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28 Table 8. Singapore traffic statistics, 20042008. Year Total ERP Average Speed (km) ADT(*) Average Annual VKT per Vehicle Vehicles Gantries Highway Arterial Entering Autos Motor- Private and Light and Owned City cycles School Heavy Buses Trucks 2004 727,395 45 62.7 26.1 246,000 20,298 13,744 34,266 45,237 2005 754,992 48 63.0 27.2 244,000 20,603 13,711 34,008 46,905 2006 799,373 48 61.6 27.1 270,400 21,100 13,700 34,850 47,300 2007 851,336 58 62.4 26.9 278,300 20,800 13,800 35,250 48,500 2008 894,682 66 63.3 26.7 278,100 19,700 13,300 34,950 46,350 CAGR 4.2% 8.0% 0.2% 0.5% 2.5% -0.6% -0.7% 0.4% 0.5% (*) ADT denotes average daily traffic Source: Land Transport Authority of Singapore, 2009 without a valid smart card are assessed an administrative charge have either decreased or remained relatively constant during to cover processing costs (Menon, Gobinath, and Kian-Kong, this period. Table 8 summarizes traffic data within Singapore 2004). Additionally, penalties are assessed for nonpayment in from 2004 to 2008. excess of 28 days and violators are required to appear in court. A unique aspect of this cordon pricing system is that Singa- pore has three separate international ports of entry, including Impact of the Singapore System on Traffic one ferry terminal and two land connections. Foreign vehicle owners can purchase temporary transponders and smart cards. The initial decrease in traffic was 44%, which was largely due Because some foreign visitors need to enter into Singapore to a reduction in through trips. During the 1980s, traffic levels on a regular basis, a number of vehicle owners have found it within the congestion zone steadily increased as a result of to be more cost effective to purchase a permanent in-vehicle increases in population, economic activity, and vehicle owner- transponder. ship. Because fees are assessed each time a vehicle enters the congestion zone, the ERP system had the immediate impact of reducing the number of multiple trips. To better manage con- 2.4.2 London gestion, the congestion charge increases or decreases in accor- Overview of the London System dance with traffic levels, as described below. To maintain traffic flow, the Singapore Land Transport As a means of reducing traffic congestion within the London Authority, which oversees the congestion pricing system as CBD and to raise revenues, the City of London instituted a fee well as the public transit, has instituted an 85th Percentile for private automobiles in 2003. Cordon charges are imposed Speed Measurement Mechanism, in which congestion charges weekdays from 7 a.m. to 6 p.m., but are not based on distance vary to meet an 85th percentile benchmark. The average speed traveled or location. In the first year that the congestion charge for roads located within the CBD is targeted at 20 km/hour to was implemented, the average daily traffic decreased from 30 km/hour. For expressways, the average speed is targeted to 378,000 to 324,000, or 14% (Transport for London, 2007). In be from 45 km/hour to 65 km/hour. When the average speeds 2005, the daily congestion charge was increased from 5/vehicle exceed the upper threshold, the congestion charge is decreased to 8/vehicle (as of December 22, 2009, $1 = 0.625977). In to optimize road capacity for that facility. To discourage road 2007, the congestion zone was expanded to include parts of use during heavy travel periods, congestion prices increase inner west London, including Westminster, Kensington, and when average speed falls below the lower threshold. Chelsea (see Figure 9). This expansion has nearly doubled the Although financial data on the ERP system are not available, size of the congestion zone. Although the western zone experi- the Singapore Land Transport Authority has compiled sta- ences high levels of congestion throughout the day, it is rela- tistical information that indirectly measures the effectiveness tively residential, with two-thirds of the traffic (in terms of of this approach. From 2004 to 2008, the ERP system added VKT) of the original congestion zone. 21 gantries, which has increased enforcement and helped to maintain traffic speeds on local highways and arterials despite Operations and Enforcement of the London System the estimated 4% increase in the number of vehicles per annum. Additionally, the average daily traffic entering into the city has To enforce the congestion pricing systems, Transport for increased at a roughly 2.5% compound annual growth rate London (TfL), which operates the payment system within the (CAGR) per annum. Depending on vehicle classification, congestion zone, has installed video cameras at entrances, exits, the average vehicle-kilometers traveled (VKT) per vehicle and within the congestion zone to read vehicle license plates.

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29 Source: Transport for London Figure 9. London congestion charge zone. There are currently over 300 camera sites that monitor every TfL's cameras have an integrated automatic number plate lane of traffic at all entry and exit points to and from the recognition (ANPR) computer system. The ER is encrypted charging zone. License plate images are checked against a and transmitted to the data center over a dedicated and secure database to determine whether the vehicle owner has already broadband link. The main elements of London congestion pric- paid the charge, is exempt from payment, and/or is eligible ing are to receive a discount. Once the vehicle registration number (VRN) has been matched, then the photographic images of Weekends, public holidays, and the period between Decem- the vehicle are automatically removed from the database. The ber 25th and January 1st are free. images captured by the cameras form the evidential record There are signs on or at the side of the road, but no barri- (ER), which is used to confirm possible violations. The ER is a ers or tollbooths. compilation of images that provides evidence that a vehicle was Residents who live within the congestion zone receive a in the zone during the congestion charging period. A black and 90% discount for one vehicle, providing that owners regis- white camera takes a close-up image of the vehicle license plate, ter their vehicles with TfL. Additional vehicles must pay the while a color camera takes a wider image of the vehicle. All of full congestion charge.

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30 "Blue badge" holders (e.g., disabled persons) are eligible to the central London road network. TfL, which also operates the receive a 100% discount. London Underground, buses, and the Dockland Rail Line, has TfL has also initiated a congestion charging fleet auto pay, found that there has been a significant shift toward the use of which provides a 1/vehicle discount for vehicle fleets of public and non-motorized transit. Since 2003, there has been more than 10 vehicles. a 45% increase in bus ridership and a 43% increase in cycling Payments can be made at selected retail outlets, payment within the zone (Transport for London, 2007). Additionally, machines located in the zone, online, and by cellular text the economic impact of the congestion pricing system within messaging. the zone is considered to be neutral. Table 9 summarizes the Vehicle owners can purchase weekly, monthly, and annual impact of the congestion zone in the first 5 years of operations. passes. Nonpayment days result in a 120 fine, which is reduced to Financial Performance of the London System 60 if paid within two weeks. A free passage route runs through the congestion zone Initial projections were that the congestion charge system (Transport for London, 2007). would generate 160 million annually in revenue but would have annual operating costs of approximately 64 million. The congestion zone is bordered by a high-capacity route, The cost/revenue ratio would be roughly 40%. In a review of which allows drivers to make through-trips with ultimate TfL's financial statements, both actual revenues and expen- origins and destinations outside the zone without paying the ditures have exceeded initial projections. From FY 2004 to charge. Additionally, the Inner Ring Road, which runs through FY 2007, operational revenues averaged 228 million per the expanded congestion zone, remains free of charge to year, while annual operational expenditures averaged 126 users and essentially serves as a free northsouth route million. During this period, operational costs/revenues and through the congestion zone. The elevated section of the gross margin averaged 55% and 45%, respectively. Gross A-40 Westway that runs eastwest through the western margin is defined as revenues minus the cost of goods sold extension zone is also free to users. However, it is not possi- divided by revenues. These results exceeded initial projec- ble to enter into or exit from the A-40 within the congestion tions. Moreover, the addition of non-operating costs, which zone. Figure 9 summarizes the boundaries of the London are defined as financial assistance to other entities, depreci- congestion zone. ation, and administration and capital costs relating to the western extension improvements, averaged 16 million per annum, adding to the overall cost structure for this system. Impact of the London System on Traffic Consequently, operating margin has averaged 37.1% from TfL reported that the initial benefits (e.g., reduced traffic, FY 2004 to FY 2007. Operating margin is defined as earnings emissions) of the congestion pricing scheme initially exceeded before taxes and interest divided by revenues. Table 10 sum- expectations. However, these benefits have since eroded due to marizes the financial performance of the London congestion interventions and incidents that have removed capacity from pricing system during this period. Table 9. Impact of the London congestion zone, 20032007. Impact 2003 (Year 1) 2005 (Year 3) 2007 (Year 5) Traffic and Traffic adjusted rapidly to the 8% decrease in 3% decrease in total vehicles and VKT congestion introduction of the congestion congestion in the original from 2006 to 2007. charge with few traffic zone compared to 2002 With the introduction of the expanded problems. levels. zone, traffic entering into the original TfL found that there was an VKT on the Inner Ring zone increased by 5%. increase in traffic on the Inner Road again fell slightly Traffic within the western expansion Ring Road. during 2005, returning to zone decreased by 10% compared to VKT decreased by 15%. pre-congestion charge 2006. levels. Average daily traffic in the Traffic on the boundary route along congestion zone during the western extension increased by 4% charging hours decreased by compared to 2006. 14%. Congestion has returned to 2002 levels in the original zone. Total 324,000 316,000 405,000 vehicles* *Total vehicles in 2007 include both the original and expanded congestion zone. Source: Transport for London.