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BITRE | Working paper 74

• the introduction of congestion charges will encourage increased use of public

transport

• the success of congestion charging in achieving behavioural change is more likely

if the options to peak-hour use of the road are enhanced (providing ‘transport

choices’)

• improvements to the public transport system will reduce the political fall out from

the charges.

There is a twist to this argument for diverting funds raised by congestion charging

to fund public transport—the introduction of congestion charging with the aim of

raising revenue to fund a public transport project. The Metropolitan Washington

Airports Authority suggested that a peak-hour levy (congestion charge) be introduced

on the Dulles Toll Road in Virginia (US) to generate funds to extend Metro Rail to

Dulles Airport. The Airports Authority offered to ‘take over’ the toll road to bring this

about. 50 Without this ‘innovative source

Easy access to congestion charging

revenue can reduce the pressure for

careful scrutiny of project funding.

of revenue’, the Dulles rail extension

was unlikely to proceed. 51

Criticisms of the project highlight

the extent to which easy access to an

assured funding stream risks distorting

policy priorities. One irony in the situation is that raising revenue via congestion

charging reduces the case for extending the metro because it would relieve the

traffic problem on the toll road:

It looks like the Dulles Tollroad is being tapped to pay for part of the metro extension

to the airport. However if the road is tolled using congestion-pricing principles, then it

will flow at 60 mph 24/7. At which point there is no transit mobility reason for the metro

extension, since buses can travel on the toll road at 60 mph at all times (Padelford 2006).

One way to safeguard the embrace of congestion charging on the basis of its revenuegenerating

power could be to make the default option revenue neutrality such that

no net revenue was generated but, rather, other taxes were reduced.

3.12 Exploring congestion charging options can be

costly

Policy makers should be aware that congestion charging schemes involve considerable

time, money and political resources. In 2005, a public referendum overwhelmingly

rejected the congestion charging scheme proposed for the city by Edinburgh

Council. The £2-a-day charge was rejected by 3 out of 4 voters. Total spending on the

proposal was over £9 million ($A21 million) between 2000 and 2005, with the publicity

campaign alone costing more than £1.5 million ($A3.5 million). 52 This comes on top

of a council bid to reintroduce trams, which has already cost more than £16.5 million,

50. A Virginia State Delegate reported that the State of Virginia had previously been offered US$6 billion for the toll road

(R. Marshall undated).

51. With capital costs of US$3.5 billion and operating subsidies estimated at around US$65 million per annum by 2015,

the project failed to meet federal cost-effectiveness standards (Dulles Corridor Rail Association 2005).

52. As one critic commented, ‘that could fill a lot of potholes in the roads’.

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