Is congestion charging the answer?

Len Harper

One might say: the answer to what? Well, if you haven’t noticed, traffic congestion in the CBD and major arteries leading to the CBD, especially in Sydney and Melbourne, is an increasing problem, costing the community an estimated $9.4 billion a year across Australia.

And the situation is going to get worse with the proportionate increase in motor car travel and the progressive increase in freight movements. Indeed, the Bureau of Transport and Regional Economics estimated that congestion costs in Australia would balloon to some $20.4 billion by the year 2020.

Of course, there are the options of diverting traffic or spreading the peak but much of this is happening already. A far more effective option is to charge marginal users for the use of road space at peak times. In simple terms a congestion charge.

Congestion charging works by discouraging travel. A study in 2007 suggested that up to 40% of Sydney drivers during peak hours are on trips that could be made at any time of the day.

Congestion charging is not new. It has been around in Singapore since 1974, in Durham, UK, since 2002, in London since 2003 and Stockholm since 2007. In all instances there was a clear result of reduced congestion, higher use of public transport and cleaner air.

In London, there was a 26% reduction in the number of vehicles entering the City in the first six months. Most car travellers (55%) transferred to public transport, some 25% avoided the London area and the rest did not travel or travelled outside the hours.

Moreover, carbon emissions in London reduced by 15%.

Revenue generated by the congestion charging accounts for the equivalent of AUD625 million a year – half of which is targeted for investment in London’s transport infrastructure.

In Stockholm, the city government introduced a seven-month trial of congestion charging in 2006.

During the trial period, traffic into Stockholm reduced by 22%, mobility improved significantly, carbon emissions reduced by 14%, and public transport usage increased by 6%. The trial finished on 31 July 2006 and on the very next day traffic jams reappeared on the major arteries. Following the seven-month trial, a referendum of Stockholm residents voted in favour of the congestion tax on a permanent basis.

In summary, where congestion charging applies, traffic congestion has been reduced by about 25-30%. Public transport has increased by about 25% and carbon emissions have been reduced by about 15%. Importantly, the income raised from congestion charges is being used for improvements to public transport.

But is Australia ready for a congestion charge?

For a start, Sydney and Melbourne account for about 70% of traffic flows in Australian capital cities. Sydney alone accounts for 40% of the nation’s congestion costs.

The Business Council of Australia has recommended a congestion charge in a new report on infrastructure, “Roadmap for Reform”. The Council of Australian Governments (COAG) sees benefits for a congestion charge, finding that “congestion pricing measures stand out as the most effective option for alleviating congestion and improving the efficiency and productivity of the transport network.”

However, state governments to date have flatly rejected a congestion charge. The NSW Roads Minister Eric Roozendaal said recently: “There is no merit in putting tolls on free roads or setting up an exclusion zone around Australia’s biggest CBD.”

Notwithstanding, the newly-elected Federal Government is currently examining the option of differential pricing (peak-off/ peak) for motor traffic entering busy areas.

A main argument against congestion charging is that the public transport would not cope and we have to fix that firstly. Hold on, we have been trying to fix public transport in NSW for more than 30 years. Sure there have been real improvements but don’t use the lack of public transport as a reason for not making travel and environmental conditions better for a main part of the population. In fact, one of the benefits of the tax has been the opportunity to upgrade the public transport system through the proceeds of the tax income.

The opportunity exists in Australia to test the net benefits of congestion charging, just like they did in Stockholm. It is a real opportunity for politicians (state and federal) to tackle a real problem ‘in consultation’ with the community.

Len Harper is the executive director of the Chartered Institute of Logistics and Transport Australia (CILTA).

* Excerpted from Australasian Freight Logistics Issue 12, June/July 2008 (p.16)


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