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The Rising Price of Congestion Pricing

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by

James A. Bacon
in

I know Jim is a fan of congestion pricing, and even believes it may hold some hope of changing the transportation landscape in far-flung portions of the state.

But then there is a this cautionary tale out of London, where congestion pricing has been in place for some time. The results aren’t exactly pretty:

Motorists in London have paid more than £677 million since the introduction of the congestion charge in 2003 — but only a fraction of this has been invested in other transport projects.

And with Ken Livingstone, the capital’s mayor, planning to extend the zone west into Kensington and Chelsea, opposition politicians claim much of the revenue has been swallowed up in the cost of running the scheme.

According to the Greater London Authority’s own figures, the bill for the congestion charge is rising above the rate of inflation, from £120.8 million two years ago to £143.5 million last year.

However, setting up the scheme cost an estimated £161.7 million and it is now believed that motorists will have to help find the £103 million to extend it to the West.

The London experience will in crease public doubts concerning road pricing. To add to the controversy it has emerged that a large slice of the income made by Transport for London comes not from motorists who pay the charge, but from fines on those who don’t.

While London’s experience does not necessarily mean the concept of congestion pricing should be abandoned, it does tell me that before such a scheme is tried here, far more needs to be done to ensure that the sort of “budget creep” London is facing isn’t repeated.

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7 responses to “The Rising Price of Congestion Pricing”

  1. E M Risse Avatar
    E M Risse

    The “problem” with London congestion pricing — if it is a problem and not just the political opponents carping — has little to do with congestion pricing and everything to do with dysfunctional governance structure.

    Metropolitan London (AKA, London New Urban Region) has done far more than any New Urban Region in the United States to evolve a functional regional governace structure but it has a long ways to go not just in Congestion Pricing but in other areas as well.

    It is hard to overcome 2,500 years of “tradition.” We cannot even get out of late 18th centruy regional goverance and it was only 10 years old when it was laid out.

    From what I understand the Congestion Pricing has reduced congestion.

    I have not idea what transportation improvements the money was to be spent on. As we all should know by now, regional traffic congestion can almost never not be reduced by building more transport facilities. It can be reduced by changing the settlement patterns and thus the location and level of travel demand.

    By the way the same governace dysfunction can be observed for abuses in the application of Einent Domain (AKA, ED according to Larry Gross.

    I have seen no problem cited as a reason to change ED that is not clearly a failure of fundamental democratic priciples that should be part of every governance structure, especially the seven levels that need to exist at the Regional scale and below.

    EMR

  2. E M Risse Avatar
    E M Risse

    Sorry, the third from last para has more that the usual number of errors. It should read:

    I have no idea what transportation improvements the money collected in the congestion pricing scheme were to be spent on. As we all should know by now, regional traffic congestion can almost never be reduced by building more transport facilities. It can be reduced by changing the settlement patterns and thus the location and level of travel demand.

    EMR

  3. Jim Bacon Avatar
    Jim Bacon

    Norm, I’m certainly no expert on the London congestion charges. But I’m under the impression — and am willing to stand corrected — that there are two sets of problems: (1) the cost of administering the system, and (2) the disposition of revenues. London’s mayor is a self-avowed socialist, and it comes as no surprise to me that he may have diverted congestion-toll revenues to other initiatives. No credible source, to my knowledge, is saying that the congestion charge doesn’t work.

    The first challenge for Virginia would be to find an economic system for administering the system. Again, I am no expert, but I believe that the technology has advanced rapidly since London instituted its congestion charge, and toll-administration overhead would absorb a much smaller percentage of the revenues in any project undertaken today.

    The second challenge would be to create a mechanism for keeping faith with motorists than any surplus revenues would be reinvested in the same transportation corridor or cordoned zone from which they came. I quite agree with you, congestion toll revenues cannot be allowed to become a slush fund for politicians.

  4. Norman Leahy Avatar
    Norman Leahy

    I agree that this article is probably as much of a platform for those who dislike “Red Ken” as much as it is a look at the problems with London’s system.

    While I remain agnostic on the congestion pricing concept, my greatest concern is the one Jim mentioned — that it would become a slush fund for pols.

    Virginia’s budget follies in the last few years have shown that whenever they are confronted with a new or unexpected windfall, the state’s political class will go to great lengths to spend said monies on just about anything that catches its fancy.

  5. nova_middle_man Avatar
    nova_middle_man

    So we need a toll lock box. That whole lock box thing isn’t too popular though. Maybe this year the transportation lock box will pass. Kaine campiagned on it and certain republicans have been wanting it for years.

  6. Jim Wamsley Avatar
    Jim Wamsley

    Welcome. It will be a pleasure to comment on your posts.
    Regarding the London congestion Charging Zone, it is such a success that it is being expanded on February 19, 2007. The Congestion Charging zone will extend to the west to cover the areas of Bayswater, Notting Hill, North and South Kensington, High Street Kensington, Knightsbridge, Chelsea, Belgravia and Pimlico.
    A few factoids:
    Reductions in congestion inside the charging zone over the whole period
    since the introduction of the scheme now average 26 percent. This reflects
    an apparent combined effect of some gains following the July 2005
    changes, offset by the loss of decongestion benefits since late 2004.

    In comparison with pre-charging trends, road users in 2005 were probably experiencing an effective 30 percent reduction in congestion, comparable to that in 2003 and early 2004.

    Typical delay values in the charging zone in 2005 were 1.8 minutes per
    kilometre, compared with 1.6 minutes per kilometre previously reported
    and 2.3 minutes per kilometre for representative conditions before the
    introduction of charging in 2002.

    Businesses performance in the charging zone was significantly better than
    in the rest of London, particularly in terms of profitability and productivity.

    You can read more (warning this is 215 pages) in the Fourth Annual Report

    http://www.tfl.gov.uk/tfl/cclondon/pdfs/FourthAnnualReportFinal.pdf

  7. Miles Avatar
    Miles

    The article seems to attack not the concept of congestion pricing, but the way it was managed in this one instance. It ignores entirely the main question — did it work? Did it prompt more drivers to take public transportation or commute at off-peak times?

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