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(4.11) INTRODUCING A COMMERCIAL ROAD CHARGING SYSTEM
Advancements in technology probably mean a system of Shadow tolls and road fund is probably unnecessary. It would only be a temporary measure to pay shadow tolls as it is very unsatisfactory as the price the user pays will be related only to fuel used for small vehicles and distance travelled for larger vehicles (see (4.4) Road Fund). This will match price to cost reasonably well with regard to road damage, maintenance, pollution and climate change, but will not effectively deal with congestion – capacity required for economically priced demand i.e. capacity required for maximum demand much more expensive to supply than capacity for steady demand. The rural motorist is in effect likely to subsidise the urban or inter urban motorist.
The best way to overcome these problems is by the use of Global Positioning System to charge vehicles an economic price at the point of use. This could become flexible, to increase charges at busy times of day and reduce prices when roads are underused.
Original proposals as described in Road
Fund (4.4), can be missed as
obsolete, The revenue would be collected when fuel was purchased, and additionally
for large vehicles a distance axle weight system would collect revenue to pay
for the additional road maintenance that large vehicles generate. This revenue
would then be paid to road companies on the basis of shadow tolls. The shadow
toll system could even provide for paying road companies congestion charges
from the road fund, but there is no way from fuel or distance charging that the
Road fund could collect this congestion fee fairly. It would in effect be
charged equally to all road users irrespective of whether they only travelled
at quiet times on empty rural roads or were adding to the severe congestion
caused by the school run.
The Road PLCs would be free to introduce electronic road tolls through the Global Positioning System. They would need to agree a system throughout Britain with suitable equipment so that all vehicles could travel anywhere, this should ideally be internationally compatible.
Table (4.1) PAYING FOR ROAD USE – SHADOW TOLL SYSTEM (For interest only
Shadow Tolls not required due to technology advances, see table 4.2 below)
|
TYPICAL RECEIPT WHEN 1 LITRE OF FUEL PURCHASED |
£/Litre |
Where Money Paid Will Go |
|
Road Infrastructure |
0.77 |
Paid to Road PLC to service liabilities cover capital costs and improve infrastructure |
|
Road Maintenance |
0.04 |
Paid to Road PLC to cover cost of road maintenance |
|
Congestion Charge |
0.50 |
Paid to PLC who distribute this as shown Part 2 (2.6.3) |
|
Noise Pollution |
0.07 |
Paid to PLC who distribute to the bearers of noise pollution |
|
Air Pollution etc |
0.56 |
Paid to bearers of pollution cost via pollution fund as shown Part 2 (2.1.5) |
|
Fuel |
0.20 |
Paid to fuel retailers at the current market price. |
|
Sub Total |
2.14 |
|
|
VAT @17.5% |
0.37 |
Paid to the Treasury as now. |
|
TOTAL |
£2.51 |
|
|
|
|
Accident Costs paid entirely by insurance companies |
|
|
|
Police & Court Costs paid entirely by road law offenders |
Table (4.2) PAYING FOR ROAD USE – GLOBAL POSITIONING SYSTEM TO CHARGE FOR
ROAD USE, The technology is now available and so this method should be used
from the start
Road Infrastructure, Maintenance, Congestion Charge and Noise pollution
charge collected direct by Road PLC through commercially priced road charge
Accident Costs paid entirely by insurance companies
Police & Court Costs paid entirely by road law offenders
Fuel duty abolished, but a charge for the externality cost imposed by
fuel consumption that is paid direct to where the costs incurred. See 2.1.3 Cost of Roads Environmental Costs
|
TYPICAL RECEIPT WHEN 1 LITRE OF FUEL PURCHASED FOR ANY PURPOSE NOT JUST ROAD USE. Fuel Duty to be abolished This money not to go through the Treasury at all but
direct to where the costs are incurred as described in The Cost & Price
of Transport. See 2.1.3 Cost of
Roads Environmental Costs |
£/Litre |
|
Air Pollution etc |
0.56 |
|
Fuel |
0.20 |
|
Sub Total |
0.76 |
|
VAT @ 17.5% |
0.13 |
|
TOTAL |
£0.89 |
All costs distributed as shown above
(4.12) CASE STUDY – SHADOW AND ELECTONIC TOLLS ARUNDEL AREA
Italics obsolete due to technological advances When the system is set up initially, shadow tolls will be calculated from the axle weight counters at the tolling sights, mostly where vehicles transfer between different Road PLCs as marked by “T” on the Arundel road map (map 4.1). The Arundel Road PLC may also install a physical toll for LGVs where the Ford Road passes the boundary out of the parish of Arundel to divert LGVs via the more suitable recommended lorry route. LGVs that continue to use the Ford road paying a fee to provide reasonable compensation for residents whose quality of life is currently so poor. However this would be subject to approval from the Road Regulator, and income from the Road Fund via shadow tolls would be reduced accordingly.
A reliable electronic charging system using Global Positioning System will be developed, with technology agreed by all the Road PLCs so that a nationally compatible system could be installed. (Hopefully agreement for an international standard could be reached).
As each vehicle makes a journey, a charge will be raised paid to the Road PLC the vehicle is travelling along with a distance-based portion based on type of vehicle for damage to road and the external costs that have to be paid by the Road PLC e.g. noise and severance. There will also be a variable commercial portion of the charge based on the economic laws of supply and demand – when demand is high for a scarce supply of road capacity the price will be high, when demand low for a surplus supply of road capacity the price will be low.
This will have several effects: -
Ø Some journeys may be made at less congested cheaper times.
Ø Some journeys may change destination with shorter distance.
Ø Some journeys may change mode (walk, cycle, public transport).
Ø Some journeys may cease.
Ø Some journeys may change to different routes, cheaper tolls.
Ø Many journeys will not change.
For the A27 at Arundel all of the above effects are likely to take place. Arundel Roads could eliminate rat running by carefully designing a charging regime with a punitive toll for any vehicle entering at one tolling point and departing another within 10 minutes on rat running routes, on the basis that any vehicle, even delivery vehicles will spend more than 10 minutes in Arundel. Those vehicles that do insist on rat running will provide extra revenue and the shareholders, mostly residents, will be able to choose whether to take a larger dividend, discourage rat running with traffic calming, or enhance the road network or anything else the may decide appropriate.
As many journeys may not change, there may still be congestion at times. This will be generating extra income for the Road PLCs. If enough extra revenue generated, consideration may be given to increasing road capacity. This would have to be financed out of reserves or borrowing against future revenue to cover all expenditure including a public enquiry.
Historically a significant proportion of the population of Arundel has demanded the building of a second Arundel By-pass that has been turned down due to the traffic generating effects and lack of economic viability. Now, as shareholders of Arundel Roads PLC and Trunk Roads PLC, the implications of building this road come into clear focus. Trunk Roads PLC with a nationwide shareholding would only build this road if there were an unequivocal economic case that was going to enhance profits. However, Arundel residents as shareholders of Arundel Roads PLC may decide they really want this road built, and vote to withhold dividends or even raise finance from residents.
However, if the economic case for building the road is weak, they will find it not viable to borrow and if no cooperation from Trunk Roads PLC, the tolls they would have to charge may just divert traffic back onto the existing A27. If Trunk Roads PLC decide not to build this road, it is very difficult to imagine the residents of Arundel making the investment (between £6,000 & £10,000) per person at late 1990’s prices) with the knowledge that if it had been considered financially viable, Trunk Roads PLC would have built it.
The most likely scenario is that commercial prices would stabilise traffic
volume with a less intense peak, and raise significant revenue, but not enough
to make building this second by-pass viable. However, there would probably be
justification for enhancing the existing route by improving junction layout and
road alignment, and reducing conflict with local traffic and non-motorised
modes, thus improving long distance traffic flow, local traffic flow and non
motorised routes reducing severance.
Top
(4.13) TYPICAL ROAD SHAREHOLDING PORTFOLIO
The initial value of shares has been calculated by dividing the value of roads as calculated in Part 2 table (2.2) Apportioned to Trunk, County and Local Road Networks and divided by 57 million population.
The individual shareholding of County Roads and Local Roads will be very variable depending where the shareholder lives.
The value of Local Road PLC shares will be very variable with busy urban areas growing strongly, while in remote areas the roads commercial value may be lower than the initial book value based on land value and building costs. However, the shareholders, whatever the stock market value, will own a substantial asset directly, generating dividend income. This is in stark contrast to the current situation, with local authority ownership, and residents paying the entire road costs through Council Tax and general taxation via Government grants.
Table (4.3) Typical Road Shareholding Portfolio
|
|
Initial
Value Based on Road Building Costs and Land Value |
Guestimate
of Annual Dividend Based on 1990’s Traffic Volume and Shadow Tolls |
Stock Market Value Change |
|
Trunk Road PLC |
£942 |
£80 |
Strong Growth |
|
County Road PLC |
£1,128
|
£70 |
Variable Mostly Moderate Growth |
|
Local Road PLC |
£3,856 |
£150
|
Very Variable, If Significant Parking Revenue or a Congested Area Could be Substantial Growth |
|
TOTAL |
£5,926 |
£300 |
|
(4.14) Technology for Road Pricing Update
Most of this web site
was written before suitable technology was developed. However, Satellite, Global
Positioning System (GPS) is now far enough advanced for commercial road
companies to most efficiently charge for road use.
If a driver wants to
find out how much a journey will cost, the same as drivers who already have
GPS, they will key in the destination, the best route will be offered together
with the price and expected time of arrival, taking into account expected
traffic levels, the weather, type of vehicle etc.
Other routes may be
offered at different prices. The driver will choose a route, accepting the
price.
The technology will
alert the driver to unexpected congestion or crashes and where necessary advise
the driver to take an alternative route.
If the driver is
delayed, arriving at destination late – but not due to driver choosing to drive
slowly, there should be a compensation arrangement.
For the majority of
local journeys, once a driver is used to the charging regime, drivers may just
drive without keying in their destination – and so be charged without finding
out the price first. However, with the benefits of advise of congestion etc and
compensation for late arrivals, drivers may become more keen to key in their
destination at departure, even for local routine journeys.
It will be important
for road safety that these GPS units are predominantly audio, any visual
screens and controls being unavailable while the vehicle is in motion.
Charging could be pre-payment, billed, or a mixture. The recording and payment of road use can be fully automatic with no human intervention and so avoid civil liberty implications. However, it may be sensible for there to be a capability of extracting journeys if (i) a driver disputes the charge, (ii) in exceptional circumstances on the authority of say a court, for the police to access information if trying to find a person believed abducted or other exceptionally serious situation.