is currently investigating uses for smartcard and sensor embedded jewellery. In the future we could wear smartdevices that allow us to be in continuous contact with our environment, automatically gaining access to and paying for services as we use them.

Conclusion

Without interoperability, the business case for investment in smartcard technology is limited. Ultimately, interoperability in UK depends on the success of ITSO. Oyster is not yet ITSO compliant, however, there has been an agreement to work towards this. Another success which ITSO hinges upon is the National Concessionary Bus Travel Pass. If the roll-out is a success, it could encourage Local Authorities to implement ITSO compliant schemes, thus securing ITSO as the national standard. The obvious benefits from smartcards are for public transport as they can be used as authorisation and payment tickets, and reduce fraud and boarding times. Transport services will benefit from technological advances as the device gets smaller and cheaper to make and as data quality improves and in-depth passenger information is elicited, clear, dynamic servwww.h3bmedia.com

ice performance statistics can be used for marketing purposes and creating incentives. However, further research must be carried out to determine the privacy effects and the willing of the public to trade personal information. Interoperable and multi-application transport smartcard provides the ability to piggy-back ticketing access and payment onto devices people already carry. There is no inconvenience for the user and they will be reminded that public transport is a viable option and alternative to the private car, providing the potential to reduce congestion and the impact of travel on the environment.

References

(1) Sim L. S. K., Seow E. A. C., Prakasam S.,“Implementation of an Enhanced Integrated Fare System for Singapore”, Land Transport Authority, RTS Conference, Singapore, 2003 (2) 10 Downing Street “E-petitions”: http://petitions. pm.gov.uk/traveltax/ (22/06/2007) Hannah Bryan is a Research Assistant and Prof Phil Blythe is Professor of Intelligent Transport Systems at Newcastle University’s Transport Operations Research Group. www.ceg.ncl.ac.uk/research/transport/index.htm ETCetc Vol 3 No 1

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All photographs in this article© Transport Technology Consultants

London

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London

So what have we learned? As London celebrates the 5th birthday of its congestion charging scheme, ANDREW PICKFORD takes a look at recent progress made in developing real-world congestion charging solutions worldwide and current trends to see how much we have really learnt about pricing for the use of roads in our towns and cities Happy Birthday, London. On 17 February 2003 the London Congestion Charging scheme went live. The primary target, to reduce congestion, was rapidly met. Decreases of up to 26 per cent (now about 21 per cent) from pre-launch levels were reported by the charging authority, Transport for London (TfL) and the overall net income from the scheme, to be fed into complementary transport measures, rapidly surpassed £100m (€130m) per year and is now over £125m per year.Five years later the scheme area has been extended westwards to roughly double its original size and various refinements have been made to its charging policy. According to TfL 50,000 fewer cars per day are being driven into central London – not a reason to claim that the same number had been ‘priced off the road’ though. London’s buses carried over 1.9 billion passengers in 2006/07, an increase of 45 per cent from 1999/2000, induced in part by the charge itself and through increased investment in new buses. No charging policy would be aimed at reducing the wealth-creation ability of a region so it is notable that the net reduction in the number of people entering the centre of London was about 4,000 in 2003. This is a small proportion of the 20- 25m daily journeys that were made during the same period. Whether or not you will be celebrating the congestion charging scheme’s fifth birthday, it is clear that the arguments for and against the application of road user charges to reduce congestion in other cities worldwide are as intense and as healthy as ever five years on. The distribution and nature of benefit received or cost incurred depends on who you are. Owners and drivers of many vehicles are required to pay the charge in return for a more reliable and reduced journey time - on average - according to periodic surveys. Paying a fee to drive into a charged area does not provide the same level of visual and instant gratification received by paying a toll to cross a bridge over the Thames, San Francisco Bay or a tunnel under Hong Kong www.h3bmedia.com

Harbour (or any one of hundreds of crossings and tunnels worldwide). Congestion charging and its big brother, national road pricing, forces a more challenging set of questions even before I get into my car. What benefits would I receive if I paid the charge? Should I drive at all? And if so, when should I travel? What other modes are available to me ?

Taking Stockholm

Stockholm City’s strategy to make the benefits and the costs visible to business and individuals was to install a pilot congestion charging scheme encircling the city. The trial ran for seven months from 2006 and not only highlighted the effect of a charge on congestion but also showed what would happen if it was turned off. Unsurprisingly, traffic levels quickly returned to a level close to pre-charging levels. Following the pilot and a referendum that demonstrated, by a slim majority, support for congestion charging, the scheme was turned back on, with many operational refinements, on 1 August 2007. This on-off experiment was not unique, however. Trondheim in Norway suffered from a 10 per cent increase in traffic within six months and correspondingly reduced investment in bus network subsidies since its cordon toll scheme was turned off on 31 December 2005. Restoring the cordon scheme is now back on Trondheim’s political agenda. Most of us are creatures of habit - individuals often impose upon themselves, over time, routines that are largely fixed and often dependent on the routines that are established by others. These self-created routines evolve through choices that we all make; the schools to which we send our children to, the places that we work and go shopping. Or, as businesses, we expect employees to be available at generally fixed hours, we expect our goods to arrive just-in-time to be used on manufacturing lines and we do not expect to pay more to move goods by roads than our businesses already pay through ETCetc Vol 3 Issue 1

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Londoners are reminded that they don’t have to drive to work

other means. The value of time, or rather the opportunity cost of sitting in congestion is often not factored into this logic though. An assessment of the marginal social cost of congestion is unlikely to be on our individual agendas unless we happen to be a transport economist, of course. So, implementing congestion charging (or just talking about it) makes us question historic decisions and the logic of our embedded behaviour. It also questions whether we, as individuals, are equipped with sufficient information to make a rational decision based on the collective cost of congestion, including the adverse impact on the local economy, health and its contribution to the generation of emissions harmful to the environment. Making an informed decision at a local level needs not only a ‘leap of faith’ but a full understanding of the benefits to at least the same level of awareness as the charges that, unsurprisingly, seem stick more readily in the collective memory.

Embedded decisions

But exactly how embedded are the transport choices that we make? One of the most surprising findings of the Stockholm pilot was that the expected level of behaviour change (measured by traffic patterns and modal shift) happened faster than predicted. Over 80 per cent of expected migration from peak period to off-peak and public transport modes occurred in three weeks rather than the expected three months. In this case the travelling public and business were more flexible than some of the early surveys had predicted. This suggests that enough road users were able to modify their travel behaviour such as the time of travel or choice of mode to reduce congestion to published target levels - about 20 per cent compared with precharging levels. This success also hides another economic truth - increasing a charge does not necessarily reduce vehicle movements (and its near relation - traffic

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congestion) in proportion - as shown by the reduced impact of raising the nominal charge in London from £5 to £8. In effect the demand is becoming more and more inelastic as pricing stimulates more and more road users to seek alternatives. This does not undermine the logic of congestion charging though but demonstrates that pricing can only be regarded as one tool in the transport policy-maker’s toolbox. For example the Singapore Land Transport Authority (LTA) has applied charges that vary monthly since 1998. Although not urban congestion charging, varying the charge to maintain a specified level of service has been applied on SR91 in California since 1995.

A solution for smaller cities

It may be no coincidence that some of the global pioneers of congestion charging are large cities; Singapore, London and Stockholm. However, the challenge now is not to replicate the London scheme or even Singapore but to find local solutions, particularly for smaller cities and towns where the benefits and costs of congestion charging also warrant going ahead with a scheme. Regardless of the benefits, the short-term financial model still needs to stack up though. Simply, the price charged for road use needs to exceed the costs of charge collection and scheme operation. It must exceed it, over the long-term, by an amount that supports the complementary measures needed to help ‘lock in’ a change in user behaviour, including an improved public transport network and improved public information on travel options before and during a journey. Of course, reality is more complex than this. For example, if the charge required to induce a behaviour change to meet congestion charging limits is low then it may not be enough to cover costs and meet financial targets to invest in projects such as park and ride (Stockholm), increased bus provision (London) or the proposed fare freeze on public transit (New York). Furthermore, as national pioneers the London and www.h3bmedia.com

London

The BBC opened the airwaves for a Congestion Charging debate in 2003 (left) while (right) a taxi, which was and still is exempt from paying the charge, passes a Central Zone sign 10 minutes after the scheme went live

Stockholm schemes were developed in isolation of other local schemes, in other words, all of the functions required for congestion charging have been provided (or procured) from within. Figure 1 (on page 50) highlights the functional complexity of a typical charging scheme based on the application of charges on a public road network. The figure assumes that many vehicles are equipped with some means of recording road usage such as using Dedicated Short Range Communication (DSRC) tags or, in the future On Board Units (OBU) that employ Global Navigation Satellite System (GNSS) to identify the vehicle’s position on the road network and Cellular Networks (CN) to communicate vehicle journey information back to the same charging authority. It is assumed that enforcement does not depend on barriers to limit vehicle access but instead depends on image data as primary evidence of the vehicle’s presence at a specific time and place. To be useful, the images captured need to show the vehicle’s number plate (interpreted by Automatic Number Plate Recognition, ANPR) and other context data. Figure 1 also shows the variety of payment channels that would need to be offered to enable broad accessibility, including the option to pay cash through retail outlets. Where the investment in tags to ensure automatic charging is not justified based on usage then videobased accounts could also be offered at higher operational expenditure for each chargeable event. The lowest usage customers or those that travel very occasionally would be able to register for individual journeys, enforced entirely by cameras. International charging schemes such as the City Link in Melbourne (Australia), ETR 407 (Canada) and Highway 6 (Israel) offer a variety of account types matched to predicted road usage of individual account holders and several payment channels to maximise accessibility and compliance. www.h3bmedia.com

Joining the club

An urban charging solution does not need to develop all of these functions but could have access to some of them from third parties; either other charging authorities with spare operating capacity or specialised providers. Having the choice between buying services from a menu or developing internally may be the key to joining the club. How could a smaller scheme take advantage of the benefits of scale and define a business case that is sustainable and generate sufficient funds for complementary measures such as enhancement to public transport? If we cannot answer this question, then congestion charging will remain an elite group to which only large cities can afford to participate. The introduction of congestion charging can no longer be justified solely by social benefits and costs but on having an operations cost structure that works at a smaller scale to return enough of the revenues collected to be invested elsewhere.The same is true of toll schemes such as the Oslo Ring that had, as its primary target, to fund the building and maintenance of a cross-city tunnel. The bankable surplus of revenues over costs for this charging scheme meant that the tolls are still being applied even after the initial investment needs had been satisfied. Norway has implemented 22 charging (toll) schemes, including six cities all of which are socially and economically justified. Although the strategic objectives of these toll schemes are not aimed at reducing congestion it demonstrates that small scale solutions can be delivered through the development of proven operating models, proven legislation, single account interoperability, an educated and competitive local supply chain, agreement on inter-operator data exchanges, centrally delivered guidance and common functional modules. Pioneers carry a disproportionate implementation risk – being a follower is not such a bad thing if this risk is reduced. ETCetc Vol 3 Issue 1

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London The basis of comparison between schemes is no longer costs as a proportion of revenues; costs reflect the underlying complexity of the organisation and its operating volumes whilst revenues reflect charging policy requirements.So,as the number of schemes increases the maturity of service providers’ solutions, as pricing for bought in services becomes more competitive and predictable, as legislation is refined and as greater awareness of the costs and benefits of congestion charging are known, then the scale at which the business case enables congestion charging should fall. This will not only enable small city solutions but allow policy evolution at lower cost since this will depend less on the activity of the charging and enforcement services. However, the challenge remains regardless of scale - to ensure that the benefits of charging for road use remain local, direct and visible. In the last few weeks, Geneva, Dublin, Gothenburg and Helsinki have all announced the prospect of congestion charging. Even Brunei and Monaco have announced their interest. San Francisco is part way through a study and Los Angeles amongst several other US regions will bid for funds from the Urban Partnership and Congestion Reduction Demonstration (CRD).

The end game?

Just as we are seeing congestion charging appearing on political agendas we are already seeing new charging policies emerge. Milan turned on its EcoPass ‘pollution charge’ on 2 January 2008 for a 12-month trial. Rome imposed limits on the most polluting vehicles later in January and Turin is considering introducing an emis-

sions-based charge. Other cities are considering access schemes where only authorised vehicles and those that pay a period charge would be permitted access. London is not standing still and, although congestion charging is part of the fabric of London’s transport strategy, it continues to evolve further. On 4 February 2008 London turned on its Low Emission Zone for heavy goods vehicles driving into and within the most of the Greater London Area. Furthermore, in November this year, plans have already been made to extend the original scheme with an emissions-related charge. Paying for road use in our towns and cities is no longer only about congestion but also about air quality and other policy objectives. The goalposts are moving and reflect potential new trends planned to be implemented in London and New York - among others. The next article in this occasional series will be entitled ‘Ten Years On’ – a review of progress and what we have learnt about urban congestion charging and its many policy variants. Only time will tell how well this increasingly complex policy environment has been translated into understandable policies that are costeffective to operate. The subject of charging for road use forces us to think more about travel choices. This is perhaps why congestion charging and its big brother, national road pricing, are not subjects that are most likely to break the ice at parties – at the moment at least. E Andrew Pickford of Transport Technology Consultants in Cambridge (a potential congestion charged area) at [email protected]

Figure 1 Interfaces to stakeholders

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Tailored solutions for individual needs

Demand Management As the supplier and operator of the Western Extension Zone (WEZ) of the London congestion charging scheme for Transport for London and the recently announced Low Emission Zone (LEZ), Siemens Traffic Controls is an established enforcement specialist. With over 60 years‘ experience in the UK traffic market, we are equipped to provide flexible, inter-operable and scalable road pricing schemes and are proven integrators of ANPR, DSRC and GNSS technologies. See you at Intertraffic, Amsterdam 1 - 4 April 2008, stand 01.312. www.siemenstraffic.com

Environmental Pricing

Green dreams Is BOB McQUEEN going soft? In the November/ December 2007 issue of Thinking Highways’ North American edition he wrote about fashion and now he turns his attention to the environment

Maybe it’s raining too much here in Southern California as I have the distinct feeling that I’m going green. Oh yeah, I hear you say, McQueen jumps on the environmental bandwagon because it’s the cool and trendy thing right now. Well, before you judge me read on for a bit. I recently attended a Connected Urban Development conference in San Francisco. It was sponsored by Cisco Systems as a part of the Clinton Global Initiative on climate change. While the subject matter was wider than transportation, addressing urban sustainablity in terms of work, mobility, energy and buildings, my participation in the event made me more aware than ever of the power of world class transportation performance management and the central role that congestion pricing techniques can play. I also learned that the work we are doing in intelligent

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transportation systems, congestion pricing and toll road operation has an important fit within the larger picture where ICT (Information and Communication Technologies) are being used to support the movement towards sustainable work practices, energy use and mobility. In essence, I was awakened to the fact that congestion pricing and intelligent transportation systems are connected and form part of larger possibilities for sustainable urban development. Drawing on this experience and some amazing insight and information gained from the H3B Media UK Road Pricing Think Tank, held on the former site of the Brooklands motor racing circuit last November, I thought it would be great to write this article on how congestion pricing might be used as part of a wider portfolio of measures, to make urban transportation more efficient and sustainable.

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Environmental Pricing Background

While there is confirmed and growing global interest in the application of congestion pricing and related value pricing techniques in urban areas, it is obvious that the majority of the transportation community are still grappling with this new technique. There are great lessons and experiences to be gleaned from the previous applications in Singapore (since 1975), London and Stockholm, but introducing and explaining the approach, potential effects and how it might operate in a specific urban area, remain challenges. I heard several people at the Brooklands Think Tank ask for advice and assistance in explaining congestion pricing to decision makers and to the general public. There seems to be a consensus view that since congestion pricing is not an off the shelf product, it needs a lot more effort to explain and communicate. Both the Transport Innovation Fund (TIF) in the UK and the Urban Partnerships Agreement initiative in the US, place a renewed emphasis on congestion reduction through the application of a balanced portfolio of measures including congestion and value pricing techniques. Techniques such as demand actuated transit, travel information, advanced traffic management, parking management and transit management all have a complementary role to play in urban congestion reduction. This provides us with an extra challenge to explain the operation and effects of the bigger picture of measures as well as congestion pricing. For many months now, I have been working with an network of international metropolitan areas on the subject of metropolitan transport optimization. Known as the MeTrO (metropolitan transport optimization) net-

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work, this informal and ad-hoc group of 12 major cities, have been working together to share knowledge, information and best practices on a range of metropolitan transport optimization techniques, including congestion pricing. Through the work of the group we have come to recognize the role that a balanced portfolio of technology supported optimization applications will play in the development of sustainable urban transport. We have also realized the importance of complete integration with conventional approaches such as traffic engineering and land use planning. The group has also recognized that in many cases, the technology supported applications enable a range of management solution or ways to do things that really deliver service and results. We now understand that the implementation of a sophisticated congestion pricing application requires equally effective travel information delivery. If fees for road use will vary by time, distance, place and vehicle category, then an information system will be required to deliver decision quality information to travelers. I often wonder how I would feel if I had spent my money on an MP3 player and then discovered that it didn’t come with a user manual. How much more critical is the user manual for a multibillion dollar transportation system? (This may be my unique perspective I am Scottish after all!). Similarly, we know from experiences with toll roads and transit services that bringing the point of payment as closely as possible to the point of service delivery changes the user’s perception and expectations with respect to service delivery. Therefore the need for efficient traffic and transit management in order to underwrite service

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Environmental Pricing quality, points the way towards advanced traffic and transit management. From another perspective, transit management becomes a crucial element when congestion pricing techniques are applied. We already know that successful and effective congestion pricing can have a dual effect – excellent demand management through a pricing mechanism that cane be fine tuned and the generation of new revenue for additional transportation systems improvements. This second effect can create a virtuous cycle effect in which congestion pricing revenue is utilized to make transit more attractive as an alternative, re-enforcing the demand management effects.

Steward’s enquiry

This virtuous cycle will only be sustained if the additional revenue is subjected to careful stewardship, indicating the need for excellence in transit management and fleet operations. Advanced transit management systems for fleet and passenger management can play a pivotal role in this respect. Indeed, the payment systems infrastructure being used to collect congestion charges and transit fares would also be a rich source of use data for this purpose. Data on how many passengers board and alight at each bus stop in the system can be used to tailor service frequencies for optimized operation. So we can now see the close connection between congestion pricing and other application of technology supported systems that can together optimize urban transportation. Coming back to the issue of how to communicate the effects of congestion pricing and the other complementary technology measures, I believe that the answer lies in a laser focus on results, effects and benefits. As a profession and community we in transportation can do much better at sales and marketing if we take a leaf out of the books of some of the experts. If we take a look at some other business sectors such as commercial services and consumer electronics we can see some patterns and principles that may be usefully applied to the transportation context. Now I don’t mean that we need to behave like time share or double glazing salesmen and go about trying to sell people things that they don’t need or want by making them feel stupid if they say no. By the way this technique doesn’t work on Scots as we have no problem feeling, or even looking stupid for that matter, if it saves a few bucks! I have deep pockets and short arms, as my grandad used to say.

supporting the introduction of new systems and solutions. Aha! Here may lie a key principle that we can use to great effect in congestion pricing and other ITS applications. Instead of just focusing on the cost of the systems and the level of the congestion charge, can we also define the value proposition? What return on investment will the customer experience through the deployment of traffic management, travel information and transit management systems? What return on toll or fee will the traveler see in return for the congestion charge? The first and most obvious return on fee comes in the form of reduced congestion. The second and less obvious return comes with the reinvestment of the revenue from congestion charging into transportation systems and operations improvements. Perhaps if we could state the latter as a true meaningful value proposition rather than a string of capital or operational projects, we could be as effective as some of the best sales people on the planet.

“This is not about trying to sell people things that they don’t need or want”

Needs must

If you consider transportation sales and marketing as a structured process designed to understand the needs of the consumer (traveler) and match those needs to the products and service on offer (transportation facilities and services) then it gets interesting. Having understood the needs of the customer, it is then possible to define a value proposition that clearly defines,describes and communicates the value that the customer can unlock by making use of the products and services or

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Environmental Pricing

“Pay your congestion charge and get an immediate 20 per cent reduction in congestion, but wait, you will also get a 10 per cent improvement in transit service frequency and a 15 per cent improvement in overall journey time reliability” Now we’re in the business of value sales and needs matching marketing. Perhaps a really good sales pitch for congestion pricing also involves the definition and communication of the value of a world class urban transportation system? After all,congestion pricing is intended to improve urban transportation so should we not describe the thing that we are trying to improve at the same time?

the approximate capital and operating costs of the deployment. All simple and obvious questions that key decision-makers will rightfully ask and the equally obvious response might be – “give us the resources to develop and validate a detailed mathematical simulation model and we will determine the answers to your questions”. This could well elicit a response that forms the basis of an undesirable chicken and egg type problem – “well, no, you give us some idea of what to expect, then we’ll give you the resources to study it further. As a way of addressing the potential for chicken and egg and as a communication tool to explore the likely effects of congestion pricing proposals, we worked with the cities in the MeTrO network to develop a web based sketch planning tool. The tool, known as Metro, was developed on the basis of information and lessons learned during the Singapore, London and Stockholm urban zone congestion pricing implementations. You input the size of the zone, the current traffic speed, the number of vehicles expected to enter the zone under current conditions and the average peak hour traffic speed in the zone. The sketch planning tool then calculates the emissions and energy savings, the expected congestion reduction and the annual net revenue expected from the implementation. It also produces an estimate of the total cost of implementing the system. Using this information, it is possible to interactively explore zone congestion charging effects with a non technical audience. The economics of congestion pricing can be simply and effectively explained and a justification made for further detailed research, study, data collection and modeling. Based on our experiences to date in using this tool with a range of city transportation professionals we feel certain that it does the job of breaking the potential chicken and egg cycle really well and supports the kind of pre-study exploration, discussion and agreement that makes it easier to justify the resources required for the essential follow up study. Focusing on effects both direct/immediate and indirect/long term, is, we believe, critical to public acceptance of congestion pricing. The effects range through safety, efficiency and customer service, with significant environmental benefits in support of connected and sustainable urban mobility. When I dream at night I dream in green. Green for the environmental effects of congestion pricing and green for the potential new revenue stream that could be made available and dedicated to further transportation improvement. E Bob McQueen, Senior Vice President & Senior Advisor at PBS&J, is an internationally recognized expert in the field of ITS, with more than 30 years of experience in the field. His track record incorporates extensive experience in conventional transportation planning and traffic engineering with a steady migration towards specializing in applying information and communication technologies to transportation. [email protected]

“Now we’re in the business of value sales and needs matching marketing”

Getting the message across

So now let’s address the issue of explaining and communicating the effects and benefits of a proposed congestion pricing deployment. How much emissions and gasoline are likely to be saved, how many vehicle kilometres and vehicle hours of travel will be saved, how much annual net revenue can be expected and what are www.h3bmedia.com

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Sweetening the pill

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Environmental Pricing

MIGUEL ANGEL MARTINEZ OLAGUE addresses a burning issue. Can the idea of road pricing be made more attractive to the public if it’s approached from an environmental angle? Whenever road pricing or congestion charging is discussed, economists and transport specialists generally agree that such schemes are fair and help to solve many of today’s traffic problems. Nonetheless there is an equal consensus about the difficulty of getting these advantages across to the public at large. The upshot is that most governments are somewhat wary about adopting these systems until they become the last-ditch alternative. This scenario is now changing because of society’s increasing concern about the environment. This concern has, to some extent, become a new need that society is prepared to pay a certain price for. Most people regard it as unfair to have to pay a congestion charge for using a road they have already paid for with their taxes (and previously used for free), but it is quite a different thing to argue that the environment should be protected by rationalizing vehicle use.Witness the fact that in some European countries the most fervent advocates of road pricing policies are also the most fervent environmental groups.

A political vehicle

According to official records transport is responsible for 30 per cent of CO2 emissions. Depending on the type of vehicle, the CO2 emission rate per kilometre ranges from 80 grams per kilometre for the most eco-friendly vehicles and up to 300 grams per kilometre for the most www.h3bmedia.com

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Environmental Pricing aggressive. Some countries have already brought in new legislation to favour the least polluting vehicles with lower road tax rates and heavily levy the “gas guzzlers”. In Spain’s case the greener vehicles (lower than 120 grams per kilometre), hitherto taxed at 7 per cent, are now exempt. Those emitting more than 200 grams per kilometre have had their tax rate raised from 12 to 14.75 per cent. But the final emission produced by a vehicle throughout its whole useful life depends on other factors such as the type of use, in the city or on the open road, and also, as stands to reason, the mileage clocked up. An average vehicle travelling 20,000 kilometres a year in a highly congested city like Madrid or Barcelona will give out a ton more CO2 than a 4x4 used only for journeys on the open road. Furthermore, and this is particularly important, consideration would also have to be given in the first case to the vehicle’s marginal congestion and its impact on the marginal emissions created by the other vehicles on the road.

A questionable contribution

“In Spain, those emitting more than 200 grams per kilometre have had their tax rate raised from 12 per cent to 14.75 per cent”

In principle the fuel tax is supposed to take these additional factors into account, insofar as it is higher for the highest consumers, either because they clock up more miles or because they consume more fuel in doing so. This is not in fact the case, however, for it is incapable of distinguishing whether or not a user is contributing towards urban congestion. Put another way, for equal fuel consumption, a driver making a 30 km journey on the open road would pay the same tax as another making a 10 km journey in a highly congested area. This is a fair system as the vehicle emission in both cases could be very similar; in the second case, however, the driver’s vehicle has made a bigger contribution to road congestion and hence caused other road users to consume more and ipso facto emit more CO2. Although the additional CO2 emission per vehicle is very small, it has to be multiplied by the thousands of vehicles on the road. This effect is not taken into account by the road tax or fuel tax.

Personal effects

The ideal system would tax the most polluting vehicle owner more heavily and also the driver who uses his/ her car on a very congested road, clogging up traffic even more. This does not happen at present; the vehicle owner has no idea of the high cost of polluting and clogging up a big city. Under the current taxation system users pay a fixed sum in advance and this then gives them “carte blanche” to pollute as much as they like thereafter (although an allowance does have to be made here for the aforementioned fuel-tax effect). The result is that people do not take into account the effect of using a private vehicle each time they take it out on the road.

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As is common knowledge, some cities like London, Singapore and Stockholm have implemented congestion charging schemes that try to solve this problem by creating a marginal price in the form of a charge for entering the city centre; this, of course, impinges on the individual decision to use the car. The revenue thus raised is ploughed back into new infrastructure and public transport. The overall result is more fluid traffic and lower pollution. As already pointed out, despite all the benefits of these schemes, as universally recognized by experts, the public at large and politicians tend to view at them with varying degrees of scepticism, except for the most convinced environmental groups. Nonetheless, Global Navigation Satellite System (GNSS) technology allows groundbreaking schemes to be applied in which users do not see it as paying an additional tax or charge but rather polluting and congesting less and hence making a significant saving on the taxes they already pay. There is where the green cheque, as presented in this article, comes into its own.

Going green

It works like this. New vehicle purchasers are offered a rebate on part of the road tax when it is eventually changed. This sum, or green cheque, is calculated automatically from the data furnished by a GPSbased OBU, fitted in the vehicle when the owner opts into the scheme. The amount of the green cheque will depend on the type of vehicle and its lifelong mileage in those areas, thoroughfares or time bands previously defined and announced as high congestion. Furthermore, the cost in terms of mobile communications of this scheme will be very low, since, rather than in real time, the discount can be calculated monthly by periodically downloading the OBU data. From an economic view the business case would seem prima facie to be viable. We should bear in mind here that the difference in road tax between a greener vehicle and another highly polluting vehicle might be as much as 15 per cent. In absolute terms this more than pays for the investment and operational cost of the OBU. This scheme has doubly positive results. It not only continues to favour the purchase of greener vehicles but also gives a real incentive to owners of more polluting vehicles to use them in a more eco-friendly way. Another advantage is that the scheme is voluntary, allowing environmentally aware members of society to opt in of their own volition and help in the fight against climate change. E Miguel Angel Martinez Olague is corporate development director for the Madrid-based company GMV. He is contactable via email at [email protected] www.h3bmedia.com

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Interoperability

The art of the possible STEVE MORELLO and ERIC WURMSER on the future for road and driver services, using an innovative project in Ireland as a shining example

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Interoperability An efficient transport system is primordial for economic stability and development for all countries around the world. In many Central and Eastern European countries, and other EC and OECD countries, a significant portion of the roads including the main trunk road network are in relatively poor condition or only in fair condition, requiring major new investments to sustain economic growth of the country. This situation has led to the development and implementation of toll roads in countries like Croatia, Hungary, Ireland, Poland and Portugal, in addition to the traditional toll road countries in Europe, e.g., France, Italy, Spain and Norway. At a country-specific level and with the rising use of ETC (Electronic Toll Collection) the issue of interoperability across distinct toll roads in each country has become an increasing challenge. This article will review the Easytrip concept developed by Egis Projects, current trends in one country regarding interoperable toll (or fee) collection services and then draw some main conclusions.

Integrated services

The very notion of tolling, in general, is changing, extending the infrastructure business to include ETC, ORT (Open Road Tolling), congestion charging, road pricing and toll road interoperability. Since 2005, Egis Projects has embarked on the mission to provide fully integrated services for end users, toll road/congestion charging operators, HGV tolling companies, car park companies, etc with the development of a corresponding brand name called Easytrip Services. This business development strategy is based on managing customer relations across a range of tolling/road

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pricing sectors and stakeholders whereby Egis Projects brings to bear almost 20 years of experience in the development, launching, and operation and management of 16 toll operating companies worldwide. Based on our past PPP concession and turnkey toll projects and recent new projects (turnkey supply of an ORT system and operation for the Golden Ears Bridge in Vancouver, Dublin Port Tunnel operations, and a contract to design, build, finance and operate the first section of Vienna’s north-eastern bypass – Austria’s first PPP motorway project), Egis Projects is promoting and developing the establishment of an interoperable ETC or EFC (Electronic Fee Collection) framework within respective countries. The best example of the development and implementation of this strategy is Ireland.

ETC and EFC in Ireland

As part of its PPP programme, the National Roads Authority (NRA) developed an approach towards ETC interoperability in Ireland. The NRA imposed standard ETC encoding and processing rules and, in December 2004, launched a tender to establish an ETC clearinghouse organisation, the so-called Information Exchange Agent (IEA). In Ireland, all ETC systems implemented are interoperable from a technical point of view, allowing a tag user to cross any toll facility in the country with a single tag. The IEA aims at facilitating commercial interoperability through the mandatory exchange of both ETC

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Interoperability Information clearinghouse

Service Provider (Tag Issuer) Lists

Receive Consolidate distribute

Issuer Consolidated charging information

Clearinghouse Office

Payment

Charging information

Invoice

Consolidated Lists

Road/Car Park Operator

User

Service

Toll/Car Park Infrastructure Service

subscriber lists and ETC transactions among road operators, enabling settlement of interoperable revenue between those operators. With at least 12 toll projects scheduled for operation by 2010, and therefore potentially 12 different concessionaires (and operators) spread out across the whole country, there was a strong need for an ETC interoperable network. This would allow a road user to hold a single ETC tag providing payments for all toll-operated infrastructure in the Republic of Ireland: one client, one tag, one bill. The business model developed by Egis for this project has two main information flows between the IEA and the operators: • Information flows with the ETC tag issuer (pure Service Provider). The tag issuer is delivering the ETC tags to the users, managing their subscribers’ accounts and invoicing them. • Information flows with the road infrastructure service provider (Road Operator). The road operator delivers the infrastructure service (usage of the road) to the users and collects an ETC toll rate in return. As all Concessionaires are not both ETC tag issuers and road service providers, the solution delivered by the IEA allows a Compatible Operator to provide one or both of the services. The interoperability concept has been turned into real life in Ireland through the IEA project (operational since November 2005). It has proven to be a technically robust, time-efficient and cost-effective tool to support interoperability development throughout the country. Taking advantage of the IEA framework, Egis Projects has developed a new business in Ireland under the eTrip banner – an independent service provider to road users. eTrip is a joint venture between Egis Projects and

ElectroAutomation, a company that has many years of experience in the field of car parking and access control. See www.etrip.ie for more details. eTrip Services Ireland is a specialised company for the provision of ETC account relationship management services and ETC tags distribution on the Irish market. eTrip Services Ireland has invested in an ETC back office system, a call centre team near Dublin and new electronic fee collection value-added service offers. Commencement date of operation was December 2006. The back office is interfaced to the IEA to manage ETC interoperable transactions. This means that eTrip clients have access to all toll roads in Ireland. On top of this conventional ETC service, eTrip has embarked on the development of additional useful services to its clients, the road drivers. With their tags, eTrip clients have access to other useful and intelligent services such as car parks in Dublin. Besides increasing the ETC customer base by differentiating ourselves from other ETC service providers, the goal is to broaden the range of services supported on the same platform, thus strengthening our business model and technology options. Key benefits of accepting eTrip for car park owners are: • Better customer service; • Customers feel more secure and therefore better car park attractiveness, more usage; • Fewer cash transactions and therefore savings on cash management; • Payment guarantee; • Better customer knowledge and therefore better service promotion; • Bottom line increase.

“This would allow a road user in Ireland to use a single tag for the whole country. One client, one tag, one bill”

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Interoperability Service started with a number of Q-Park (the leader of car parks in Ireland) managed car parks across Ireland. Other value-added services are also currently under development in order to accelerate the market development of eTrip by offering customers additional ITS services while they use their cars. Specific services for trucks and business fleets are currently under development (such as fleet management) in order to offer under the same banner a wide range of ITS services to professional users. For instance a commercial agreement has been signed with Celtrak, the Irish leader in the field of fleet management services. Celtrak offers customised fleet management services for business and trucks fleet in Ireland and the UK. As a result, the Irish driver is offered the much-vaunted, long-expected “one client, one tag, one bill” service package. (It should be noted here that eTrip is the Easytrip trade name in Ireland and the UK. Across the rest of continental Europe, the activity will be developed under the Easytrip Services banner.)

Market trends

Today, two key trends are occurring regarding the evolution of the electronic tolling market in Europe: • Nationwide charging for road user charging for HGVs: There is a growing trend towards nationwide road user charging for HGVs. Austria, Czech Republic, Germany and Switzerland have implemented nationwide systems for HGV tolling. The Slovak Republic is currently tendering for an HGV tolling scheme, and Hungary and the Netherlands are likely to be the next countries to move towards HGV tolling. Despite European Commission willingness and Directives, interoperability across these HGV tolling schemes will not exist for years to come. • Toll concessionaires across the country: Countries following a similar model to Ireland whereby there are many existing or planned toll concessionaires (and local road pricing schemes) across the country include Croatia, Greece, Portugal, Poland and the UK. The UK’s Department for Transport has decided to establish “The Interoperability Forum” with key objectives being to help road users make sense of an increasing number of local road pricing schemes, offer greater convenience and choice for road users, promote compliance and help deliver value for money. The nemesis for this forum emanates from the model developed and promulgated in Ireland. France is currently deploying the TIS-PL scheme for interoperable electronic fee collection for HGVs on the current toll roads. However, competition is still somewhat limited due to the absence of a national regulatory entity for payments on toll roads, unlike the mobile phone business for instance. Indeed, independent service providers are accredited by a private body emanating from the toll road concessionaires. A different approach will likely be implemented by the French Government upon introduction of an electronic toll (tax) on existing public non-tolled trunk roads and motorways, which is expected to be deployed by 2010 The European Union directives on interoperability www.h3bmedia.com

(2004) and Euro-Vignette (2006) are creating the concept of European Electronic Toll Service, paving the way for future development of Easytrip across EU Member States. A new directive should be issued in 2008 or 2009 allowing actors like Easytrip to collect tolls on existing toll road networks, provided that they follow accreditation rules. This should be a powerful motor for the development of Easytrip services.

Conclusions

Public perception of road charging is migrating from its image as a tax/toll and the arrival of additional ITS services associated with independent tag operators and service providers is paving the way for this migration. The perception of Road Pricing is evolving in that it is not necessarily always viewed as a “tax” – rather as an instrument providing gains for all stakeholders: • Public sector gains revenue streams enabling better and more sustainable infrastructure; • Infrastructure users gain better access to a range of ITS services and products; and • Business sector gains innovative ways of creating value. Another important element is that Road Pricing is an instrument set-up by the Public Sector which should be efficiently implemented in a competitive framework. However, careful consideration should be paid to the resistance of existing toll road concessionaires resulting in slowing down the implementation of the European Electronic Toll Service (EETS). Further attention should be paid to the role of toll regulators. It is of paramount importance that they maintain appropriate commercial conditions enabling independent service providers to have fair economic return for their services. In conclusion, the process and lessons learned from the Irish Government’s approach to interoperability has culminated in new private sector initiatives to launch independent value-added services in the ITS road market as a means to improve mobility and enhance the quality of life for road users. E Steve Morello is Business Development Manager, Egis Projects and can be contacted via email at [email protected] Eric Wurmser is Project Director, Egis Projects and can be contacted via email at [email protected]

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Electronic Payment

Consumer nation

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Electronic Payment Intelligent Transport Systems have many benefits, but how best to convince the consumer. Shortens journey times ? Great. Reduces “historic erosion” of cities and towns? That’s good. Increases commuter convenience? Excellent. Eases congestion? Now you’re talking, says SIMON GOODALE Since the 1980s when the UK’s infrastructure began to struggle with heavy road use and pollution, and increased urbanisation meant new highway constructions were less viable, Intelligent Transport Systems (ITS), which use information and communications technology to monitor and improve road use, have been developed and implemented across the country to provide solutions on both a national and local level. According to the Department of Trade, ITS helps local authorities battle congestion problems on a number of levels. Firstly, it protects the “historic fabric” of cities and towns eroded by constant or heavy traffic and can improve access to and from workplaces and facilities by reducing private car use and improving public transport services to areas with poor access. Safety can be increased through speed monitoring equipment and CCTV cameras. The Department has also claimed social inclusion is “fostered by helping to meet the transport needs of all social groups” and can lead to a “more efficient and sustainable, integrated [transport] system”, helping to regenerate local areas without increasing congestion. There is a huge range of technologyled schemes available, from national road user charging and main route tolling and charging plans, to local town planning requirements such as integrating bus routes with increased park and ride schemes; streamlined car parking access and payment solutions and access to public facilities.

the benefits of the new systems effectively.” According to Charmatz, one of the most fundamental purposes behind a successful ITS is ensuring it improves the life of the consumer. Parking is a good example. Whilst finding change for the parking meter combined with a heavy fine for being five minutes late, are well known pet-hates of many drivers, intelligent systems like Payzone’s mParking system in Glasgow, Scotland, provide an appealing solution. Already present in Sydney, Dublin, Edinburgh, Oklahoma City, Las Vegas and New York, the system uses the latest technology to allow consumers to pay on-street parking fees via their mobile phone and a pre-registered credit or debit card. A text reminder of when the parking ticket is due to expire can also be requested. Once details have been registered, consumers can use the service in any city which operates the system. Providing a range of purchase and payment options together also help ITS appeal to different groups of society. Payzone offers a wide range of ticketing options including e-vouchers, mobile phone ticketing, travel cards, and web ticketing. Evouchers enable travellers to buy their bus or coach ticket in advance. In Staffordshire, UK, Payzone has developed the first multi-operator bus ticket, which allows consumers to buy daily, weekly or monthly bus tickets from 200 locations offering Payzone terminals across the region. Named the “SMART” ticket, the scheme can be used on a number of popular bus operators including First, D&G, Wardles, Scraggs, RML, Procters, Arriva Midlands and Bakerbus, giving travellers the freedom to hop on and off buses using just one ticket and offering greater flexibility and choice of payment. Mobile phone ticketing services enable commuters to order, purchase and receive tickets via their mobile phone. Tickets are delivered to

“Major infrastructure schemes can be delayed by lobbying as consumers fail to understand the benefits”

Ignorance is no excuse

While the benefits of ITS are clear - more efficient travel, less pollution and fewer accidents - the high front end capital expenditure often needed for deployment can mean a long wait for the green light, as authorities debate the budget expenditure. Major infrastructure schemes can be delayed by lobbying as consumers fail to understand the medium or long-term benefits. Local transport schemes - like the Leeds and Hampshire tram services in 2005, are often dismissed by the government as “uneconomical”. According to Paul Charmatz, Managing Director of Payzone, a European consumer payments and cash distribution network, the ITS industry needs to focus on developing consumer-friendly technology. He believes there are a number of ways of getting the consumers on board namely, “developing systems that suit their daily life and cause minimum disruption, ensuring new systems are accessible and innovative and communicating www.h3bmedia.com

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Electronic Payment

Ireland’s M50 Motorway Toll Payzone plc recently won the contract to provide BetEire Flow, the operator of the planned barrier-free tolling system on Ireland’s M50, with retail and on-line toll payment services for users of the motorway.The M50 motorway is a National Primary Route around Ireland’s capital city, Dublin.The road carries in excess of 100,000 vehicles per day. The National Roads Authority announced the barrierfree tolling system will be introduced on the M50 in August 2008, replacing the existing barrier toll system. The contract means M50 users will be able to pay the M50 toll charges at any of Payzone Ireland’s branded network of two thousand convenience stores, which already offer Payzone’s mobile phone top-up and other services. Road users will also have the option of paying the M50 toll charge via the internet or by telephone using Payzone’s epayment solutions. M50 users who register with BetEire Flow will benefit from lower toll rates.* The new tolling system is among the first multi-lane barrier-free tolling systems in Europe and is regarded as a flagship project for road usage charging. Chief Executive John Nagle said the contract would “provide an alternative and convenient way for members of the public to pay for road usage on the M50 motorway in Ireland” and “leverages the R&D investment [the company] made some time ago in developing innovative parking and other payment solutions for the road transport sector.”

mobiles either as an SMS text message or a java barcoded ticket and are secure and encrypted, ensuring against duplication of tickets. Additionally, smart card tickets enable commuters to either load money on to a travel card or buy weekly or monthly tickets. The card can be used until the money runs out or without limit for the time frame purchased and ends the need to carry change. Web ticketing provides web-based registration, transaction and customer account management, which allows travellers using both smart card and mobile phone ticketing to view account history. For many of these new transaction processes, building familiarity on a local level helps introduce similar schemes on a larger or national level. Convenience and accessibility are also important factors in making ITS acceptable to consumers. Prepaid networks like Payzone, are now offering consumers the option of buying prepaid tickets, paying congestion charges or declamping cars at local convenience stores across the UK and Ireland. “Whatever section of society you come from, one thing that unites all commuters is convenience. Whether you are a regular bus user who wants to buy a monthly ticket in advance or you own a BMW which has just been clamped, being able to pay for either at your local corner shop,is incredibly appealing”explains Charmatz.

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But the appeal is not solely consumer-focussed. For local authorities, ITS providers offer flexibility, point of sale productivity and a national cash handling service. This means the onus of collecting parking fines and congestion or toll charges can be passed on to companies like Payzone who simplify the process by providing large number of accessible payment points and also an invaluable cash collection service from retailers. The key is to ensure the provider has the R&D backing to offer its transport clients bespoke and flexible solutions, whether they are bus operators or local authorities. Finally, whilst the benefits of ITS may seem clear, Charmatz is quick to point out the importance of effective communication. “A common misconception is that implementing ITS is extremely costly. In actual fact, the use of existing infrastructure makes initial set up and subsequent management costs surprisingly low.” Consequently, he believes public communication needs to be at the forefront of ITS, in order to create positive opinion, build momentum and help the successful and seamless introduction of new services. Charmatz concludes “I believe ITS has a great deal to offer the transport sector. If the industry continues to keep the consumer as the main drive for innovation, I anticipate huge improvements in congestion, pollution and convenience in the future and I am thrilled Payzone is part of it.” E www.h3bmedia.com

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Enforcement Many European countries, for example Czech Republic, Slovak Republic and Hungary, are currently in the process of introducing nationwide tolling systems and other countries are preparing for this task too, as it will be a necessity in the near future. These countries are used as a convenient corridor by many drivers for transit. This is true especially for large trucks, which cause the most damage to the road infrastructure and are also causing the highest environmental and safety risks (1). In each of these tolling schemes automated enforcement plays a very important role. An enforcement system has two major functions. First, it detects all violators and collects all required proof material so that they can be found and made to pay the fee. The second aspect is more indirect: the presence of a good enforcement system has a positive effect on driver behaviour and decreases the number of attempted violations. The enforcement system is necessary, but rather expensive. The original investment is rarely small and at the same time an automated enforcement system requires rather high operational costs. The real cost of operation of the enforcement system differs among the different systems and providers, but it cannot be eliminated. In Switzerland, toll system operating costs, including amortization of all infrastructure, vehicles and IT, accounts for 6 per cent of toll revenue, in Italy 8 per cent, in Austria 10 per cent and in Germany it accounts for an incredible 24 per cent(2). The conclusion supported by experience from existing projects shows(3) that a completely enforced system would cost much more than the retrieved revenue, including fines. Also, the maximal net revenue can be achieved with a low enforcement sample. Also for this reason, a decision about the requested level of enforcement is met in each project and its importance cannot be underestimated. It is often done by the toll charger and it can be used to maximize performance of the overall tolling system. In many projects this decision is made directly by the customer, often a government, and the requirements are part of tender documentation. This cost will affect the overall costs of all offered projects and it is easier to compare the different offered solutions.

clearly in bringing the random effect to the system. The drivers are not aware of its position so they cannot avoid it so easily. The operation is however more expensive (replacement of the technology, data transfer, and power supply). Mobile enforcement: the enforcement technology is installed in a vehicle moving along with trucks in the traffic stream. Contrary to the fixed enforcement, it introduces a large random effect in the enforcement system. The drivers cannot be sure not to meet the mobile enforcement unit (MEU). It processes just a limited number of vehicles; however it can focus direct on problematic vehicles or foreign vehicles. For the purpose of this paper, the mobile and portable enforcement is denoted random enforcement (RE), because these both parts introduce the randomness to the enforcement process.

Factors affecting the level of enforcement

The type of the tolling system and the technology used has a significant effect on determining the needed level

Components of automated enforcement

Basically, the enforcement system consists of the following distributed components(4): Fixed enforcement: all equipment needed for the automated enforcement including evidence collection is placed at the road-side on a fixed gantry. It is able to process large data volumes (all vehicles passing under the gantry) with low operational costs. The drivers can however learn where they are placed and attempt to avoid them. Also the processing of the offenses (especially in case of foreign vehicles) can be long and costly process. Portable enforcement: the components are very similar to the fixed enforcement, just installed on a portable infrastructure so it can be easily moved. Its advantage is

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Enforcement of enforcement. In case it is easy to avoid payment (for example to switch off the OBU, or not install OBU at all, to manipulate the communication channels and others), there are higher expectations on the enforcement system. There is also a difference between DSRC and GNSS/ CN based systems. In case of a DSRC system, the OBU is rather simple. The data is sent just when the OBU passes a gantry on the road. The OBU for a GNSS/CN system is more complicated. It is usually equipped with DSRC components, but also a GSM module, for example.There are more potential sources for manipulation. On the other hand, the OBU collects the GPS coordinates from the total trip. There is a possibility for additional check of feasibility (for example, the OBU is switched off, parts of the trip are not covered).

Road network

The type and structure of the road network plays a very significant role too. The drivers have different behaviour patterns in case there are many parallel roads which

can be used for avoiding the tolling segments or the segments on which the enforcement gantries are known to be placed. This is also an important factor in deciding on the placement of the enforcement gantries.

Traffic volumes and structure

The type and scope of enforcement used depends also on the structure of the traffic and its volume. In case there is not a high volume of traffic, an enforcement gantry is uneconomical. In such case a mobile enforcement unit (MEU) can lead to better and more effective results. On the other hand, the MEU can check just a small percentage of vehicles travelling in high volumes.

Systematic error minimization

The type of enforcement used also depends on our basic objectives. The fixed enforcement is able to check all vehicles traveling on a given road segment. On the other hand, the drivers quickly learn where the gantries are and the violators can attempt to avoid them by using alternative roads, or by tampering with the OBU or even

Fuzzy logic ONDREJ PRIBYL on determining the optimal scope of enforcement for elecronic fee collections systems

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Enforcement the license plate. Some vehicles can, thanks to inconsistencies in the system, systematically avoid enforcement. Small pickup trucks which can be, for example, always automatically classified as non-tollable, even though they should pay in some schemes. The drivers know about these errors in the system and start capitalising on it. All of these problems can be solved by introducing random enforcement (RE). It has a lower processing capacity, but introduces the beneficial random effect in the whole process. A significant number of RE ensures that the tollable vehicles can never be sure of not being enforced. The MEU can focus especially on “not-so-typical vehicles” which could otherwise use a systematic error in the automated enforcement system, or foreign vehicles whose enforcement is otherwise very complicated.

Economical aspects

When realizing an enforcement system, its prime objective is to motivate people to pay the toll. The principle is depicted in Figure 1 and described below. The X-axis denotes the level of enforcement, from none to complete enforcement. Even in case there is no enforcement at all, a certain portion of users tends to pay the toll anyway (Point A). The number of the users differs based on many factors. Point B corresponds to the situation where there is a complete enforcement (user have no chance of driving without paying). This cannot generally be done in freeflow systems. An example is a closed system, where users must stop at the entry and exit point, and pay on site. The Y-axis denotes the revenues collected by the tolling system. If there is none enforcement the loss of revenues is rather high (100-A). If there is complete enforcement, there is no loss of revenues. However, reaching this point is expensive. The basic objective is to find a point in which the marginal loss of revenues approximately equals the marginal cost of increase in the level of enforcement (for example building one new gantry, or introducing one new MEU). Such a point is denoted O in the figure and can be determined as point on the curve where the marginal changes of R and E equal:

O:


R 1
E

FESOLE provider

Usually, a government organization must decide on the level of enforcement requested. However, the responsible personnel are not always familiar with the technical background and for this reason can be easily manipulated, for example by lobbyists. In order to avoid this, a fuzzy expert system named FESOLE was developed at the Czech Technical University in Prague(5).

What is a fuzzy expert system?

An expert system is an SW application which aims to replicate a decision made by an expert or an expert group. The knowledge collected from experts is stored in a form of decision rules (IF-THEN rules) in a knowledge database. The decision (reasoning) is made based on an inference engine. The data about actual cases is collected using a user interface and stored in working storage. In order to enable the use of linguistic variables such as “high level of enforcement” and vague information, fuzzy logic is combined with the common expert system. Fuzzy logic enables the expression of human knowledge in a comprehensive matter. For example, we do not need to express variable “level of coverage” by an exact (crisp) value (53.5 per cent), but we can express it using human description, such as “medium”. The fuzzy set theory provides us with tools to define such variables, and to work with them in the model, mapping the vector of input values and the parameters of the model
to the output vector y :

y = f (x ,
) Based on the theoretical foundations, a fuzzy expert system was developed using the software environment Matlab and calibrated for the given problem, i.e. what is the ratio of the enforced sections to the overall number of tolled sections?

Evaluation of FESOLE

In order to demonstrate its suitability, a few scenarios corresponding to real world projects were selected. Scenario 1: German Tolling System(7) Scenario 2: Czech Tolling System(8) - Phase 1 Scenario 3: Czech Tolling System - Final Phase The input values were set based on expert evaluation

Fear of enforcement

There are also many other important issues affecting the decision.We would like to stress out the following, which could be shortly denoted as the fear of enforcement. First of all it is the presence of alternative enforcement methods next to automated enforcement, such as audit systems in companies. The violators can never be sure that they will not be caught, even some time after the committed violation. Also the amount of the penalty to be paid for in case of proved violation serves as an efficient deterrent. In cases where the the penalty is large, the need for a sophisticated enforcement system is lower, because fewer drivers will take the risk.

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Vol 3 No 1 ETCetc

Figure 1: Example of the curve presenting the effect of the level of enforcement on the loss of revenues.

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Enforcement Table 1: Example of the set inputs parameters as well as results of the model

INPUT

I1 I2 I3 I4

Questions How many tolled sections are there? How important is it to minimize the loss of revenues? How would you quantify fear from alternative enforcement tools? How easy is it to take an alternative route and avoid enforcement? How easy is to tamper with the technology?

Scenario 1 5371 3

Scenario 2 352 7

Scenario 3 852 6

5

3

4

2 6

8 4

5 8

580 10,90%

71 24,90%

146 16,90%

585,4

87,6

144,0

OUTPUT Requested/realised level of enforcement (sum of fixed, portable and mobile enforcement) The level of enforcement computed by the model Corresponding number of enforcement estimated by the model (sum of fixed, portable and mobile enforcement) of given scenarios and available documentation. An example which compares the different input values is provided in Table 1 (above). The expected or requested results, known from the realized projects, as well as the results from the FESOLE model are also presented. The results for scenarios 1 and 3 are very close to the requested values, the difference is smaller than 2 per cent. In scenario 2 the difference is larger, about 20 per cent. The model could be waiter calibrated to meet this result. However, scenario 2 describes just a preliminary phase of the project realized in the Czech Republic. The author supposes that the level of enforcement requested was underestimated in order to allow fast implementation of the tolling system. For this reason, the model was not calibrated to replicate also this request and rather represents the know how of the experts.

Conclusion

This article has presented the different factors affecting the needed level of enforcement for electronic fee collection systems. This knowledge is especially needed by the authorities preparing EFC tenders. This decision is very important because it decides on the costs of the system and at the same time on the collected revenues. In order to make a first estimation on the level of enforcement needed, the FESOLE fuzzy expert system was developed. The results of this system on three real life European projects were presented. The results obtained are really promising. As the next steps, more real life projects will be studied, their significance (truthfulness) will be discussed and the model will be calibrated to meet the results. The author hopes it becomes a tool helping in the coming real projects and that the system will be used by responsible institutions during the phase of tender preparation. E www.h3bmedia.com

Ing. Ondrej Pribyl, Ph.D. is product manager at ROBOT Visual Systems GmbH in Germany. He can be contacted via email at [email protected]

References

[1] Egeler Ch.: Management of EFC through DSRC Interoperability in the Alpine area. Rapp Trans AG. Paper presented IBTTA Fall technology workshop, 13-16 November 2004, Madrid, Spain [2] Uhlmann, E. “Germany’s Troubled Maut System: Our Fears Have All Come True”. EuroTransport Intelligence Report,Volume 1 No24, 27 October 2003. [3] Stappert. K.-H. “Fixing a hole. Enforcement of Large Open Road Tolling Schemes.” IBTTA Spring Technology Workshop, Berlin. June 11th, 2007 [4] Pribyl, O. “Modular Enforcement System for Electronic Fee Collection Systems in the Czech Republic“. Paper presented at the First International Conference: Transport Policy and the Market in the Czech Republic and EU, Prague, 9.-10.3.2005, Abstract proceeding, p. 32 and paper included on the CD proceeding (in Czech). [5] Pribyl, O. “Fuzzy expert system for determining the optimal level of enforcement. Paper submitted for presentation on ITS Congress New York 2008. [6] Turban, E. “Expert System and Applied Artificial Intelligence“. New York: Macmillan Publishing Company. 1992. [7] TollCollect http://financecommission.dot.gov/Documents/The%20German%20GNSS%20Toll%20System %20on%20Motorways%20and%20on%20Main%20Roa ds_Martin%20Rickmann.ppt#1 (accessed 10.10.2007). [8] Ceska republika - Ministerstvo dopravy. Zadavaci dokumentace verejné zakazky Poskytovani sluzeb a dodavek vybrane infrastruktury k realizaci projektu vykonoveho zpoplatneni vybranych komunikaci v CR. 13.7.2005. ETCetc Vol 3 No 1

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