Supplement to

THIN KING
HIG HW AYS
Volume 3 Issue 1
March 2008

The international road pricing and

electronic toll collection review

Fabrizio Palenzona
and Kallistratos Dionelis
predict the future for
Europe’s roads

Bern Grush on Toronto Bob McQueen on urban pricing

Bryan & Blythe on smartcards
Miguel Angel Martinez on green tolling
Andy Graham on Scotland
Andreas Kossak on Germany
Duncan Matheson on privacy
Steve Morello on Easytrip
Simon Goodale on consumer issues
Andrew Pickford on London
Ondrej Pribyl on enforcement
Mel Byrne on revenue assurance

the

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 Foreword Thinking

Two for the

Kevin Borras is
publishing director
of H3B Media and
editor-in-chief of
Thinking Highways
and ETC, etc. To
contact him email
price of one
kevin@h3bmedia.com The saying ‘you learn something new every day’ was
only half right for me last week...

Editor-in-Chief
Kevin Borras
Sales and Marketing
Luis Hill, Tim Guest
Design and Layout
Phoebe Bentley, Kevin Borras
Sub-Editor and Proofreader
Maria Vasconcelos
Senior Editorial Advisors
Bern Grush, Jack Opiola, Andrew
Pickford, Harold Worrall
Contributors to this issue
Phil Blythe, Hannah Bryan, Mel Byrne,
Kallistratos Dionelis, Simon Goodale,
Bern Grush, Andreas Kossak, Miguel
Angel Martinez Olague, Duncan
Matheson, Bob McQueen, Steve Morello,
Fabrizio Palenzola, Andrew Pickford,
Ondrej Pribyl, Eric Wurmser
I turn 40 shortly after this
issue of ETC, etc “hits” the
“streets” (I suppose flops
onto your desk is a bit more
accurate but a little less
dramatic-sounding.
I share this fact with you not
so I’m showered with birthday
cards (although I only got four
last year so a few more would
be nice) but to give the
impression, that as I approach
my fifth decade on the planet I
should, at least, have accrued a
fair amount of information -
both useful and useless, but
every now and then I find
something out that surprises
me.
Last week while watching the
news on the BBC I learned two
things, both of which
succinctly met my “surprising”
criteria. The first was that the
UK has a Minister for Postal
Affairs, and the second was the
“they” are thinking of updating
the Seven Deadly Sins.
I really don’t mean to belittle
the postal industry in any way.
shape or form, but discovering
Web Design
Code Liquid
Visualisation
Tom Waldschmidt
Conferences and Events
Odile Pignier
Subscriptions and Circulation
Pilarin Harvey-Granell
Financial Director
Martin Brookstein
Editorial and Advertising
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Wallington,
Surrey
SM6 9QL, UK
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Email info@h3bmedia.com
that we have a member of the concerning the “21st
government whose job it is to Centurification” of the Seven
look after the delivery of Deadly Sins is actually related
letters made me wonder why if you think about it.
we don’t have a Minister for The general public, it seems,
Road Pricing or Congestion are to be invited to suggest
Charging, or whatever we want what new sins can be
to call it. We all send and incorporated, although
receive mail, we all (well, most suggestions that the current lot
of us) drive cars and sit in aren’t relevant is clearly not
traffic jams of our own making, true as I happily admitted to
so is that not enough of an coveting my neighbour’s ox at
equilibrium? the weekend. Updating the
A Minister for Road Pricing text is one thing (“thou shalt
would, one could safely not covet they neighbour’s
assume, have his work cut out Lamborghini Gallardo”) but
trying to convince the good have the basics of the sins
people of cities like actually changed all that
Cambridge, Bristol, Edinburgh much?
and Newcastle of the How about:“Thou shalt not sit
sociological, societal and in a traffic jam of thine own
environmental benefits making, thereby slowly
(there’s one more - oh yes, poisoning and polluting the
financial) of implementing a environment with your noxious
scheme and it would certainly carbon emissions.” What
save a lot of other people who would that come under? Sloth.
find that somewhat tricky task Obviously.
thrust upon them a lot of time Our fourth ETC, etc focuses
and effort. rather more on Europe than
The other seemingly any other region, by the way.
unrelated news item, the one Still, it’s hardly a sin, is it. E
ETC etc,, a twice-yearly supplement to thinking Highways, is published
by H3B Media Ltd in the UK. ISSN 1753 4348
Thinking Highways is published quarterly in two editions – North America and
Europe/Rest of the World - and is available on subscription at £30/€40 (Europe/RoW) and
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Although due care has been taken to ensure that the content of this publication is accurate
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stated, this publication has not tested products or services that are described herein, and
Managing Director/CEO their inclusion does not imply any form of endorsement. By accepting advertisements in this
Luis Hill publication, the publisher does not warrant their accuracy, nor accept responsibility for their
contents. The publisher welcomes unsolicited manuscripts and illustrations but can accept no
liability for their safe return.
Publishing Director © 2008 H3B Media Ltd. All rights reserved.
Kevin Borras The views and opinions of the authors are not necessarily those of H3B Media Ltd.
Reproduction (in whole or in part) of any text, photograph or illustration contained in this
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www.h3bmedia.com ETCetc Vol 3 No 1 01

 CONTENTS
COVER STORY
04 ASECAP Secretary General Kallistratos
Dionelis’s predictions for Europe’s road tolling
future
Europe Europe

A tempting piece in the Financial Times was the

challenge for me to write this article on sustainable
transport and the internalization of external trans-
port costs.
The FT story started by recognizing that a surfeit of
buzz words can obscure the real meaning of sustainabil-
ity and sustainable development. After the article makes
reference to a number of alternative definitions of the
term, it finally gets satisfaction accepting the Brundtl-
land Report from the of 1987 World Commission on
Environment and Development as the definitive state-
ment: “Humanity has the ability to make development
sustainable – to ensure that it meets the needs of the
present without compromising the ability of future gen-
erations to meet their needs”.
So we have given a name and a definition to the moun-
tain in front of us. Is it the end? Is it enough? Do we still
need a map to climb it?
Transport services play a central role in modern soci-
ety and economy and are correlated to economic
growth. Transport growth leads to the need to increase
and better manage infrastructure capacity of several
modes and continues to exert pressure on air quality –
the climate and the land use. These costs imposed on
society by infrastructure use are unequally shouldered
by different actors in the transport system and society.
Transport infrastructure generates costs and benefits
related to land use which have different aspects in urban
and non-urban areas. The costs and benefits of transport
must be split into internal costs (and benefits) borne by
the person’s transport activities and external costs (ben-
efits) that do not affect the user and are imposed on - or
offered to - others.
These negative and positive externalities can only be
vaguely assessed.

The analysis

From analysis
The State can no longer play the role of the wise, benev-
olent strong monarch able to meet all the unlimited
wishes of his subjects in the way that it could some
decasdes ago. In the modern world the budgetary con-
siderations become the key factor of defining the soci-
etal needs and preparing the phased approach to meet

to synthesis
Is the transport service in Europe a public good or a market
product, wonders ASECAP Secretary General, KALLISTRATOS
DIONELIS. And, more to the point, where are the borders?
them. The new era of the modern State leads to new def-
initions and to new questions. On one hand we see the
“State politician” in permanent pursuit of social targets
and priorities, while on the other hand, there is the “State
manager” knowing that the cash-cow period is over and
efforts are urgently needed to move its balance sheet
from the red.
If we are to trust our political leaders, (Lisbon EU polit-
ical strategy/commitment ) then, by 2010, the EU should
be the most dynamic and competitive knowledge-based
economy in the world, capable of sustainable economic
growth, greater social cohesion and respect for the envi-
ronment.
One chapter of this policy covers the transport domain
where the 27 EU member states have concluded that a
sustainable transport policy should tackle rising
volumes of traffic and levels of cohesion, noise and
pollution, and achieve the internalization of the external

46 Vol 3 Issue 1 ETCetc www.h3bmedia.com www.h3bmedia.com ETCetc Vol 3 Issue 1 47

TORONTO
10 Has Canada’s biggest city finally woken up to
the realities of congestion charging? If it has,
says Bern Grush, then it’s not before time

ITALY
18 Fabrizio Palenzona’s Italian-flavoured picture
of Europe

CITY TOLLING
24 Andreas Kossak on congestion pricing in cities
- notably his home town of Berlin
p18
SCOTLAND
30 Andy Graham laments the end of tolling in
Scotland - and not just for personal reasons 56 Miguel Angel Martinez Olague wonders if
approaching road pricing from an ostensibly
REVENUE COLLECTION environmental angle might just make it more
34 Is your revenue leaking away somehow? Mel publically acceptable
Byrne on Portugal’s first foray into revenue
assurance. INTEROPERABILITY
60 Steve Morello and Eric Wurmser report on
PRIVACY Easytrip - an innovative project in Ireland
38 Duncan Matheson on the concerns generated Interoperability Interoperability

The art of
An efficient transport system is primordial for pricing sectors and stakeholders whereby Egis Projects

by distance-charging policies
economic stability and development for all
countries around the world.
In many Central and Eastern European countries, and
other EC and OECD countries, a significant portion of
brings to bear almost 20 years of experience in the
development, launching, and operation and manage-
ment of 16 toll operating companies worldwide.
Based on our past PPP concession and turnkey toll

the possible
STEVE MORELLO and ERIC WURMSER on the future for road and
driver services, using an innovative project in Ireland as a
the roads including the main trunk road network are in
relatively poor condition or only in fair condition, requir-
ing major new investments to sustain economic growth
of the country. This situation has led to the development
and implementation of toll roads in countries like
Croatia, Hungary, Ireland, Poland and Portugal, in addi-
tion to the traditional toll road countries in Europe, e.g.,
France, Italy, Spain and Norway.
At a country-specific level and with the rising use of
ETC (Electronic Toll Collection) the issue of interoper-
ability across distinct toll roads in each country has
become an increasing challenge. This article will review
the Easytrip concept developed by Egis Projects, cur-
projects and recent new projects (turn-key supply of an
ORT system and operation for the Golden Ears Bridge in
Vancouver, Dublin Port Tunnel operations, and a
contract to design, build, finance and operate the first
section of Vienna’s north-eastern bypass – Austria’s first
PPP motorway project), Egis Projects is promoting and
developing the establishment of an interoperable ETC
or EFC (Electronic Fee Collection) framework within
respective countries.
The best example of the development and implemen-
tation of this strategy is Ireland.
ETC and EFC in Ireland

SMARTCARDS
shining example rent trends in one country regarding interoperable toll
(or fee) collection services and then draw some main
conclusions.
Integrated services
The very notion of tolling, in general, is changing,
extending the infrastructure business to include ETC,
ORT (Open Road Tolling), congestion charging, road
As part of its PPP programme, the National Roads Author-
ity (NRA) developed an approach towards ETC interop-
erability in Ireland. The NRA imposed standard ETC
encoding and processing rules and, in December 2004,
launched a tender to establish an ETC clearinghouse
organisation, the so-called Information Exchange Agent
(IEA). In Ireland, all ETC systems implemented are
interoperable from a technical point of view, allowing a

42 Hannah Bryan and Phil Blythe investigate

pricing and toll road interoperability. tag user to cross any toll facility in the country with a
Since 2005, Egis Projects has embarked on the mis- single tag.
sion to provide fully integrated services for end users, The IEA aims at facilitating commercial interoperabil-
toll road/congestion charging operators, HGV tolling ity through the mandatory exchange of both ETC
companies, car park companies, etc with the develop-
ment of a corresponding brand name called Easytrip
Services.
This business development strategy is based on man-

the slow take-up of smartcards in the UK

aging customer relations across a range of tolling/road

LONDON
46 As London “celebrates” the fifth anniversary of 46 Vol 3 Issue 1 ETCetc www.h3bmedia.com www.h3bmedia.com ETCetc Vol 3 Issue 1 47

its Congestion Charging Zone, Andrew ELECTRONIC PAYMENT

Pickford wonders which other cities are 64 Simon Goodale on putting the consumer first
learning from its example
ENFORCEMENT
ENVIRONMENTAL PRICING 68 Optimising the scope for EFC enforcement,
52 Congestion charging, intelligent transportation by Ondrej Pribyl
and the environment, all seamlessly linked
together by Bob McQueen 72 Advertisers Index
 BEFORE AFTER

THE COUNTRY REMAINS UNSPOILT,

THANKS TO SATELLITE TECHNOLOGY.

INVEST IN THE FUTURE. INVEST IN TRAFFIC MANAGEMENT FROM SATELLIC.

No diìerence. But a change nevertheless. Satellic Traïc Management shapes
tomorrow’s mobility today. With innovative traïc management. With satellite-
based toll systems. With people ready to take one step into the future every
single day. INTELLIGENT ROAD PRICING. BECAUSE MOBILITY MATTERS.

SEE MORE OF OUR VISION AT: WWW.SATELLIC.COM

SATELLIC – MEMBER OF DEUTSCHE TELEKOM GROUP
Europe

From analysis
to synthesis
Is the transport service in Europe a public good or a market
product, wonders ASECAP Secretary General, KALLISTRATOS
DIONELIS. And, more to the point, where are the borders?

04 Vol 3 No 1 ETCetc www.h3bmedia.com

 Europe

A tempting piece in the Financial Times was the

challenge for me to write this article on sustainable
transport and the internalization of external trans-
port costs.
The FT story started by recognizing that a surfeit of
buzz words can obscure the real meaning of sustainabil-
ity and sustainable development. After the article makes
reference to a number of alternative definitions of the
term, it finally gets satisfaction accepting the Brundtl-
land Report from the 1987 World Commission on Envi-
ronment and Development as the definitive statement:
“Humanity has the ability to make development sustain-
able – to ensure that it meets the needs of the present
without compromising the ability of future generations
to meet their needs”.
So we have given a name and a definition to the moun-
tain in front of us. Is it the end? Is it enough? Do we still
need a map to climb it?
Transport services play a central role in modern soci-
ety and economy and are correlated to economic
growth. Transport growth leads to the need to increase
and better manage infrastructure capacity of several
modes and continues to exert pressure on air quality –
the climate and the land use. These costs imposed on
society by infrastructure use are unequally shouldered
by different actors in the transport system and society.
Transport infrastructure generates costs and benefits
related to land use which have different aspects in urban
and non-urban areas. The costs and benefits of transport
must be split into internal costs (and benefits) borne by
the person’s transport activities and external costs (ben-
efits) that do not affect the user and are imposed on - or
offered to - others.
These negative and positive externalities can only be
vaguely assessed.

The analysis
The State can no longer play the role of the wise, benev-
olent strong monarch able to meet all the unlimited
wishes of his subjects in the way that it could some dec-
ades ago. In the modern world the budgetary consider-
ations become the key factor of defining the societal
needs and preparing the phased approach to meet
them. The new era of the modern State leads to new def-
initions and to new questions. On one hand we see the
“State politician” in permanent pursuit of social targets
and priorities, while on the other hand, there is the “State
manager” knowing that the cash-cow period is over and
efforts are urgently needed to move its balance sheet
from the red.
If we are to trust our political leaders, (Lisbon EU polit-
ical strategy/commitment ) then, by 2010, the EU should
be the most dynamic and competitive knowledge-based
economy in the world, capable of sustainable economic
growth, greater social cohesion and respect for the envi-
ronment.
One chapter of this policy covers the transport domain
where the 27 EU member states have concluded that a
sustainable transport policy should tackle rising
volumes of traffic and levels of cohesion, noise and
pollution, and achieve the internalization of the external

www.h3bmedia.com ETCetc Vol 3 No 1 05

Europe

environmental and social transport costs. At the heart of

this targeted sustainable transport policy should be a
fair transparent and efficient charging system for all
modes of transport.
This is a crucial political decision given that in the
“conventional state” the supply side of the transport was
covered by the “state” and the demand side was the
“citizen”. Neither has well defined parameters in eco-
nomic terms, mainly when interconnected by the “tax
system” which, given its inefficiencies, is not the fairest
way to organize a modern State.
It is a really daring decision to move away from the
simplified thinking of an (economically undefined)
society which supports the State’s spending ever more
for the “transport/public good” while the “citizen”
should always ask for more “public transport services”.

Policy of truth
European societies and their leaders were not always
clear when addressing transport matters whether
growth or the environment were higher on their priority
list.Without a fixed view on this the policy shapers were
never sure how to apply the transport instrument and to
which direction. As a result, the policy guidelines pre-
ferred to tackle the transport area in a fragmented man-
ner with diverging views on Infrastructure, safety,
Intelligent transport systems, taxation, charging policy,
congestion, etc.
Each European region had its own procedures for
identifying and recovering costs by arbitrary charging,
or by arbitrary taxation or by both. As long as the belief
that “the State resources are unlimited” was the key fac-
tor, the above scenario was a functioning one.
One of the enduring peculiarities of the road transport
sector in this period was the fear of all the interested
bodies to call the transport sector an “industry”. It is a
fact that in the past the terms “public interest” and “pri-
vate capital” were - in broad terms at least - mutually
exclusive. Of course this dysfunction and mistrust
helped us to recognize that diverse and differentiated
charging policies did not encourage
sustainable use of transport resources “Transport is a
and a common framework was neces- domain where one
sary to inject much greater consist-
ency in the infrastructure charging. part produces a
So, what is recognized under the transport product
term “transport” in modern times? Is
transport a public good or a market and the other part
product? Or is it both? And if it is so, consumes it”
then, where transport stops being a
public good and becomes a product? Presently it is
widely agreed that transport is a domain where under
the regulating state one part (public or private entity)
produces a transport product (with well defined quality
and cost) and the other part consumes it.
When addressing the road transport as an industry we
already inject a realistic, market-oriented approach
based on the eternal balance of power between the
concrete and defined terms “supply” and “demand”.
The commercial aspect of the road industry does not
necessarily contradict the state’s priority to meet the
citizen’s concerns and requirements. On the contrary,
under the new market approach, the previously obscure
and undefined political messages are now translated as
clear and concrete socio-economic objectives.
The cumbersome, inexperienced and tardy public
procedures accompanied by the absence of a legal
framework were never attractive to the private industry
which faced with great concern the absence of any real-
istic possibility to manage efficiently the political, eco-
nomic and financial risks in the transport domain.
The synthesis
Within the European Union, parts of the
transport infrastructure are overloaded,
poor, or poorly maintained. In addition,
many of the economic and social costs
of transport, (air pollution, congestion,
accidents, etc.) are not directly met by
the users. In brief there are issues about
how to fund in a competitive and trans-
parent way major new transport infra-
structures in Europe, how to define the mechanisms by
which users should be charged for their use and how to
agree on the ways in which the money raised by the var-
ious institutions involved, (public or private), are to be
spent.
All these have to be seen not as a code of fixed/static
principles but as a dynamic roadmap. Interpreting
wrongly the term “transport” in a simplistic and purely
mechanistic way calls these fundamental principles into
question. The policy makers recognize finally that the
social stability, the economic growth, and the environ-

06 Vol 3 No 1 ETCetc www.h3bmedia.com


mental protection should be measurable parameters in
the complex transport matrix which will have to prove
its worth as a well coordinated mechanism, serving the
citizen’s needs.
To take action we must be clear about the potential
instruments that are available. Better, commonly under-
stood indicators need to be developed to really monitor
progress towards sustainable cohesion. These indica-
tors will assist society, states and industry to evaluate
whether we are getting better at managing transport
demand, adding the needed supply and at improving
the modal split, based on the newly coined doctrine of
“commodality”. All the actors involved should brush
aside all these targets, visions and codes.We know them
but they are not the solution to the establishment of a
sustainable transport system. What we need is not so
complicated.We need a clear and simple check list and
tick all its boxes accordingly.
We can always measure carbon in the environment
but we can neither measure happiness nor satisfaction.
Sustainable transport must be encouraged, but the
structured society must be in the position to know and to
measure whether the environmental performance of
the transport sector is really improving and accordingly
modify the list of incentives (political, economic, tax),
encouraging the possible use of alternative scenarios.
The policy makers and the stakeholders involved in
the urban and interurban transport should recognize
that packages “designed to match policy instruments to
tackle externalities” perform much better than isolated
instruments proposed. However, all these packages
www.h3bmedia.com
Europe
must be carefully evaluated by various studies which
need to provide clear comparative assessments of the
tools under examination. Analyses have shown that opti-
mal policy packages combine and supplement mar-
ginal cost-based usage charges such as vehicle taxes,
standards or other regulations. (An example often
presented is that if a CO2 fuel charge provides insuffi-
cient incentives to develop and buy fuel efficient vehi-
cles, then a differentiated vehicle tax related to CO2
emissions should be adopted too to offer an additional
impetus.)
A matter of choice
Of course, finally, the choice between transport pack-
ages of instruments (incentives and alternative scenar-
ios) depends not only on their relative efficiency but
also on their equity impacts since in general the overall
objective of the society concerns not only a maximiza-
tion of total efficiency but also to achieve an equitable
distribution of welfare. There are of course important
issues to be examined related to the acceptability of dif-
ferent transport pricing measures and basically which
are the factors influencing/affecting acceptability.
In the areas of aviation, maritime, rail, even in the
heavy goods sector, the answer is easy and immediate.
In these domains, transport is easily recognized as a
market product where a professional company (air car-
rier, ship-owner, railway company, haulage company)
supplies a transport product of a certain quality/cost
and the customer/passenger receives it by paying the
price following the market rules.
The question there is not related to the acceptability of
the charging but on the realistic difficulty that pricing
research in these domains has not reached the maturity
stage of the road transport mode. The open issues start
from the lack of common industrial agreements on the
need of an action on pricing mechanisms, on the meth-
odological alternatives, on the assessment of the bene-
fits and the costs (which are the cost and/or benefits
drivers).
On the other hand, though, the road sector charging
methodologies appear more mature, the issue in ques-
tion related to the road charging acceptability appears
more complicated given that the same persons/citizens
(in the other sectors parts of a professional contract)
become amateurs and reflect differently on the same
questions .
There are important issues to be examined related to
the acceptability of different transport pricing meas-
ures and basically which are the factors influencing/
affecting acceptability. It is generally seen as accepta-
ble amongst users if the charging regime tackles com-
monly recognized problems, is seen as fair, is based on
the vehicle type and the emissions quality while a hot
matter for the citizens is the use of the revenues which
need to be earmarked in the transport area.
The socially accepted charging system depends on
the regulating and operating structures allowing the
various states, when dealing with private sector ques-
tions, to create a legislative framework permitting a
smooth market functioning.
ETCetc Vol 3 No 1 07
Europe
Conclusion
The social needs are not simplistic, mechanistic targets.
In the modern era, the situation has become clear and
growth and the environment go hand in hand. EU Insti-
tutions, based on common principles are in pursuit of a
new set of principles and methods based on the inter-
nalization of the external cost, shaping a modern trans-
port deal. An enhanced program of investment
(designed, planned, financed, built and operated)
should be the final policy target with evaluated plans
and strategies of local, national and paneuropean
dimension using the modern socially accepted fair
charging principle, by internalizing the external cost.
This charging method will create the necessary mar-
ket pricing mechanisms where both the user pays the
calculated internal cost to the transport service pro-
vider and the polluter pays the estimated external cost
to the directly affected “external” society.
In this second case the destination of the revenues col-
lected is not always clear. The real urgent answer to be
given is how the policy makers will decide to use the
additional revenues from the charging of the external
costs. So, should the revenues be spent as direct short
term cheques to the directly affected regions/societies
(lowering tax burden, tax incentives, etc) or should the
state authorities choose a long term policy re-investing
the externalities’ revenues in the transport domain
affecting the region in question?
After this important question gets answered other pol-
icy and/or technology oriented issues will surely
appear. The questions will refer on how the modern
road transport service providers (city, region, state, con-
cession companies) will examine and follow their charg-
ing policies, applying of course diverging technologies
in their dramatically different road environments.
It should not be forgotten that in the EU environment
there is never “a typical average road entity applying
charging”. When talking about road charging, the pub-
08 Vol 3 No 1 ETCetc
lic sector should always bear in mind a simple thing that
the private sector always remembers: Never mix the
ideas, visions, various alternatives using different, still
experimental,video charging schemes, and realities
identifying differently the urban road transport, the
interurban secondary road network and the existing
realities of the PanEuropean (although still not fully
interoperable) charged and tolled motorway network.
Different realities demand different answers and sep-
arate road maps. These maps must be supported by a
social business model and rationale that will logically
affect positively the objective of “an interoperable
charging scheme” applied differently to all above the
sectors involved, respecting their proper operational,
legal, managerial and the technological specificities.
In the following years it will be a common understand-
ing that the guiding principle of the legislative frame-
work will be the opening–up of the environmentally
friendly and caring transport market. Transport will be
generally recognized as the key “development hope
and environmental question factor in the modern global
world, the modern society and its regional diverging
micro-systems.
The role of the State will be crucial as a regulating
machine, guaranteeing the rules of a fair, transparent
and sustainable transport service for the user.
If no action to these directions is taken, transport will
remain a big obscure incognita creating permanent con-
tradictions between the society (demanding ever more
mobility), the economy (working for more and more
growth), the public opinion (becoming increasingly
intolerant of chronic delays) and the environment (tail-
spinning its way to who knows where). E
Kallistratos Dionelis is Secretary General of ASECAP,
the Association of European toll road operators and
concessionaires. He can be contacted via email at
k. dionelis@asecap.com
www.h3bmedia.com
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Toronto

Decision time
The idea of road pricing has been floated in Toronto
countless times over the past five years. Compared to cities
that have gone before, says BERN GRUSH, it’s all the same
and it’s all different...

10 Vol 3 No 1 ETCetc www.h3bmedia.com

 Toronto

www.h3bmedia.com ETCetc Vol 3 No 1 11

Toronto

Early on, road pricing thinking in Toronto was pre-

dominantly congestion-related as it was during the
2003 and 2006 mayoral campaigns. There have been
the obligatory comparisons with London, as dozens
of other cities have made. Toronto’s Mayor David
Miller even sent one of Toronto’s Councillors over to
see London’s system first-hand.
For a modest period it was environmentally related.
In the summer of 2007 Toronto released its Climate
Change, Clean Air and Sustainable Energy Action Plan,
in which appeared a statement that “the city will work
with the Province [and other local authorities] to investi-
gate a road pricing regime for the GTA that will encour-
age people to use alternative modes of transportation,
and dedicate any funds raised to transit improve-
ments.”
More recently it has been almost entirely funding
related. On 21 February 2008, Toronto released a com-
mission report entitled: Blueprint for Fiscal Stability and
Economic Prosperity, which included a strong recom-
mendation that the arterials around Toronto be tolled.
Since many of these are under Provincial jurisdiction
this cannot be undertaken without regional (i.e., provin-
cial administration).
The Mayor has been quoted several times as saying
he favors the idea of road pricing as a last resort, but that
it needs to be a wide-area mandate – essentially a
provincially administered initiative. Since the Blueprint
report was published, Ontario’s Minister of Transporta-
tion, Jim Bradley, has been quoted as saying the prov-
ince has no intention of tolling its existing “400-series”
highways, but that the Mayor of Toronto, who has been
recently granted certain new taxation powers, is free to
toll those under city jurisdiction, such as the two limited
access congestionways: the Gardiner and the Don Val-
ley Parkway.
But tolling the roads you can toll for financial reasons
instead of the ones that you should toll for demand-
management reasons can have unintended effects.
Network demand management requires at least some
finesse. Attaching a toll to one small part disturbs the
system unevenly.

Same old?
In some ways, traffic congestion is the same everywhere.
It has similar causes and similar harms. Sandwiched
between its minority advocates and its minority detrac-
tors is a majority of motorists who are against it – usually
around 60-70 per cent.
But no detractor, no local politician and certainly no
effected motorist is interested in a general economic
theory of the effect of market pricing on network effi-
ciency. However much the common good may be
harmed by congestion and emissions, most of us prize
our purse more. Even Al Gore’s message fades in the
face of a tax bill. And however much government may
indeed be running out of money, a majority of citizens
believe the money can be found elsewhere – certainly
not from their entitled drive to work.
But in other ways, no two cities’ political and urban
landscapes are identical with respect to congestion and
congestion pricing. One of the truisms that challenge
advocates (and aids detractors) is that London, Stock-
holm and Singapore are not only not like each other,
they are also not like any other city. More specifically,
they are not like Toronto.
So when cities like New York and now Toronto begin a
public debate about road user charging or congestion
pricing, they variously think they have everything or
nothing to learn from the cities that have stumbled
through this before us.
The truth, as always, falls in between, and in this mine-
field of opinion the truth can be hard to tease out. No one
has yet got it exactly right and there is merit to both
sides of each argument.
But there are a few things that I am sure will apply as
much to Toronto, my city, as to any other.

12 Vol 3 No 1 ETCetc www.h3bmedia.com


“Tolling the roads you
can toll for financial
reasons instead of the
ones that you should
toll for demand-
management reasons
can have unintended
effects”
1: We will argue that it is not acceptable
A majority of Toronto motorists will be against road pric-
ing. This will change to a minority once a suitably
designed scheme is in place. This has happened in Lon-
don, Stockholm, and Singapore. It has not yet happened
in Dubai where an incomplete scheme diverts rather
than reduces traffic.
A suitably designed scheme has to be fair. Tolling just
two major arteries (the Gardiner feeding in from the
southwest and the DVP feeding in from the north-east),
forces a minority subset of motorists to shoulder the
whole road-tolling bill. This means some will possibly
overpay for driving their vehicle while others will con-
tinue to underpay. In fact, elasticity effects will encour-
age more driving from those who are not paying,because
the roads will be somewhat less congested and parking
www.h3bmedia.com
Toronto
Toronto City Hall
will be somewhat more available. This compounds the
unfairness, while diminishing the desired congestion
effects.
Every road-pricing scheme has three potential com-
ponents: reducing congestion, raising money, and eas-
ing emissions. London’s scheme, which does a very
modest job of raising money, was designed to reduce
congestion and emissions and measurably succeeds at
that. The Singapore and Stockholm schemes were simi-
larly designed. The Mayor’s Commission’s recommen-
dation of tolling a couple Toronto arterials is biased
toward raising money. This will delay its acceptance.
Indeed, if it does not noticeably ease congestion, it will
never be accepted.
A further problem will occur with tolling these two
roadways. Each has parallel secondary roadways that
ETCetc Vol 3 No 1 13
Toronto
will be subjected to more traffic from toll evaders (just
5% off the highways is a lot for these secondary roads).
Some of these traverse neighbourhoods, which has
implications for safety, local pollution, and property val-
ues. While this may only affect local acceptability, it is
still unfair.
Tolling needs to be graduated and wider-spread
rather than in a few corridors or in a small cordon.
A congestion-pricing program has to be, and be per-
ceived as being, socially beneficial, not just a correction
for a financial problem. Rather than road pricing, it
would be better if the Mayor of Toronto saw and pro-
moted congestion pricing as does San Francisco’s Mayor
Gavin Newsom, who said in his inaugural address on
January 8, 2008: “A sensible congestion pricing plan is
the single greatest step we can take to protect our envi-
ronment and improve our quality of life.”
2:We will argue over why to do it
Because of the recent report from a commission charged
by the Mayor with making recommendations regarding
Toronto’s fiscal dilemma,the current motivation is access
to funds. In the past both congestion and emissions have
been the drivers of the Toronto debate. While it is nice
to have three good reasons for a congestion-pricing
program – and Toronto does – each reason on its own
has other solutions. Congestion pricing is best designed
to address all three.
If you stress only funding there are other ways to raise
money and the argument that “we are picking on driv-
ers” can be made and requires a long-winded argument
to diffuse it. If you stress only emissions, it is possible to
argue that cleaner engines are starting to come on line,
and that governments should pressure automobile man-
ufacturers and rely on innovation. If you stress only con-
gestion, demands for improvement to our deteriorating
transit system will be made in its stead.
The truth is we pay for road use the wrong way. Fuel
taxes are losing their ability to fund roads in the face of
more efficient engines, they are weak in addressing
emissions, especially in North America, and they are
14 Vol 3 No 1 ETCetc
completely silent about congestion.
We need to move away from fuel taxes and toward
pay-for-use. This means that tolling needs to be gradu-
ated and wide-spread rather than in a few corridors or
in a small cordon. Road pricing should become the new
fuel tax, not remain as a surcharge. The Mayor of Toronto
is right in theory that the province should take the lead,
but he should move forward anyway. If he did what he
could the province would have to follow his lead. The
Ontario Minister, while right about the original mandate
of his stewardship of the 400-series roads, needs to start
looking to guidance from the Feds who do encourage
the application of pricing programs. The mid-20th cen-
tury era of Big Free Roads in North America has played
out long ago.
3: We will argue over how to do it
We are on the cusp of a dramatic technology change.
There will be advocates for the older, more familiar
short-range radio technology (the kind used on the 407,
the only tolled highway in Ontario) and yet other advo-
cates for the newer and more flexible technology based
on GPS. The older technology while limited is adequate
for tolling the DVP and the Gardiner, but it is hyper-
expensive for tolling a central business district. This
and the inconvenient urban-clutter of gantries in the
downtown core is why the New York proposal to blanket
Manhattan in 340 E ZPass gantries was rejected in favour
of a simpler, but less comprehensive system.
If Toronto were to toll the DVP and Gardiner and no
other roadway or cordon, then Toronto could simply
extend what is being used on the 407. But most planners
realize that the jig is up on free road access. They know
that whatever Toronto does with road pricing, it will only
be the beginning. For this reason, the newer infrastruc-
ture-free, GPS technology should be used. It will allow
gradual pricing by distance throughout Toronto and
eventually North America so that the financial burden is
fairly spread, so that traffic is reduced rather than re-
routed, so that prices can be set to offset emissions and
so that pay-per-use can gradually supplant the fuel tax.
www.h3bmedia.com

The Netherlands believes that GPS technology is
ready and intends to deploy it countrywide over the
next 8 years. It would be wise to follow that lead rather
than London’s (look where that took Mayor
Bloomberg).
4:We will argue that it harms the poor
Many argue that road pricing harms those with lower
incomes. But advocating a policy of unfettered road
access is actually detrimental to low-income earners.
Lower-income commuters are generally captives of
transit – often buses. These buses are delayed in traffic
that is generated more by motorists of middle to higher
incomes than by transit users. According to Todd Litman
of the Victoria Transport Policy Institute (a world-lead-
ing transport think-tank based in Brit-
ish Columbia): “In virtually every “Why not raise the
congestion pricing project analyzed,
low-income people represent a very
minimum wage
small portion of total users. When rev- rather than eschew
enues are spent to improve transit
services or in other ways to help
market pricing of
lower-income people, congestion our roads?”
pricing is almost certainly progres-
sive.”
Professor Harry Kitchen makes the identical point in
his essential but much maligned, January 2008 report,
Financing Public Transit and Transportation in the Greater
Toronto Area and Hamilton:“...if some of the road pricing
revenues are used to subsidize public transit, the poor
will benefit because they use public transit much more
than the rich.”
New York City’s recent Kheel Report, suggests com-
bining congestion charging with free public transit for
New York City. In Toronto, public transport is not only
underfunded, it is overpriced and there is no account-
ing for distance travelled making short trips overpriced
– especially for people of lower income who may not
have a vehicle for short distances nor the money to pay
for parking. Money to improve transit and to lower fares
would be of dramatic value to those with lower incomes
www.h3bmedia.com
Toronto
as well as to our environment.
Unfortunately, there is another terrible bit of social
logic afoot in the myth that road-pricing automatically
harms the poor. Most us agree that human activity is
harming the planet. We also generally agree that the
transportation sector is a major contributor in that harm.
In turn, we have singled out the single-occupant vehicle
commuting to work daily as the single most offensive
component of that. Finally, we argue that with proper
pricing signals we could have a significant portion of
commuters choose a different modality. Given all that,
some then make the argument that road-pricing should
be avoided to prevent (unsubstantiated) harm to the
poor. This implies that we should choose between pov-
erty and our planet.
Why not raise the minimum wage
rather than eschew market pricing of
our roads? To do otherwise this
unfounded logic would keep poverty
and congestion locked in together.
There is not a lot of difference between
how we treat our planet and how we
treat our fellow humans.
5:We will argue that it is not environmentally
friendly.
Because most congestion schemes are proposed as cor-
dons around central business districts or, worse, pro-
posed as tolls on selected arterial segments, many
people warn that a significant portion of vehicles will
simply use other streets, moving emissions to another
place, and generating parking problems including
idling and circling at the cordon boundaries. While
these effects do occur they are not necessarily as bad as
their worst predictions. But there is enough truth to this
to look closely at it for Toronto. If the DVP were tolled,
what would happen on Don Mills or Victoria Park or
Yonge Street? If this were modeled it would raise ques-
tions, and that, in turn, would reduce the likelihood of
acceptance for such a tolling program.
Why not, instead, consider Nobel winner William
ETCetc Vol 3 No 1 15
Toronto
Vickrey’s advice to avoid sharp pricing shoulders –
charging something significant on one road and noth-
ing on the next – if we believe that will risk harm to the
neighborhoods along the free road? Why not toll more
broadly and more gradually, since the technology to do
that is now available and can be deployed at a far lower
cost of ownership than current technology?
What if we tolled a central business district at C$0.30/
km, a wider area at C$0.15/km, and a wider area still at
C$0.07, etc., we’d have no abrupt boundaries. Short
trips would be quite affordable – perhaps little more
than a dollar. Longer trips from Pickering to Mississauga
would cost more – C$9 at 15 cents/km. And there is no
reason to have a simple tiered scheme like that, because
the CBD of Mississauga could be priced higher that the
comparably lower price of the less congested area in
between it and Toronto. Basically, Southern Ontario
could rebate the fuel tax and deploy end-to end conges-
tion pricing with relative pricing peaks in all densely
populated areas and times.
The important issue is to turn back congestion by
shifting travel times and modalities and without spilling
it into new places – a problem that is prone to occur with
many current schemes.
6:We will argue that it is unsafe
There are studies that demonstrate that tolling increases
accidents and accident severity. One released in
November 2007 by Peter Swan and Michael Belzer
makes the case readily: Depending how toll rates are
set it is possible to “introduce substantial inefficiencies
in the overall road transportation network and actually
increase congestion and safety hazards in other parts of
the system”. Swan and Belzer “showed that as the [Ohio]
Turnpike toll increased, truck traffic increased on alter-
nate, free routes as truckers balanced the monetary sav-
ings with the cost of the extra time needed to take an
indirect route.”
It has several times been argued in Toronto that tolls
on limited access roadways such as the DVP will cause
some traffic to be deflected. The argument is reasona-
ble. Surely, each additional vehicle added to city roads
16 Vol 3No 1 ETCetc
and streets adds both environment and safety risks. So
while not quantified for any Toronto circumstance one
can imagine that some Toronto streets may be less safe
if tolling were instituted on nearby roads.
Again the solution is easy: toll modestly, toll gradually,
and toll the entire network, not just a few segments or a
ring-road around Toronto. New liability-critical and pri-
vacy-assured GPS technology can do this already.
7: We will argue that we already pay too
many taxes
No one wants to pay more taxes. And very few of us think
we pay too little. But we are paying the wrong taxes. Fuel
taxes are insensitive to congestion, only a charge related
to the level of congestion, or a time, distance and place
charge can address that.
Mary Peters, US Secretary of Transport said it best in
January 2008:“It is a virtual economic certainty that con-
gestion and system unreliability will worsen if we con-
tinue to rely on a tax-based financing system that has
little or nothing to do with the true costs of using or pro-
viding transportation infrastructure. Today, a fundamen-
tally new transportation policy must focus on system
performance…”
The only way we can make the requisite tax shift from
fuel consumption to road use is to take those steps nec-
essary to toll everywhere and, at first, to find tax rebate
or payment exclusion methods until such time that the
fuel tax and or other regressive automotive taxes can be
replaced.
8: We will argue that transit is not ready
It is almost certain that if we took 10 or 15 per cent of
peak-hour cars off of Toronto’s roads and a large portion
of those commuters decided to use peak-hour transit
that our transit system would strain and possibly fail us.
However, we can add buses and train cars prior to the
onset of a tolling program. London and Stockholm did
this and did it successfully.
One of the effects of more buses and less cars is that
buses arrive more frequently, and they get to their des-
tinations more quickly. So what was a dreaded bus com-
mute before becomes more attractive after. Note, as
well, that transit demographics predicts that this gener-
ally benefits those with lower incomes who had previ-
ously been using the less-frequent and slower buses, or
the less frequent and more crowded trains. Not only can
transit easily be made ready, but the result benefits both
the tolled (faster journeys) and the transit users (faster
journeys). Since this correlates with income, a properly
designed congestion-pricing program benefits both
high and low income earners.
And there are many modalities besides peak-hour
transit, including time shifting, telework, car pooling,
biking, walking, and, for some, moving closer.
9:We will argue that it is too expensive to
implement
The minority that understand that Toronto really does
need to solve its financial woes and who also understand
that we currently underpay for gas often suggest that
www.h3bmedia.com

tolling is terribly complex and expensive. They suggest
that if we must raise more money, just raise gas taxes. If it
were not the case that congestion is largely unaddressed
by fuel tax, I would agree.
Some may note that London and Stockholm spent
US$600m and US$300m, respectively to set up their pro-
grams and that they each spend about 40 per cent of
their revenues on operations. If Toronto were to spend
that much for the sole purpose of raising funds I think we
should all complain. I certainly will.
London and Stockholm were less concerned about
the optics of cost because both cities were squarely
addressing congestion. If that were our only agenda,
just breaking-even would work well enough. But it is not
our only agenda. In fact, the most recent recommenda-
tion in front of the Mayor is to raise money and the roads
recommended for tolling are simply the handiest to
meter with current technology. That puts the debate on
a bad footing from the start.
This is one of the problems with being unclear about
whether we are being green, addressing congestion or
raising money. Congestion pricing should be about
congestion cessation. It should be designed primarily
to maximize congestion reduction (which can be auto-
matically aligned with reducing emissions) and only
secondarily to raise revenue. Obviously, to be careless
about the financial aspects of the system would be a der-
eliction of duties, so we’ll need to maximize retained
revenues – which we can do by minimizing both capital
and operating expenses.
real vision
Inspiring reality
www.h3bmedia.com
Toronto
The new generation of tolling technology does that.
The current generation does not.
10: We will argue that our city is different
We will argue that our congestion is not nearly as bad as
London’s so that we should not copy that. We will point
out that we are not a peninsular island as is Stockholm,
so that we cannot copy that. We will observe that our
natural democratic entitlements are different from those
in Singapore, and that we cannot copy their approach.
That’s all true. And we shouldn’t copy any of them.
Until federal and state/provincial governments
address congestion management from a fuel-tax reform
perspective, each city must find its own way. Fortunately,
there is a way to spread tolls gradually and fairly, to
introduce new transit at the outset, to save the poor from
financial harm, to address congestion and emissions
while raising funds for better roads and transit, to pro-
tect motorists’ privacy, and to minimize system costs. A
dozen companies worldwide, including at least one
here in Canada, are developing the next-generation
technology that enables these progressive policies.
In the end, Toronto – or the Greater Toronto Area – will
have to find its own way, but hopefully with the under-
standing, guidance and collaboration from the Province
of Ontario. E
Bern Grush is Chief Scientist at Skymeter Corporation,
based in Toronto. He can be contacted via email at
bgrush@skymetercorp.com
Can you see it ?
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safer routes ... tolls adjusting to trafÞc
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ETCetc Vol 3 No 1 17
Italy

FABRIZIO PALENZONA, president of ASECAP,

theEuropean toll road concessionaires
association, and AISCAT, the Italian national
version, gave a stirring address at ASECAP’s
recent Venice summit.This is a summary of his
thoughts and opinions, focusing mainly on his
home country’s position

18 Vol 3 No 1 ETCetc www.h3bmedia.com

 Italy

A picture
of Europe

www.h3bmedia.com ETCetc Vol 3 No 1 19

Italy

“No competitive economies may exist without valid

transport networks… The creation and smooth oper-
ating of the trans-European transportation net-
work…are essential conditions for the success of the
Internal Market and to guarantee sustainable mobil-
ity in a wider Union.”
These are the words of the European Commission in
2003 in its Communication on the development of the
trans-European transportation network; words which
are as relevant and pertinent today as they were five
years ago. But the Commission added: “However, the
network is still challenged by a strong but unbalanced
growth of traffic… Transport infrastructure continues to
be utilised poorly and funds are missing due to the non
transparency of the costs paid by users, the financial
resources available with the Union and the lack of a
favourable investment climate. The chances that public
funds towards such projects may increase significantly
in the short-term are scarce.
“For certain projects the use of public-private part-
nership funding may be expected…but there are too
many unknown factors concerning the projects to be
built and decisions on transport policies ”.
In just a few words it had clearly outlined its objec-
tives, accurate analysis of structural problems and defi-
nition of the instruments required. In other words, a plan,
an operating plan, to be implemented through close
coordination among Member States.
The plan for the creation of a single currency led to the
introduction of the Euro in 1999. But this is not the case
for the trans-European transport network, which is pro-
ceeding at a far slower pace – this is always the case
when the building of large infrastructure is involved.
Furthermore, we must note that progress is slower in
certain States compared to others.

Europe united
A European motorway network, guaranteeing free
movement and preparing Europe for the challenge of
globalisation is the long-term goal.
To understand what is needed in order to effectively
achieve the free movement of people and goods we may
compare market operating requirements with those of a
living organism, which needs four essential elements: a
blood circulation system (the transportation infrastruc-
ture), a central nervous system (telecommunication
infrastructure), a muscular system (energy infrastruc-
ture), and a brain system (training infrastructure)
together all known as “trans-European networks”.
The aim is to “connect” all economic operators and all
European citizens (including those residing on islands
and the territory’s outskirts) to each other, so that all
may benefit from the advantages of a space having no
internal borders.
Therefore, it is through these large networks that the
European Union’s (as well as individual countries’)
possibilities for growth and competitiveness run.

20 Vol 3 No 1 ETCetc www.h3bmedia.com

 Italy

Indeed, in a global economy characterised by the

deregulation of exchanges, companies set up where
they find the best conditions to become more competi-
tive. In such a framework, the availability of infrastruc-
ture and in particular transportation infrastructure is
unanimously considered by economists to be a param-
eter of a country’s economic and social development.
The European Union is one of the richest areas in the
world, but there are great differences within its Member
States as well as among Member States. It is clear that
the ability of equipping Europe with a standard and
shared infrastructure system, is a requirement to avoid
that the gap between different regions of the European
Union increases further. The trans-European networks,
together with the single market, are therefore an essen-
tial element to strengthen the European economy and
prepare individual countries and Europe to meet the
globalisation challenge.

Italy: hit and myth

As an Italian I feel compelled to summarise the current
situation in my home country, if only for the sake of deny-
ing or confirming what is being widely published in the
popular press with particular regard to the motorway
sector. Italy is not proving to be pro-European in the way
it is applying EC laws that apply to motorways under
concession. Italy continues to be plagued by critical
areas and elements of risk which do not encourage pri-
vate investment in public works.
These may be broken-down and looked at as follows:
• Concession rules, and in particular rules for
motorway concessions, are much more stringent com-
pared to EC rules, discriminate on the basis of national-
ity, fall into conflict with the most elementary principles
of harmonisation of rules - a prerequisite for a truly
competitive market.
• The constraints posed on motorway conces-
sionaires with regard to the organisation of “Groups” in
Italy are one of the most evident proofs of such discrimi-
nating practice, given that they are factually discrimi-
nated with respect to the rest of Europe and with respect
to other industrial sectors; Italian motorway concession-
aires are forced to reorganise themselves according to
rules that are so rigid that we may actually describe
“The European Union them as having to compete with their hands tied.
is one of the richest • The uncertainty of the “rules of the game” dis-
courages investors, given the danger of potentially arbi-
areas in the world, but trary and discriminating interference by the authorities,
there are great as underlined by the very same European Commission
in connection with our new “reform” of motorway con-
differences within each cessions. The failure to harmonise rules – EC and
of its Member States, national – therefore weighs more heavily if financing is
the trailer, because the movement of capital does not
let alone among them” like national fences.
• The “administrative risk” in Italy has grown due
to particularly long and cumbersome procedures which
guarantee no certainty with regard to the times, and

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Italy
therefore the costs of the construction of the works; to
this we need to add the uncertainty deriving from an
unclear juridical status of the Granting Authority and its
rights and obligations vis-à-vis concessionaires.
Italy is an important component of Europe, it is a found-
ing state, a fundamental ring in Europe’s connection
with the Mediterranean basin and the economies of the
area. If, by not respecting the rules, Italy halts European
policies for transport networks, and with these growth
policies too, then it is not only hurting itself but it is hurt-
ing all of Europe.
Public address
Another issue widely analysed by the national press in
Italy is the creation of public law entities – for the realiza-
tion of Motorways infrastructures – expressly built like
companies and with the participation of ANAS (i.e. by
the company that has received from the State, by law, the
concession of the Motorway network and to which the
realization and the management of the road network of
National interest is also given.
We are talking about a reality
which has already produced in 2007
a company composed by ANAS and
Lombardia Region, called CAL and
“If, by not respecting
which has later received a general- the rules, Italy halts
ised legislative recognition with the
Italian Budgetary Law for 2008,
European policies for
whose provisions have already transport networks
brought to the February 2008 crea-
tion of a company composed by
then it is not only
ANAS and Molise Region, another hurting itself but it is
composed by ANAS and Veneto
Region and in early March we saw
hurting all of Europe”
the creation of a company com-
posed by ANAS and Lazio Region. The subject being
always and only the realization of motorway infrastruc-
tures, either as grantor either as direct operator for the
execution and maintenance of the infrastructures.
I will not go any deeper for now, - I could analyse the
Constitutional consistency of these legislative provi-
sions, for example but I will just briefly say that they do
not seem to contain real indications of social utility goals
or criteria to which the law itself should be referred to:
consequently the absence of these criteria could lead to
believe that the principle of legal reserve has not been
respected.
Neither do I intend to analyse the issue of how many
resources it is possible to get from the toll revenues of
newly public motorway infrastructures: I can under-
stand that the local Government are looking for these
revenues in order to invest them in new regional infra-
structures.
What I will say is...
However, I will restrict myself to just further reflect on
the new Community legislation about toll tariffs, which
is based on a strict connection between costs – of con-
struction, maintenance and operation – and tolls and
which foresees exceptions to these rules only for spe-
cific and limited cases, such as the need of tackling con-
22 Vol 3 No1 ETCetc
gestion and environmental damages, or the need of
realizing alternative infrastructures in specific moun-
tainous regions.
I feel also compelled to underline a reality with a
strong political meaning, I am talking about the struc-
tural choice made by the Italian legislator and also the
“reversion” of that choice occurred in few months: in
2006, with the Motorway system reform, the Roads pub-
lic company - ANAS - has been identified by the Italian
Government as the subject supposed to replace the
operational management, without any tender and tem-
porarily, those motorway concessionaires that did not
intend to accept the new contractual agreements.
In 2007, with the Budgetary Law, the role of ANAS,
which was a replacing and transitional role, has on the
contrary become direct and permanent, with the only
modification that today the management is shared by
ANAS and the Regions.
A truly European marketplace
The final “political” aspect of the issue, the real line of
demarcation lies on the fact that
no democracy can exist without a
market: political democracy and
market economy are the two sides
of the same coin.
Moreover, nowadays competi-
tion is a fundamental principle of
the European Union, to which Italy
belongs, therefore competition is
a fundamental principle for Italy
too.
However, as it was said in 1996
by the former President of the Ital-
ian Antitrust Authority, Giuliano
Amato, “…. competition does not exist in the market
itself; competition represents a legal order in which all
the operators supposed to respect competition are
obliged to move ... a system is able to develop and
deploy all its dynamism only if the entrepreneur cannot
live in peace, only if he is afraid of another competitor in
front of him, behind him, at his right, at his left. But this is
not the logic that leads our legislation (the National one)
… Our problem is to make entrepreneur’s life very dif-
ficult concerning competition and less complicated
concerning costs and rules”.
Unfortunately, 12 years later, a Government whoseMr.
Amato is also a Minister, has issued the above mentioned
legislation that is going to make public (coming back to
the past) the first Motorways infrastructures. I underline
the “first”, provided that ANAS aims at managing also
the other motorways, whose concession contracts will
expire in the following years.
Nevertheless it is indisputable, in the economic litera-
ture, that the expansion of the public involvement in a
country’s economy presents limits that cannot be
crossed over without negative consequences for the
country’s overall development. E
For more information on ASECAP and AISCAT go to
www.asecap.com and www.aiscat.it
www.h3bmedia.com
Sponsors of the GNSS In The Road Transport Sector Think Tank,
Intertraffic Amsterdam 2008, Amsterdam RAI, 2-3 April
City Tolling
The idea to use tolls as a means of managing auto-
mobile traffic on modern roads is already more than
85 years old.
It was first recommended by the British economist
Arthur Pigou in 1920 - explicitly with regard to conges-
tion pricing by way of varying the amount of toll depend-
ing on the time of day, part of the network and distance
travelled. Almost 40 years ago (when I was a student at
Berlin’s Technical University) we discussed and
expected road pricing to soon be introduced and to be
the only efficient instrument for solving the traffic-prob-
lems in the inner districts of all major German cities.
Back then we did not discuss road pricing as an instru-
ment for financing and operating roads.
In those days the prediction for the saturation level of
private car ownership was 200 per 1000 inhabitants.
Based on that the General Transport Plan for Berlin
contained a dense network of City Autobahns with seven
lanes in each direction. Today the level of car ownership
is above 600 per 1000 inhabitants and is still increasing
– and we have no city-pricing in Berlin or in any other
city in Germany yet. But that may change in the near
future for various reasons. Back then the Government
and the German communities made a different choice.
Following the recommendations of the Expert Commis-
sion on “Community Traffic” regarding the “Improve-
For
An whom
interesting
the road
perspective
tolls
24 Vol 3 No 1 ETCetc
ment of the traffic conditions in Communities,”
government and communities concentrated on:
• improving public transit (especially light-rail-
and heavy-rail-systems),
• improving the road network,
• improving traffic management,
• managing parking space,
• introducing and expanding park + ride,
• introducing pedestrian areas,
• flexible working hours etc.
Based on the “Community traffic financing law”
(Gemeindeverkehrsfinanzierungsgesetz in German),
the public transit systems in German cities have been
improved substantially and reached a comparatively
high (and internationally renowned) standard. As a
result it was not really necessary (or urgent) to think
about City Tolls (and Road Pricing in cities respectively)
for mitigating congestion and/or for financing transport
infrastructure to date.
The debate rolls on
Worldwide, however, the discussion about city pricing
continued. Singapore started in the middle of the 1970s
with it’s so-called “area licence scheme” – a vignette
system, which was substituted by an electronic toll col-
lection system in 1998. In Europe, several Norwegian
www.h3bmedia.com

cities followed suit from 1986 for different reasons:
Bergen (in 1986), Oslo (in 1990), Trondheim (in 1991)
and Kristiansand (in 1992). More recently Stavanger (in
2001), Namsos (in 2003) and the small town of Töns-
berg near Oslo (in 2004) have instigated “city” pricing
schemes of one kind or another.
The reasons for introducing the toll in the respective
cities were increasing congestion, increasing environ-
mental problems, decreasing road safety and a lack of
available funds to make necessary improvements to the
transport infrastructure. Because of the difficult topo-
graphical conditions major infrastructure projects are
comparatively expensive in most Norwegian cities. The
so-called “Norwegian urban road packages” explicitly
aim at:
• better use of the available road capacity:
• improving traffic safety: and
• improving the environmental conditions.
The packages include road infrastructure projects,
improvements of public transit and of the facilities for
pedestrians and cyclists. The toll is collected from driv-
ers through “toll rings” covering all roads leading into
the central part of the cities. In general there is a direct
context between the costs of the infrastructure projects
of a package, the amount of the tolls and the time period
of tolling. At the end of this time period a formal decision
DR ANDREAS KOSSAK looks at Germany’s
take on the notion of road pricing in cities
www.h3bmedia.com
City Tolling
has to be made on the continuation of tolling based on a
new package; otherwise the tolling ends. The tolling
technology in use is primarily based on microwave
communication between electronic tags and control-
bridges, commonly called Dedicated Short Range Com-
munications or DSRC.
Supporting structure
In the mid-1990s the European Commission started to
support city pricing activities. The first project was
called EURoPrice. It sponsored and coordinated a polit-
ical network of cities interested in the topic. EURoPrice
stands for “European Urban Pricing Network” and was
scheduled for 1998–2000. Mmember cities were:
Amsterdam, Belfast, Bristol, Edinburgh, Genoa, Leeds
and Rome. EURoPrice was followed by the “European
Transport Pricing Initiative Progress (2000–2004),
Progress being an acronym for “Pricing road use for
greater responsibility, efficiency and sustainability in
Cities”. Member cities were: Bristol, Copenhagen,
Edinburgh, Genoa, Gothenburg, Helsinki, Rome and
Trondheim.
The objective of the Progress project was: “to demon-
strate and evaluate the effectiveness and acceptance of
integrated transport pricing schemes to achieve trans-
port goals and raise revenue”.
ETCetc Vol 3 No 1 25
City Tolling
To research this, one existing road pricing scheme
was extended (Trondheim - cordon and zonal charging
using DSRC), one was newly introduced (Rome - cordon
charging using Automatic Number Plate Recognition -
ANPR), and five trials of different pricing technologies
were carried out:
• in Bristol (distance and cordon charging using
GPS and ANPR),
• in Copenhagen (distance and zonal charging
using GPS),
• in Edinburgh (cordon charging using ANPR),
• in Genoa (cordon charging using ANPR) and
• in Gothenburg (distance-based charging
using GPS).
Supporting this, detailed modelling work was done,
the social and political acceptance of such schemes was
examined, and their effectiveness was evaluated - espe-
cially in Helsinki.
Parallel to Progress the European Commission sup-
ported the thematic network CUPID
(Coordinating Urban Pricing Inte-
grated Demonstration). It was the “The statements
basis for a coordinated assessment
of the results of the single Progress
regarding the
projects. Progress and Cupid ended reliability or accuracy
as scheduled in 2004. Regarding
the effectiveness of city pricing the
of GPS and ANPR are
following main lessons learned no longer valid”
have been stated:
• Legal issues: Delays to scheme implementation
can be caused by the need to work within existing legal
frameworks or await specific legislation
• Package: pricing is considered most effective if
introduced as part of a package of transport measures,
although this can also cause delays, especially if com-
plementary public transport is controversial or experi-
ences delays
• Three main technology options: DSRC, ANPR,
and GPS. Results indicated:
• Accuracy DSRC: 99.5 per cent in Trondheim.
• Accuracy ANPR: 74 per cent in Rome, 85-95
per cent in Bristol.
• Accuracy GPS: signals easily lost in urban areas
due to street canyons,
• Other issues - DSRC: robust and reliable tech-
nology, but can be affected by metalised windscreens
and have a relatively short battery life.
• Other issues - ANPR: placement and number of
cameras, especially on 2-lane roads, can increase accu-
racy, as can use of a triggering device to increase vehi-
cle detection.
• Other issues - GPS: advanced technology, but
more flexible than practical at this stage; coordinate
accuracy often low enough to necessitate further
analysis.
The statements regarding the reliability or accuracy
of GPS and ANPR are no longer valid. GPS has met all
requirements in the meantime based on tests for exam-
ple in London and Berlin. ANPR met all the requirements,
for example, in Stockholm.
• Traffic impacts: Reductions in private car trips
26 Vol 3 No 1 ETCetc
and increases in public transport use have been meas-
ured or modelled at every site. The scheme in Rome saw
a 10 per cent decrease in daily traffic and 6 per cent
increase in public transport use in the first year; 50 per
cent of participants changed their driving behaviour in
the Copenhagen trial, mostly for non- commuting trips.
• Environmental impacts: any reductions in traf-
fic levels and congestion will have a positive impact on
air quality. The Gothenburg environmental charging
scheme would see traffic in the city centre reduced by
13 per cent by 2010; modelling in Bristol estimated that
a charging scheme running for 10 years could reduce
particulate emissions by 24 per cent.
• Economic impacts: the tolling scheme in Trond-
heim started in 1991 and the long-term analysis has
shown no distortion in trade competition or damage to
retail in the city centre.
• Raising revenue: modelling of the preferred
scheme for Edinburgh estimates that €78m could be
raised per year by 2011; Trondheim‘s
toll raised €l25m in its first 12 years,
all reinvested in transport and envi-
ronmental measures.
• Scheme design: will vary
greatly depending on the individual
city and the aims of the scheme.
Regarding the “Acceptance of
Pricing” it was stated:
• Developing a long-term strat-
egy for communication is vital, with concerns such as
exemptions and privacy considered in scheme design.
• Providing examples of similar schemes, such as
London, can aid acceptance, as can proving the benefits
of pricing by running a demonstration.
• A Political champion can greatly help the
acceptance of a road pricing scheme, although timing of
decisions can be limited by elections.
• Key stakeholders are to be consulted, including
politicians, businesses, retailers, and the general
public, and should be involved from an early stage.
• The public will need to be kept informed about
a pro-active campaign and the scheme‘s objectives,
operation, and likely impacts.
• To achieve higher levels of acceptance, road
pricing should be considered as part of a larger strat-
egy that includes other transport improvements.
• Privacy was not found to be a major concern
with the GPS systems.
• The reinvestment of revenues in transport
system is vital for gaining user acceptance, especially
with complementary measures in place before pricing.
If information was currency...
A number of conclusions can be drawn from the project
and the analysis of its results, namely:
• Traffic and congestion reduction can be
achieved through pricing road use, and revenue can be
raised to reinvest in transport measures.
• Public acceptance can be maximized with a
package of supporting measures alongside the pricing
and with thorough consultation.
www.h3bmedia.com
 City Tolling

Toll rings in Norway

City Plazas Start End Pop. In op.* AADT EFC
in ar. ** %
Bergen 1 8 1986 2004 300’ 16/5 60’ -
Oslo 19 1990 2012 900’ 24/7 250’ 83
Trondheim 12 1991 11/5
17 1998 250’ 12/5 100’ 95
23 2003 2005
Kristiansand 5 1997 2007 100’ 24/7 55’ 84
Stavanger 21 2001 2011 230’ 12/5 150’ 91
Namsos 3 2003 2017 15’ 12/5 7’ 89
Tønsberg 6 2004 2019 50’ 24/7 50’ 86
Bergen 2 8 2004 2014 300’ 24/6 100’ 87
Source: statens vägvesen * Hours a day and days a week
** During hours of operation
Dr.-Ing. Andreas Kossak, Hamburg ‘ in thousands

• There is technology avail- research and monitoring results of

able to run an urban road pricing “In Germany the
scheme.
• A variety of schemes are
revival of discussions
possible but simplicity improves concerning city tolls
support and understanding.
In summary, a wealth of valuable
caused immediate
information on a broad range of reactions by lobbyist
aspects of urban road pricing
could be drawn from the projects.
organisations”
In detail some 60 “Lessons Learned” were identified
and recommendations were made on how future road-
pricing implementations in European cities could take
account of those lessons. They cover:
• Consultation and information
• Legal and institutional issues
• Transportation policy
• Technology and transaction
• Enforcement and
• User Acceptance
Overall conclusion of the projects was stated to be:
“Tolling road use varied by time of day, location and dis-
tance travelled is an efficient instrument for reducing
urban traffic. The benefits are cleaner and safer cities
with more efficient transport networks for all
travellers.”
Progress after Progress
Progress and Cupid were followed by a project titled
Curacao (Coordination of urban road-user charging
organisational issues). Official objectives of the project
are: To support and promote fairer and more efficient
pricing of road usage in urban areas by coordinating
road user charging schemes. The aim
of the project is to answer the follow-
ing questions:
• What barriers are stopping cit-
ies from moving forward with road
pricing implementation?
• What support do cities need in
order to overcome these barriers?
Project Partners are 15 consortiums
(including Deutscher Städtetag). The scheduled dura-
tion is April 2006 to March 2009. The work to be done
within the project is defined as: research, best practice
monitoring, coordination and dissemination (but with
no demonstrations).
And finally regarding the activities of the European
Commission. Dated 25 September 2007 it published a
Green Paper for City Traffic for consultation. In compli-
ance with the activities mentioned before it recom-
mends road pricing as an efficient instrument to improve
mobility and the environmental conditions in the cen-
tral districts of European cities.
All these activities on the institutional European level
(except the last one) have gained only little attention in
Germany to date. Above all, London’s Congestion
Charging scheme, operational since February 2003 and
the Stockholm Congestion tax trial in 2006 have been
noticed and discussed much more - primarily in context
with the EU-Regulations regarding the particulate
emissions.
In Germany the revival of discussions concerning city
tolls caused immediate reactions by lobbyist organisa-
tions. The retail lobby condemned it as the “death of the

www.h3bmedia.com ETCetc Vol 3 No 1 27

City Tolling
city centre” in favour of large shopping malls on green-
field sites. The lobby uses exactly the same arguments
against tolling as it used 30-40 years ago against the
introduction of pedestrian areas. Later on it called for
pedestrian areas even in those cities, where it would
truly not have been appropriate. Other arguments in
this context include:
• Shift of traffic to other highly occupied elements
of the infrastructure and/or sensible housing areas;
• Further increase of the tax/cost-burden for
road-user;
• Increase of costs of city centre-related services
• Detriment of lower social classes (two class
society);
• No substantial contribution to solve environ-
mental problems;
• Too high transactions costs;
• Misuse of revenue to be expected (by
experience);
• More efficient traditional instruments available
to solve the same problems;
• Structure and Conditions of German cities are
not comparable to those cities, where tolling has been
introduced;
• Only relevant for Mega-cities;
• No legal basis;
• The public is against tolling.
Food for thought
Some of these arguments have already proven to be
untrue in the tolling reality - or at least more than ques-
tionable. Others should be taken into consideration,
while thinking about (or planning) a
tolling scheme. They all are appro- “Thanks to the
priate anchors for a generally highly
important communication strategy lobbyists and the
to be properly defined and executed, attitude of the
if the introduction of city tolling is
prepared. German public, tolling
Thanks to the lobbyists and the atti- is still broadly seen as
tude of the German public, tolling is
still broadly seen as a threat and not a threat”
as a valuable complement to the con-
ventional instruments of financing and managing trans-
port systems.Tolling is not an end in itself. It is an efficient
solution to problems - problems of traffic management,
of congestion, of traffic safety, of environment and of
financing transport infrastructure - or of all aspects
combined.
The structure of Germany’s cities is not that different
compared to that of other European countries which
have already implemented a city-tolling scheme or plan
to do so in the near future. The level of problems (in par-
ticular congestion) may be lower to date, because of the
facts mentioned previously. However that may change
in the near future for various reasons, including:
• Reaching a level of congestion, which cannot be
accepted any more – for example as the result of ever
more maintenance and reconstruction needs of the
technical infrastructure in inner cities.
• Lack of money to finance maintenance, recon-
28 Vol 3 No1 ETCetc
struction and improvements; the general budgets are
increasingly burdened by other needs – not least in the
social sector.
• Increasing environmental problems which can-
not be accepted any longer or must not be accepted as
the result of more rigid regulations.
• Changing boundary conditions and require-
ments to be met by the inner cities – for example along
with the so-called Mega-trend (in particular socio-
graphic change, re-urbanization, scarcity of energy,
public safety).
• Improvements and decreasing costs in the
tolling-technology-sector and
• Changes of the aims and concepts of town- and
traffic-planning in reaction on the factors previously
mentioned.
No time like the present
Politicians, as well as town- and traffic-planners in
Germany tend to wait until a certain level of problems
(or a level of pain) is reached before actions are taken or
even only taken into consideration. A general paradigm
shift in financing the transport infrastructure from financ-
ing based on the general budgets to financing by the
user is not yet “on the political agenda” (according to
the stereotypical answer of our Secretary of Transport,
whenever he is asked about an expansion of tolling in
compliance with the recommendations of the Pällmann
Commission).
From my point of view city tolling should be taken into
consideration, whenever severe problems connected to
traffic in the inner cities occur or are foreseeable. I rec-
ommend the following approach:
• If the identified problems are to
be solved satisfactorily by conven-
tional means, it should be done.
• If they can be solved better by
implementing city tolling, city
tolling should be taken into
consideration.
• If a satisfactory solution or set-
tlement is only possible by way of
introducing city-tolling (permanent
or for a limited period of time), an appropriate tolling
scheme should be defined, prepared and introduced.
If a tolling scheme ever comes into question, it should
be investigated and designed taking all relevant aspects,
conditions and options into consideration – while also
taking into account the special local situation and han-
dling it as an integrative part of a comprehensive strat-
egy including complementary measures.
Academic model-calculations regarding tolling as an
isolated measure, based on selected factors, assessed
with regard to selected (and more or less questionable)
cost-benefit components are generally more discrimi-
nating city-tolling than leading to usable adequate
results. E
Dr Andreas Kossak is principal of Dr Kossak Consulting,
based in Hamburg, Germany. He can be contacted via
email at drkossak@aol.com
www.h3bmedia.com
"5),$).'!3534!).!",%&5452%
Sustainability is vital to Transurban Group’s vision
for the future.
As an international toll road developer, the Group’s
success depends on its commitments to its local
communities, customers, the environment and
employees.
Transurban’s approach to sustainability in its
projects and operations has earned international
recognition.
TUCM1431
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www.transurban.com
Scotland

ANDY GRAHAM (pictured here

on the Knoybart ferry in a
remote part of Scotland)
examines the rationale
behind Scotland’s decision to
scrap tolling and ponders the
longer-term ramifications

Now I know how Michaelangelo would feel if they

painted over the Sistine Chapel with whitewash.
“My” toll plaza at the Forth Road Bridge has now
gone.
For those of you not experts in geography, this is the
road bridge that links Edinburgh, Scotland’s capital,
with Fife over the Firth of Forth. At one time it was the
longest suspension bridge in Europe.
Scotland became toll free on 11 February 2008 and
there is now free passage on every previous toll bridge
in Scotland. Along with the Skye Bridge Tolls removed in
2004 and the Erskine Bridge in 2006, the Tay Bridge is
also no longer tolled.
Now much to my disappointment, the toll plaza was
not immediately taken to the Science Museum as an icon
of past technology but simply pulverized. I would not
claim to have been more than loosely involved in these
systems but they were a feature of my early career in
Scotland with a long since swallowed-up company
called TPA.With the keen support of the bridge Authori-
ties, our team put together some innovative ideas in
vehicle classification, video enforcement, use of VMS
and communications for tolling …. all now gone to the
great toll junkyard in the sky.

Go Forth and multiply

Since opening in 1964, almost 500m drivers have paid to
use the Forth Road Bridge (always referred to as the
Road Bridge so it is not confused with the iconic railway
bridge next door). It was opened to replace a vehicle
ferry or a long detour. Since then, more than £225m
(€300m) of revenue has been collected. Some critics
point out that this is over 11 times the initial cost of build-
ing the Bridge.
They also remember that initially, tolling was planned
to cease once the cost of construction plus interest had
been repaid. This balance was achieved in 1993 but the

30 Vol 3 No 1 ETCetc www.h3bmedia.com

 Scotland

Scotland
the brave?
www.h3bmedia.com ETCetc Vol 3 No 1 31
Scotland

tolls were never removed. A key reason for this was that
the structure costs so much to maintain and operate.
The bridge was designed for about 11m vehicles a
year but now carries around twice that, often heavier
vehicles than allowed for in its 1950s design. The wires
that when spun together make up the suspension cables
have started to corrode and even snap, meaning costly
additional maintenance. Other investment has been on
the bases of the main towers to mitigate ship collisions,
strengthening the towers and replacing all the bolts.
Like the famous railway bridge next door, a new paint
system was needed, as the original method was no
longer environmentally acceptable. In addition, “my”
toll plaza and booths were updated to allow safer work-
ing conditions and to support electronic tolling. The £1
two-way toll from 11m users a year made a significant
fund for these projects.
So why has the Scottish Government taken this major
step, at a cost of £16m a year in lost toll revenue? It is
simple – to meet public pressure for free passage. Scrap-
ping of the tolls was a major commitment by the Scottish
National Party during last year’s national elections and
Members of the Scottish Parliament voted on 20 Decem-
ber 2007 to pass this law by 122 votes to three.

Theory of devolution
The devolved Government structure in Scotland means
that relatively rapid decisions like this can be made, not
linked to the “British” parliament in London.Yet interest-
ingly the Member of Parliament for Dunfermline at the
northern end of the bridge is a certain Mr Gordon Brown
MP – the current UK Prime Minister.
It is interesting to look at the impact for scrapping tolls
on maintaining the crossings. Many people assume they
are now generators of cash with a surplus – construction
and upgrades having long been paid for. Yet interest-
ingly, a Government payment of £14.8m is being made
to the Tay Bridge Board to pay off its outstanding final
“So why has the
debts – the tolls collected having not been enough to Scottish Government
keep this crossing debt free.
The bridges’ maintenance will now be directly funded
taken this major step,
by the Scottish Government. There is an interesting at a cost of £16m a
argument there about where exactly that money comes
from, which I will not enflame by taking a nationalist
year in lost toll
stance. Suffice to say though, a historic “Barnett formula” revenue?”
was used to rightly make sure Scotland and Wales get an
enhanced share of infrastructure spending - they have
fewer taxpayers so disproportional investment needs.
Unfortunately this old rule doesn’t fit the mega
schemes of today’s transport world, so when London
receives £5bn for its Crossrail railway scheme, Scotland
will get an automatic £500m bonus for its budget. That is
quite handy for paying off toll schemes.
Therefore, it could be argued that these maintenance
funds will come from central UK taxation, not Scottish
bridge users. This is not in line with the “polluter pays”
approach core of transport policy. And being a central
tax not a toll, the maintenance fund is also far further
from the influence of those who actually need it to oper- The William Wallace Monument in Stirlingshire,
ate and maintain these structures, unlike toll revenue. testament to a true relic of Scotttish bravery
The tolling regime was one reason for a successful

32 Vol 3 No 1 ETCetc www.h3bmedia.com

 Scotland

and sustainable park-and-ride service.What will be the

incentive for commuters to continue to use this, beyond
perhaps the congestion from extra traffic?
The real heart of the problem is that Joe Public (not just
in Scotland but the UK generally) cannot see a clear dif-
ference anymore between charges, to cover the actual
cost of something (like maintaining a bridge) and taxes
which are the Government’s way of using their money to
buy things (like hospitals, schools and tanks). In short,
tolls are now being seen simply as taxes. So abolishing
them, and so quickly too, is a great move, politically.

Short-term thinking?
This is where short-term actions will have implications
for funding future transport. The corroding cables on
the current Forth Road Bridge cannot be repaired for-
ever, so the same Scottish Parliament has decided to
fund a new bridge, costing £3.2 to £4.2 billion.They have
not actually said it will not be tolled, but following the
logic of all crossings now being free, people will surely
expect this to be so. As a result Scotland will need to use
taxation to pay for this, meaning users may not cover the
direct cost of building the bridge but they will still pay
for a new bridge somewhere, somehow, as taxes.
An implication for the tolling industry if this happens
is the end of the well-proven package of a traditional
design, build, operate toll crossing put together by
banks and concessionaires. It may be replaced by the
Government paying for an asset as it is built, from tax
funds. So interesting times are ahead for the construc-
tion industry in Scotland but not perhaps for those in
tolling.

A bridge too far

Is this the beginning of the end for all toll bridges in the
rest of the UK? Well, no.
Dartford Crossing near London is going to retain its
tolls, even though it too has now reached the end of its
payback concession. There will be a reduced fee for
local traffic. Some might argue that this is a handy way of
congestion pricing the M25 Orbital Motorway and hav-
ing tollbooths at a tunnel portal provides a handy way of
managing traffic to meet EU Directives on tunnel safety.
But a final thought. Scotland is a very smart nation
(Scots have invented far more useful things per head of
the population than the English have), so we may still
see new and innovative ways of funding transport invest-
ment. These need public support that do not rely on
taxes. Alternatively, maybe we might just see a sale of
some second-hand toll equipment – one careful owner
only.
And maybe, just maybe, a national charging system
for Scotland becomes much easier once the double
charging of tolled crossings is removed… and easier to
sell to Scots voters once a shiny new Forth Road Bridge
is in place, one that cost them “nothing.” E

Andy Graham is principal of White Willow Consulting

based in Redhill (which was in England, the last time we
looked). He can be contacted via email at
andy.graham@whitewillow.biz

www.h3bmedia.com ETCetc Vol 3 No 1 33

Revenue Collection

Rest
assured
How can companies that collect revenue from tolling
schemes ensure that the revenue stays collected?
MEL BYRNE explains what Revenue Assurance is and
how it’s having the desired effect in Portugal

34 Vol 3 No 1 ETCetc www.h3bmedia.com

 Revenue Collection

Firms that deliver services to clients in return for a

fee spend a good deal of time and money ensuring
that the revenues owed as a result of services deliv-
ered are billed and collected in a timely, accurate
and complete manner.
However, firms and industry analysts recognize that it
is commonplace for potential revenues to remain
unbilled and/or uncollected. These unbilled and/or
uncollected revenues are called revenue leaks. The
process of measuring, reducing and, if possible, elimi-
nating revenue leaks in a firm’s business processes is
called Revenue Assurance, abbreviated to RA.
Industry analysts estimate that revenue leaks exist in
all major industry sectors. They acknowledge that the
extent of these revenue leaks varies considerably by
industry sector. In the Telecoms and Utilities sectors the
consensus among analysts is that revenue leaks rou-
tinely amount to 2 per cent to 4 per cent of the operating
firm’s total revenue. Therefore, an efficient RA process
supported by a tried-and-tested RA solution has the
potential to recover 2 per cent to 4 per cent of a firm’s
revenues that would otherwise remain unaccounted,
unbilled and uncollected. Clearly, most Chief Financial
Officers (CFO) and company boards would acknowl-
edge that this statistic alone constitutes the basis of a
sound business case for investing in RA processes and
solutions.
In addition to the RA business case and its effect on
the bottom line, firms have started to implement RA as
they find that RA processes and solutions allow them to
comply with the provisions of the Sarbanes-Oxley Act.
The Sarbanes-Oxley act applies to all firms either
quoted on a US stock exchange or with more than 300
US-based share holders. In a nutshell, the act was intro-
duced in the aftermath of high-profile accounting scan-
dals in the US and elsewhere and makes CFOs and CEOs
personally responsible for the accuracy of the firm’s
financial reports. Telecoms firms, in particular, were
quick to appreciate the role of RA systems in demon-
strating Sarbanes-Oxley compliance and have been
particularly aggressive in implementing RA solutions so
that they can demonstrate that all billed items derive
from the delivery of contracted services and that they
are therefore legitimate.

This is what we do
WeDo Technologies is the world leader at delivering
industry-proven RA expertise and solutions to over 60
clients worldwide in the Utilities and Telecoms sectors.
This article provides an overview of RA in general and of
the experiences of Portugal’s largest toll-roads opera-
tor, Brisa, in implementing a state-of-the-art RA solution
from WeDo Technologies.
Brisa was founded in 1972 and operates a network of
15 motorways in Portugal, with a total length of around
1,500 km constituting the main Portuguese road links.
Brisa is a pioneer in electronic toll collection systems
and enjoys annual revenues in excess of €500m from
automatic and manual tolls. Annual traffic levels include
8m transits on the manually controlled lanes and 12m
transits on the On-Board Unit (OBU)-controlled lanes.

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Revenue Collection
In addition, Brisa is a leading player in the sector in
Europe and worldwide with share-holdings in toll-road
operators in Brazil, Spain, Austria and the US.
WeDo’s RA solution allowed Brisa to measure revenue
leaks due to the errant behaviour of both motorists and
internal fraudsters and to reduce the extent of these rev-
enue leaks, providing a return-on-investment that meant
the RA solution paid for itself within three months. As a
result of the success of the initial phase, Brisa and WeDo
are currently extending the scope of the RA solution to
provide additional coverage and assurance of Brisa’s
revenue generation and collection processes.
Revenue Assurance techniques
So, given the potential of an efficient RA process to con-
tribute positively to the bottom line and to ensure regu-
latory compliance, the question arises of how, exactly, is
a firm to undertake RA? Fortunately the principles and
techniques of RA are almost as old as business itself and
can be summarized under just three headings: Recon-
ciliation; Trend Analysis and Reporting.
The origins of reconciliation in business can be traced
back to the 15th Century when mathematician Luca
Pacioli described the double-entry bookkeeping meth-
ods used by Venetian merchants to keep their books of
account. As described by Pacioli, the essence of the
double-entry system is the cross-referencing or recon-
ciliation of two different views of
the same underlying information “The trend analysis
to ensure that both views are accu-
rate and complete.
techniques will detect
In RA, cross-referencing or rec- even the most subtle
onciliation of two different views of
the same underlying data is a fun-
changes in the levels of
damental technique that is used to transactions being
ensure that both views are correct.
Prior to the advent of digital com-
generated”
puters, this reconciliation was per-
formed by accounting staff on financial information
gleaned from the bookkeeper’s records of the day’s
transactions. With the advent of digital computers and
the record processing power that they provide, business
began to reconcile the underlying transactions directly
with financial records, to ensure the accuracy of both.
RA down to a T
For example, in the UK in the 1950s, J. Lyons & Co. oper-
ated a nationwide chain of hundreds of tea shops that
served tea, cakes and light meals. At the close of each
day of business, each shop would report information
from the waiting staff’s notebooks to head office in Lon-
don. These reports were fed into the Lyons Electronic
Office or LEO, the world’s first business computer.
At the end of each reporting period, LEO would run an
application that reconciled each shop’s report of unit
sales with the cash lodgements taken from the shop’s
bank statement. This allowed Lyons’ management to
directly measure the reconciliation between the cake
count and the cash for each tea shop on each day and to
ensure that all revenues that ought to be collected, were
being collected. Thanks to J. Lyons & Co., the first busi-
36 Vol 3 No 1 ETCetc
ness application on the world’s first business computer
was a classic RA application.
Trend analysis is a powerful technique and relies on
the fact that most transaction processing systems in
mature businesses reach a steady state of transactions
and revenues per unit time, other things being equal. In
the absence of any change in the business environment,
one would not expect any significant change in the
number of transactions or the amount of revenues being
generated from those transactions.
The transaction processing power of today’s digital
computers allows sophisticated, automatic trend analy-
sis techniques to be implemented across transaction
and financial processing systems. The trend analysis
techniques will detect even the most subtle changes in
the levels of transactions being generated and recorded
and will alert the revenue analyst to undertake investi-
gations and corrective actions, if necessary.
Finally, RA reporting functions can be divided into
three categories, as follows: Alarms, Dashboards and
End-of-period Management Reports.
Alarms are generated by the RA system to alert opera-
tions staff that a potential revenue leak condition has
occurred and requires investigation and possibly reme-
diation. Dashboards are used to provide operations staff
and others with an up-to-the-minute view of the current
status of the RA system and the revenue processes under
its control.
End-of-period management
reports are used by manage-
ment to assess the efficiency
(or otherwise) of the firm’s
revenue generation and
collection processes
over the reporting
period and to allow
management to plan
for any required
improvements to those processes.
Brisa and RA
Brisa contracted WeDo to deploy RAID,
WeDo’s RA software platform for reconcili-
ation, trend analysis and reporting. Brisa’s
main driver in deciding to deploy an RA solution was to
allow for the full detection and measurement of revenue
losses associated with certain modes of internal and
external fraudulent activity. The RA solution was also
configured to report on unpredictable and intermittent
hardware faults, software faults, configuration errors
and collection errors and to alert operations staff to
these conditions as and when they occurred.
Each entry and exit toll booth includes a range of
sensors that provides a rich data set on each transit,
including digital camera images, automatic vehicle
classification data and toll records from manual and OBU
toll units. By gathering, reconciling, trending and
reporting these data for each transit, the RAID solu-
tion enabled Brisa to detect and measure anoma-
lous revenue leak situations in real time.
RAID was deployed to collect records from 10
www.h3bmedia.com
 Revenue Collection

control points on each manual lane and seven control

points on each OBU lane. This resulted in a tally of some
50m records per month to be reconciled, trend-
analysed and reported. The system provided end-to-
end visibility and control, from the toll booth to the
customer debit, and implemented 26 separate valida-
tion rules on the manual and automatic lanes generating
six different types of alarms.
In addition to the routine RA validation functions out-
lined above, the RAID deployment includes reconcilia-
tion rules to detect fraudulent activity among motorists.
These usually involve the misuse of OBU lanes. Some
examples of such activity include:
• Motorists with no OBU or an invalid OBU
entering or exiting using OBU lanes;
• Placing an OBU from a motorcycle into a truck to
avoid paying the full and appropriate tariff;
• Motorists entering the motorway on a manual
lane and exiting the motorway using an OBU lane
In each of these situations, the real-time reconciliation
facilities provided by RAID allows the detection of the
fraud as it happens and the capture and storage of an
image of the offending vehicle from the toll booth’s dig-
ital cameras. The image and the records associated with
the fraudulent transit are then used to support collection
processes by the appropriate agency.
A common mode of fraudulent activity among toll
operations staff involves the misreporting of the vehi-
cle’s classification. For example, the toll operator could
collect the toll from a truck and report it as a car. The
operator would then pocket the difference between the
car toll and the truck toll. Initially, this activity was
detected by RAID’s trend analysis functions as the pro-
file of traffic for certain shifts would not match the
expected profile for that day of the week or time of day.
In response to this activity, additional reconciliation
rules were implemented that reconcile the toll opera-
tor’s payment record with the automatic vehicle classifi-
cation record in real-time.

Conclusion
To conclude, the RAID deployment has provided the fol-
lowing benefits to Brisa:
• Detailed end-to-end visibility of the revenue
chain across multiple control points;
• Details on any operational deviation, revenue
leakage and risk exposure as and when they arise;
• Daily automatic assurance of multiple
information systems;
• Proactive initiation of corrective actions through
a system of automatic validations and alerts; and
• Operational business intelligence for ongoing
planning and analyses.
As a result of these benefits and RAID’s contribution to
the bottom-line, Brisa and WeDo are currently planning
to extend the scope of the RAID deployment to provide
additional coverage of Brisa’s revenue generation and
collection processes. E
Mel Byrne is Global Partner Manager for WeDo
Technologies, based in Dublin, Ireland. He can be
emailed at mel.byrne@wedotechnologies.com

www.h3bmedia.com ETCetc Vol 3 No 1 37

Privacy

38 Vol 3 No 1 ETCetc www.h3bmedia.com

 Privacy

A very
private
function
ETC etc presents DUNCAN MATHESON’s approach to overcoming
privacy concerns around distance-charging policies

Around the world, a number of Governments have

been looking into satellite positioning-based road
charging systems as a means of tackling congestion
or raising revenues.
For some, the more challenging concepts being con-
sidered incorporate the concept of Time Distance Place
(TDP) charging – making users pay according to their
vehicle class, the time of day, where and how far they
drive.
To date, the German Lorry Charge represents the first
major deployment of satellite positioning solutions for
charging the motorway network. In a more indirect
manner, the Swiss system also incorporates this tech-
nology to support its tachograph-based distance charg-
ing lorry scheme that applies countrywide.
More recently, the Netherlands government has made
a positive commitment to the introduction of TDP solu-
tions over the next few years and the Swedish and French
authorities are also looking into satellite positioning
solutions for national distance charging schemes for
lorries. Closer to home, the UK Department for Trans-
port (DfT) has launched a Demonstrations Project to
investigate the feasibility of TDP charging and compli-
ance determination.

Positive negativity
However, the myriad range of policy options that
satellite charging solutions offer can lead to require-
ments that could have a marked negative impact upon
user acceptability. In particular, the UK press, and more
overtly the tabloids, often mistakenly (and it has to be

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Privacy

said, lazily) refer to ‘satellite tracking’ and ‘spy in the

sky’ type charging.
Whilst this is not technically possible, the data that
On-Board Units (OBUs) installed in vehicles collect
about the position of a vehicle as it travels clearly has the
potential to undermine the ‘privacy’ of the vehicle’s
driver – where the two can be linked. This requires pol-
icy makers to understand the impacts, and potential for
perverse outcomes, inherent in the process of setting
the key objectives for charging schemes. It also needs
implementers to approach system design in a manner
that will minimise concerns from users.
So, how can meaningful policy objectives be devel-
oped that can deliver win-win outcomes for govern-
ment, industry and private users?

It’s good to talk

The only way to really understand the concerns of the
public is to actively engage with them to assess their
legitimate concerns for privacy in all circumstances
when they act compliantly. This will include setting out
the charging policy and objectives, tariff options, and
their implications upon scheme organisation, system
design, and data management. If this is not done the risk
is that privacy will become the Achilles heel of road
pricing in the future.
To implement this engagement process there are four
specific actions that need to be undertaken:
• Consider the real policy needs and the associ-
ated objectives, in the form of requirement options for
scheme rules (tariff approaches), and how these will
impact users;
• Identify the candidate system and technology
requirements that are likely to be necessary to imple-
ment the policy options and understand the data design
and management choices;
• Explore the implications of the outline solutions
with a representative set of users covering a broad
spectrum of the public; and
• Take user’s feedback on solution acceptance
and data privacy concerns, to develop and refine policy
options that meet the needs of government and the user.
Let’s look briefly at each one in turn.
Consider the real policy needs and the
associated objectives
At the outset, it is important to formulate the range of
options for who and/or what is to be charged and where,
when and how charges are to apply. Examples could
include:
• Charging at specific points of entry into or exit
from schemes;
• Charging for distance travelled within a zone or
area;
• Charging by individual road types;
• Charging by road lane;
• Identifying the tariff options and times when
they might apply.

Identify the corresponding system and

technology requirements
The next step in the process is to build upon the policy
needs and set out a range of candidate options for how
systems might be implemented by way of illustration.
This could encompass the following plan of action:
• Consider the relevant business models that
could deliver the policy;
• Set out how the end to end system should per-
form in terms of its accuracy and the minimum service
requirements to Scheme Owners and Users; and
• Formulate a range of related supporting data
designs and the implications for what data could be
held, where it might be held, the level of detail to be cap-
tured and retained, and who would have access to it.
This would need to address both the charging regime
and to support checking for compliance and
enforcement.

40 Vol 3 No 1 ETCetc www.h3bmedia.com

Explore the implications of the outline
solutions with users
Thirdly, there is a need to engage with a wide cross sec-
tion of users in a manner that gives them a simple expla-
nation of each option. This is so that they can understand
them in the broadest terms and provide their reactions
to the implications upon their travel choices, impact
upon personal privacy and so on. An approach to this
could:
• Set out the policy and implementation objec-
tives in a clear and concise manner that can be pre-
sented to as broad a set of potential users as possible;
• Articulate the cost/price trade-offs for the dif-
ferent business models and technical options incorpo-
rating aspects of any personal data to be capture, how
this is used and who has access to it, charge computation
processes, data location and the role of the user;
• Capture and quantify/qualify their levels of
comfort or explicit concerns, and preferences; and
• Draw out and seek to understand where the key
sensitivities lie and confirm these with participants and
possible ways in which these might be mitigated.

Take user’s feedback to develop and refine

policy options
Lastly, present the user feedback to policy makers in a
way that clearly sets out the key sensitivities around:
• Solution options;
• Privacy concerns on data, computation and
presentation;
• The perceived intrusiveness of the possible
implementation options and the role of the user; and
• Users’ minimum ‘acceptance criteria’ and criti-
cal success factors.
This information would then be used to help refine
policy requirements to provide the basis for a mutually
acceptable approach.
In summary, this article has suggested that to minimise
the concerns of the public about distance charging
schemes and their effect upon personal privacy, that a
four stage approach should be adopted: developing
and presenting options for the future, capturing feed-
back from a wide constituency of possible users, and
building upon this to develop policy requirements that
seek to deliver a win-win for Scheme Owners and road
users.
Failure to give appropriate prominence to the public
as key stakeholders in the creation of policies that, if
implemented inappropriately, could have a marked
impact on personal privacy and hence acceptability
could lead to failure. Consequently, now is the time for
such investigations before any irrevocable decisions
are taken. E

Duncan Matheson is a Managing Consultant in

PA Consulting’s Government Practice. He
provides support to a number of governments on
road charging policy and related research
and regularly presents and writes articles on
this subject. He can be contacted by email at
duncan.matheson@paconsulting.com

www.h3bmedia.com ETCetc Vol 3 No 1 41

Smartcards

HANNAH BRYAN and

PHIL BLYTHE examine the
slow take-up of smartcards in
the UK, despite their obvious
benefits and success
elsewhere

The use of smartcards as ticketing for transport

services is not uncommon in many countries around
the world.
However, for a technology that has been in use for
more than two decades, the take-up in UK is fairly low
when considering the benefits and the apparent com-
mitment to it from the UK government. Smartcard tech-
nology and applications are continuously developing.
The device will almost certainly get smaller and be
cheaper to make and a natural progression will lead to
changes in its appearance. As a result of increased
memory capacity and flexibility of use, new applica-
tions are being tested and developed, the result of which
will be a dynamic and useful tool that transport services
can take advantage of.
We will examine here the use of smartcards in the UK
to date, including the issues surrounding interoperabil-
ity, data collection and privacy, and will discuss how the
technology may evolve for the benefit of transport. of services and applications, and is a highly suitable
solution for public transport ticketing. The operator can
What are smartcards? collect fares from an e-purse, verify access rights, and
A smartcard is a credit card-sized piece of plastic with a differentiate between complex fare products and price
chip that gains power from an external source. The chip structures, for example, for loyalty incentives.
performs all functions for the card and is available in two The in-built security ensures different datasets are
main varieties: memory-only, with storage space for owned by separate parties and protected from copying
data; and microprocessor, with memory and a proces- or alteration by third-parties. The card could store both
sor to deal with small programs. high- (e.g. annual rail pass or airline tickets) and low-
The reusable card is able to hold datasets which can value ticketing (bus/metro day or single tickets), along-
be compartmentalised securely. This means the card side other applications, e.g. local authority ‘citizen-card’
can be used for numerous unrelated applications, such or private sector applications (e.g. payment for parking
as holding credit or subscription rights to access a range or employee access to offices).

42 Vol 3 No 1 ETCetc www.h3bmedia.com


When the
chips are
down...
Smartcards in the UK
The success for smartcards in the UK was only evident
after the emergence of successful world-class schemes,
such as in Singapore, Hong Kong, Tokyo and Seoul (to
name but a few), and research which suggested that
smartcards could have a positive impact on fraud. For
example, when Singapore migrated to public transport
smartcards fraud decreased from 1 in 6,000 to 1 in
200,000, while average boarding increased from 35 to
50 people per minute.(1)
Some small-scale smartcard schemes were deployed
in the UK for passenger access to public transport in the
late 1990s and early 2000s and were mainly for conces-
www.h3bmedia.com
Smartcards
sionary travel on bus networks. Nottinghamshire County
Council (NCC) was amongst the first of the County
Councils to introduce their smartcard scheme, called
freedom, in 1998/99. Other early UK schemes include
Edinburgh’s Ridacard in 2001 and Cheshire County
Council’s Travelcard in 2002.
Interoperability
During early deployment it became obvious that a
patchwork of different smartcard standards were
emerging across the country; one person would need
multiple cards to travel in adjacent counties, detracting
from one of the major benefits of smartcards: interoper-
ETCetc Vol 3 No 1 43
Smartcards
able travel.Without this it would be more convenient for
passengers to pay with cash! When A New Deal for Trans-
port stated in 1999 that smartcards would be essential
for transport if the UK is to have good quality and “inte-
grated ticketing”, ITSO (Integrated Transport Smart-
card Organisation) was formed to develop a framework
that would provide multimodal technical, procedural
and contractual interoperability in UK.
Unfortunately, the ITSO standard was not complete
when the largest scheme in the UK to date was rolled out
in 2004; the ‘Oystercard’ scheme in London that cur-
rently has over 10m cards in circulation.
Nationwide ITSO-compliant schemes have been
rolled-out in, for example, Scotland, Cheshire, Mer-
seytravel and Wales. Further schemes are expected
later this year and other existing schemes are migrat-
ing. Furthermore, a large scheme is expected this year
which may determine the fate of ITSO. In 2006 the gov-
ernment announced that off-peak local
travel for concessionary people (e.g.
over-60s) would be free in England
“The privacy
from 1 April 2008. trade-off could be
In Consultation on a national conces-
sionary bus travel pass for older and
utilised by
disabled people in England DfT transport providers
(Department for Transport) proposed
that an ITSO smartcard should be used,
to encourage public
either as a smartcard in areas with transport use”
existing ITSO schemes or a flash pass
until compliant schemes are in place. See Figure 1 for an
example of the card.
Demand management versus privacy
As with many Intelligent Transport Systems (ITS), the
computing capabilities of smartcards generates an
immense amount of data; essentially every transaction
is captured. This could be used to better manage the
transport system and meet the customer needs.
As with any personal data storage, it also poses con-
cerns in terms of personal privacy and the effects still
need to be investigated.
At Newcastle University we have found that the data
can be used to compile individual passenger journey
histories; you know who the customer is
(if not individually, then as part of a user
group), where and when they use the
network, and how frequently. The data
also offer geographical locations for
events so results can be transposed to
visualise profiles using GIS (Geograph-
ical Information Systems) and identify
demand on the network (see Figure 2).
With a large dataset, e.g. covering an
entire city, analysis could illicit thorough
customer knowledge to compliment
traditional survey techniques.
Despite the benefits of using smart-
card data, there are obvious repercus-
sions to consider.Privacy is a particularly
contentious issue for ITS; almost two mil-
lion people signed a petition lobbying
44 Vol 3 No 1 ETCetc
Road User Charging (RUC) in 2007, citing privacy as a
major concern:“The idea of tracking every vehicle at all
times is sinister and wrong”(2).
The concern for many transport users is that their
whereabouts will be stored quickly and surreptitiously.
However, the Data Protection Act (DPA) limits personal
data use to the purpose it was collected. Movement data
can be used but personal data is restricted unless the
user has given permission. Supermarkets are success-
fully obtaining and using personal information as they
offer incentives that users want; the storecard. Shoppers
trade their personal information to save money, often
without realising. The result: supermarkets can closely
monitor their customers; what they buy, spend, etc.
This privacy trade-off could be utilised by transport
providers to encourage public transport use, however,
research would need to be carried out to determine
what level of service people would trade their personal
information for and what the implica-
tions would be.
Technological advances in
transport
When interoperability issues have
been resolved, smartcards could be
highly convenient and used for many
applications anywhere in UK or even
the world. As W. Meyer said, “Travel-
lers in the future should be able to use
ticketing technology interoperably throughout the
world to obtain the fares most appropriate to them wher-
ever they may wish to use local transport”.
Although Oyster is not interoperable with the rest of
UK it is now available as a multi-application card which
is both travel and credit card (with Barclays Bank), and
offers an incentive of automatically topping up the travel
e-purse whenever it dips below £5 (€8). Combining
smartcards with devices and other applications is a nat-
ural progression, benefitting in shared infrastructure
and development costs, and an increased customer
Figure 1: English National Concessionary Bus Travel Pass,
courtesy of DfT
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Figure 2: GIS display of disabled passenger demand derived
smartcard data
base. One card can accommodate multiple uses: per-
sonal identity storage, such as biometrics and medical
information; smart passports; ID cards; and small and
large purchases. Furthermore, multi-application
devices, such as Near Field Communication (NFC) ena-
bled mobile phones or smart-watches, offer conven-
ience and ease of use to the customer.
In the future techniques to monitor customer boarding
and alighting (without the need to present the card to
the reader), such as Be in/Be out, will seamlessly cap-
ture more customer information. Devices are also minia-
turising and become cheaper. Newcastle University is
currently investigating uses for smartcard and sensor
embedded jewellery. In the future we could wear smart-
devices that allow us to be in continuous contact with
our environment, automatically gaining access to and
paying for services as we use them.
Conclusion
Without interoperability, the business case for invest-
ment in smartcard technology is limited. Ultimately,
interoperability in UK depends on the success of ITSO.
Oyster is not yet ITSO compliant, however, there has
been an agreement to work towards this. Another suc-
cess which ITSO hinges upon is the National Conces-
sionary Bus Travel Pass. If the roll-out is a success, it
could encourage Local Authorities to implement ITSO
compliant schemes, thus securing ITSO as the national
standard.
The obvious benefits from smartcards are for public
transport as they can be used as authorisation and pay-
ment tickets, and reduce fraud and boarding times.
Transport services will benefit from technological
advances as the device gets smaller and cheaper to
make and as data quality improves and in-depth
passenger information is elicited, clear, dynamic serv-
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Smartcards
ice performance statistics can be used for marketing
purposes and creating incentives.
However, further research must be carried out to
determine the privacy effects and the willing of the
public to trade personal information. Interoperable and
multi-application transport smartcard provides the abil-
ity to piggy-back ticketing access and payment onto
devices people already carry.
There is no inconvenience for the user and they will
be reminded that public transport is a viable option and
alternative to the private car, providing the potential to
reduce congestion and the impact of travel on the
environment.
References
(1) Sim L. S. K., Seow E. A. C., Prakasam S.,“Implementa-
tion of an Enhanced Integrated Fare System for Singa-
pore”, Land Transport Authority, RTS Conference,
Singapore, 2003
(2) 10 Downing Street “E-petitions”: http://petitions.
pm.gov.uk/traveltax/ (22/06/2007)
Hannah Bryan is a Research Assistant and
Prof Phil Blythe is Professor of Intelligent Transport
Systems at Newcastle University’s Transport
Operations Research Group.
www.ceg.ncl.ac.uk/research/transport/index.htm
ETCetc Vol 3 No 1 45
46
London

Vol 3 Issue 1 ETCetc

www.h3bmedia.com
All photographs in this article© Transport Technology Consultants

So what have
we learned?
As London celebrates the 5th birthday of its congestion
charging scheme, ANDREW PICKFORD takes a look at recent
progress made in developing real-world congestion charging
solutions worldwide and current trends to see how much we
have really learnt about pricing for the use of roads in our
towns and cities
Happy Birthday, London. On 17 February 2003 the
London Congestion Charging scheme went live.
The primary target, to reduce congestion, was rapidly
met. Decreases of up to 26 per cent (now about 21 per
cent) from pre-launch levels were reported by the
charging authority, Transport for London (TfL) and the
overall net income from the scheme, to be fed into com-
plementary transport measures, rapidly surpassed
£100m (€130m) per year and is now over £125m per
year.Five years later the scheme area has been extended
westwards to roughly double its original size and vari-
ous refinements have been made to its charging policy.
According to TfL 50,000 fewer cars per day are being
driven into central London – not a reason to claim that
the same number had been ‘priced off the road’ though.
London’s buses carried over 1.9 billion passengers in
2006/07, an increase of 45 per cent from 1999/2000,
induced in part by the charge itself and through
increased investment in new buses. No charging policy
would be aimed at reducing the wealth-creation ability
of a region so it is notable that the net reduction in the
number of people entering the centre of London was
about 4,000 in 2003. This is a small proportion of the
20- 25m daily journeys that were made during the same
period.
Whether or not you will be celebrating the congestion
charging scheme’s fifth birthday, it is clear that the argu-
ments for and against the application of road user
charges to reduce congestion in other cities worldwide
are as intense and as healthy as ever five years on.
The distribution and nature of benefit received or cost
incurred depends on who you are. Owners and drivers
of many vehicles are required to pay the charge in return
for a more reliable and reduced journey time - on aver-
age - according to periodic surveys.
Paying a fee to drive into a charged area does not pro-
vide the same level of visual and instant gratification
received by paying a toll to cross a bridge over the
Thames, San Francisco Bay or a tunnel under Hong Kong
www.h3bmedia.com
London
Harbour (or any one of hundreds of crossings and tun-
nels worldwide).
Congestion charging and its big brother, national road
pricing, forces a more challenging set of questions even
before I get into my car. What benefits would I receive if
I paid the charge? Should I drive at all? And if so, when
should I travel? What other modes are available to me ?
Taking Stockholm
Stockholm City’s strategy to make the benefits and the
costs visible to business and individuals was to install a
pilot congestion charging scheme encircling the city.
The trial ran for seven months from 2006 and not only
highlighted the effect of a charge on congestion but also
showed what would happen if it was turned off. Unsur-
prisingly, traffic levels quickly returned to a level close
to pre-charging levels.
Following the pilot and a referendum that demon-
strated, by a slim majority, support for congestion charg-
ing, the scheme was turned back on, with many
operational refinements, on 1 August 2007.
This on-off experiment was not unique, however.
Trondheim in Norway suffered from a 10 per cent
increase in traffic within six months and correspond-
ingly reduced investment in bus network subsidies
since its cordon toll scheme was turned off on 31 Decem-
ber 2005. Restoring the cordon scheme is now back on
Trondheim’s political agenda.
Most of us are creatures of habit - individuals often
impose upon themselves, over time, routines that are
largely fixed and often dependent on the routines that
are established by others. These self-created routines
evolve through choices that we all make; the schools to
which we send our children to, the places that we work
and go shopping. Or, as businesses, we expect employ-
ees to be available at generally fixed hours, we expect
our goods to arrive just-in-time to be used on manufac-
turing lines and we do not expect to pay more to move
goods by roads than our businesses already pay through
ETCetc Vol 3 Issue 1 47
London
Londoners are reminded that they don’t have to drive to work
other means. The value of time, or rather the opportunity
cost of sitting in congestion is often not factored into this
logic though.
An assessment of the marginal social cost of conges-
tion is unlikely to be on our individual agendas unless
we happen to be a transport economist, of course.
So, implementing congestion charging (or just talking
about it) makes us question historic decisions and the
logic of our embedded behaviour. It also questions
whether we, as individuals, are equipped with sufficient
information to make a rational decision based on the
collective cost of congestion, including the adverse
impact on the local economy, health and its contribution
to the generation of emissions harmful to the
environment.
Making an informed decision at a local level needs
not only a ‘leap of faith’ but a full understanding of the
benefits to at least the same level of awareness as the
charges that, unsurprisingly, seem stick more readily in
the collective memory.
Embedded decisions
But exactly how embedded are the transport choices
that we make? One of the most surprising findings of the
Stockholm pilot was that the expected level of behav-
iour change (measured by traffic patterns and modal
shift) happened faster than predicted. Over 80 per cent
of expected migration from peak period to off-peak and
public transport modes occurred in three weeks rather
than the expected three months. In this case the travel-
ling public and business were more flexible than some
of the early surveys had predicted.
This suggests that enough road users were able to
modify their travel behaviour such as the time of travel
or choice of mode to reduce congestion to published
target levels - about 20 per cent compared with pre-
charging levels. This success also hides another eco-
nomic truth - increasing a charge does not necessarily
reduce vehicle movements (and its near relation - traffic
48 Vol 3 No 1 ETCetc
congestion) in proportion - as shown by the reduced
impact of raising the nominal charge in London from £5
to £8. In effect the demand is becoming more and more
inelastic as pricing stimulates more and more road users
to seek alternatives.
This does not undermine the logic of congestion
charging though but demonstrates that pricing can only
be regarded as one tool in the transport policy-maker’s
toolbox. For example the Singapore Land Transport
Authority (LTA) has applied charges that vary monthly
since 1998. Although not urban congestion charging,
varying the charge to maintain a specified level of serv-
ice has been applied on SR91 in California since 1995.
A solution for smaller cities
It may be no coincidence that some of the global pio-
neers of congestion charging are large cities; Singapore,
London and Stockholm. However, the challenge now is
not to replicate the London scheme or even Singapore
but to find local solutions, particularly for smaller cities
and towns where the benefits and costs of congestion
charging also warrant going ahead with a scheme.
Regardless of the benefits, the short-term financial
model still needs to stack up though.
Simply, the price charged for road use needs to exceed
the costs of charge collection and scheme operation. It
must exceed it, over the long-term, by an amount that
supports the complementary measures needed to help
‘lock in’ a change in user behaviour, including an
improved public transport network and improved
public information on travel options before and during
a journey. Of course, reality is more complex than this.
For example, if the charge required to induce a behav-
iour change to meet congestion charging limits is low
then it may not be enough to cover costs and meet finan-
cial targets to invest in projects such as park and ride
(Stockholm), increased bus provision (London) or the
proposed fare freeze on public transit (New York).
Furthermore, as national pioneers the London and
www.h3bmedia.com

The BBC opened the airwaves for a Congestion Charging debate in 2003 (left) while (right) a taxi, which was and still is exempt from
paying the charge, passes a Central Zone sign 10 minutes after the scheme went live
Stockholm schemes were developed in isolation of
other local schemes, in other words, all of the functions
required for congestion charging have been provided
(or procured) from within. Figure 1 (on page 50) high-
lights the functional complexity of a typical charging
scheme based on the application of charges on a public
road network.
The figure assumes that many vehicles are equipped
with some means of recording road usage such as using
Dedicated Short Range Communication (DSRC) tags or,
in the future On Board Units (OBU) that employ Global
Navigation Satellite System (GNSS) to identify the vehi-
cle’s position on the road network and Cellular Networks
(CN) to communicate vehicle journey information back
to the same charging authority. It is assumed that
enforcement does not depend on barriers to limit vehi-
cle access but instead depends on image data as pri-
mary evidence of the vehicle’s presence at a specific
time and place.
To be useful, the images captured need to show the
vehicle’s number plate (interpreted by Automatic
Number Plate Recognition, ANPR) and other context
data. Figure 1 also shows the variety of payment chan-
nels that would need to be offered to enable broad
accessibility, including the option to pay cash through
retail outlets.
Where the investment in tags to ensure automatic
charging is not justified based on usage then video-
based accounts could also be offered at higher opera-
tional expenditure for each chargeable event. The
lowest usage customers or those that travel very occa-
sionally would be able to register for individual jour-
neys, enforced entirely by cameras.
International charging schemes such as the City Link
in Melbourne (Australia), ETR 407 (Canada) and High-
way 6 (Israel) offer a variety of account types matched
to predicted road usage of individual account holders
and several payment channels to maximise accessibil-
ity and compliance.
www.h3bmedia.com
London
Joining the club
An urban charging solution does not need to develop all
of these functions but could have access to some of them
from third parties; either other charging authorities with
spare operating capacity or specialised providers. Hav-
ing the choice between buying services from a menu or
developing internally may be the key to joining the
club.
How could a smaller scheme take advantage of the
benefits of scale and define a business case that is sus-
tainable and generate sufficient funds for complemen-
tary measures such as enhancement to public transport?
If we cannot answer this question, then congestion
charging will remain an elite group to which only large
cities can afford to participate.
The introduction of congestion charging can no longer
be justified solely by social benefits and costs but on
having an operations cost structure that works at a
smaller scale to return enough of the revenues collected
to be invested elsewhere.The same is true of toll schemes
such as the Oslo Ring that had, as its primary target, to
fund the building and maintenance of a cross-city tun-
nel. The bankable surplus of revenues over costs for this
charging scheme meant that the tolls are still being
applied even after the initial investment needs had been
satisfied.
Norway has implemented 22 charging (toll) schemes,
including six cities all of which are socially and econom-
ically justified. Although the strategic objectives of
these toll schemes are not aimed at reducing conges-
tion it demonstrates that small scale solutions can be
delivered through the development of proven operat-
ing models, proven legislation, single account interop-
erability, an educated and competitive local supply
chain, agreement on inter-operator data exchanges,
centrally delivered guidance and common functional
modules. Pioneers carry a disproportionate implemen-
tation risk – being a follower is not such a bad thing if
this risk is reduced.
ETCetc Vol 3 Issue 1 49
London
The basis of comparison between schemes is no
longer costs as a proportion of revenues; costs reflect
the underlying complexity of the organisation and its
operating volumes whilst revenues reflect charging pol-
icy requirements.So,as the number of schemes increases
the maturity of service providers’ solutions, as pricing
for bought in services becomes more competitive and
predictable, as legislation is refined and as greater
awareness of the costs and benefits of congestion charg-
ing are known, then the scale at which the business case
enables congestion charging should fall.
This will not only enable small city solutions but allow
policy evolution at lower cost since this will depend less
on the activity of the charging and enforcement serv-
ices. However, the challenge remains regardless of
scale - to ensure that the benefits of charging for road
use remain local, direct and visible.
In the last few weeks, Geneva, Dublin, Gothenburg
and Helsinki have all announced the prospect of con-
gestion charging. Even Brunei and Monaco have
announced their interest. San Francisco is part way
through a study and Los Angeles amongst several other
US regions will bid for funds from the Urban Partnership
and Congestion Reduction Demonstration (CRD).
The end game?
Just as we are seeing congestion charging appearing on
political agendas we are already seeing new charging
policies emerge. Milan turned on its EcoPass ‘pollution
charge’ on 2 January 2008 for a 12-month trial. Rome
imposed limits on the most polluting vehicles later in
January and Turin is considering introducing an emis-
Figure 1 Interfaces to
stakeholders
50 Vol 3 No 1 ETCetc
sions-based charge. Other cities are considering access
schemes where only authorised vehicles and those that
pay a period charge would be permitted access. Lon-
don is not standing still and, although congestion charg-
ing is part of the fabric of London’s transport strategy, it
continues to evolve further. On 4 February 2008 London
turned on its Low Emission Zone for heavy goods vehi-
cles driving into and within the most of the Greater Lon-
don Area. Furthermore, in November this year, plans
have already been made to extend the original scheme
with an emissions-related charge.
Paying for road use in our towns and cities is no longer
only about congestion but also about air quality and
other policy objectives. The goalposts are moving and
reflect potential new trends planned to be implemented
in London and New York - among others.
The next article in this occasional series will be enti-
tled ‘Ten Years On’ – a review of progress and what we
have learnt about urban congestion charging and its
many policy variants. Only time will tell how well this
increasingly complex policy environment has been
translated into understandable policies that are cost-
effective to operate.
The subject of charging for road use forces us to think
more about travel choices. This is perhaps why conges-
tion charging and its big brother, national road pricing,
are not subjects that are most likely to break the ice at
parties – at the moment at least. E
Andrew Pickford of Transport
Technology Consultants in Cambridge
(a potential congestion charged area)
at andrew.pickford@dsl.pipex.com
www.h3bmedia.com
 Tailored solutions
for individual needs

Demand Management
As the supplier and operator of the Western Extension Zone (WEZ) of the London congestion
charging scheme for Transport for London and the recently announced Low Emission Zone (LEZ),
Siemens Traffic Controls is an established enforcement specialist. With over 60 years‘ experience in
the UK traffic market, we are equipped to provide flexible, inter-operable and scalable road pricing
schemes and are proven integrators of ANPR, DSRC and GNSS technologies.
See you at Intertraffic, Amsterdam 1 - 4 April 2008, stand 01.312.

www.siemenstraffic.com
Environmental Pricing
Green dreams
Is BOB McQUEEN going soft? In the November/
December 2007 issue of Thinking Highways’ North
American edition he wrote about fashion and now
he turns his attention to the environment
Maybe it’s raining too much here in Southern Cali-
fornia as I have the distinct feeling that I’m going
green. Oh yeah, I hear you say, McQueen jumps on
the environmental bandwagon because it’s the cool
and trendy thing right now.
Well, before you judge me read on for a bit. I recently
attended a Connected Urban Development conference
in San Francisco. It was sponsored by Cisco Systems as a
part of the Clinton Global Initiative on climate change.
While the subject matter was wider than transportation,
addressing urban sustainablity in terms of work, mobil-
ity, energy and buildings, my participation in the event
made me more aware than ever of the power of world
class transportation performance management and the
central role that congestion pricing techniques can play.
I also learned that the work we are doing in intelligent
52 Vol 3 No 1 ETCetc
transportation systems, congestion pricing and toll road
operation has an important fit within the larger picture
where ICT (Information and Communication Technolo-
gies) are being used to support the movement towards
sustainable work practices, energy use and mobility.
In essence, I was awakened to the fact that congestion
pricing and intelligent transportation systems are con-
nected and form part of larger possibilities for sustain-
able urban development. Drawing on this experience
and some amazing insight and information gained from
the H3B Media UK Road Pricing Think Tank, held on the
former site of the Brooklands motor racing circuit last
November, I thought it would be great to write this arti-
cle on how congestion pricing might be used as part of
a wider portfolio of measures, to make urban transpor-
tation more efficient and sustainable.
www.h3bmedia.com

Background
While there is confirmed and growing global interest in
the application of congestion pricing and related value
pricing techniques in urban areas, it is obvious that the
majority of the transportation community are still grap-
pling with this new technique. There are great lessons
and experiences to be gleaned from the previous appli-
cations in Singapore (since 1975), London and Stock-
holm, but introducing and explaining the approach,
potential effects and how it might operate in a specific
urban area, remain challenges. I heard several people
at the Brooklands Think Tank ask for advice and assist-
ance in explaining congestion pricing to decision mak-
ers and to the general public.
There seems to be a consensus view that since con-
gestion pricing is not an off the shelf product, it needs a
lot more effort to explain and communicate. Both the
Transport Innovation Fund (TIF) in the UK and the Urban
Partnerships Agreement initiative in the US, place a
renewed emphasis on congestion reduction through the
application of a balanced portfolio of measures includ-
ing congestion and value pricing techniques. Tech-
niques such as demand actuated transit, travel
information, advanced traffic management, parking
management and transit management all have a com-
plementary role to play in urban congestion reduction.
This provides us with an extra challenge to explain the
operation and effects of the bigger picture of measures
as well as congestion pricing.
For many months now, I have been working with an
network of international metropolitan areas on the sub-
ject of metropolitan transport optimization. Known as
the MeTrO (metropolitan transport optimization) net-
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Environmental Pricing
work, this informal and ad-hoc group of 12 major cities,
have been working together to share knowledge, infor-
mation and best practices on a range of metropolitan
transport optimization techniques, including conges-
tion pricing. Through the work of the group we have
come to recognize the role that a balanced portfolio of
technology supported optimization applications will
play in the development of sustainable urban transport.
We have also realized the importance of complete inte-
gration with conventional approaches such as traffic
engineering and land use planning. The group has also
recognized that in many cases, the technology sup-
ported applications enable a range of management
solution or ways to do things that really deliver service
and results.
We now understand that the implementation of a
sophisticated congestion pricing application requires
equally effective travel information delivery. If fees for
road use will vary by time, distance, place and vehicle
category, then an information system will be required to
deliver decision quality information to travelers. I often
wonder how I would feel if I had spent my money on an
MP3 player and then discovered that it didn’t come with
a user manual.
How much more critical is the user manual for a multi-
billion dollar transportation system? (This may be my
unique perspective I am Scottish after all!). Similarly, we
know from experiences with toll roads and transit
services that bringing the point of payment as closely as
possible to the point of service delivery changes the
user’s perception and expectations with respect to serv-
ice delivery. Therefore the need for efficient traffic and
transit management in order to underwrite service
ETCetc Vol 3 No 1 53
Environmental Pricing

quality, points the way towards advanced traffic and

transit management.
From another perspective, transit management
becomes a crucial element when congestion pricing
techniques are applied. We already know that success-
ful and effective congestion pricing can have a dual
effect – excellent demand management through a pric-
ing mechanism that cane be fine tuned and the genera-
tion of new revenue for additional transportation systems
improvements. This second effect can create a virtuous
cycle effect in which congestion pricing revenue is uti-
lized to make transit more attractive as an alternative,
re-enforcing the demand management effects.

Steward’s enquiry
This virtuous cycle will only be sustained if the addi-
tional revenue is subjected to careful stewardship, indi-
cating the need for excellence in transit management
and fleet operations. Advanced transit management
systems for fleet and passenger management can play a
pivotal role in this respect. Indeed, the payment systems
infrastructure being used to collect congestion charges
and transit fares would also be a rich source of use data
for this purpose. Data on how many passengers board
and alight at each bus stop in the system can be used to
tailor service frequencies for optimized operation.
So we can now see the close connection between con-
gestion pricing and other application of technology
supported systems that can together optimize urban
transportation. Coming back to the issue of how to com-
municate the effects of congestion pricing and the other
complementary technology measures, I believe that the
answer lies in a laser focus on results, effects and bene-
fits. As a profession and community we in transportation
can do much better at sales and marketing if we take a
leaf out of the books of some of the experts. If we take a
look at some other business sectors such as commercial
services and consumer electronics we can see some
patterns and principles that may be usefully applied to supporting the introduction of new systems and
the transportation context. solutions.
Now I don’t mean that we need to behave like time Aha! Here may lie a key principle that we can use to
share or double glazing salesmen and go about trying great effect in congestion pricing and other ITS applica-
to sell people things that they don’t need or want by tions. Instead of just focusing on the cost of the systems
making them feel stupid if they say no. and the level of the congestion charge,
By the way this technique doesn’t work “This is not about can we also define the value proposi-
on Scots as we have no problem feeling, trying to sell people tion? What return on investment will
or even looking stupid for that matter, if the customer experience through the
it saves a few bucks! I have deep pock- things that they deployment of traffic management,
ets and short arms, as my grandad used don’t need or travel information and transit man-
to say. agement systems? What return on toll
want” or fee will the traveler see in return for
Needs must the congestion charge?
If you consider transportation sales and marketing as a The first and most obvious return on fee comes in the
structured process designed to understand the needs of form of reduced congestion. The second and less obvi-
the consumer (traveler) and match those needs to the ous return comes with the reinvestment of the revenue
products and service on offer (transportation facilities from congestion charging into transportation systems
and services) then it gets interesting. Having under- and operations improvements. Perhaps if we could state
stood the needs of the customer, it is then possible to the latter as a true meaningful value proposition rather
define a value proposition that clearly defines,describes than a string of capital or operational projects, we could
and communicates the value that the customer can be as effective as some of the best sales people on the
unlock by making use of the products and services or planet.

54 Vol 3 No 1 ETCetc www.h3bmedia.com


“Pay your congestion charge and get an immediate
20 per cent reduction in congestion, but wait, you will
also get a 10 per cent improvement in transit service fre-
quency and a 15 per cent improvement in overall jour-
ney time reliability” Now we’re in the business of value
sales and needs matching marketing. Perhaps a really
good sales pitch for congestion pric-
ing also involves the definition and “Now we’re in the
communication of the value of a world
class urban transportation system?
business of value
After all,congestion pricing is intended sales and needs
to improve urban transportation so
should we not describe the thing that
matching
we are trying to improve at the same marketing”
time?
Getting the message across
So now let’s address the issue of explaining and com-
municating the effects and benefits of a proposed con-
gestion pricing deployment. How much emissions and
gasoline are likely to be saved, how many vehicle kilo-
metres and vehicle hours of travel will be saved, how
much annual net revenue can be expected and what are
www.h3bmedia.com
Environmental Pricing
the approximate capital and operating costs of the
deployment. All simple and obvious questions that key
decision-makers will rightfully ask and the equally obvi-
ous response might be – “give us the resources to
develop and validate a detailed mathematical simula-
tion model and we will determine the answers to your
questions”. This could well elicit a response that forms
the basis of an undesirable chicken and egg type prob-
lem – “well, no, you give us some idea of what to expect,
then we’ll give you the resources to study it further.
As a way of addressing the potential for chicken and
egg and as a communication tool to explore the likely
effects of congestion pricing proposals, we worked with
the cities in the MeTrO network to develop a web based
sketch planning tool. The tool, known as Metro, was
developed on the basis of information and lessons
learned during the Singapore, London and Stockholm
urban zone congestion pricing implementations. You
input the size of the zone, the current traffic speed, the
number of vehicles expected to enter the zone under
current conditions and the average peak hour traffic
speed in the zone.
The sketch planning tool then calculates the emissions
and energy savings, the expected congestion reduction
and the annual net revenue expected from the imple-
mentation. It also produces an estimate of the total cost
of implementing the system. Using this information, it is
possible to interactively explore zone congestion charg-
ing effects with a non technical audience.
The economics of congestion pricing can be simply
and effectively explained and a justification made for
further detailed research, study, data collection and
modeling. Based on our experiences to date in using
this tool with a range of city transportation professionals
we feel certain that it does the job of breaking the poten-
tial chicken and egg cycle really well and supports the
kind of pre-study exploration, discussion and agree-
ment that makes it easier to justify the resources required
for the essential follow up study.
Focusing on effects both direct/immediate and indi-
rect/long term, is, we believe, critical to public accept-
ance of congestion pricing. The effects range through
safety, efficiency and customer service, with significant
environmental benefits in support of connected and
sustainable urban mobility.
When I dream at night I dream in
green. Green for the environmental
effects of congestion pricing and green
for the potential new revenue stream
that could be made available and ded-
icated to further transportation
improvement. E
Bob McQueen, Senior Vice President
& Senior Advisor at PBS&J, is an internationally recog-
nized expert in the field of ITS, with more than 30 years of
experience in the field. His track record incorporates
extensive experience in conventional transportation
planning and traffic engineering with a steady migration
towards specializing in applying information and
communication technologies to transportation.
bobmcqueen@pbsj.com
ETCetc Vol 3 No 1 55
Environmental Pricing

Sweetening
the pill

56 Vol 3 No 1 ETCetc www.h3bmedia.com

 Environmental Pricing

MIGUEL ANGEL MARTINEZ

OLAGUE addresses a burning
issue. Can the idea of road
pricing be made more
attractive to the public if it’s
approached from an
environmental angle?
Whenever road pricing or congestion charging is
discussed, economists and transport specialists
generally agree that such schemes are fair and help
to solve many of today’s traffic problems.
Nonetheless there is an equal consensus about the dif-
ficulty of getting these advantages across to the public
at large. The upshot is that most governments are some-
what wary about adopting these systems until they
become the last-ditch alternative.
This scenario is now changing because of society’s
increasing concern about the environment. This con-
cern has, to some extent, become a new need that soci-
ety is prepared to pay a certain price for. Most people
regard it as unfair to have to pay a congestion charge for
using a road they have already paid for with their taxes
(and previously used for free), but it is quite a different
thing to argue that the environment should be protected
by rationalizing vehicle use.Witness the fact that in some
European countries the most fervent advocates of road
pricing policies are also the most fervent environmental
groups.

A political vehicle
According to official records transport is responsible
for 30 per cent of CO2 emissions. Depending on the type
of vehicle, the CO2 emission rate per kilometre ranges
from 80 grams per kilometre for the most eco-friendly
vehicles and up to 300 grams per kilometre for the most

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Environmental Pricing
aggressive. Some countries have already brought in
new legislation to favour the least polluting vehicles
with lower road tax rates and heavily levy the “gas guz-
zlers”. In Spain’s case the greener vehicles (lower than
120 grams per kilometre), hitherto taxed at 7 per cent,
are now exempt. Those emitting more than 200 grams
per kilometre have had their tax rate raised from
12 to 14.75 per cent.
But the final emission produced by a vehicle through-
out its whole useful life depends on other factors such as
the type of use, in the city or on the open road, and also,
as stands to reason, the mileage clocked up. An average
vehicle travelling 20,000 kilometres a year in a highly
congested city like Madrid or Barcelona will give out a
ton more CO2 than a 4x4 used only for journeys on the
open road.
Furthermore, and this is particularly important, con-
sideration would also have to be given in the first case to
the vehicle’s marginal congestion
and its impact on the marginal emis-
sions created by the other vehicles “In Spain, those
on the road.
emitting more than
A questionable contribution 200 grams per
In principle the fuel tax is supposed
kilometre have had
to take these additional factors into
account, insofar as it is higher for their tax rate raised
the highest consumers, either
because they clock up more miles
from 12 per cent to
or because they consume more fuel 14.75 per cent”
in doing so. This is not in fact the
case, however, for it is incapable of distinguishing
whether or not a user is contributing towards urban
congestion.
Put another way, for equal fuel consumption, a driver
making a 30 km journey on the open road would pay the
same tax as another making a 10 km journey in a highly
congested area. This is a fair system as the vehicle emis-
sion in both cases could be very similar; in the second
case, however, the driver’s vehicle has made a bigger
contribution to road congestion and hence caused other
road users to consume more and ipso facto emit more
CO2. Although the additional CO2 emission per vehicle
is very small, it has to be multiplied by the thousands of
vehicles on the road. This effect is not taken into account
by the road tax or fuel tax.
Personal effects
The ideal system would tax the most polluting vehicle
owner more heavily and also the driver who uses his/
her car on a very congested road, clogging up traffic
even more. This does not happen at present; the vehicle
owner has no idea of the high cost of polluting and clog-
ging up a big city.
Under the current taxation system users pay a fixed
sum in advance and this then gives them “carte blanche”
to pollute as much as they like thereafter (although an
allowance does have to be made here for the afore-
mentioned fuel-tax effect). The result is that people do
not take into account the effect of using a private vehicle
each time they take it out on the road.
58 Vol 3 No 1 ETCetc
As is common knowledge, some cities like London,
Singapore and Stockholm have implemented conges-
tion charging schemes that try to solve this problem by
creating a marginal price in the form of a charge for
entering the city centre; this, of course, impinges on the
individual decision to use the car. The revenue thus
raised is ploughed back into new infrastructure and
public transport. The overall result is more fluid traffic
and lower pollution.
As already pointed out, despite all the benefits of these
schemes, as universally recognized by experts, the pub-
lic at large and politicians tend to view at them with
varying degrees of scepticism, except for the most con-
vinced environmental groups.
Nonetheless, Global Navigation Satellite System
(GNSS) technology allows groundbreaking schemes to
be applied in which users do not see it as paying an
additional tax or charge but rather polluting and con-
gesting less and hence making a
significant saving on the taxes they
already pay. There is where the
green cheque, as presented in this
article, comes into its own.
Going green
It works like this. New vehicle pur-
chasers are offered a rebate on part
of the road tax when it is eventually
changed. This sum, or green
cheque, is calculated automatically
from the data furnished by a GPS-
based OBU, fitted in the vehicle when the owner opts
into the scheme.
The amount of the green cheque will depend on the
type of vehicle and its lifelong mileage in those areas,
thoroughfares or time bands previously defined and
announced as high congestion.
Furthermore, the cost in terms of mobile communica-
tions of this scheme will be very low, since, rather than in
real time, the discount can be calculated monthly by
periodically downloading the OBU data.
From an economic view the business case would seem
prima facie to be viable. We should bear in mind here
that the difference in road tax between a greener vehi-
cle and another highly polluting vehicle might be as
much as 15 per cent. In absolute terms this more than
pays for the investment and operational cost of the
OBU.
This scheme has doubly positive results. It not only
continues to favour the purchase of greener vehicles but
also gives a real incentive to owners of more polluting
vehicles to use them in a more eco-friendly way.
Another advantage is that the scheme is voluntary,
allowing environmentally aware members of society to
opt in of their own volition and help in the fight against
climate change. E
Miguel Angel Martinez Olague is corporate
development director for the Madrid-based
company GMV. He is contactable via email at
mmartinez@gmv.com
www.h3bmedia.com
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We invite
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Hosted by:

www.h3bmedia.com ETCetc Vol 3 No 1 59

Interoperability

The art of
the possible
STEVE MORELLO and ERIC WURMSER on the future for road
and driver services, using an innovative project in Ireland
as a shining example

60 Vol 3 No 1 ETCetc www.h3bmedia.com


An efficient transport system is primordial for
economic stability and development for all
countries around the world.
In many Central and Eastern European countries, and
other EC and OECD countries, a significant portion of
the roads including the main trunk road network are in
relatively poor condition or only in fair condition, requir-
ing major new investments to sustain economic growth
of the country. This situation has led to the development
and implementation of toll roads in countries like
Croatia, Hungary, Ireland, Poland and Portugal, in addi-
tion to the traditional toll road countries in Europe, e.g.,
France, Italy, Spain and Norway.
At a country-specific level and with the rising use of
ETC (Electronic Toll Collection) the issue of interoper-
ability across distinct toll roads in each country has
become an increasing challenge. This article will review
the Easytrip concept developed by Egis Projects, cur-
rent trends in one country regarding interoperable toll
(or fee) collection services and then draw some main
conclusions.
Integrated services
The very notion of tolling, in general, is changing,
extending the infrastructure business to include ETC,
ORT (Open Road Tolling), congestion charging, road
pricing and toll road interoperability.
Since 2005, Egis Projects has embarked on the mis-
sion to provide fully integrated services for end users,
toll road/congestion charging operators, HGV tolling
companies, car park companies, etc with the develop-
ment of a corresponding brand name called Easytrip
Services.
This business development strategy is based on man-
aging customer relations across a range of tolling/road
www.h3bmedia.com
Interoperability
pricing sectors and stakeholders whereby Egis Projects
brings to bear almost 20 years of experience in the
development, launching, and operation and manage-
ment of 16 toll operating companies worldwide.
Based on our past PPP concession and turnkey toll
projects and recent new projects (turnkey supply of an
ORT system and operation for the Golden Ears Bridge in
Vancouver, Dublin Port Tunnel operations, and a
contract to design, build, finance and operate the first
section of Vienna’s north-eastern bypass – Austria’s first
PPP motorway project), Egis Projects is promoting and
developing the establishment of an interoperable ETC
or EFC (Electronic Fee Collection) framework within
respective countries.
The best example of the development and implemen-
tation of this strategy is Ireland.
ETC and EFC in Ireland
As part of its PPP programme, the National Roads Author-
ity (NRA) developed an approach towards ETC interop-
erability in Ireland. The NRA imposed standard ETC
encoding and processing rules and, in December 2004,
launched a tender to establish an ETC clearinghouse
organisation, the so-called Information Exchange Agent
(IEA). In Ireland, all ETC systems implemented are
interoperable from a technical point of view, allowing a
tag user to cross any toll facility in the country with a
single tag.
The IEA aims at facilitating commercial interoperabil-
ity through the mandatory exchange of both ETC
ETCetc Vol 3 No 1 61
Interoperability

Service Provider Information

(Tag Issuer) clearinghouse

Lists
Receive
Issuer Consolidate
distribute
Consolidated charging
information

Clearinghouse
Office

Payment Invoice Charging Consolidated

information Lists

Road/Car Park
Operator

Service
User Toll/Car Park
Infrastructure
Service

subscriber lists and ETC transactions among road oper-
ators, enabling settlement of interoperable revenue
between those operators.
With at least 12 toll projects scheduled for operation
by 2010, and therefore potentially 12 different conces-
sionaires (and operators) spread out across the whole
country, there was a strong need for an ETC interopera-
ble network. This would allow a road user to hold a sin-
gle ETC tag providing payments for all toll-operated
infrastructure in the Republic of Ireland: one client, one
tag, one bill.
The business model developed by “This would allow a
Egis for this project has two main infor-
mation flows between the IEA and the
road user in Ireland
operators: to use a single tag
• Information flows with the ETC
tag issuer (pure Service Provider). The
for the whole
tag issuer is delivering the ETC tags to country. One client,
the users, managing their subscribers’
accounts and invoicing them.
one tag, one bill”
• Information flows with the road
infrastructure service provider (Road Operator). The
road operator delivers the infrastructure service (usage
of the road) to the users and collects an ETC toll rate in
return.
As all Concessionaires are not both ETC tag issuers
and road service providers, the solution delivered by
the IEA allows a Compatible Operator to provide one or
both of the services. The interoperability concept has
been turned into real life in Ireland through the IEA
project (operational since November 2005). It has
proven to be a technically robust, time-efficient and
cost-effective tool to support interoperability develop-
ment throughout the country.
Taking advantage of the IEA framework, Egis Projects
has developed a new business in Ireland under the
eTrip banner – an independent service provider to road
users. eTrip is a joint venture between Egis Projects and
ElectroAutomation, a company that has many years of
experience in the field of car parking and access con-
trol. See www.etrip.ie for more details.
eTrip Services Ireland is a specialised company for
the provision of ETC account relationship management
services and ETC tags distribution on the Irish market.
eTrip Services Ireland has invested in an ETC back
office system, a call centre team near Dublin and new
electronic fee collection value-added service offers.
Commencement date of operation was December
2006.
The back office is interfaced to the
IEA to manage ETC interoperable
transactions. This means that eTrip
clients have access to all toll roads in
Ireland.
On top of this conventional ETC serv-
ice, eTrip has embarked on the devel-
opment of additional useful services to
its clients, the road drivers. With their
tags, eTrip clients have access to other
useful and intelligent services such as car parks in Dub-
lin. Besides increasing the ETC customer base by dif-
ferentiating ourselves from other ETC service providers,
the goal is to broaden the range of services supported
on the same platform, thus strengthening our business
model and technology options.
Key benefits of accepting eTrip for car park owners
are:
• Better customer service;
• Customers feel more secure and therefore bet-
ter car park attractiveness, more usage;
• Fewer cash transactions and therefore savings
on cash management;
• Payment guarantee;
• Better customer knowledge and therefore
better service promotion;
• Bottom line increase.

62 Vol 3 No 1 ETCetc www.h3bmedia.com


Service started with a number of Q-Park (the leader of
car parks in Ireland) managed car parks across Ireland.
Other value-added services are also currently under
development in order to accelerate the market devel-
opment of eTrip by offering customers additional ITS
services while they use their cars. Specific services for
trucks and business fleets are currently under develop-
ment (such as fleet management) in order to offer under
the same banner a wide range of ITS services to profes-
sional users.
For instance a commercial agreement has been signed
with Celtrak, the Irish leader in the field of fleet manage-
ment services. Celtrak offers customised fleet manage-
ment services for business and trucks fleet in Ireland
and the UK. As a result, the Irish driver is offered the
much-vaunted, long-expected “one client, one tag, one
bill” service package. (It should be noted here that eTrip
is the Easytrip trade name in Ireland and the UK. Across
the rest of continental Europe, the activity will be devel-
oped under the Easytrip Services banner.)
Market trends
Today, two key trends are occurring regarding the evo-
lution of the electronic tolling market in Europe:
• Nationwide charging for road user charging for
HGVs: There is a growing trend towards nationwide
road user charging for HGVs. Austria, Czech Republic,
Germany and Switzerland have implemented nation-
wide systems for HGV tolling. The Slovak Republic is
currently tendering for an HGV tolling scheme, and
Hungary and the Netherlands are likely to be the next
countries to move towards HGV tolling. Despite Euro-
pean Commission willingness and Directives, interop-
erability across these HGV tolling schemes will not exist
for years to come.
• Toll concessionaires across the country: Coun-
tries following a similar model to Ireland whereby there
are many existing or planned toll concessionaires (and
local road pricing schemes) across the country include
Croatia, Greece, Portugal, Poland and the UK.
The UK’s Department for Transport has decided to
establish “The Interoperability Forum” with key objec-
tives being to help road users make sense of an increas-
ing number of local road pricing schemes, offer greater
convenience and choice for road users, promote com-
pliance and help deliver value for money. The nemesis
for this forum emanates from the model developed and
promulgated in Ireland.
France is currently deploying the TIS-PL scheme for
interoperable electronic fee collection for HGVs on the
current toll roads. However, competition is still some-
what limited due to the absence of a national regulatory
entity for payments on toll roads, unlike the mobile
phone business for instance. Indeed, independent serv-
ice providers are accredited by a private body emanat-
ing from the toll road concessionaires. A different
approach will likely be implemented by the French
Government upon introduction of an electronic toll (tax)
on existing public non-tolled trunk roads and motor-
ways, which is expected to be deployed by 2010
The European Union directives on interoperability
www.h3bmedia.com
Interoperability
(2004) and Euro-Vignette (2006) are creating the con-
cept of European Electronic Toll Service, paving the way
for future development of Easytrip across EU Member
States. A new directive should be issued in 2008 or 2009
allowing actors like Easytrip to collect tolls on existing
toll road networks, provided that they follow accredita-
tion rules. This should be a powerful motor for the devel-
opment of Easytrip services.
Conclusions
Public perception of road charging is migrating from its
image as a tax/toll and the arrival of additional ITS serv-
ices associated with independent tag operators and
service providers is paving the way for this migration.
The perception of Road Pricing is evolving in that it is
not necessarily always viewed as a “tax” – rather as an
instrument providing gains for all stakeholders:
• Public sector gains revenue streams enabling
better and more sustainable infrastructure;
• Infrastructure users gain better access to a
range of ITS services and products; and
• Business sector gains innovative ways of creat-
ing value.
Another important element is that Road Pricing is an
instrument set-up by the Public Sector which should be
efficiently implemented in a competitive framework.
However, careful consideration should be paid to the
resistance of existing toll road concessionaires result-
ing in slowing down the implementation of the European
Electronic Toll Service (EETS). Further attention should
be paid to the role of toll regulators. It is of paramount
importance that they maintain appropriate commercial
conditions enabling independent service providers to
have fair economic return for their services.
In conclusion, the process and lessons learned from
the Irish Government’s approach to interoperability has
culminated in new private sector initiatives to launch
independent value-added services in the ITS road mar-
ket as a means to improve mobility and enhance the
quality of life for road users. E
Steve Morello is Business Development Manager,
Egis Projects and can be contacted via email at
steve.morello@egis.fr
Eric Wurmser is Project Director, Egis Projects and can
be contacted via email at eric.wurmser@egis.fr
ETCetc Vol 3 No 1 63
Electronic Payment

Consumer
nation

64 Vol 3 No 1 ETCetc www.h3bmedia.com


Intelligent Transport Systems have many benefits, but how
best to convince the consumer. Shortens journey times ? Great.
Reduces “historic erosion” of cities and towns? That’s good.
Increases commuter convenience? Excellent. Eases
congestion? Now you’re talking, says SIMON GOODALE
Since the 1980s when the UK’s infrastructure began
to struggle with heavy road use and pollution, and
increased urbanisation meant new highway con-
structions were less viable, Intelligent Transport
Systems (ITS), which use information and commu-
nications technology to monitor and improve road
use, have been developed and implemented across
the country to provide solutions on both a national
and local level.
According to the Department of Trade, ITS helps local
authorities battle congestion problems on a number of
levels. Firstly, it protects the “historic fabric” of cities
and towns eroded by constant or heavy traffic and can
improve access to and from workplaces and facilities by
reducing private car use and improving public trans-
port services to areas with poor access. Safety can be
increased through speed monitoring equipment and
CCTV cameras. The Department has also claimed social
inclusion is “fostered by helping to meet the transport
needs of all social groups” and can
lead to a “more efficient and sustaina- “Major
ble, integrated [transport] system”, infrastructure
helping to regenerate local areas with-
out increasing congestion. schemes can be
There is a huge range of technology- delayed by lobbying
led schemes available, from national
road user charging and main route toll- as consumers fail to
ing and charging plans, to local town understand the
planning requirements such as inte-
grating bus routes with increased park benefits”
and ride schemes; streamlined car
parking access and payment solutions and access to
public facilities.
Ignorance is no excuse
While the benefits of ITS are clear - more efficient travel,
less pollution and fewer accidents - the high front end
capital expenditure often needed for deployment can
mean a long wait for the green light, as authorities
debate the budget expenditure. Major infrastructure
schemes can be delayed by lobbying as consumers fail
to understand the medium or long-term benefits. Local
transport schemes - like the Leeds and Hampshire tram
services in 2005, are often dismissed by the government
as “uneconomical”.
According to Paul Charmatz, Managing Director of
Payzone, a European consumer payments and cash dis-
tribution network, the ITS industry needs to focus on
developing consumer-friendly technology. He believes
there are a number of ways of getting the consumers on
board namely, “developing systems that suit their daily
life and cause minimum disruption, ensuring new sys-
tems are accessible and innovative and communicating
www.h3bmedia.com
Electronic Payment
the benefits of the new systems effectively.”
According to Charmatz, one of the most fundamental
purposes behind a successful ITS is ensuring it improves
the life of the consumer. Parking is a good example.
Whilst finding change for the parking meter combined
with a heavy fine for being five minutes late, are well
known pet-hates of many drivers, intelligent systems
like Payzone’s mParking system in Glasgow, Scotland,
provide an appealing solution. Already present in Syd-
ney, Dublin, Edinburgh, Oklahoma City, Las Vegas and
New York, the system uses the latest technology to allow
consumers to pay on-street parking fees via their mobile
phone and a pre-registered credit or debit card. A text
reminder of when the parking ticket is due to expire can
also be requested. Once details have been registered,
consumers can use the service in any city which oper-
ates the system.
Providing a range of purchase and payment options
together also help ITS appeal to different groups of
society. Payzone offers a wide range of
ticketing options including
e-vouchers, mobile phone ticketing,
travel cards, and web ticketing. E-
vouchers enable travellers to buy their
bus or coach ticket in advance.
In Staffordshire, UK, Payzone has
developed the first multi-operator bus
ticket, which allows consumers to buy
daily, weekly or monthly bus tickets
from 200 locations offering Payzone
terminals across the region. Named
the “SMART” ticket, the scheme can be used on a number
of popular bus operators including First, D&G, Wardles,
Scraggs, RML, Procters, Arriva Midlands and Bakerbus,
giving travellers the freedom to hop on and off buses
using just one ticket and offering greater flexibility and
choice of payment. Mobile phone ticketing services
enable commuters to order, purchase and receive tick-
ets via their mobile phone. Tickets are delivered to
ETCetc Vol 3 No 1 65
Electronic Payment
mobiles either as an SMS text message or a java bar-
coded ticket and are secure and encrypted, ensuring
against duplication of tickets.
Additionally, smart card tickets enable commuters to
either load money on to a travel card or buy weekly or
monthly tickets. The card can be used until the money
runs out or without limit for the time frame purchased
and ends the need to carry change. Web ticketing pro-
vides web-based registration, transaction and customer
account management, which allows travellers using
both smart card and mobile phone ticketing to view
account history. For many of these new transaction proc-
esses, building familiarity on a local level helps intro-
duce similar schemes on a larger or national level.
Convenience and accessibility are also important fac-
tors in making ITS acceptable to consumers. Prepaid
networks like Payzone, are now offering consumers the
option of buying prepaid tickets, paying congestion
charges or declamping cars at local convenience stores
across the UK and Ireland. “Whatever section of society
you come from, one thing that unites all commuters is
convenience.
Whether you are a regular bus user who wants to buy
a monthly ticket in advance or you own a BMW which
has just been clamped, being able to pay for either at
your local corner shop,is incredibly appealing”explains
Charmatz.
66 Vol 3 No 1 ETCetc
Ireland’s M50 Motorway Toll
Payzone plc recently won the contract to provide BetEire
Flow, the operator of the planned barrier-free tolling
system on Ireland’s M50, with retail and on-line toll
payment services for users of the motorway.The M50
motorway is a National Primary Route around Ireland’s
capital city, Dublin.The road carries in excess of 100,000
vehicles per day.
The National Roads Authority announced the barrier-
free tolling system will be introduced on the M50 in August
2008, replacing the existing barrier toll system. The
contract means M50 users will be able to pay the M50 toll
charges at any of Payzone Ireland’s branded network of
two thousand convenience stores, which already offer
Payzone’s mobile phone top-up and other services. Road
users will also have the option of paying the M50 toll
charge via the internet or by telephone using Payzone’s e-
payment solutions. M50 users who register with BetEire
Flow will benefit from lower toll rates.* The new tolling
system is among the first multi-lane barrier-free tolling
systems in Europe and is regarded as a flagship project for
road usage charging.
Chief Executive John Nagle said the contract would
“provide an alternative and convenient way for members
of the public to pay for road usage on the M50 motorway
in Ireland” and “leverages the R&D investment [the
company] made some time ago in developing innovative
parking and other payment solutions for the road
transport sector.”
But the appeal is not solely consumer-focussed. For
local authorities, ITS providers offer flexibility, point of
sale productivity and a national cash handling service.
This means the onus of collecting parking fines and con-
gestion or toll charges can be passed on to companies
like Payzone who simplify the process by providing
large number of accessible payment points and also an
invaluable cash collection service from retailers. The
key is to ensure the provider has the R&D backing to
offer its transport clients bespoke and flexible solutions,
whether they are bus operators or local authorities.
Finally, whilst the benefits of ITS may seem clear,
Charmatz is quick to point out the importance of effec-
tive communication. “A common misconception is that
implementing ITS is extremely costly. In actual fact, the
use of existing infrastructure makes initial set up and
subsequent management costs surprisingly low.” Con-
sequently, he believes public communication needs to
be at the forefront of ITS, in order to create positive opin-
ion, build momentum and help the successful and seam-
less introduction of new services.
Charmatz concludes “I believe ITS has a great deal to
offer the transport sector. If the industry continues to
keep the consumer as the main drive for innovation, I
anticipate huge improvements in congestion, pollution
and convenience in the future and I am thrilled Payzone
is part of it.” E
www.h3bmedia.com
CARE, COMPASSION
AND CONCERN ON
THE FREEWAY
Some of the differences between Samaritania Incorporated’s service patrol programs and others:
01 Our patrol vehicle operators have state and
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not cost to motorists.
03 Provide Internet based Fleet Management
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recording/reporting systems.
05 Personnel, vehicles, equipment, AVL/GPS,
patrol dispatch centers, and public relation
programs.
06 The most experienced provider. Over
27 years providing service patrol
programs throughout the U.S.
07 Provide the widest variety of quick
clearance, motorist, and public safety
assistance.
08 Provide a variety of different custom service
patrol vehicles with and without tow
capabilities.
09 Endorsed by Departments of Transportation
and State Governments.
10 Endorsed by State Police, Fire/Rescue,
and other public safety agencies.
11 National award winning programs.
12 Consistent media recognition.
13 Rural, remote area, and urban program
applications.
Samaritania Incorporated,
10 Riverside Drive, Lakeville, MA 02347, USA
Tel: +1-508-947-3700
Fax: +1-508-947-5544
www.freewayservicepatrol.com
info@freewayservicepatrol.com
14 All program service costs included in
single patrol hourly billing rate.
15 Operators adhere to detailed conduct
policies
16 Standard Operation Procedure
Development
17 Local office and project management
18 Provide Complete Indemnification and
hold harmless agreements.
19 Provide audited financial resources.
20 Operators have perfect no-fault safety
records. Zero fatalities.
21 Private Sector funding available to
offset costs.
Enforcement

Many European countries, for example Czech clearly in bringing the random effect to the system. The
Republic, Slovak Republic and Hungary, are cur- drivers are not aware of its position so they cannot avoid
rently in the process of introducing nationwide toll- it so easily. The operation is however more expensive
ing systems and other countries are preparing for (replacement of the technology, data transfer, and power
this task too, as it will be a necessity in the near supply).
future. Mobile enforcement: the enforcement technology is
These countries are used as a convenient corridor by installed in a vehicle moving along with trucks in the
many drivers for transit. This is true especially for large traffic stream. Contrary to the fixed enforcement, it intro-
trucks, which cause the most damage to the road infra- duces a large random effect in the enforcement system.
structure and are also causing the highest environmen- The drivers cannot be sure not to meet the mobile
tal and safety risks (1). enforcement unit (MEU). It processes just a limited
In each of these tolling schemes automated enforce- number of vehicles; however it can focus direct on prob-
ment plays a very important role. An enforcement sys- lematic vehicles or foreign vehicles.
tem has two major functions. First, it detects all violators For the purpose of this paper, the mobile and portable
and collects all required proof material so that they can enforcement is denoted random enforcement (RE),
be found and made to pay the fee. The second aspect is because these both parts introduce the randomness to
more indirect: the presence of a good enforcement sys- the enforcement process.
tem has a positive effect on driver behaviour and
decreases the number of attempted violations. Factors affecting the level of enforcement
The enforcement system is necessary, but rather The type of the tolling system and the technology used
expensive. The original investment is rarely small and at has a significant effect on determining the needed level
the same time an automated enforcement system
requires rather high operational costs. The real cost of
operation of the enforcement system differs among the
different systems and providers, but it cannot be
eliminated. In Switzerland, toll system operating costs,
including amortization of all infrastructure, vehicles and
IT, accounts for 6 per cent of toll revenue, in Italy 8 per
cent, in Austria 10 per cent and in Germany it accounts
for an incredible 24 per cent(2).
The conclusion supported by experience from exist-
ing projects shows(3) that a completely enforced system
would cost much more than the retrieved revenue,
including fines. Also, the maximal net revenue can be
achieved with a low enforcement sample.
Also for this reason, a decision about the requested
level of enforcement is met in each project and its
importance cannot be underestimated. It is often done
by the toll charger and it can be used to maximize per-
formance of the overall tolling system. In many projects
this decision is made directly by the customer, often a
government, and the requirements are part of tender
documentation. This cost will affect the overall costs of
all offered projects and it is easier to compare the differ-
ent offered solutions.

Components of automated enforcement

Basically, the enforcement system consists of the follow-
ing distributed components(4):
Fixed enforcement: all equipment needed for the auto-
mated enforcement including evidence collection is
placed at the road-side on a fixed gantry. It is able to
process large data volumes (all vehicles passing under
the gantry) with low operational costs. The drivers can
however learn where they are placed and attempt to
avoid them. Also the processing of the offenses (espe-
cially in case of foreign vehicles) can be long and costly
process.
Portable enforcement: the components are very simi-
lar to the fixed enforcement, just installed on a portable
infrastructure so it can be easily moved. Its advantage is

68 Vol 3 No 1 ETCetc www.h3bmedia.com


of enforcement. In case it is easy to avoid payment (for
example to switch off the OBU, or not install OBU at all, to
manipulate the communication channels and others),
there are higher expectations on the enforcement
system.
There is also a difference between DSRC and GNSS/
CN based systems. In case of a DSRC system, the OBU is
rather simple. The data is sent just when the OBU passes
a gantry on the road. The OBU for a GNSS/CN system is
more complicated. It is usually equipped with DSRC
components, but also a GSM module, for example.There
are more potential sources for manipulation. On the
other hand, the OBU collects the GPS coordinates from
the total trip. There is a possibility for additional check
of feasibility (for example, the OBU is switched off, parts
of the trip are not covered).
Road network
The type and structure of the road network plays a very
significant role too. The drivers have different behav-
iour patterns in case there are many parallel roads which
Fuzzy logic
ONDREJ PRIBYL on determining the optimal scope of
enforcement for elecronic fee collections systems
www.h3bmedia.com
Enforcement
can be used for avoiding the tolling segments or the
segments on which the enforcement gantries are known
to be placed. This is also an important factor in deciding
on the placement of the enforcement gantries.
Traffic volumes and structure
The type and scope of enforcement used depends also
on the structure of the traffic and its volume. In case there
is not a high volume of traffic, an enforcement gantry is
uneconomical. In such case a mobile enforcement unit
(MEU) can lead to better and more effective results. On
the other hand, the MEU can check just a small percent-
age of vehicles travelling in high volumes.
Systematic error minimization
The type of enforcement used also depends on our basic
objectives. The fixed enforcement is able to check all
vehicles traveling on a given road segment. On the other
hand, the drivers quickly learn where the gantries are
and the violators can attempt to avoid them by using
alternative roads, or by tampering with the OBU or even
ETCetc Vol 3 No 1 69
Enforcement
the license plate. Some vehicles can, thanks to inconsist-
encies in the system, systematically avoid enforcement.
Small pickup trucks which can be, for example, always
automatically classified as non-tollable, even though
they should pay in some schemes. The drivers know
about these errors in the system and start capitalising
on it.
All of these problems can be solved by introducing
random enforcement (RE). It has a lower processing
capacity, but introduces the beneficial random effect in
the whole process. A significant number of RE ensures
that the tollable vehicles can never be sure of not being
enforced. The MEU can focus especially on “not-so-typ-
ical vehicles” which could otherwise use a systematic
error in the automated enforcement system, or foreign
vehicles whose enforcement is otherwise very
complicated.
Economical aspects
When realizing an enforcement system, its prime objec-
tive is to motivate people to pay the toll. The principle is
depicted in Figure 1 and described below.
The X-axis denotes the level of enforcement, from
none to complete enforcement. Even in case there is no
enforcement at all, a certain portion of users tends to
pay the toll anyway (Point A). The number of the users
differs based on many factors. Point B corresponds to
the situation where there is a complete enforcement
(user have no chance of driving without paying). This
cannot generally be done in freeflow systems. An exam-
ple is a closed system, where users must stop at the entry
and exit point, and pay on site.
The Y-axis denotes the revenues collected by the toll-
ing system. If there is none enforcement the loss of rev-
enues is rather high (100-A). If there is complete
enforcement, there is no loss of revenues. However,
reaching this point is expensive.
The basic objective is to find a point in which the mar-
ginal loss of revenues approximately equals the mar-
ginal cost of increase in the level of enforcement (for
example building one new gantry, or introducing one
new MEU). Such a point is denoted O in the figure and
can be determined as point on the curve where the mar-
ginal changes of R and E equal:

R
O: 1

E
Fear of enforcement
There are also many other important issues affecting the
decision.We would like to stress out the following, which
could be shortly denoted as the fear of enforcement.
First of all it is the presence of alternative enforcement
methods next to automated enforcement, such as audit
systems in companies. The violators can never be sure
that they will not be caught, even some time after the
committed violation.
Also the amount of the penalty to be paid for in case of
proved violation serves as an efficient deterrent. In
cases where the the penalty is large, the need for a
sophisticated enforcement system is lower, because
fewer drivers will take the risk.
70 Vol 3 No 1 ETCetc
FESOLE provider
Usually, a government organization must decide on the
level of enforcement requested. However, the responsi-
ble personnel are not always familiar with the technical
background and for this reason can be easily manipu-
lated, for example by lobbyists. In order to avoid this, a
fuzzy expert system named FESOLE was developed at
the Czech Technical University in Prague(5).
What is a fuzzy expert system?
An expert system is an SW application which aims to
replicate a decision made by an expert or an expert
group.
The knowledge collected from experts is stored in a
form of decision rules (IF-THEN rules) in a knowledge
database. The decision (reasoning) is made based on an
inference engine. The data about actual cases is
collected using a user interface and stored in working
storage.
In order to enable the use of linguistic variables such
as “high level of enforcement” and vague information,
fuzzy logic is combined with the common expert sys-
tem. Fuzzy logic enables the expression of human
knowledge in a comprehensive matter. For example, we
do not need to express variable “level of coverage” by
an exact (crisp) value (53.5 per cent), but we can express
it using human description, such as “medium”.
The fuzzy set theory provides us with tools to define
such variables, and to work with them in the model,
mapping the vector of input values and the parameters
of the model
to the output vector y :
y = f (x ,
)
Based on the theoretical foundations, a fuzzy expert
system was developed using the software environment
Matlab and calibrated for the given problem, i.e. what is
the ratio of the enforced sections to the overall number
of tolled sections?
Evaluation of FESOLE
In order to demonstrate its suitability, a few scenarios
corresponding to real world projects were selected.
Scenario 1: German Tolling System(7)
Scenario 2: Czech Tolling System(8) - Phase 1
Scenario 3: Czech Tolling System - Final Phase
The input values were set based on expert evaluation
Figure 1: Example of the curve presenting the effect of the level
of enforcement on the loss of revenues.
www.h3bmedia.com
 Enforcement
Table 1: Example of the set inputs parameters as well as results of the model

INPUT
Scenario Scenario Scenario
Questions 1 2 3
How many tolled sections are there? 5371 352 852
I1 How important is it to minimize the loss of revenues? 3 7 6
How would you quantify fear from alternative
I2 enforcement tools? 5 3 4
How easy is it to take an alternative route and avoid
I3 enforcement? 2 8 5
I4 How easy is to tamper with the technology? 6 4 8
OUTPUT
Requested/realised level of enforcement
(sum of fixed, portable and mobile enforcement) 580 71 146
The level of enforcement computed by the model 10,90% 24,90% 16,90%
Corresponding number of enforcement estimated by
the model (sum of fixed, portable and mobile
enforcement) 585,4 87,6 144,0
of given scenarios and available documentation. An Ing. Ondrej Pribyl, Ph.D. is product manager at
example which compares the different input values is ROBOT Visual Systems GmbH in Germany.
provided in Table 1 (above). The expected or requested He can be contacted via email at
results, known from the realized projects, as well as the ondrej.pribyl@robot.de
results from the FESOLE model are also presented.
The results for scenarios 1 and 3 are very close to the References
requested values, the difference is smaller than 2 per [1] Egeler Ch.: Management of EFC through DSRC Inter-
cent. In scenario 2 the difference is larger, about 20 per operability in the Alpine area. Rapp Trans AG. Paper pre-
cent. The model could be waiter calibrated to meet this sented IBTTA Fall technology workshop, 13-16 November
result. However, scenario 2 describes just a preliminary 2004, Madrid, Spain
phase of the project realized in the Czech Republic. The [2] Uhlmann, E. “Germany’s Troubled Maut System: Our
author supposes that the level of enforcement requested Fears Have All Come True”. EuroTransport Intelligence
was underestimated in order to allow fast implementa- Report,Volume 1 No24, 27 October 2003.
tion of the tolling system. [3] Stappert. K.-H. “Fixing a hole. Enforcement of Large
For this reason, the model was not calibrated to repli- Open Road Tolling Schemes.” IBTTA Spring Technology
cate also this request and rather represents the know Workshop, Berlin. June 11th, 2007
how of the experts. [4] Pribyl, O. “Modular Enforcement System for Elec-
tronic Fee Collection Systems in the Czech Republic“.
Conclusion Paper presented at the First International Conference:
This article has presented the different factors affecting Transport Policy and the Market in the Czech Republic
the needed level of enforcement for electronic fee col- and EU, Prague, 9.-10.3.2005, Abstract proceeding, p. 32
lection systems. This knowledge is especially needed and paper included on the CD proceeding (in Czech).
by the authorities preparing EFC tenders. This decision [5] Pribyl, O. “Fuzzy expert system for determining the
is very important because it decides on the costs of the optimal level of enforcement. Paper submitted for presen-
system and at the same time on the collected revenues. tation on ITS Congress New York 2008.
In order to make a first estimation on the level of [6] Turban, E. “Expert System and Applied Artificial
enforcement needed, the FESOLE fuzzy expert system Intelligence“. New York: Macmillan Publishing Company.
was developed. The results of this system on three real 1992.
life European projects were presented. The results [7] TollCollect http://financecommission.dot.gov/Doc-
obtained are really promising. As the next steps, more uments/The%20German%20GNSS%20Toll%20System
real life projects will be studied, their significance %20on%20Motorways%20and%20on%20Main%20Roa
(truthfulness) will be discussed and the model will be ds_Martin%20Rickmann.ppt#1 (accessed 10.10.2007).
calibrated to meet the results. [8] Ceska republika - Ministerstvo dopravy. Zadavaci
The author hopes it becomes a tool helping in the dokumentace verejné zakazky Poskytovani sluzeb a
coming real projects and that the system will be used by dodavek vybrane infrastruktury k realizaci projektu
responsible institutions during the phase of tender vykonoveho zpoplatneni vybranych komunikaci v CR.
preparation. E 13.7.2005.

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