The Observer reports numerous stories of vehicle keepers charged for use of the Dartford Crossing (Kent, UK) without actually using it because the Automatic Number Plate Recognition (ANPR) system for identifying vehicles is generating errors in number plate recognition. Stories include cases of change of ownership that get ignored, and also an account that had automatic top up but had the top up declined, without the motorist being aware of it. 

Failures in ANPR reading will, of course, happen. Classic errors include getting 0 and O mixed up along with 1 and 7, but some of the errors in enforcement appear to be strange. Any lookup of a number plate with the Driver and Vehicle Licensing Agency (DVLA) should identify the vehicle make, model and colour which ought to rule out most errors of identification.  

Highways England interestingly reports 93% compliance with the toll, which is not bad, but clearly not at an optimal level (I would have thought over 95% would be the target). However, the article outlines a number of theories as to the compliance issues. One being the alleged lack of signage about the toll, including the use of the “C” congestion charge sign used there (seen below).  Dartford Crossing is, legally, a congestion charge, because the capital costs of all three stages have been recovered, so it remains as a traffic management measure (although the cost of maintaining and operating the two tunnels and bridge is around half the net revenues from the toll). Yet many people consider the “C” sign to refer to the London Congestion Charge. To almost anyone, Dartford Crossing is a toll, as it applies to a single route, it replaced a toll and there is little sign that the charge reflects demand by time of day (except that it does not apply overnight).

All of this ought to be teething problems, and it appears that some effort is being made at “soft” enforcement with initial penalties being waived within two weeks for motorists who may well have not known of the need to pay. For me, I think this demonstrates the importance of people in the toll and highway management industry thinking of road users as customers, rather than people who ought to simply do what they are told.

The Dartford Crossing is a service that is charged for, and what is needed is for those who encounter it for the first time to understand that they need to pay and to have options to pay that are easy. Imagine a motorist driving alone for the first time over the crossing, with obviously no chance to write down a phone number or website address to pay. Yet options ought to clearly exist for the few motorists without web based payment access to go to a service station or a kiosk to pay by cash or card.

I was invited by BBC Essex radio to be interviewed on the James Whale breakfast show this morning, specifically about the Dartford Crossing - the UK's busiest tolled crossing - because of a range of issues arising from its conversion to fully electronic free flow tolling.

A recording of the programme is here (and will remain for 30 days) and the segment I was in starts at 2:11 into the programme.

Regardless, I thought it might be useful to write a number of key facts about the Dartford Crossing given the debate in the county.  It is clear the toll remains highly unpopular, not least because it was original sold to road users on the basis that when the capital costs of the crossing were repaid, the toll would be removed.  The first single lane each way tunnel was opened in 1963, followed by a second tunnel in 1980, which was connected to the M25 on the northern side in 1982 and southern in 1986. Subsequently, the Queen Elizabeth II Bridge was completed in 1991.  

As effectively the only tolled section of London's only ring motorway - the M25 (although technically the crossing is not part of the motorway, in practice it works as part of it), it is controversial, because there are no alternative local crossings of the Thames by road for another 12-15 miles west, at the heavily congested (untolled) Blackwall Tunnels.  Local cross Thames traffic must use the tolled crossing, although a discount scheme means residents of the Dartford and Thurrock Boroughs can pay £20 a year to get unlimited use of the crossings.

Dartford Crossing facts

Previous articles about the Dartford Crossing

On 30 November 2014, manual tolling finally ended at the Dartford Crossing - the 4 lanes each way tunnel/bridge crossing of the Thames that connects the eastern ends of the M25 ring motorway around London.  Already the southbound toll booths that lead down from the QE2 bridge have been removed as is seen here in FleetNews, with the northbound ones to be removed in coming months

The system that has been introduced is an electronic free flow system that relies on automatic number plate recognition, and requires all motorists using the crossing to either:

- Set up a pre-pay account that deducts the toll every time the vehicle crosses a tolling point;

- Make one-off payment via phone, online, retail outlet or by post no later than midnight the day after the crossing is made.

Of course, while the tolling has been automated, the booths have yet to be removed, which caused some chaos on the first day as many motorists stopped to try to pay for a toll at empty booths with barriers raised.  The problem being that, on weekends, most users are not regular enough to be aware in advance of the change.  I suspect also that there will be a deluge of penalty notices that might be sent out, although I suspect the operator would be wise to not send out any such notices for the first day, and subsequently focus enforcement on any repeat violators.

With full removal of the toll booths, there should be a significant improvement in the quality of service of the road, with congestion of 7-11 minutes on average being largely relieved. 

However, as I wrote a couple of years ago, the policy around the road remains a public relations disaster.

Why?

Because with congestion relieved, the toll prices are being increased by 20% (although there is a 13% discount for those with accounts) and there is no indication about what the money raised is for.  It is, in essence, being treated as a tax, or more accurately, as one of the government's most profitable ventures.

Dartford Crossing toll prices with discount for account holders

Although it is legally a congestion charge, the toll does not vary at peak times, or by direction (even though there is a reasonable case for doing this), although it does not operate for 8 hours a day (overnight) to encourage heavy commercial traffic in particular to use the M25 at night.

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

I believe that Dartford Crossing needs three key policy measures:

- The replacement of manual toll booths with fully electronic free flow tolls;

- Charging that varies according to demand, with peak, interpeak and offpeak rates, which vary by direction;

- Financing and funding of substantial new capacity.

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

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

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

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

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

According to the Highways Agency:

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

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

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

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

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

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

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

What a policy change would do

For a start it would cost the exchequer a few million pounds of deferred toll increases, but it would also start to stop the overwhelming slide of cynicism and opposition to tolls at Dartford.  There will also be politicians and lobbyists who will call for the toll to be removed, but the biggest gripes about the toll are clear:

1.  It causes congestion to collect the toll;

2.  "We've already paid for the road" we're just used as a cashcow for the government; and

3.  We pay to use a congested bottleneck of a route (service quality is poor).

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

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

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

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

Australia - New South Wales government denies interest in congestion pricing

AAP reports that NSW Roads Minister Duncan Gay has said that the State Government has ruled out a congestion tax, but is considering implementing distance-based tolling.   Certainly it is clear that NSW is considering reforming toll roads around Sydney so that pricing is more closely related to a proxy for distance, but it is less clear as to whether the state is interested in a wider roll out of distance based charging to replace ownership taxes.

China - Standard & Poors affirms BB- rating and negative outlook for toll road investor Road King

Reuters reports that property and toll road investment company Road King maintains its rating with with S&P.  Property is the dominant factor for the relatively low rating and negative outlook.  On toll roads it reports a more optimistic side to the firm:

Road King's stable operating performance and the sizable cash flows from its toll road business support the rating. The company currently derives more than 80% of its toll revenue from its expressway projects, including the Longcheng Expressway it acquired early in 2011 and which commenced operation in July 2012. We expect Road King's toll road business to continue to provide stable cash flows in the next one to two years, underpinned by its stable profit sharing ratios. 

Indonesia - Longer toll road concessions to be allowed

Tempo Interactive reports that the Indonesian Government is to change the law to extend the maximum toll road management permits for private companies from 40 to 50 years.

The Jakarta Post reports that a 73km toll road is to be built in North Bali from Kuta to Seririt at a price of US$872 million.  The project is intended to open up a wide area for tourism and development, and is linked to plans for a new airport at the north of the island.

Macquarie Atlas Roads posts half year loss and further asset devaluations

Business Spectator reports that Macquarie Atlas Roads has posted a loss of A$75.2 million (US$77.7 million) in the six month to June 30 2012.  This is an improvement on the A$106.4 million (US$110 million) loss for the same period last year.

The A$33.4 million fall in the value of investments comprised a loss of A$26 million on the Autoroutes Paris-Rhine-Rhone (APRR) toll road in France compared to a profit of A$11 million in 2011; a loss of A$7.4 million on the Dulles Greenway toll road in the US compared to a loss of A$10.8 million in 2011; and no loss on the Chicago Skyway toll road in the US compared to a loss of A$17.5 million in 2011.

The Australian reports that the company expects to release a dividend next year.  It also noted:

Macquarie Atlas Roads said the increased losses partly reflected losses on interest rate swaps and higher debt-related amortisation.

Texas - new toll road to have highest speed limit in US

The Texas Weekly reports that Texas State Highway 130  (which will be a toll road) will have a speed limit of 85mph (about 137km/h), which will be the fastest in the USA.  Some advocates of private toll roads have promoted the idea that roads could be built to enable relatively safe driving at faster speeds, and motorists could be charged the price to allow it.  In Texas, it looks like it will happening, albeit with an increment of only 5mph.

Meanwhile, the Statesmen argues that the new speed limit is partly about enhancing the viability of the toll road, which includes lowering the speed limit on the existing highway from 65mph to 55mph, even though it will be safer (because the new road will be between the north and southbound lanes of the existing lanes).   Is it a conspiracy to make the new lanes more likely to be financially positive or just coincidence?

UK - Dartford Crossing manual tolling to be gone by 2014

The Brentwood Weekly News reports that the UK Government has announced that it is spending £25 million (US$40 million) to undertake a range of improvements to the tolled Dartford Crossing routes, including removal of manual toll booths as part of a programme to make the highway a fully electronic free flow tollway.  The route is notorious for being a bottleneck in both directions, in part due to the queues at toll booths.  The UK Highways Agency is hoping to have removed the manual toll booths by October 2014.

France

Romania Insider reports that two Romanian truck drivers, contracted to Spanish company Giraud Iberico, (which itself is a subsidiary of French company Geodis, which is owned by SNCF (the French state owned rail operator)) are subject to legal action for toll fraud on French toll roads owned by concessionaire Vinci.  The drivers claimed they were under pressure to keep rates low, and it is alleged they were "leaving tickets with low tariffs at an olive tree next to a lay-by for other drivers to pick up".  The roads appear on motorways linking France with Spain.  The toll system is a closed toll system whereby tickets are issued to motorists at toll booths entering a motorway, and used to determine distance travelled and tariff at exiting toll booths.   The claim is that 1.25 million Euro (US$1.55 million) was evaded.

Nigeria

The obvious answer is to have a serious price incentive to move to the free flow electronic option, so that people make the transition, and to ensure that there isn't such a delay that it block people using that option from using the road.  If people are reluctant, make sure it can be prepaid and that it is tailored to be attractive to a greater proportion of users.

Philippines

According to the Inquirer (Philippines) the Filipino Government is considering privatising the 30-kilometer Kennon Road which is operated today as a toll road by the Department of Public Works and Highways (DPWH).

Public Works Secretary Rogelio Singson said that the government is thinking of privatising the road to improve its maintenance and the riding comfort of motorists and commuters.

“We are looking at the best option for the government to improve the maintenance and riding comfort for Kennon road because there is an alternative non-toll road,” Singson said. “If you don’t want to pay a toll fee, you could take Marcos Highway.” 

It also plans to connect Kennon Road to the ongoing Tarlac-Pangasinan-La Union Expressway, to reduce travel time from Metro Manila to Baguio City from the current six to seven hours to three to four hours. The big fear among locals is that the price will go up too much, so options to exempt residents are being considered.

UK

The London Evening Standard reports that the UK government is increasing tolls on its lucrative Dartford Crossing from October 2012 by 50p for most vehicles, except HGVs which will pay £1.30 more.  The reason?  To "pay for" conversion to fully electronic free flow operation.

I think this move is foolish and inequitable.  Why?  Well nobody should be "paying for electronic free flow" until it is up and running.  The appropriate step would be to borrow the necessary funds and have the people benefiting from free flow pay sufficient to pay back the debts over the depreciate life of the asset.  Pay As You Go is not how the government funds most capital, it shouldn't be how it funds this.

Secondly, let's not pretend that this increase will be dropped when the system is "paid for".  It wont be, and by linking the increase to that it creates a false impression that this is what should happen.

Thirdly, the whole point of freeflow is to generate both economic benefits from reduced congestion and savings in operations.  Charging people more counteracts those benefits, especially since net revenue from the Crossing is now surplus to the capital spent on the crossings (debt has been paid off) and the ongoing maintenance and operating costs.

There is to be another increase two years after that, but that doesn't have a justification.  It could be inflation, but the ineptness in communication shows up exactly what has been wrong with the political and  bureaucratic handling of road charging in the UK for the past 15 years.  Motorists think they are treated as cash cows to be milked on demand.  This step simply proves that this is exactly what Treasury thinks and the government is unwilling to take an alternative approach.

A far more strategic view of lessening the toxic noise around tolls would be to pay for the upgrade without an increase, by a combination of:
- Acknowledging the surpluses generated by toll users over recent years, and seeing this as a way of giving them back something because of the inertia in moving the toll system onto modern technology;
- Having new prices after the conversion that reward those with accounts, and charge more those who are occasional users;
- Charge peak tolls to manage congestion and significant off peak discounts.

In other words, actually let the price mechanism deliver optimised revenue when the system itself is optimised.  Let people pay more when they have improved service, not before and charge the most those who cost the system the most in how they interact with it.

Why does the UK government insist on treating motorists in a manner that sees them treat the tolls with utter contempt?

Macquarie Atlas Roads

Nine MSN reports that Peter Trent, Chief Executive of Macquarie Atlas Roads expects that revenue from the company's main asset the APRR motorway network, a 2,264km road linking Paris and Lyon in France, would be higher in 2012 than 2011. It was also expected that more motorists in the US would take to Macquarie's toll roads in Chicago and Virginia despite a slightly negative first quarter.

However, Macquarie does not expect to see an improvement in the low volume of traffic on its British M6 toll road, a major bypass north east of Birmingham. Chairman David Walsh flagged the company may consider selling the M6, but said there were currently no plans to do so.

A curious article has appeared on the BBC News website reporting that UK Transport Minister, Mike Penning, has contradicted an earlier statement that all money from planned increases in the Dartford Crossing tolls would be hypothecated for expansion of the crossing.   This has upset users of the route who feel ripped off by tolls on a route that has been fully paid for (and which generates a substantial surplus after operating costs and costs to maintain the crossing).   What the Minister actually is meaning is that far more than the money from hypothecation will be spent on the road, although I would argue that over time that probably is not true, as the money from tolls should be able to sustainably finance yet another crossing.

The Dartford Crossing is the only tolled portion of London's motorway ring road, which is (except for the crossing) known as the M25 (Dartford Crossing is not a motorway because the tunnels have restrictions on certain dangerous goods).  Dartford Crossing consists of two 2-lane tunnels and a 4-lane bridge, providing 4 lanes in each direction.  The first tunnel opened in 1963 with tolls, followed by the second tunnel in 1980 and the bridge in 1991, as traffic grew rapidly.   It is the most easterly road crossing of the Thames and some distance from the nearest road crossing, the severely congested Blackwall Tunnels.  As a result, it carries very high volumes of traffic, with around 150,000 vehicles a day.

The tolls have over time fully paid the capital (including debt) costs for the two tunnels and bridge, so that by 2002 all were deemed to have been fully paid.  As a result, many locals have campaigned for an end to the tolls, which are primarily manually collected (although there is an electronic tag system that operates some barrier lanes).

The problem is that withdrawal of the toll is likely to result in increased demand, so the toll was legally changed from being a toll to what is effectively a congestion charge.  Around £40 million (US$61.7 million) a year is generated in surplus from the tolls.

So a toll is operated, in both directions, on one of the UK's most heavily congested stretches of highway.  The toll annoys the motorists because they know the tolls are far more than what is needed to maintain the route, the toll delays traffic and overall they feel they are paying more to use a road that offers shockingly poor standards of service.   Of course, they are right.

The new Conservative/Liberal Democrat coalition government has made its highest priority to eliminate the UK's budget deficit by the next election, so is hardly going to give up a lucrative source of revenue.  However, its approach does appear to have the elements of a solution that could satisfy motorists if done in the right order.

The government announced earlier this year that:

- Tolls would go up 33% in 2011 and another 25% on top of that in 2012 (£1.50 today for cars rising to £2.50);

- Manual tolls would be replaced by fully electronic free flow tolling;

- Another crossing would be built.

However, as can be expected the only one of those announcements that seems obvious is the increase.  The increase in itself will reduce delays by reducing demand, but it will be seen as not delivering improved service as long as nothing is done about replacing manual tolls and expanding capacity.   

One way of delivering value would be to introduce electronic free flow tolls as a transition, with half of the existing toll booths converted to fully free flow lanes.  Existing DartTag users (which have a non-EU standard DSRC system) should be transitioned to free flow accounts using the EU 5.8 GHz standard, with Automatic Number Plate Recognition (ANPR) for enforcement.   DartTag users already have a 33% discount over cash.   A discount should be maintained with electronic free flow, as it not only incentivises a shift to freeflow accounts, but increases acceptability if there remains an option to pay less.  

It shouldn't be difficult to introduce partial free flow lanes and demonstrate how easy it is to avoid the queues at the toll booths.   Enforcement procedures would need to be developed and applied so that penalties are strictly applied to those using such lanes without paying, but revenue from fines should make this easily self-funding.

Lessons from Dublin's M50 toll transition to free flow should be applied for the final shift to fully electronic free flow tolls, particularly provision of information, call centre capacity and means to pay in advance (and after the event).  Bearing in mind that removing the toll booth queues is critical to delivering value to users of the route in the next few years.

Beyond that is the question of what to do with the revenue, and although it wont be officially hypothecated, there is no reason why it can't be unofficially hypothecated for both maintenance and expansion of the route. 

Three options for increased capacity are already under investigation.  A parallel crossing, a new local crossing that will link the A2 highway to the docks at Tilbury (relieving the existing route of much local traffic and port traffic), or a third bypass far to the east.  Details are here.  Whatever is selected (my bet is that a new local connection or a major bypass to the east would deliver considerable traffic benefits, but I'll let objective appraisal determine that) should proceed, and motorists on the existing crossing should be told clearly that tolls are not simply to be treated as profit.

Tolling gets a bad reputation when those who impose it don't treat those who pay as customers, entitled to a high standard of service.  It already generates a cynical reputation in the UK as a way for government to rip off consumers.   If done properly, the Dartford toll can be reformed to remove one of the key sources of congestion and to be used to deliver long term value by enabling the financing of extra capacity.

If what motorists (and voters) see first are increased tolls, no progress on new capacity and no implementation of free flow tolling  (which most commentators don't seem to understand even exists), then British politicians wont be surprised that they aren't trusted on this issue.