I know this has been posted elsewhere (notably by Eric Jaffe at Atlantic Cities).

Jonas Eliasson,  Centre for Transport Studies at Sweden’s Royal Institute of Technology, describes what happened in Stockholm in this video published in late 2012.  It is nearly 9 minutes long, so isn't taxing on your time.

I like his reference to the Soviet planner who rang an official in London in 1989 asking what official was responsible for managing London's bread supply.  The answer being no one.

Perhaps some will take that analogy and wonder why the same can't be said for transport networks.  

On Stockholm his key points are (much of this is already known):

On 2 January 2013 Gothenburg became the second city in Sweden to introduce congestion charging.  I wrote about the planned scheme in 2011 with some details, more details are now available from the Swedish transport website here.

Gothenburg is Sweden's second city with a population of around 0.9 million in the wider metropolitan area.   The Council agreed to the congestion tax in 2010, but it has been controversial with some citizens demanding a referendum similar to Stockholm.

Lots of information is available in Swedish on the website.

Governance

Traffic Technology Today reports on the governance of the tax:

Price, operating hours and exemptions

There are 36 crossing points on the system's cordon, which operates for 12.5 hours every weekday (except public holidays, the day before a public holiday and the month of July) between 0600 and 1830.  

The charging points are said to be designed to target congestion, and comprises one single cordon, with an additional charging point on the Älvsborg Bridge (part of the western ring road bypass to the city), and a curious series of charging points off to the north along the E6 motorway.   The website in Swedish offers explanations for these unusual additions based on traffic management, the Älvsborg Bridge is a matter of concern that it would be more congested due to diversion if it was not charged, and the E6  approaches because of fear that charging the road itself would create diversions through residential areas, so it is better to charge the approaches from those areas it would appear (although it is likely to cause concern for those seeking to drive onto the E6 to go north rather than towards the city).

The price range is between SEK 8 (US$1.22) and SEK 18 (US$2.74) per crossing, with a cap of SEK 60 (US$9.14)  as follows (there is no differentiation by vehicle type in that trucks and minibuses pay the same as cars):

 

Only Swedish registered vehicles are required to pay (Sweden's authorities are preferring not to chase up foreign registered vehicles) and the exempt vehicles include emergency vehicles, military vehicles, full sized buses, motorcycles and vehicles with disabled parking permits.

There is no exemption for electric or other low emission vehicles on the grounds that they contribute to congestion.  Taxis are also not exempt on the grounds that they will benefit from the reduction in congestion, and will likely reach the daily capped amount.

The issue of foreign vehilces is not being ignored as the government has appointed a commission to examine how it can charge a tax or fee for foreign vehicles.  Findings are expected to be reported in February 2013.  I expect the example of London to be considered as one approach (as Transport for London has a contractor that pursues such fees and fines from foreign EU jurisdictions, and I was last told it has about a 33% success rate)

Technology, payment and fines

Q Free was contracted to provide the system at a price of US$25.5 million, using ANPR (Automatic Number Plate Recognition) technology, with higher charges at peak times compared to the interpeak (similar to Stockholm).  A tweet from one Magnus Rex indicated 97% accuracy for the system, a far cry from the less than 50% accuracy some such systems had over a decade ago. Payment is either by account with direct debit, or by prepayment or postpayment online or via retail outlets.   At the end of each month, a bill is sent to the vehicle owner which provides information on the number of crossings of the cordon and the amount billed per day.   Failure to pay results in a SEK500 (US$76) fine.  A website exists to register for automatic payments (in Swedish, but then few non-Swedish speakers will have Swedish registered vehicles).   

What has been the result so far?

Scancomark reports that the congestion tax has resulted in traffic dropping 19% on Monday 7 January (confirmed by the TrafikVerket website in Swedish), during the morning peak (0630-0830) the first full working day since the tax was introduced (1 January was a public holiday), presumably compared to the same day last year.   It was 25% down for the first three days (2-4 January).  Of course it is far too early to determine how much of this is trip suppression, time shift of trips (to outside the peaks or charging periods) and mode shift.  Hopefully, there will be some more details after a full month of operation.

The expectation has been that traffic volumes at charging points would drop by 10-15% on average, with a 4% overall reduction in traffic volumes across Gothenburg.  It was also expected that particulates and other pollutant levels would drop by around 10-15%.

Where is the money going?

The operating cost is declared to be SEK 200 million per annum (US$30.4 million) said to be over 20% of gross revenue.  The expectation is that these costs will drop to between 10-15% of gross revenue over the longer term. This implies gross revenues of around SEK 1 billion (US$152 million) per annum (2009 prices)

A surplus of SEK 14 billion (US$2.1 billion) (in 2009 prices) is to be generated over 25 years to spend on transport improvements.  This will raise part of the revenue for the "West Swedish Package" of transport improvements (the rest comes from central and local government taxes). 

The cost of the transport improvement package is SEK 34 billion (US$5.2 billion), it includes improvements to public transport (more commuter railway carriages, railway station improvements, 55km of new bus lanes and increased rail, tram and bus service frequencies), a new Göta älvbron (road and tramway bridge at SEK 2 billion), a new road tunnel under the Göta Älv River (SEK 4.2 billion), the West Link (new railway line under the city to make the main central station a through station rather than just a terminus SEK 20 billion) and a wide range of smaller road projects to improve safety, access and environmental impacts.

Conclusion

It is politically courageous to introduce a congestion tax in an environment of low economic growth, but I hope that it delivers net benefits to Gothenburg, both in improved mobility and reduced environmental impacts, but also with the net revenues used in a way that has widespread support across the city, particularly those paying for it.

As always, the truth will come over some months, to see what travel patterns people adopt, but I am also keen to observe the impacts on business, as this is often the key concern for central city focused congestion charge concepts, particularly given that it is an all day charge.   If business see few negative effects (and some positive ones potentially), then it will be important in promoting acceptability.  However, the political impacts will be closely observed, to see if opposition dampens if the results in reduced congestion are sustainable and see to be worth it by the public.

For me the most positive part of the system is that charges are higher and lower at different times of day, to reflect levels of congestion.  It would be good for that to evolve to different charges at individual charging points, so that charges may be lower or higher to more specifically influence traffic levels at those points.   The biggest weakness with any cordon is that it is relatively blunt, having charges that vary at individual charging points is exactly what Singapore has long had, and I expect it could improve acceptability as well as improve overall economic and environmental outcomes. Critical as well will be the process for deciding how to revise the tax rates.  Stockholm's have not changed since its system was introduced in 2007.

It is also mildly interesting to see that it is also an exclusively ANPR system (although I understand that is, in part, due to Swedish tax law that requires an image of the licence plate to enforce the tax).  The relatively high level of accuracy for this, and the lowering of the cost of this technology starts to challenge the long held advantage seen in DSRC technology for free flow tolling.

News reports on the Gothenburg congestion tax

Fewer cars on first day of congestion charges
Driver attempts to evade congestion tax by covering licence plate

The European Commission DG Environment reports on a study that indicates that the congestion tax in Stockholm has managed to sustain and enhance benefits in congestion reduction over time.   The EC believes this has positive implications for the concept's application in other cities.

Stockholm congestion tax cordon map

The report says:

The results of this study suggest that congestion charging can work over the long-term, supporting plans to introduce such charges in other cities across Europe. The findings also demonstrate that some concerns about the charges, such as increased congestion on other routes, are not supported by the evidence, and that public acceptability may increase over time.

Non-exempt* traffic had reduced by 29% across the Stockholm cordon when the congestion charge was introduced in 2005, and that level of reduction has been sustained even though prices have not increased (so have reduced in real terms by around 2% per annum).  It appears that the charge has had a long term effect on changing driving patterns into central Stockholm.   However, researchers acknowledge that over time there will need to be real increases in prices.

Another criticism about congestion charging, that it increases traffic on roads adjacent to the charging zone, appears to have been without foundation, as there has been no significant increases in traffic or congestion on other routes, except that attributable to population increases.

Finally, public acceptability for the scheme is now 70%, up from 36% in 2006 (and a narrow majority in favour of the charge in a referendum), indicating that the benefits of permanent reductions in traffic volumes and improved mobility are now widely accepted.

In conclusion, the Stockholm scheme has not only worked, but sustained a step change in traffic patterns in the city and not distorted traffic movements outside the zone.  

It's worth noting that the Stockholm scheme is slightly more sophisticated than the London one, as it has higher charges at peaks compared to the interpeak period, and no longer has an exemption for so-called "green" vehicles, because the emphasis of the tax is to reduce congestion - and all cars contribute to that.  The other interesting dimension to the congestion tax is that most of the revenue is being used to support enhancements to roads outside the charging zone, which appears to be a key part of the charge gaining acceptance by people in Stockholm.

Finally, the official title of the charge is the "congestion tax" because under Swedish law, it is the only way the charge is enforceable.

* Exempt vehicles are only buses, emergency vehicles, motorcycles, diplomatic and foreign registered vehicles and those of holders of a disability parking permit.

Gothenburg

Further to an earlier report, a press release from the firm has confirmed that Q Free is supplier for delivery of road side equipment, infrastructure and service and maintenance for 2 years with an option for additional 6 years for the forthcoming Gothenburg congestion charging scheme.  The price is NOK 143 million (US$25 million).

India


Fitch ratings has released its latest report on Indian toll roads.  Highlights include:
- First-year actual traffic levels are a strong indicator of the accuracy of traffic forecasts and hence of a project's economic prospects;
- Traffic volume forecasts are systematically over estimated, because of sponsor bias, lack of data and lack of analytical rigour.  Some cases see traffic 45% below forecasts.
- High inflation has meant inflation-proof toll increases have mitigated low demand, but demand elasticity responses to ongoing increases are unclear;
- Most projects are highly leveraged so highly susceptible to failure to meet forecasts;
- Even given short term pressure, most projects retain long term capability to service debts;
- More recently some concessionaires have been allowed to toll completed segments once 75% of a project is completed, which mitigates some of the current challenges.

London

The Evening Standard reports that embassies in London have now accumulated unpaid charges and fines for London's congestion charge worth a total of £58 million (US$91 million).  Those that do not pay claim it is a tax, so diplomats are exempt from paying it.  However, some embassies do pay.  The biggest debtor is the United States, which owes £6.1 million, followed by Russia, Japan and Germany.   Curiously a website from the Liberal Democratic Party claims that the US embassies in Oslo and Singapore do pay the toll and road pricing charges in those cities, but then again Oslo is clearly a toll paying for specific roads, and Singapore road pricing is also a charge metered on usage.  Maybe the next major change to the London scheme should be to render it more similar to the others?  Of course in Stockholm, foreign registered vehicles are exempt, so making that comparison is not possible.   Around 50 embassies refuse to pay in London.  Of minor interest to me is that my country of birth, New Zealand, does pay, but Australia doesn't.  This link shows a list of those who have not.  Curiously as well, South Korea doesn't pay, but North Korea does (or doesn't drive into central London at charging times)!

South Africa

There continues to be extensive debate about tolling in South Africa, with two recent reports indicating strong political resistance to expanding tolls. One report from the Independent Online claims that the KwaZulu-Natal (a South African provincial government) Department of Transport will continue to oppose plans to introduce tolls on roads along the “Wild Coast”. Meanwhile the City of Cape Town is reported to still be interested in taking two cabinet ministers to court following plans for tolls to be introduced as part of improvement proposals for existing highways in the city (the Winelands project involving the N1 and N2) from the South African National Roads Agency Ltd (SANRAL).  The City is claiming that SANRAL did not adequately address its concerns through its disputes resolution process.  There is another political dimension here.  Cape Town is governed by the Democratic Alliance (DA), South Africa's leading opposition party (the national government is of course governed by the ANC).  This battle is, in part, about the DA challenging the dominance of South Africa's ruling party.

Meanwhile, the trade union federation COSATU has been driving protests against tolling, but this article from South Africa Report doubts the union will achieve its aims.  It says that COSATU's position is "rooted in its opposition to privatisation" and it presumably sees user pays as part of that (and reflecting that SANRAL is a commercial, although state owned, company).   It also highlights some debating points from Deputy Transport Minister, Jeremy Cronin, of the South African Communist Party, who makes some interesting points arguing why tolls can be justified.  One such point being that the alternative is general taxation, with everyone, including those who cannot afford a car, paying for what is a facility predominantly used by the relatively affluent.   Another being that if tolling is to promote mode shift, other modes must be available and be of good enough quality.

IT Web South Africa reports that the toll cap for the Gauteng Freeway Improvement Project only applies to vehicles paying with a tag and beacon account, not those paying through ANPR detection.  The articles also describe how the opposition Democratic Alliance is opposing tolls, and how SANRAL is dealing with misinformation about payment options.

Toronto

The world's first fully electronic free flow toll road (ETR 407) is to be extended with the Highway 407 East project.  It will be extended in two phases, the first a 22 mile extension east to Oshawa, the second extension to Highways  35/115, according to the Montreal Gazette.  SNC-Lavalin has been named as the preferred consortium to design, build, finance and maintain the tolled extension.

Bloomberg Business Week has a good article reviewing the issues around the leasing of the Ohio Turnpike.  Some points include:

-  $600 million of any lease would be used to pay back turnpike bonds issued by the state;

-  Former Governor Ed Rendell (Democrat) said that "The bid for the 545-mile Pennsylvania Turnpike by Abertis and Citi Infrastructure Investors died because the Legislature didn’t want to lose patronage jobs at the Turnpike Commission...But could they get a good deal? I think probably yes"

- Ohio Turnpike collected $232.2 million of toll revenue in 2010;

- Fitch has a negative outlook on the debt, based in part on the need to replace the road’s original concrete base, “a project that could possibly result in significant capital or debt needs in future years that are beyond current expectations";

-  Ohio expects a lease term of about 40 years, compared with Indiana’s 75-year deal and Chicago’s 99-year agreement...It also would retain a percentage of the toll revenue over time, even if that reduces the upfront payment" said said Jerry Wray, director of the state transportation department.

- "it’s unlikely Ohio would get offers comparable to what was received by Indiana, Pennsylvania and Chicago’s $1.8 billion lease of its Skyway in 2005 because they were highly leveraged deals with an expectation of economic growth that didn’t materialize"

On balance, it still looks like a potentially good deal can be gained for Ohio, but key to all of this is price and ensuring the road is kept in a good condition throughout the life of the lease.

Sign On San Diego has an editorial commending the "nationalisation" of the South Bay Expressway.  It says:

- "Jerome Stocks, chairman of the SANDAG board, says the agency may only have to come up with about $245 million of the purchase price because the remaining $100 million or so is owed to the federal government";

- "Purchase of the road would likely obviate the need to add four express lanes to Interstate 805 south of SR-54, scheduled for around 2030 and estimated to cost nearly $700 million, making more money available for other regional projects";

- "As a government agency, SANDAG would have no multimillion-dollar property tax bill to cover, it already has the employees to operate the toll road, and SANDAG would be looking only to maximize the movement of people and goods, while a private operator would be looking to maximize profit".

SANDAG surely has to factor in not receiving property tax revenue as well as not making the same money from the toll road.  The key public policy benefit must be in deferring other works, yet if they were tolled as well, would the case for the buy back still stack up?

Stockholm

Norwegian tolling equipment supplier QFree has won the contract to continue servicing and maintaining the Stockholm congestion charging infrastructure that it originally installed. The contract is only for 1 year started 1 January 2012 at a value of US$2.9 million.

Philippines

The Manila Standard reports that the Supreme Court of the Philippines has confirmed that toll operators must charge VAT of 12% on their tolls.  They have been resisting this on the basis that it is not akin to a "service", but of course because putting up the price will reduce demand (and revenue).

South Africa

The New Zealand Herald reports comments by Ridesharing Institute spokesman Paul Minnett claiming that congestion charging could support growth in car pooling. Given the propensity of so many authorities to promote car sharing through HOV lanes, it is welcome to see someone note that road pricing is likely to be highly effective in promoting car pooling, without segregating special lanes for that traffic.

Toll evasion in Queensland: Brisbane’s Courier Mail reports that the Queensland Government is owed A$7 million (US$7.3 million) in unpaid tolls from around 58,000 toll evaders using toll roads owned by state owned tollway company – Queensland Motorways. “State Penalties Enforcement Registry has finalised 6368 toll debts totalling $891,000 but it is still trying to recover almost $7.25 million from 52,000 others.” The problem arises from motorists using free flow lanes on the toll roads, which results in them getting four notices to pay before the debt is referred to the State Penalties Enforcement Registry.

Professor pushes first toll road for Western Australia: According to WA Today, Professor Peter Newman, well known in “new urbanism” circles, is pushing for a new expressway planned between Perth and its airport to be the city’s first toll road. He says that Australian capital cities would inevitably have to introduce a sophisticated pricing mechanism such as the system used in Singapore for the past 15 years, which measures the level of congestion on a road and charges accordingly. He’s an advocate for road pricing to subsidise public transport, but it is notable how Perth is currently Australia’s fastest growing city, but the largest city with no toll roads (unlike Sydney, Melbourne and Brisbane).

Q-Free wins Gothenburg congestion charging contract: CisionWire notes that Norwegian toll supplier, Q Free has won the contract to supply roadside equipment for the Gothenburg, Sweden, congestion charge scheme, it has been subject to a complaint by a competitor that as of writing, appears to yet to be finalised.

I have added a link to the small congestion tax page for the city of Gothenburg in Sweden.   Gothenburg plans to introduce congestion pricing as of 1 January 2013 closely following the approach taken by Stockholm, to the point that the concept and technology are nearly identical.   The only interesting variations are the inclusion of an internal cordon at Gota Alvbron, and an extension of the cordon west to cover a river crossing at Alvsborgbron.

It is planned to operate 0600-1829 weekdays, excluding July (which is deemed to be a holiday month).  Political approval for the tax was reported in January 2010.

The purpose is stated as being:

Already the Ministry of Finance is proposing inflation-proofing of the tax with another increase in 2015.

The tax is part of a large package of measures that includes new public transport infrastructure, a new road tunnel, and various road safety measures. (Full details in Swedish here, use Google Translate)

The intention is that charges be cheaper during the inter-peak period, and the technology used will be ANPR (Automatic Number Plate Recognition) as is used in Stockholm.  The tax will comprise a single cordon, which includes a river crossing boundary outside the cordon.  A map is available here (click the box Visa trängselskatteområde to get the cordon). 

Once again, congestion pricing should be proven to have a positive effect on congestion and be helping to finance improvements to both rail and road infrastructure, both are important as motorists need to get value not only from reduced travel times, but also some capital investment if other charges are not to be reduced.  It will be interesting to see whether this catalyses similar steps in more European cities.   In my view the move is rather adventurous at a time of significant economic downturn, but for practitioners of tolling and advocates of economically efficient road pricing it will add another real time case study to the mix, and I expect another argument to support the point that road pricing can work to reduce congestion.