Develop a statutory and legal framework for as a foundational step for levying road pricing fees and utilizing revenues.
Experience from road pricing programs in Europe and Asia
Made Public Date
03/14/2011

352

Germany

376

Sweden
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Identifier
2011-00567

Reducing Congestion and Funding Transportation Using Road Pricing In Europe and Singapore

Background

Road pricing projects have been implemented in many parts of the world, notably in the Czech Republic, Germany, Singapore, Sweden, the United Kingdom, and the Netherlands. A scan team from the United States traveled to Europe and Singapore to meet with transportation officials involved in implementation of road pricing programs and to learn firsthand about their approaches and practices.

The scan tour was sponsored by the American Association of State Highway and Transportation Officials (AASHTO), the Federal Highway Administration (FHWA), and the National Cooperative Highway Research Program (NHCRP). The 10 members of the multidisciplinary scan team included transportation professionals from four State departments of transportation (DOT), one regional transportation agency, FHWA, the Federal Transit Administration (FTA), and private industry.

The team met with officials from Berlin, Germany; the Czech Republic; London, United Kingdom; Singapore; Stockholm, Sweden; and The Hague, Netherlands, from December 7 to 18, 2009. The face-to-face visits enabled participants to gain a deeper understanding of each host country’s history and context, the goals and objectives that were established, how road pricing was designed to address transportation and policy objectives, and the hurdles that were faced and how they were overcome. The exchanges provided an opportunity to gain in-depth understanding of program goals and methods, implementation costs, benefits, transportation impacts, revenue generation and use, operating and technical practices and their costs, financing approaches, effects on safety and the environment, and public acceptance.

Much like the U.S. experience, overseas road pricing projects have been met with considerable resistance and political and public debate. International examples indicate that public acceptance and approval of pricing programs improves significantly after project implementation, when the benefits and impacts can be weighed in tangible terms based on the context of its application. Based on discussions and observations made during and after the scan, the scan team developed a series of lessons learned.

Lessons Learned

Congestion pricing programs face political, institutional, and public acceptance challenges and concerns everywhere in the world. Over a 12-day period, from December 7 to 18, 2009, a multidisciplinary scan team from the United States interacted with the experts in Europe and Asia to develop an understanding of factors that contributed to the successful implementation of road pricing. Based on their international experience, the scan team offered the following lessons learned on addressing legal and institutional issues.

Develop the statutory and legal authority early on as an essential foundation for road pricing programs.

  • Stockholm Experience: Road user fees first became possible in Sweden in 1988 through a change in law, which allowed tolls on the bridges to Norway and Denmark. Stockholm defines its road pricing as a national tax, since the city of Stockholm has no power to tax nonresidents. As a consequence, changes to the fee schedule require parliamentary action. In London and Singapore, the congestion charge is considered a fee, which allows the rates to be adjusted by the managing authority and fines to be resolved through administrative actions. Stockholm officials report that the benefit of treating congestion charges as a tax is higher collections because taxes are paid with higher frequency than other fees.

Forge interagency agreements and relationships for effective operations and enforcement.

  • Stockholm Experience. All pricing programs reviewed during the scan-tour have procedures and relationships in place to share vehicle registry data for operations and enforcement among agencies. Some agencies, such as the new Swedish Transport Agency, operate the priced facility and manage vehicle registration, further streamlining data sharing, billing processes, and associated costs.

Formulate legal framework governing the use of road-pricing revenues for multi-modal transportation investments.

  • German Experience. In Germany, the revenue generated from the truck tolling program is legally required to be allocated to projects for roads (50 percent), rail (38 percent), and waterways (12 percent). This preserves the majority of the revenue benefit for road users, but helps meet a national goal of multimodal transportation solutions to address mobility and future capacity needs.
  • Swedish Experience. In Sweden, the national government has established a long-term 2010–2030 investment plan for infrastructure investment, with the equivalent of US$14.5 billion programmed from a variety of revenue sources, including the Stockholm congestion tax and plans for congestion taxing in Göteborg. The investment plan allocates 53 percent of the funding to road projects and 47 percent to rail projects. The Swedish policy of “advancement” is incorporated in the Road Act to allow municipalities to augment national funding, making more investment possible and creating higher design and operating standards.

Beware that laws that limit the price-setting power may be required but such limits may also constrain the ability to use price signals most effectively.

  • European Union Experience. A European Union directive dictates that the differential between the highest and lowest toll rate cannot be more than two times the lower value. Some European officials claim that this differential is not significant enough to manage traffic effectively in urban areas. The argument is that the limited price differential is insufficient to allow efficiencies to be realized through substantial temporal or mode shifts or avoided road trips. European Union Directives 1999/62/EC and 2006/38/ EC cover vehicle taxes, tolls, and user charges imposed on vehicles intended for the carriage of goods by road and having a maximum permissible gross laden weight of not less than 12 metric tons. The directives establish total revenue thresholds that must not exceed infrastructure costs, which some officials view as limiting for network investment purposes.

Road pricing programs implemented in Europe and Asia offer important lessons on exploring the use of market-based approaches to address traffic congestion and improve mobility. For successful implementation, the program managers should be prepared to resolve legal challenges, which may require the government at various levels (e.g., city, state, country, or union of countries) establish the statutory and legal authority for levying the pricing fee as well as for utilizing the revenue generated.

Reducing Congestion and Funding Transportation Using Road Pricing In Europe and Singapore

Reducing Congestion and Funding Transportation Using Road Pricing In Europe and Singapore
Publication Sort Date
12/01/2010
Author
Robert Arnold, Vance C. Smith, John Q. Doan, Rodney N. Barry, Jayme L. Blakesley, Patrick T. DeCorla-Souza, Mark F. Muriello, Gummada N. Murthy, Patty K. Rubstello, Nick A. Thompson
Publisher
Federal Highway Administration, U.S. DOT

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