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26 miles driven as calculated using speed data from the OBDII incorporated into the system and allowed to continue using toll port and miles from the odometer reading. revenue; however, roads built from that point on as part of the Any system to collect revenue will be subject to evasion and Interstate system could not have tolls levied. ISTEA allowed for avoidance behavior. Both may be relevant in terms of evaluat- some exceptions to this prohibition, but it generally still pre- ing a VMT system. Some systems will be designed to induce vails. Detailed discussion of the prohibitions, exceptions, and avoidance (e.g., congestion pricing systems), but others may legal issues are presented in Fishman (2009, pp. 2028). Infor- induce inefficient behavior. For example, a system like Ore- mation on the use of tolls on the Interstate system can be found gon's, which charges by the mile in-state but has no charge for in FHWA (2009a). out-of-state mileage, could induce a driver to make a long trip along the Washington side of the border with that state. This 2.4 Cordon Pricing would reduce the amount of mileage fee owed to Oregon with- out affecting the gas tax rebate. Evasion is a larger problem. Cordon pricing systems have been implemented in Singa- With a GPS-based system, this might be accomplished by pore, London, Oslo, Stockholm, Milan, Malta, and several small blocking the antenna to prevent signal acquisition. Since sig- cities in Norway. The objectives of implementing cordon pric- nals may be problematic in some areas, such as those with large ing systems are to reduce congestion in congested areas with rel- buildings or forests, it may be difficult to determine whether atively high densities, to raise funds to finance infrastructure there has been purposeful interference or a natural problem. development, and to reduce vehicle emissions. Additionally, There must be a mechanism for audit and reconciliation public agencies have used congestion pricing policies to man- if there are differences between the amounts that the system age vehicle ownership rates in areas with high population den- charges motorists and their view of an appropriate level of sities, encourage greater walking or cycling, and induce transit charges. If integrated with the gas tax, the POS software usage. Other potential benefits of cordon pricing include reduc- requires substantial modification to allow the system to inter- tions in vehicle emissions, decreased fuel consumption, and act with the mileage-fee system. Some determination of the improved safety conditions. cost for this conversion and determination of who will be Public acceptance is one of the major obstacles encountered responsible should be made. It would also be necessary to sub- in the implementation of the cordon pricing system. For exam- stantially improve the ability to detect which pump a vehicle ple, in the early 1980s, Hong Kong implemented a cordon pric- is being fueled at since missed reads create both an accounting ing system on a pilot project basis, but it was later discontinued and a customer-relations problem. The accuracy of the system due to public opposition. Cordon pricing systems were also will be more important as the number of vehicles participat- considered in Edinburgh, United Kingdom, which held a ing increases, since there would be more possibility of inter- referendum on the implementation of a two-cordon system. ference or incorrect association between a vehicle and a pump. More than 74% of voters rejected the cordon pricing scheme For more complex systems, information on prices must in a referendum held in 2005. Concerns were raised regarding be communicated to vehicles and displayed to drivers. There the potential fairness to local residents who live in outlying should also be a method to update information. This is likely to areas as well the potentially negative impact on local businesses. be necessary if there is any intention to change fees over time. Table 7 summarizes the locations in which cordon (or conges- There are several equity issues that must be addressed. If tion) pricing systems have been adopted or considered. In this the fee is simply a mileage fee for equipped vehicles, equity section, the operational and financial performance of the Singapore, London, Oslo, Stockholm, and Milan systems will between equipped and non-equipped vehicles will be an issue. be examined in greater detail. The financial performance of four One possibility would be to refund an estimate of the gas tax of these systems (not including Singapore) will also be com- based on miles driven and EPA mileage estimates. Other equity pared with tolling systems in the United States and Canada. concerns relate to equity between vehicle classes, geographic The remainder of this section is divided into six subsections. equity, and equity relative to income. The first five subsections describe cordon pricing systems that If the system is to be used for road management, some deter- have been implemented in a country or major cities, and the mination must be made of how the system will be phased in last subsection provides a summary analysis for the five systems and what level of coverage is needed to make the system effec- presented. tive. For example, congestion pricing is not likely to be effec- tive unless most vehicles face the congestion charge. There may be a need to pass enabling legislation or apply 2.4.1 Singapore for existing exceptions allowing for a charge to be levied on Overview of the Singapore System the Interstate highway system. To encourage interstate com- merce, the legislation creating the Interstate system prohib- The Singapore system was the first cordon pricing system ited the use of tolls on the system. A number of toll roads were ever implemented, initially instituted as a manually based

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27 Table 7. Summary of operational and proposed congestion pricing systems. Location Date Coverage Area Status Adopted Singapore 1975 Central business district, 66 gantries Operational Hong Kong 1983 Toll tunnels linking Hong Kong and Kowloon Demonstration project Pensinsula cancelled in 1985 Bergen, Norway 1986 Urban ring road, eight toll stations Operational Oslo 1990 Urban ring road, 19 toll stations Operational Trondheim, Norway 1991 Urban ring road, 22 toll stations Operational Kristiansand, Norway 1992 Partial ring road, five toll stations Operational Rome 1998 6 km2 area Operational Stavanger, Norway 2001 Urban ring road, 21 stations Operational Durham, U.K. 2002 Single streets Operational Namsos, Norway 2003 Urban toll road, three toll stations Operational London 2003 Central business district, expanded in 2007 Operational Tnsberg, Norway 2004 Urban ring road, six toll stations Operational Stockholm 2005 Two zones Pilot project adopted Valetta, Malta 2007 Urban cordon Operational Milan 2008 Urban 8.2 km2 cordon area, 43 gates Operational Edinburgh, U.K. N/A Two cordons, Edinburgh Bypass and Central Referendum rejected Business District Manchester, U.K. N/A Two cordons Referendum rejected New York, NY N/A N/A Considered, but not adopted San Francisco, CA N/A N/A Considered, but not adopted Auckland, New N/A N/A Under study Zealand Source: Jacobs Engineering Group (2010) and Bain and Plantagie (2003) scheme (i.e., paper tickets checked at various control points) monthly or daily license. Monthly licenses could be purchased in 1975. This system was developed to manage congestion and at the post office, while daily licenses were sold at post offices, system demand, especially within the more congested parts roadside sales booths, gas stations, and convenience stores. of the CBD, which was designated as a restricted zone (RZ). Different-shaped licenses were used for various vehicle classi- The RZ covered 610 hectares at the beginning and then was fications. To deter fraud and support enforcement activities, expanded to 725 hectares to include reclaimed land along the license colors were changed each month. The other manual seafront as well as newly commercialized areas. The conges- pricing system in Singapore involved the use of special licenses tion pricing periods have been expanded over time. When the for use on local expressways during the morning peak period. system was first opened for operation, the congestion charge The congestion zone licenses were also valid. This system was was applied during the morning peak period from 7:30 to enforced at five separate checkpoints. 10:15 a.m. except for Sundays and holidays. In the late 1980s, Technological improvements permitted the implemen- the charging period was expanded to cover the evening peak tation of an electronic vehicle recognition and enforcement period from 4:30 to 7:00 p.m. In 1994, the congestion pricing system in 1998. The electronic road pricing (ERP) system sup- period was modified to cover the off-peak period of 10:15 a.m. ported enforcement along a wider area in addition to the man- to 4:30 p.m., essentially extending the congestion pricing ual checkpoints. Moreover, the ERP system reduced the evasion throughout the workday (Yap, 2005). technique of transferring licenses among vehicle owners. This system uses in-vehicle transponders, smart cards, electronic gantries, and a central control center, which processes payment Operations and Enforcement transactions, reviews violation images, and sends out violation of the Singapore System notices. Before being replaced by an electronic system in 1998, cor- The ERP system is intended to be user-friendly. As a vehi- don pricing was administered manually though the use of cle passes through the ERP gantry, the appropriate charge is paper permits that were checked at 31 control points demar- deducted from a smart card. If a driver lacks a smart card or is cated by overhead gantries. Additionally, 13 park-and-ride carrying an insufficient balance, then the ERP system will take facilities were established at the outer edges of the RZ. To gain a picture of the vehicle. The image will be sent to the control access to the RZ during the congestion charge periods, drivers center, which will retrieve the vehicle registration number were required to purchase and display a specially marked using optical character recognition (OCR) technology. Drivers