PDF: 1832 KB - Bureau of Infrastructure, Transport and Regional ...


PDF: 1832 KB - Bureau of Infrastructure, Transport and Regional ...

BITRE | Working paper 74

Perhaps the more important issue is that there is little to be gained from ensuring

a common scale of time values if there is no interdependence between congestion

charging schemes of different cities. Hypothetically, if City A adopted a value of $100

per hour for the value of peak-hour travel time and City B adopted a value of $150

per hour then, all else being equal, City B is more likely to implement a congestion

charging scheme. The value of time saved (through reduced congestion) will be 50

per cent greater in City B than in City A. Is such an outcome undesirable

In other words, are there gains from enforcing a nationally-consistent value of

time when congestion charging is under consideration If the value of time were

unambiguous, then the answer would

While there are gains in learning from

experience of other cities there is no

presumption that schemes across cities

should be coordinated—apart from the

obvious inter-operability of the e-tags.

more likely be ‘yes’. If the schemes were

financially interconnected—say through

relying for funds from a national pool—

then again the answer could be ‘yes’.

In contrast, if schemes were financially

independent and the cities autonomous,

then there would be no purpose in

different jurisdictions putting effort into

reach agreement to adopt common values of time or of coordinating other aspects of

the schemes. Such agreement absorbs scarce resources for little obvious gain. Each

jurisdiction/city needs to appreciate why their time values differ—and this can be a

powerful check on the robustness of the time value estimations—but once those

checks have been undertaken and the figures confirmed, then it would be erroneous

to seek convergence on those values.

To conclude this point, there are clear gains in learning from the experiences of

other cities. However, there is no reason to presume that coordination of traffic

management systems between independent cities—whether by congestion charging

or other methods—justifies the cost of achieving that coordination.

The evolving science of congestion charging

In the long history in the development and application of congestion charging there

has never been such a dynamic period. This is in no small part due to the advances in

technology. The two examples below illustrate this point.

Pay-as-you-drive insurance

Pay-as-you-drive (PAYD) insurance illustrates the potential of deploying GPS for roaduser

charging. The option of car insurance payments that more accurately reflect

accident risk has been offered for a number of years by two companies—Progressive

and Norwich Union—initially as a trial but now as fully operational systems. Charges

depend on a number of risk factors including distance, location and, in some cases,

traffic levels. Involvement is voluntary but those that opt for such insurance generally

benefit from lower premiums.

Essentially, savings are possible through pay-as-you-drive (PAYD) insurance because

charges more closely reflect costs. PAYD represents a private sector illustration of

the scope for shifting fixed charges to point-of-use charges that are determined by


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