CONGESTION PRICING                                    

• Introduction
• Rationale
• System Description
• Congestion Pricing
• The Effects of Different Types of Congestion Pricing
• Systems Approach:  Europe to the United States
• Implementation
• Funding
• Assessment
• Key Results
• Benefits
• Costs
• Where is Congestion Pricing Implemented?
• Case Studies: Variable Tolls on Toll Facilities; Lane Pricing (HOT and FAIR); Cordon Tolls
• Links
• References

INTRODUCTION

“Congestion pricing” is also known as “value pricing,” “peak-period pricing,” time-of-day pricing,” and “variable pricing.”  To avoid the word “toll,” transportation experts and politicians have coined various terms for the same concept. 

Essentially, congestion pricing harnesses the power of the market to reduce the waste associated with traffic congestion, according to Patrick De-Souza of the Federal Highway Administration (FHWA). It can encompass a variety of market-based approaches to respond to congestion problems.
Congestion pricing is connected with other key technologies and congestion-reducing concepts like electronic toll collection, carsharing, ridesharing, parking pricing, Mileage-Based Automotive Leasing and Vehicle Taxation, and Pay-As-You-Drive Automotive Insurance. 
Systems Approach:  Congestion pricing works best to reduce congestion when paired with other programs like carsharing.  This concept of combining several strategies to reduce congestion is known as taking a “systems approach.”  The systems approach method is used more in Europe than the United States. While a notably successful strategy, it is harder to implement because it requires cooperation amongst many levels of government and industry.  For example, successful European carsharing organizations paired with automotive and public transit systems to increase their marketability.  Paired with congestion pricing, driving levels in impacted areas and during peak periods dramatically fell.  The most successful cases of congestion pricing take a systems approach.  The successful cases also put a large part of the revenue into public transportation or transportation alternatives.

A distinction should be drawn between tolls to fund roadways ("road pricing") and tolls to reduce congestion (congestion pricing, value pricing, etc.) as these have different objectives and impacts. Congestion pricing seeks to charge drivers for the “true costs of congestion.”  This includes environmental as well as road costs.  Therefore, it is common for the proceeds from congestion pricing to be allocated to environmental and public transportation costs.  A portion of revenues must be dedicated to tolling infrastructure and labor costs.

RATIONALE

The cost of traffic congestion in 75 urban areas was 67.5 billion in 2000, according to the Texas Transportation Institute.  During the evening rush, 25% or more of the cars on the road are not carrying people to or from work. A peak-period toll could encourage some of these discretionary travelers to make their trips off-peak, or to use less congested routes.
Many economists argue that urban traffic congestion is virtually impossible to reduce without some sort of congestion pricing to more efficiently allocate limited roadway capacity. In most cases, increasing the capacity of a road does not in the end reduce congestion because motorists who previously used other roads, traveled at off-peak times, or took public transit tend to abandon those routes and modes for the rebuilt road. Before long, despite their higher capacity, these roads are as congested as before (Holtz-Eakin 2003).
By recognizing that trips have different values at different times and places and for different individuals, congestion pricing provides incentives for more efficient use of existing highway capacity; it can also signal the need for future capacity expansion. Because congestion grows rapidly as roads near capacity, even a small reduction in the number of cars on the road can substantially reduce congestion-related delays and crashes. Variable pricing, Lane Charging, and Cordon Tolls are three main forms of congestion pricing.
Congestion pricing may lead to:

• a reduction in total trips,
• in the long term may motivate changes in residential or workplace locations,
• raise the number of high-occupancy vehicles on the road,
• raise the number of people using public transit,
• shift trips to off-peak periods and routes away from congested facilities,
• raise number of people using public transit,
• and generate funding for projects, including projects that improve public transportation.

ASSESSMENT

Travel Impacts
Congestion pricing can have a number of travel impacts depending upon the variability and range of prices, the price elasticity of demand for the tolled facility, the level of availability of travel alternatives, and schedule flexibility.

Economists measure price sensitivity using price elasticities, which are defined as the percentage change in consumption caused by a percentage change in price. For example, a price elasticity of -0.1 for urban highways would indicate that a 10% increase in tolls would reduce vehicle use by 1% if everything else remained the same. But "prices" in this case should also represent perceived user costs, which can include time and discomfort, in addition to money. If delay were also reduced, then the "price" the motorist pays for the toll, if it included time saved from traveling on less congested roads, will not necessarily be greater.

Potential travel impacts are:

• A change in the time of travel. Peak traffic may shift to off-peak with a consequent reduction of peak period traffic.
• A shift in mode from automobile to alternative travel modes (transit, carpooling, cycling etc.), gradually reducing traffic.
• A shift in routes to untolled roads or less tolled roads.
• Combining more activities into a single trip.
• A change in destination. Changes in work or residential location, or for non-work trips, shorter trips could potentially be made. If congestion pricing were to be implemented on a regional level, land use patterns would be affected—although it is still unclear how. Some argue that it would discourage sprawl; others believe it would increase decentralization.

As illustrated by this list, the range of behavioral adaptations to congestion pricing is complex. The main determinant of the level of impact is the price elasticity, which fluctuates depending upon the region, country and availability of alternatives to the automobile, alternate routes, or schedule flexibility. Cities with excellent public transportation systems will normally have higher price elasticities because car travel will be more sensitive to price changes (because people can take transit more easily).

Many studies have arrived at price elasticity estimates of between -0.1 to -0.4 for urban highways. A 2002 survey of automobile long-distance commuters indicates that financial incentives are the most effective strategy for reducing car trips. A $3 round-trip toll was expected to reduce automobile commuting by 25%. A 2000 study involving time- and mileage-based pricing found that motorists reduced peak-period trips by 22%, total trips by 6%, peak mileage by 25% and total mileage by 12% ("Road Pricing").

Equity
Equity refers to the distribution of benefits and costs resulting from a policy decision. Some common equity-based objections to congestion pricing include:

• the argument that low-income people may be priced off the road during the peak period and
• that congestion pricing is actually a double tax: motorists are being asked to pay to use a facility that was initially financed through gasoline and other taxes.

Despite these objections, studies of users of the "value priced" lanes on Rt. 91 in San Diego, for example, have shown that a significant proportion of the frequent users are in both higher and lower income brackets. This suggests that people who are less wealthy still value their time and thus are willing to pay a toll to save time. Moreover, value pricing systems like "FAIR lanes" may allay equity concerns because they allow for all motorists to benefit by either saving time or acquiring financial credits. Congestion pricing will only be inequitable and regressive

• if low-income drivers are not adequately compensated for the higher tolls, or
• in the absence of reasonable transportation alternatives.

If the value to the consumer of the saved time plus a portion of the redistributed revenues (if these are returned in some manner such as direct transfers or other mechanisms) is larger than the cost of the toll, then the consumer is better off.

Similarly, for the traveler who chooses untolled but congested roads, if the cost of waiting in line is lower than the benefit of the transfer, then she or he is also better off.

Under the right redistribution policy most people across income groups can be made better off (whether one chooses to wait in congestion or pay to save time). Regarding the double tax issue, critics often ignore the fact that it costs more to provide capacity for the peak period than for off peak. This is the rationale for peak load pricing of utilities. With smaller peaks, less capacity is needed.

Benefits

Congestion pricing provides a number of potential benefits, such as

• Reduced traffic congestion:  Reduced traffic congestion, especially peak-period congestion.
• Increased road savings: Reduced new road construction to serve peak-period demand.
• Increased parking savings: If total car trips are reduced, there will be less of a parking demand in urban areas.
• Enhanced transportation choices: In areas with HOT lanes, travelers may chose between the following three options: drive for free in congestion; ride a bus or take a carpool for free in the HOT lane, or drive alone and pay a toll in the HOT lane.
• Increased safety: Congestion pricing when paired with traffic reduction strategies like ride-sharing, has shown a reduction in automobile accidents.  In urban areas, pilot congestion pricing studies have shown a general decrease in traffic accidents involving injuries.
• Reduced emissions of pollutants, greenhouse gases, and energy consumption:  Reduced congestion will reduce emissions of hydrocarbons, carbon monoxide, and carbon dioxide; reduced congestion will also reduce fuel consumption. If overall trips are reduced, emissions of nitrogen oxides will be reduced as well.
• Congestion pricing, when paired with strategies for decreasing vehicles on the road and promoting alternative forms of travel like walking, bicycling, or public transit, show a marked increase in public health and wellness. 

Costs

• Toll collections infrastructure, staffing and enforcement
• Inconvenience to motorists in time required to pay the tolls
• Financial costs to consumers for paying the toll. This is actually not a cost but an economic transfer from the travelers to the toll authority. How this transfer affects the consumer ultimately depends on how much she or he values the time savings and the redistributed revenues (if any) over the cost of the toll.

Implementation and Operational Challenges

The main challenge to the implementation of congestion pricing is opposition from groups who fear they will be worse off once pricing is established.
Users generally accept congestion pricing on a single lane that was not previously available if other lanes are free, as with HOT lanes. Where all previously free lanes are tolled, there is often opposition because the toll is perceived as imposing double taxation on all users and creating hardship for less affluent drivers.
Cordon tolls face an additional challenge: settling on the location of the cordon.
One of the big lessons learned from many of the congestion pricing projects is that marketing, public education and public involvement with the project, and transparency in terms of toll revenue redistribution are essential to gain wide support.
There are also statutory challenges. 
For example, tolls are prohibited on the Interstate Highway System, except for roads that already had tolls in place before they were incorporated into the system (e.g., the New Jersey and Pennsylvania Turnpikes) or where exceptions have been made for the implementation of pilot projects. (23 U.S.C. § 301.)  Congestion fees, as well as most other types of fees, are also prohibited on the inland waterways because of the Interstate Commerce clause, according to the Army Corps of Engineers. Therefore, addressing some of these restrictions would be necessary to make greater use of congestion pricing. (GAO-03-735T Reducing Congestion)

Federal Legislation
http://ops.fhwa.dot.gov/publications/congestionpricing/sec6.htm
There are three programs or provisions within the Federal-aid Highway Program that support congestion pricing:
Value Pricing Pilot Program: This program, initially authorized in the Intermodal Surface Transportation Efficiency Act (ISTEA) in 1991 as the Congestion Pricing Pilot Program, encourages implementation and evaluation of projects encompassing a variety of strategies to manage congestion on highways, including both tolling of highway facilities and other pricing strategies not involving tolls. This is the only program that provides funding.
High Occupancy Vehicle (HOV) Facilities: This program allows states to charge tolls to vehicles that do not meet the established occupancy requirements to use an HOV lane if the state establishes a program that addresses the selection of vehicles allowed in such lanes and procedures for enforcing the restrictions.
Express Lanes Demonstration Program: This program permits tolling on up to 15 selected demonstration projects to manage congestion, reduce emissions in a non-attainment area, or finance new and existing Interstate lanes for the purposes of reducing congestion.
Title 23 United States Code Section 129 Tolling Agreements: Section 129 allows tolling of non-Interstate highways as well as Interstate bridges and tunnels. There is no limit to the number of agreements that may be executed.
U.S. DOT's Congestion Relief Initiative
The U.S. Department of Transportation's Congestion Initiative further focuses the above tolling programs toward the overall goal of relieving congestion. The Department seeks to enter into Urban Partnership Agreements with selected cities.

Where It is implemented

Most technological components for congestion pricing have been tested and demonstrated throughout the world and are ready for widespread deployment.   Find below a summary of implementation cases by geographic location and implementation date. 

Summary of Implementation Cases Categorized by Geographic Location
North America
United States: California:  San Diego (1996) I-15 FasTrak; Orange County (1995) State Route 91 Express Lanes;
Florida: Lee County (1998-expansion in 2003) Cape Coral and Midpoint Bridges; Broward County (2003) Sawgrass Expressway
Texas:  Houston (1998) Katy Freeway and 290
New Jersey:  New Jersey Turnpike
New York: Westchester County, NY (Tappan Zee Bridge over the Hudson River)
New York and New Jersey (2001) George Washington Bridge, Lincoln Tunnel, Holland Tunnel, Goethals Bridge, Outerbridge Crossing, and Bayonne Bridge.
Minnesota:  Minneapolis (2005) I-394 MnPASS
Colorado:  Denver (2005) US 36 and Pecos or I-25 north of US 36;
Utah:  I-15 Express Lane Pilot Project - Salt Lake and Utah County (September 2006)
**In the U.S. there are no congestion pricing cases where free lanes are transformed into toll lanes. All the projects are either transformations of underutilized HOV lanes into HOT lanes or toll reductions during off-peak periods when tolls were already in existence.
Canada: Toronto (1997) Highway 407
Asia: Singapore (1975) Several central business areas; Seoul, South Korea (1996) two key tunnels connecting north and south Seoul; Hong Kong (1993, 1997—failed implementation attempts)
Australia:  Melbourne (1999) Several Major Freeway arteries in North and West Melbourne called “CityLink”
Europe: Bergen, Norway (1986); Stuttgart, Germany (1998); Trondheim, Oslo, Stavanger, Norway (1991); Paris, France (1992); Rome, Italy (2002); London, England (2003); Stockholm, Sweden (2006)

CASE STUDIES

SELECTED CASE STUDIES
Case studies grouped by the three general types of congestion pricing strategies:  Variable Tolls on Toll Facilities, Lane Pricing [High Occupancy or Toll (HOT) and Fast and Intertwined Regular (FAIR) Lanes], and Cordon Tolls.
 
Variable Tolls on Toll Facilities:  In this form of pricing, tolls on congested toll facilities are varied by time of day with the intention of encouraging some travelers to use the facility during less congested periods or shift to other modes or routes. Any shift of travelers will benefit the remaining peak period travelers since travel delays will decrease. (Excerpted from the Hubert H. Humphry Institute of Public Affairs website)

Summary:  New Jersey:  New Jersey Turnpike; New York:  Westchester County, NY (Tappan Zee Bridge over the Hudson River); California:  San Diego, Orange County; Florida:  Lee County, Broward County (Open Road Tolls pilot study); Canada: Toronto, Highway 407;
New Jersey (2000)
The New Jersey Turnpike Authority operates a 148-mile facility with 28 interchanges. It is one of the most heavily traveled roadways in the country with average daily trips exceeding 500,000 vehicles. The Turnpike's variable pricing program began in the fall of 2000. The program provides for tolls that are about twelve percent higher during peak traffic hours than during off-peak periods for users of the electronic toll collection system. The price differential is scheduled to increase in a phased manner over several years.
The introduction of variable tolls has improved traffic flow and provided associated air pollution and energy consumption benefits. Preliminary data show that value pricing is working to shift traffic out of the peak period. Most of the recent growth in traffic on the Turnpike has been in the off-peak hours, with total traffic up by around seven percent, but morning peak traffic up by only six percent and afternoon peak traffic up by only four percent. The proportion of daily Turnpike traffic accounted for by the morning peak dropped from 14 percent to 13.8 percent, and the afternoon peak's share of traffic decreased from 14.7 percent to 14.3 percent. However, these changes need to be studied carefully before drawing any conclusions related to the impact of value pricing program.  (Excerpted from FHWA website)

New Jersey and New York (2001)
In March of 2001,  the Port Authority of New York & New Jersey changed from fixed to variable priced tolls (price is lowered during off-peak periods and if the driver is using E-Z Pass). The fixed tolls, with incentives for frequent commuters, had been found to actually be increasing congestion.
The charges vary depending on the time of day and type of vehicle. 
The Port Authority provides a 20 percent ($1.00) discount for off-peak tolls on its bridges and tunnels crossing the Hudson River between New York and New Jersey. Peak toll rates are effective on weekdays form 6-9 a.m. and 4-7 p.m., as well as on weekends from 12 Noon to 8 p.m. An estimated 125.2 million vehicles used the tunnels and bridges in 2002, and approximately 62 million interstate bus passengers use the interstate crossings annually.

The data indicates that 35 out of 505 (representing 6.93% of individuals and 7.4% of car trips) individuals changed behavior after the Time of Day Pricing Initiative. The analyses indicate that users responded in a combination of ways to the new toll schedule. This includes: Decreased travel by car + increased use of transit (2.6%); Increased use of transit + increased / start carpooling (1.8%); Decreased number of trips during peak and increased during off peak (1.5%); Decreased number of trips during both peak and off peak (1.3%); and Increased use of public transportation + switched to E-ZPass (1.2%).

The analyses conducted using a data set collected for another purpose for the PANYNJ indicate that among E-ZPass users who are aware of the off-peak discount program, 16% had changed their travel schedules to enjoy the off-peak discounts. This represents 7.68% of the E-ZPass users and 5.33% of the total number of users. The data also suggest that carriers are responsive to receivers' desires in terms of delivery times. 93% of the carriers that indicated they cannot change delivery times, cited receivers' opposition as the key factor. The project team will corroborate these findings using a survey targeting commercial carriers. As excerpted from the Federal Highway Administration website.)
Port Authority Toll Facilities (excerpted from the TCM Encyclopedia.)

Although the off-peak price differences are modest ($1 per trip, a 16-20% discount), the effects have been significant. Comparing one typical day in May 2001 - less than 2 months after the variable pricing program went into effect - with a typical day in May 2000, the Port Authority analysis found that 7% fewer drivers used the agency’s bridges and tunnels during the morning peak hour period and that 4% fewer were traveling the crossings during the afternoon peak hours.  These declines amount to 5,150 fewer vehicles in the morning’s most congested hours and 2,500 fewer during the early evening rush.
Significantly, the shift of traffic out of the peak hours was accompanied by an increase in off-peak travel, as well as by increased car-pooling and transit use. The same May-to-May analysis found that 7% more vehicles (+ 2,150) used Port Authority facilities between midnight and 6am in 2001, with roughly half of the total vehicle increase occurring between 5-6am.  The agency also said there were “significant” gains in traffic between 3-4pm and that 3,350 more trips were made during the off-peak hours, 9am-3pm.
Also, 7% fewer trucks (-450) are traveling Port Authority crossings during the morning peak, while 4% more (+270) are traveling during the overnight hours of midnight to 6am. The shift out of the afternoon peak hours, at 50 trucks, is less significant.
Westchester County, NY (Tappan Zee Bridge over the Hudson River) (2001)
Results from a 1999 follow-up study conducted by the NY State Thruway Authority on congestion pricing on the Tappan Zee Bridge show that even modest price differentials between peak and off-peak toll rates stand to significantly reduce rush hour congestion on the chronically clogged bridge.
The base Tappan Zee Bridge toll is $3, collected only in the eastbound direction over the Hudson, which serves the I-287 corriodor. But drivers using the bridge at least 17 times per month pay only $1. The Thruway Authority estimates that more than 75% of rush hour drivers pay the $1 rate. As excerpted from the TCM Encyclopedia.  (Reference below.)
The following information is excerpted from "Mobilizing the Region – Sept. 1999." The study finds that the direct effect of higher peak prices is the shift of a significant number of drivers to other travel times. It also found that some travelers—who now shun peak hours due to congestion—return to them once the peak/off-peak price break has eased traffic flow.

Present-day toll is $1 for daily commuters. "Shift into peak" under pricing scenarios represents drivers who now avoid the peak because of congestion, but would shift back and pay the higher toll to take advantage of the freer flow of traffic created by the peak/off-peak price break. Source: "Tappan Zee Congestion Relief Study Final Report."
Surveys of Tappan Zee Bridge travelers conducted as part of the study found that more than 50% of all respondents either strongly favored or somewhat favored congestion pricing on the Tappan Zee Bridge, once they had received some information about congestion pricing's likely effects and benefits, while about 30% were opposed or strongly opposed. There was virtually no difference in opinion between low-, middle- or high-income levels.
The survey also found that many travelers have some flexibility and will actively consider time-of-day shifts when peak period prices are increased. Interviews with employers in the I-287 corridor served by the bridge indicated that "congestion is a problem, contributing to employee tardiness and stress." Some claimed "it is difficult to attract and retain employees from west of the Hudson River." Many employers felt that an incentive pricing program would not necessarily affect customers or clients, many of which are already located in Westchester County.
Lee County, Florida (1998-expansion in 2003)
http://www.leewayinfo.com/variablepricing.htm
Florida has a system-wide ETC program called Sun Pass. Approximately 54 percent of people using toll facilities in the state participate in Sun Pass. Some 1.75 million transponders have been sold. Approximately 45,000 transponders are sold per month. Sun Passes may be purchased from the toll authorities and retail partners.

Variable pricing has been used on the Cape Coral and Midpoint Bridges in Lee County, Florida, since 1998. These bridges have half-price tolls in the times just prior and just following the peak hours as an incentive for motorists to adjust their travel times (the standard toll is 50 cents to $1). The Variable Pricing discount is only available to those motorists who are participating in LeeWay and have a prepaid toll account.
The project expanded in 2003 to include variable pricing for large trucks.  It encourages three-pus axle vehicles to drive at non-congested times.
The project was funded with a 20 million dollar federal grant.  The federal grant paid for 80% of the project.  The Florida Department of Transportation and Lee County each contributed another 10%.
The number of vehicles with transponders has steadily increased since 1998.  In 2004, there were about 95,000 vehicles with transponders.  Over the years, there have been improvements in technology.  Currently, the Leeway transponders are compatible with SunPass transponders.  SunPass transponders are used in other areas of the state.  There are efforts being made to make Leeway transponders also compatible with E-Pass programs, which are used in other Florida regions.
Study results showed that a significant number of Lee County residents did change their driving behavior with even small reasons to change.  (The difference in toll in peak versus non-peak travel was as low as 25 cents.)  Congestion pricing offered residents a monetary reason to change their behavior. 
Participants in the program were motivated by toll savings, rather than time savings.  This shows some importance on knowing the population being served.  In New York or Utah, many participants in similar programs were motivated more by time savings.  Lee County is primarily a retirement community, populated by older residents. 
ETC in Lee County is being used to charge tolls that vary by time of day. Variable tolling/pricing has been operational since August 1998 and successfully shifted a significant percentage of eligible peak-period drivers to off-peak times. Traffic eligible for toll discounts has increased by over 10 percent during some discount periods while decreasing over 10 percent during some peak periods.
Since this is a pilot project, emphasis was placed not only on the number of drivers altering their travel behavior but also on the characteristics of those drivers and their primary motivation for participating in variable pricing. These data were obtained in a bridge-user survey conducted in May 1999. It was found that 28 percent of all drivers eligible for the toll discount used it at least once during the first nine months of the project. Most of these variable pricing participants, 71 percent, used it at least once per week. The reason most often cited for not using variable pricing was that time of travel was inflexible. Very few respondents felt the toll savings were too small to cause them to change their time of travel. (Excerpted from Lee County's variable pricing project-Reference below.)
Broward County, Florida (2003)
In May 2003, Florida began a pilot project to combine Open Road Tolling and Value Pricing entitled Sawgrass Expressway: A Study of New Technologies. Open Road Tolling (ORT) utilizes electronic toll collection to create a tolled highway system free from toll plazas and delays. This technology has the potential to change the toll industry by improving customer service, lowering operating and maintenance costs, and providing potential savings in capital costs. Under ORT, toll roads would be open to everyone and completely transparent to customers. There would be no toll plazas, tollbooths, or lane restrictions. All traffic would operate at highway speeds, yet every vehicle would pay a toll. Toll collection would occur through equipment located on overhead gantries. Eliminating the toll plazas themselves and the merging and weaving that occur while entering and exiting the plazas enhances roadway capacity and safety. Customers with a transponder would already have a pre-paid account with the toll agency. The toll charge would be automatically debited from their accounts. Value Pricing could be utilized during heavily congested peak periods along the corridor. (Excerpted Pricing on Toll Facilities website, reference below.)
Lane Pricing (HOT and FAIR Lanes)
The following implementation locations have HOT or Fair Lanes.  HOVs can drive for free or a reduced rate in uncongested lanes; low-occupancy vehicles can drive for a higher rate in uncongested lanes.

Summary:  Toronto, Canada; California:  San Diego: Interstate 15 Express Lane Program; Orange County, State Route 91 Project; Texas:  Houston: Interstate 10 QuickRide Program; Minnesota:  Minneapolis (2005) I-394 MnPASS; Colorado: Denver; Utah:  Salt Lake City

Toronto, Canada, Highway 407 (1997)
http://www.407etr.com
The Express Toll Route (ETR) is a multi-lane, electronic highway running 69 kilometers across the top of the Greater Toronto Area, from Highway 403 in Oakville to Highway 48 in Markham. The first phase of the highway opened in 1997 and runs from Highway 410 in Brampton to Highway 404 in Markham. It was constructed in a partnership between Canadian Highways International Corporation, a private company specializing in highway development, and the Province of Ontario. It is now owned by 407-ETR International Inc. Fees are 10¢ per kilometer during weekday peaks, 8¢ per kilometer during weekends and off-peak periods, and 4¢ per kilometer at night. About 70% of tolls are collected using electronic transponder cards that deduct charges from prepaid accounts, and 30% using a license plate photography billing system. Speeds on Highway 407 are about double that of parallel free highways. Peak-hour traffic volumes average 11,000 to 12,000 vehicles. Surveys indicate a high level of user satisfaction.
Canadian PPP Concession Example
In Ontario, Canada, the concession agreement for the 407 Express Toll Route (407 ETR) set a number of policy objectives that needed to be met. According to Imad Nassereddine, vice president for traffic operations and planning at 407 ETR Concession Company Ltd., the main objectives included operating the 407 ETR as an open-access, all-electronic toll collection system; requiring the concessionaire to adhere to provincial safety and environmental standards in the design, construction, and operation of the highway; and providing congestion relief to the alternative public highways. To relieve congestion, a separate tolling agreement was established whereby the road users' willingness to pay would directly affect the setting of toll rates.
San Diego: Interstate 15 Express Lane Program (1996)
http://argo.sandag.org/fastrak/library.html
A 2-lane, 8-mile reversible HOV-2 facility in the median of Interstate 15 (I-15) was opened in 1996 to a limited number of paying solo drivers who purchased monthly "ExpressPass" permits for $70. Prior to the initiation of this project, use of the I-15 HOV-2 facility was restricted to carpools with two or more passengers, motorcycles and emergency vehicles. With the advent of this pilot project proposed by San Diego Association of Governments, carpools and other authorized vehicles continue to ride free, while solo permit-holding motorists are allowed to use the HOV-2 facility. This is commonly referred to as HOV Buy-In, or a high occupancy toll (HOT).
A fully automated dynamic pricing pilot project on I-15 was implemented in 1998. The system deducts per-trip fees from pre-established accounts instead of charging a flat monthly fee. To accommodate the switch to dynamic pricing, monthly ExpressPass permits were replaced by windshield-mounted transponders, which allow the flexibility of varying charges with the level of congestion. Fees are assessed using overhead readers and vary depending on the real-time congestion levels in the HOV lanes. Traffic flow is monitored in the HOV lanes to ensure that operating conditions do not degrade below free-flow conditions. Carpools and other authorized vehicles continue to use the facility free of charge.
A posted schedule informs patrons of the highest toll they should expect during the hours of operation. Under regular conditions, tolls vary from 50 cents to $4. In exceptional circumstances, when heavy congestion in the free lanes causes a sharp increase in demand in the HOT lanes, the maximum toll may increase to $8 to prevent unacceptable operating conditions in the HOT lanes. Tolls can change every 6 minutes at 50-cent increments, with variable message signs informing drivers of the current toll. Depending on traffic in the HOV lanes, the fee may be lower than the posted schedule. If the toll changes during a motorist's trip on the lanes, the system algorithms calculate the toll based on the lowest amount the user may have seen on the message signs.
To provide an alternative to the tolled road or the congested freeway, a new express bus service has been introduced as part of the pricing program.
A comprehensive monitoring and evaluation effort, conducted by San Diego State University, is underway to assess the project's impacts on traffic volumes and speeds, modal usage, operational issues, costs, revenues, acceptance, and business activities.
The most recent comprehensive evaluation report on the project, released in September 2001, indicates positive results on several fronts.
The following results are from the executive summary of the report. Click here for full report http://argo.sandag.org/fastrak/pdfs/safety.pdf
Some key results, excerpted from the report:
• Volume in the I-15 Express Lanes increased steadily and substantially over the entire study period between 1996 and 1999. The magnitude of change indicates that these changes were physically significant and noticeable to I-15 Express Lane users. The transition from ExpressPass to FasTrack did not affect the monthly rate of total Express Lanes and volume, which was constant over both projects. By the end of 1999, the Express Lanes were much better utilized than before the start of the project, which represents an important step towards one of the primary project objectives to maximize the use of the I-15 Express Lanes.
• A rise in the number of HOV and ExpressPass/FasTrack vehicles contributed to improved utilization of Express Lanes. HOV volume on the I-15 Express Lanes, however, surged during the ExpressPass period and subsequently moderated during the FasTrack period. Program subscriber volume was virtually flat during the ExpressPass phase, and then accelerated substantially during the FasTrack phase. Violator volume was generally higher during the FasTrak phase than during the ExpressPass phase, yet substantially smaller than during the pre-project period.
• Study results indicate that congestion pricing can be successfully implemented on an existing HOV lane on a major urban freeway. Both fixed monthly fee-based and dynamic per-trip-based versions of congestion pricing proved feasible, operationally successful, capable of generating measurable and statistically significant system-wide traffic impacts within the affected corridor, and able to cause measurable and significant changes in travel behavior, at least among the program participants.
• Congestion pricing can be an effective tool to achieve better utilization of HOV lanes. However, the fixed monthly pricing system did not contribute to the spreading of traffic throughout the peak period; instead, it seemed to delay morning departures for work and increase trip concentration in the middle of the peak period. In contrast, the dynamic per-trip pricing can effectively redistribute part of the traffic from the middle of the peak period to the peak period shoulders.
• Both versions of congestion pricing create an identifiable new travel option, which is highly valued by the participants and can be designed in a way that protects the interest of carpoolers and keeps them satisfied. In contrast to fixed monthly pricing, dynamic per-trip pricing offers a customized use of the HOT facility, which allows participants limited use of the facility.
Orange County, California: State Route 91 Project-SR 91 (1995)
http://www.91expresslanes.com/

The four variably-priced express lanes in the median of the State Route 91 Freeway opened in December 1995. The toll schedule is adjusted every three months based on traffic observed over the three-month period. Speeds are 60 to 65 mph on the express lanes while congestion on the free lanes has reduced average peak hour speeds to no more than 15 to 20 mph. During the peak hour, which occurs on Friday afternoon (5-6 pm) in the eastbound direction, the two "managed" express lanes each carry almost twice as many vehicles per lane than the free lanes, because of the effect of severe congestion on vehicle throughput in the free lanes. Toll revenues have been adequate to pay for construction and operating costs.
This $130 million privately financed, fully automated facility is a 10-mile, four-lane toll project is located within the median of an existing eight-lane freeway between State Route 55 in Orange County and the Riverside County line.  This project connects rapidly growing residential areas in Riverside and San Bernardino counties with major employment centers in Orange and Los Angeles counties. It was the world’s first implementation of congestion pricing using electronic variable tolling.   

By agreement with the DOT, the toll is discounted 50% from regular rates for HOV3+ vehicles. Pricing allows individual travelers to decide whether the time savings on a particular trip are worth the toll.
Public-Private Partnership
Prior to opening the project to traffic, California Private Transportation Company (CPTC) formally transferred ownership of the facility to the State of California. Caltrans then leased the improvements back to the CPTC for a 35-year operating period.
 The highway opened in December 1995 and was operated by CPTC for seven years.  The partnership met with trouble because of a non-compete clause in the franchise contract that barred public transportation agencies from increasing highway capacity on other roads within one-and-one-half-miles of SR91. 
The adverse impact of the contractual non-compete clause eventually caused the Orange County Transportation Authority (OCTA) to buyout CPTC in early 2003 at a public cost of $207.5 million. The OCTA has operated the SR91 Express Lanes since 2003. The non-compete clause that existed under the CPTC ownership was removed with the buyout. (Excerpted from corridorwatch.org)  The CPTC was able to make a profit from the buyout.
Public-Private Partnership

Legislation Issues (excerpted from a Transportation Corridors Agency Fact Sheet): 
Assembly Bill 680 (1989) authorized the California Transportation Authority (Caltrans) to enter into agreements with private entities for development, construction and operation of four demonstration transportation projects at private sector expense without the use of state funds.
Special state legislation in 1986 created the TCAs as joint-powers authorities, or public agencies formed by a coalition of local governments for a specific purpose; in this case, to finance, build, and operate toll roads. The legislation permitted TCA to use toll-revenue bonds and developer fees to finance the construction of 67 miles of new toll roads in Orange County, 51 miles of which are now open to traffic. The final segment of the 241 Toll Road is currently under federal environmental review.
Points of Success Public-Private Partnership in Orange County (Excerpt continued)

• Public oversight. Unlike privately operated toll facilities, TCA-operated toll roads are accountable to local city and county elected officials who are appointed to TCAs’ governing Boards. Public oversight ensures that the public’s interests in toll pricing, traffic relief, and customer service are balanced with those financially invested in the success of the toll roads.
• Toll financing. The 73 Toll Road was the first and largest start-up toll road facility financed with non-recourse toll-revenue bonds. As government agencies, the TCAs were able to issue taxexempt debt, thus resulting in lower long-term debt service costs. Bonds are backed by future toll revenue, not taxpayer dollars, so if the agencies can’t meet its debt payments, the agencies do not have any recourse to obtain taxpayer dollars. The debt is simply extended and tolls imposed until the debt is fully repaid.
• Design/build construction. All of the TCA-operated toll facilities were constructed using a streamlined “design/build” approach – the first major highways to be built in this manner. By bidding the project to one master contractor, and building penalties and incentives into the contract, TCA toll roads were built consistent with state highway standards, on-time and within budget.
• State-of-the-art electronic toll technology. The TCAs were the first to introduce FasTrak® electronic toll collection in the state of California. FasTrak, a TCA-registered trademark, is now the statewide standard used by toll facilities statewide.

The final evaluation report for the project, published in 2000, can be obtained, along with earlier reports from the SR 91 evaluation site, http://ceenve.calpoly.edu/sullivan/sr91/sr91.htm.
Some key results from the final report:

• By June 1997, most peak period travelers on SR 91 (about 90%) had obtained FasTrak transponders and most of these (about 80%) obtained their transponders during the first six months of operation.
• Throughout the study period, traffic volumes remained generally stable in the SR 57/60 freeway corridor located roughly parallel to SR 91, about 15 miles to the north. In addition, field observations showed no association between opening the SR 91 toll lanes and any changes in the HOV traffic using the SR 57/60 corridor. This indicates that the influence of the toll lanes, while locally important, apparently did not induce traveler route shifts at the regional scale.The toll lanes have attracted a substantial share of the traffic using the SR 91 corridor.
• Toll road traffic in the morning peak direction is consistently less than in the afternoon peak direction, when congestion in the free lanes is worse.
• Even though more than 80% of peak period travelers on SR 91 are engaged in home-to-work travel, most commuters do not use the toll lanes on a daily basis. Nearly half the commuters who have used the toll lanes report using the lanes once per week or less.
• The increased capacity from adding two new toll lanes in each direction substantially reduced peak period freeway congestion on SR 91, giving short-term travel time benefits to all commuters in the corridor.
• In spring 1997, the percentage of SR 91 travelers who used the express lanes ranged from about 7% in the mid-day off-peak, when time savings were minimal, to a high of 35% during the peak hour when delay to freeway users was an estimated 12-13 minutes. These observations imply a value of time for SR 91 commuters of $13-14 per hour.
• About half of regular SR 91 commuters report they never use the toll lanes. When asked their reasons, the majority (just over 50%) gave reasons indicating that the amount of congestion avoided is not worth the cost. About 20% said that their trip patterns were not conveniently served by the express lanes. Only 10% said they do not approve of the facility and will not participate.
• The accident rate for the section of SR 91 containing the express lanes decreased significantly after the express lanes opened. This most likely reflects the reduced peak period congestion. Over the same 1995-96 period, no significant changes in accident characteristics were found.

Additional results can be obtained by visiting the SR 91 Value-Priced Express Lanes Final Report (http://ceenve.calpoly.edu/sullivan/SR91/final_rpt/FinalRep2000.pdf)
Recent Developments/General Summary excerpted from a 2005 article from the Journal of Transportation (reference below):
Experience with the variably priced Express Lanes on SR 91 in Orange County, California, has confirmed the ability of road pricing to maximize freeway efficiency.  Traffic demand on the express lanes, which became operational in December 1995, is managed using a variable toll. Initially, due to the addition of four lanes in the median, there was little congestion on the regular lanes, since total capacity had increased by 50 percent (two lanes were added per direction to the existing four lanes per direction).
However, over the past few years, congestion has increased on the free lanes as demand increased due to development growth in Riverside County, from which most commuters on SR 91 come (Sullivan 2000). While the express lanes have maintained their hourly vehicle throughput in the peak hours, throughput on the free lanes in peak hours has been steadily decreasing.
By early 2004, speeds were 60 to 65 mph on the express lanes, while congestion on the free lanes reduced average peak-hour speeds to no more than 15 to 20 mph. Moreover, the share of vehicles carried in the peak hour on the express lanes had increased to 49 percent, based on traffic volume data provided to FHWA by the Orange County Transportation Authority for the period January 9 through March 25, 2004. Thus, the two express lanes were carrying nearly the same volume as the four free lanes in the same direction. This means that the two express lanes were carrying almost 25 percent of the vehicles per lane. This also means that the remaining four free lanes were carrying only about 12.7 percent of the vehicles per lane. The express lanes were thus carrying almost twice the number of vehicles per lane as were the free lanes. The SR 91 experience demonstrates that pricing ensures efficiency with regard to both throughput and travel speeds on freeways, maximizing return on the public’s freeway investment.
Houston: Interstate 10 QuickRide Program (1998)
http://houstonvaluepricing.tamu.edu/about_hvp/
QuickRide, a congestion pricing project launched in 1998 on an existing 13-mile HOV lane of the Katy Freeway (Interstate 10), allows a limited number of carpools with only two riders (HOV-2's) to "buy into" the reversible HOV-3 lane during the peak-travel periods.
When the (previously) HOV lanes allowed HOV-2’s, the lanes were congested.  Texas tried changing the HOV requirement to HOV-3, but the lanes became underutilized.  Charging HOV-2 vehicles and raising the driving criterion to HOV-3 solved the issue.
During this time period, participating HOV-2 vehicles pay a $2 per trip fee while HOV-3 vehicles continue to travel free. Single-occupant vehicles are prohibited from using the HOV lane. The number of HOV-2 vehicles allowed to participate in QuickRide was limited to ensure that existing levels of service for the HOV-3 users of the facility would be maintained. Like the State Route 91 Express Lanes project and the I-15 FasTrak projects which came before it, the QuickRide project is completely automated using windshield-mounted transponders and overhead readers.
According to the program's Web site (accessed December 2004),

• METRO's HOV lanes facilitate almost 110,000 person trips each weekday, serving about 35,000 vehicle trips that would otherwise continue traveling the main lanes.
• The average rush-hour speed on Houston freeways is roughly 24 miles per hour, compared to the average of 50-55 miles per hour on the HOV lanes.

Minneapolis (2005)
http://www.mnpass.org/
As excerpted from summary of a presentation from the 2007 Transportation Research Board (TRB) meeting:  The opening of I-394 MnPASS Express Lanes (HOT Lanes) in May 2005 and its subsequent evaluation comprises the core of I-394 MnPASS Phase I. Preliminary experience with I-394 MnPASS proves that congestion pricing is an effective traffic management tool which ensures free-flow speeds for transit and carpoolers, while better utilizing HOV-lane capacity and providing some congestion relief for non-MnPASS lane users. I-394 MnPASS Phase II, funded in part by Value Pricing Pilot Program, identifies and analyzes future opportunities for infrastructure improvements, land-use planning considerations and transit enhancements in the I-394 corridor. The goal of this holistic visioning and public outreach effort is aimed at expanding opportunities and maximizing mobility for MnPASS users, which include transit, carpoolers and toll paying single drivers.
Referred to by the state as MNPass (I-394), several sections of freeway have been converted to HOT lanes, in a preliminary step toward a larger congestion pricing (toll lane) system.  In April of 2005, Minnesota partnered with Cambridge Systematics to conduct an extensive study (available on the MNPass website) as to the feasibility of congestion pricing. 
As excerpted from the Executive Summary, the study’s purpose was specifically to identify a potential Twin Cities Metropolitan Area MNPASS tolling lane system and to provide MN/DOT and the Metropolitan Council with information on the cost, operational, revenue, and system implications of that system.  The intent was not to evaluate the benefits of tolled versus nontolled capacity expansion, but rather to study a potential future system of express toll lanes. 
The technical analysis identified a potential toll lane system for the metropolitan area and associated implementation issues. Capital and operating costs were examined, along with the potential for revenue generation. Travel benefits focusing on changes in travel times, operational considerations, and the impacts on the existing transportation system and policy plans were assessed. The technical analysis included one round of initial screening and two rounds of increasingly detailed analysis.
There were seven major technical findings that emerged from the study. The first finding was that public investment is required for new roadway capacity. New capacity segments were clustered in the 15-to-55 percent capital cost recovery range, with a system-wide average of 22 percent. The second finding was that MnPASS provides a congestion-free alternative. MnPASS users travel approximately 25 mph faster during peak periods than non-users, with a three-to-four mph speed gain for non-users.
The third finding was that the transit system would benefit from MnPASS. Modeling MnPASS express bus service on TH 36 predicted a 6.2 percent increase in ridership. The implementation of BRT has design implications on access to MnPASS lanes, placement of transit stations, and operating speeds. The fourth finding was that a regional model shows that by 2030, little excess HOT lane capacity is available for SOVs, because 2+ HOVs fill up the lanes. This finding indicates the need for flexibility in HOV definitions.
 The fifth finding was that providing hybrid vehicles with free access supports an environmentally beneficial policy of encouraging hybrid utilization, but allowing hybrids into HOV lanes built with federal funds violates current federal law. Allowing hybrid vehicles also increases toll collection and enforcement challenges. The high cost-premium on hybrids raises equity issues. Virginia is considering discontinuing its hybrid-free policy due to high use of HOV lanes. Enforcement has also proved problematic in Virginia.
The sixth finding was that many potential projects that might have ranked high are already under construction or committed, and thus are not eligible under current policy to be considered for the MnPASS system. The I-494 design build project represents one example of a project that is not eligible. Finally, potential projects that ranked high in the technical analysis are not in the Transportation Policy Plan (TPP).
The 2030 MnPASS system concept includes approximately 120 miles of HOT lanes. This system is estimated to save some 176,000 daily vehicle hours in 2030. It would also result in higher travel speeds than the future base condition.
As excerpted from John Doan and Jeffery Buxbaum, MnPASS System Study.  Reference below. 
Colorado:  Denver (2003)
http://e-470.com/

The E-470 is a 47-mile orbital toll road running along the eastern perimeter of the Denver metropolitan area. The facility extends from State Highway C-470 at I-25 in Douglas County south of Denver to the east and north through Aurora and then passes along the western edge of Denver International Airport, finally turning back towards the west and terminating at I-25 near 157th Avenue north of Denver in Thornton.
The project was built in four separate phases, with construction on Phase 1 beginning in 1989 and ending on Phase 4 in 2003.
The facility provides both electronic and manual toll collection facilities at five tolling points. Over 60 percent of all tolls are paid electronically and there are more than 100,000 “EXpressToll” account holders.
The E-470 Authority’s underlying $1.2 billion in bond debt is scheduled to be paid off in approximately 2035 and after E-470 has established a perpetual maintenance fund to take care of E-470. At that time, the tolls will end and the road will be turned over to the Colorado Department of Transportation.
Public-Private Partnership
The private industry will be closely involved in the following areas:

• Design-build procurement
• Privately held revenue bonds
• Private operations
• Accelerated joint interchange development
• Private snow removal
  
  Private Partners:  Design-Builder:  MKK Constructors: joint venture between Washington Group International, Inc. (formerly Morrison Knudsen) and Kiewit Western; Project Oversight Engineer: O’Brien Kreitzberg Inc. URS; Design-Builder Phases 2/3: Morrison Knudsen with Fluor Daniel, Inc.; Private Operator: PB Alltech; Interchange joint development partners: county and/or city jurisdictions and private developers
  
  The project is noted for having an innovative mix of revenue sources.  E-470 and its private operations contractor received a toll innovations award from IBTTA in 2000 for toll operations.
  
  

Utah:  Salt Lake City (September 2006)
https://secure.utah.gov/expresslanes/action/public/index
The Express Lanes are on 38 miles of I-15 from 600 North in Salt Lake to University Parkway in Orem. In September 2006, the Utah Department of Transportation converted the existing Carpool or High-Occupancy Vehicle (HOV) Lanes in Salt Lake and Utah counties to Express Lanes. The lanes include 16 access points marked by a white dotted line, while the rest of the corridor is marked with a double-white solid line. Each point is 3,000 feet long, giving plenty of room for users to enter and exit the lanes.
All vehicles with two or more occupants, motorcycles, emergency vehicles, buses, and clean-fuel vehicles can use the Express Lanes free of charge. A limited number of solo drivers can use the Express Lanes for $50/month.
Traffic studies have shown that moving some of the single-occupant vehicles out of the general-purpose lanes increases the average speed of those lanes during peak travel times. Those who previously used the Carpool Lanes see more traffic in the lanes, but the average speeds have remained the same. Also, the Express Lane is a carpool lane first. By monitoring the number of decals sold, UDOT will ensure that carpooling is still a benefit. UDOT requires a monthly fee for solo drivers to use the Express Lanes, so people remain motivated to carpool and use the lanes free of charge. If more carpoolers start to use the lane UDOT may decrease the number of decals available for single-occupant vehicles.
Initially, 600 Express Lanes decals were available on a first-come, first-served basis. However, after the Express Lanes were implemented, transportation experts studied the traffic impacts and determined that the lanes could handle additional vehicles, without negatively impacting traffic flow. Now, 1,350 solo drivers are allowed to drive in the Express Lanes. UDOT will continue to monitor the lanes and adjust that number if needed to maintain minimum 55 mph speeds in the Express Lanes. (As excerpted from the Utah Express Lanes website.)

Public-Private Partnership
The Interstate 15 reconstruction was the Utah Department of Transportation’s (UDOTs) first design-build procurement.
UDOT’s decision to use the design-build model was motivated by two factors. The first was the strong public support for completing the project as soon as possible to minimize the period of severe traffic congestion resulting from the diversion of more than half of the traffic from I-15 during the construction period. The second factor was the need to have the project completed before the 2002 Winter Olympics in Salt Lake City. It was generally accepted that use of the design-build contracting methodology was the only way to satisfy these goals.
The design-build approach also relieved UDOT of many problems associated with the coordination of the design and construction of multiple individual projects in a congested urban setting. The state procurement laws were modified to clearly authorize the use of the design-build method of contracting and to permit the award of a contract to a firm that provided the "best value" proposal to the state even if another firm bid a lower initial cost.

The project was approved by the Federal Highway Administration (FHWA) as an experimental project under SEP-14. This approval permited the use of the design-build method, and required some deviations from normal federal-aid requirements dealing with the selection of contractors and consultants.
The I-15 design-build contract included provisions for payments of up to $50 million incentive bonuses for timely performance, quality of work, complying with project management requirements, and complying with requirements for community relations and maintenance of traffic.
While this approach was attractive to the owner, it created problems for the contractors who were not accustomed to bidding for work that would be performed up to 25 years later. When efforts to sufficiently raise the comfort level of the proposers failed, the maintenance period was reduced to a maximum of 10 years – an initial five-year maintenance option and five one-year renewable options covering years six through 10. Maintenance requirements and standards were restricted to pavement surfaces, structures, and drainage facilities and did not include any routine maintenance activities.

The use of performance specifications, as opposed to traditional prescriptive specifications, encouraged innovation in design and con- struction. A long contractor warranty or maintenance-after-construction period complements the use of performance specifications by compelling the design-builder to complete life-cycle-cost analyses of all design and construction options.

Cordon Tolls
In a cordon pricing plan, drivers pay to enter and/or exit a whole town area or the inner parts of a city.

Summary:  England:  London; Singapore; Norway:  Bergen, Trondheim, Oslo, Stavanger;
Cordon Tolls
London (2003)
With its limited road capacity, heavy congestion and range of alternatives to private automobile travel (such as walking, bus and subway), London was considered a good candidate for a cordon toll. Before congestion pricing, commuters would spend half their commute times waiting in line to enter the city, costing about 2-4 million pounds per week. 
On average, just over a million people enter central London on weekday mornings (7-10 a.m.). Eighty-five percent of these trips are made by public transportation, with only 10-12% made by private automobile. Source: www.vtpi.org/london.pdf
The London Congestion Charging Scheme went live on February 17, 2003. It has proven to be an enormous success and is often cited as a model for other congestion pricing schemes.  The system is run by the Transport for London (TfL), but operated by Capita, a private firm.  Congestion is down by 40 percent and increased average speeds by 37 percent.   On February 19, 2007 the congestion charging zone will be doubled, this area is generally referred to as the Western Extension Zone.  TfL is also introducing a Low Emission Zone (LEZ) in London whereby all Lorries will have to conform to EU emission standards or be liable to a substantial charge. 
Travel patterns in the area surrounding the charging area, which was expected to attract travelers seeking to avoid the charging area, had not changed significantly. In addition, the year following the implementation saw an increase in bus passengers (by 29,000) for the year. Bus reliability and journey times also improved.
The cordon area currently covers eight square miles of the downtown. The charging system relies on automatic license plate recognition to enforce ticket purchases. Vehicles entering the charging zone are monitored by two types of cameras: a monochrome camera with a narrow field of view that focuses on the vehicle registration license plate, and a color camera with a wide field of view that provides proof of position on the road. When an image is captured, a record consisting of text data and monochrome color images are created within license plate readers. The monochrome images are processed by an algorithm that extracts the vehicle registration number (VRN); this number, time, date, and camera ID are sent to a central computer that compares the captured VRN with a list of VRN for which the congestion charge has already been paid. Those drivers who have not paid this charge have to pay non-payment penalties.
The congestion charge is £5 Pounds daily for driving or parking a vehicle on public roads within the congestion charging zone between 7 a.m. and 6:30 p.m. on weekdays. Some vehicles, such as taxis, buses and motorcycles are exempt; those living within the central London charging zone receive a 90% discount.
Because the scheme needed to be completed by 2003, London was unable to use advanced technology, such as that used in variable pricing projects in California.  However, the system was designed so that London will be able to migrate to more advanced systems, including credit card billing.
Program goals included

• reducing congestion
• making radical improvements in bus services
• improving journey time reliability for car users
• making the distribution of goods and services more reliable, sustainable and efficient

Implementation Challenges
There were many challenges to the London congestion pricing scheme.  The project had to be completed within a three-year time period, before the term-end for mayor, Ken Livingstone, a major proponent of the scheme.  Other challenges included a critical media and public argument.  Moreover, it was the first time such a scheme had been implemented on a large scale in a major city.  (Deloitte Research Report, citation below.)
Many were wary of London's cordon pricing plan, including local politicians, motorist groups and some labor organizations. A major concern was that the plan would adversely affect downtown businesses.
The follow-up report found that the introduction of congestion charging had coincided with a slowdown in the London economy. Results also indicated that between 2002 and 2003 the number of people coming into central London each day was reduced by 70,000. However, slowed tourism (due to the war in Iraq) and prolonged closure of a key subway line were found to be largely responsible for the slowdown.
The study suggested that congestion charging contributed to less than 6% of the reduction in trips to central London each weekday. Overall, it was found that London's businesses remained relatively unaffected by the toll. Other factors, particularly the reduction in tourism, were found to have greater affect. Furthermore, there is some indication that tourism is again picking up.

Lessons Learned (excerpted from the Deloitt Research Report, citation below):
1. Strong political commitment:  the unwavering commitment of Mayor Ken Livingstone carried the project through attempts to delay and undermine it.
2.   The charge was introduced as an integrated part of the mayor’s transport strategy,49 which was critical to the success of the scheme. Reinvesting all revenues in transport improvements increased public acceptance, while offering enhanced bus services—with more than 300 new buses provided a public transport alternative.
3.  Third, a thorough consultation process was developed to ensure that the scheme recognized the concerns of various stakeholder groups. Other transport authorities in the city were also brought on board so that effective working relationships could be established. The various user groups were widely consulted as part of an extensive public information campaign. The general public was also consulted on key aspects of the scheme, such as discounts, exemptions, and the charging hours. This helped to resolve misunderstandings and, as a result, the widely predicted mass opposition to the scheme never materialised.
4.  Studies such as Road Charging Options for London ensured that the final solution was the result of a careful evaluation of a range of options. The solution then underwent rigorous consultation and legal scrutiny. This created a solid case for congestion charging and enabled a short development cycle as design and testing could be carried out in parallel with procurement activities.

Public-Private Partnership
In the 1980s, the United Kingdom became the leading proponent of PPPs in Europe. In 1981, the Conservative government issued the so-called Riley Rule, which provided for private-sector involvement in transportation infrastructure development when the benefits of doing so exceeded costs.  The Thatcher government adopted the Private Finance Initiative (PFI) in 1992 as the preferred approach for developing infrastructure of all types for the British government.
In 2002, Transport for London (TfL) awarded Capita a five-year contract to design, deliver and operate a transport management system to manage London's Congestion Charging Scheme.
Client goal/objective:
Capita's contract with TfL was to achieve the following:
• set up a greenfield ICT infrastructure including cameras and communications
• establish a contact centre and easy to use payment channels
• prioritize customer service.
Capita’s remit was to design, deliver and operate the London Congestion  Charging Scheme, while TfL was responsible for the scheme policy, public information campaigns and the on-street enforcement of the scheme.
The scheme was a grand scale IT project in terms of size, complexity and purpose and required a broad range of services to work together in one coherent, seamless operation. Capita therefore applied its wide skill-base and practical experience in designing and implementing complex, end-to-end processes to deliver a resilient and adaptable IT solution. The solution uses the latest technology and is designed to eliminate as much human interaction as possible.
Throughout the implementation, TfL and Capita set clear milestones and Capita met all the targets ensuring that there were no delays to the operational start of the scheme.
Around 2010, the current contract with Capita, who operates the scheme, will need to be re-tendered. This will provide an opportunity for TfL to significantly change the scheme. Options for this are currently being studied and could mean the area and type of charge could be altered along with the technology and payment structure.
Singapore
Singapore's cordon pricing programs, formerly known as the Area Licensing Scheme (ALS) and Road Pricing Scheme, are perhaps the world's longest running cordon pricing schemes.
Begun in the early 1970s as a strategy to curb the demand for vehicular access into the central business district during peak hours, they used manual methods. Traditionally, motorists were required to purchase and display a valid permit during peak periods, with enforcement performed manually.
This system was replaced in the late 1990s by Electronic Road Pricing (ERP). Under the ERP system, cars are fitted with transponders into which stored-value smart cards are inserted. When motorists pass through the ERP "gantries," an amount is deducted electronically from the smart card.
ERP has enabled time-variable pricing, which optimizes road usage. In fact, with ERP the price, in Singapore dollars, ranged from S50 cents to S$2.50, compared to the ALS charge of S$3 for peak periods and S$2 for the inter-peak period. However, unlike the Area Licensing Scheme, which allowed multiple entries into the central business district during one day, the Electronic Road Pricing charge is applied each time a vehicle passes under the gantry.
The Area Licensing Scheme was successful in decreasing the proportion of solo drivers, as well as shifting vehicle trips from peak to non-peak hours. In fact, it was found that average speeds during the non-peak hours were slower than during the peak, with a brief rush period occurring right before and right after scheme was in effect, a problem that has been addressed through the time-variable pricing allowed by ERP.
A 2002 report of the Land Transport Authority notes that traffic volume into the business district had been reduced between 10% and 15% with ERP as compared to ALS. More information can be obtained by visiting Singapore's Land Transport Authority (http://www.lta.gov.sg/).
Trondheim, Norway
http://www.progress-project.org/Progress/tron.html
Trondheim, the third largest city in Norway, is home to the world's first automatic toll ring, implemented in 1991. Follow-up studies found that the toll ring resulted in a decrease in traffic (10%) entering the cordon area both in peak and non-peak charging hours. The traffic increase on evenings and weekends, when no toll was charged, was just above 8%.
In Trondheim, Norway, revenues have exceeded capital and operating expenses of the toll facility by 5 times. Trondheim’s toll facility currently generates about $25 million in profit per year. These profits have been used to enhance the capacity of the entire transportation system, including financing additional road infrastructure as well as subsidizing public transportation facilities and services, and pedestrian and bicycle facilities (GAO-03-735T Reducing Congestion-web link under References).
As with London, resistance to the toll was initially high but subsided after the program had been in effect a short time. Contrary to the fears of some businesses inside the ring, the imposition of tolls did not hurt the economy there. According to the Web site of PROGRESS, an organization that promotes urban pricing schemes such as Trondheim's, one of the main reasons that the toll was approved was that it was part of a larger package of improvements that included a new bypass, transit priority lanes, bicycling and pedestrian routes. Another feature of the program designed to garner public approval was the distribution of free electronic toll tags at the start of the tolling. In addition, the question of motorists' privacy was addressed from the beginning; each day the time/place data collected from the toll plazas was deleted from the Toll Authority's database, with only the charge information remaining.
In 1998 the toll ring surrounding the city center was replaced with a zone-based tolling system with the goal of raising revenues and establishing a more equitable scheme. More information on Trondheim's cordon pricing project, along with projects in Bristol, UK, Helsinki, Finland and Genoa, Italy, among others, is available at http://www.progress-project.org/Progress/tron.html

Informational Links

HOT Lane Informational Sites:
1.  Study Paper on I-15 Express Lane Pilot Project - Salt Lake and Utah County:  http://www.mountain-plains.org/research/2006proj/index.php?proj=MPC-282

2.  A guide for Hot Lane Development:  Federal Step-by-step guide
http://www.its.dot.gov/JPODOCS/REPTS_TE/13668.html

3.         Brookings Institute on Economic Aspect of Hot Lanes
http://www.brook.edu/views/op-ed/downs/20020510.htm

A recent proposal for “HOT networks” promotes the use of HOT lanes in conjunction with operating bus rapid transit services, utilizing the revenues from the toll lanes. For more information, see Robert W. Poole, Jr. and C. Kenneth Orski, “Policy Summary No. 305” (Los Angeles, CA: Reason Foundation, 2003). http://www.gao.gov/new.items/d03735t.pdf

Public-Private Partnerships

The Texas Research Comprehensive Development Agreement (CDA) Procurement Process Model:  http://www.utexas.edu/research/ctr/pdf_reports/0_4661_P1.pdf

This report provides a process model for procuring an Exclusive Development Agreement (EDA). Supportive information is provided related to task breakdown, targeted durations, and associated lessons learned. This document includes findings primarily from the State Highway 130 (SH 130) project, but it also incorporates some findings from the State Highway 45 Southeast (SH 45 SE) project, currently underway within the Austin District.  (Expected completion date:  December 2007)

Technology and Technology Terms/Initialisms:

Open-Road Tolling (ORT):  Fully automatic tolling structure on an open road.  Tolls are recorded without a significant reduction in speed.  (This has been successfully tested at 55 MPH)

Implementation examples:
Florida, is planning to implement Open-Road Tolling (ORT) in more areas.  All ORT implementation locations would use variable pricing (or congestion pricing) techniques. ORT is implemented on Florida’s SR 836—by 2008.  The state is generally focused on opening “Xpress Lanes” and has been doing feasibility studies in Orlando.  By placing ORT technology over open road scenarios, vehicles are not forced to slow down.  Some reports compare the 1200 cars possible to pass through a SunPass system to the 2200 cars that can pass through an ORT lane per hour (Florida Transportation Monthly, ref. below) 

Automatic Vehicle Identification (AVI):  A technology system that uses cameras, sensors,  and transponders to identify and toll vehicles.  The toll varies depending on type of vehicle and time of day.

GPS technology to enforce congestion pricing
GPS is used in Germany to charge trucks tolls (based on distance driven) on the autobahns in Germany.  Expensive system—it requires on-board computers in each participating vehicle

New and Innovative Congestion Pricing

“Price Queue Jumps” project in Florida Implementation in 2007
A Queue Jump is a facility that can be used to bypass points on the transportation network where congestion is particularly severe and occurs in a predictable pattern. Tolls would vary by time of day and would be levied electronically, and would be tied in with the County's existing ETC system. A significant characteristic of queue jumps is their ability to generate revenue for needed roadway improvements while simultaneously contributing to travel demand management.

Oregon Mileage-Based Pricing Test
The State of Oregon is studying an approach that would allow area-wide pricing with smaller expenditures on roadside infrastructure. The study is focusing on mileage-based fees and peak-period driving charges designed to reduce traffic during the most congested periods while at the same time raising revenue to replace existing fuel-based fees. GPS-based technology is being tested.

Other GPS and Congestion Pricing Studies include

U.S. HOT Lanes Under Development
I-75 Atlanta, GA
SR 167 Seattle, WA
Loop 1 – MOPAC Austin, TX
I-95 and I-395 Northern Virginia
I-495 Capital Beltway Virginia and Maryland
I-580 and I-680 Alameda County, CA
C-470 Denver, CO
I-95 Miami, FL
I-25/US 36 Downtown Express Lanes Denver, CO
I-10 Katy Freeway Expansion Houston, TX
LBJ Freeway Dallas, TX
SR 217 Portland, OR
I-40 Raleigh/Durham, NC

Variable Pricing Projects on Toll Roads Under Study in U.S.
Variable Pricing – Pennsylvania Turnpike Pennsylvania
Value Pricing - Illinois Tollway Northeast Illinois
Express Bus/HOT Lanes - Lincoln Tunnel New York and New Jersey
Freight Efficiency Study – Ohio Turnpike Northern Ohio
Variable Pricing - Florida Turnpike Miami-Dade County, FL
Variable Pricing - Sawgrass Tollway Broward County, FL

Technology Websites:

Website on Road Traffic Technology for the  Road Traffic Industry
http://www.roadtraffic-technology.com/projects/melbourne_citylink/

MARK IV Industries Corp:  Associated with New York, Virginia, and other east coast states’ Departments of Transportation
http://www.ivhs.com/hotsolution/

October  2006:  Efkon new technology for HOT lanes.  (Article from Radio Frequency Identification Journal)
http://www.rfidjournal.com/article/articleview/2699/

Congestion Pricing: 
Congestion Pricing Technologies: Synthesis and an Evaluation Framework (2004)
http://www.ce.utexas.edu/prof/kockelman/public_html/TRB05CPtecheval.pdf

Credit-Based Congestion Pricing: Expert Expectations and Guidelines for Application (2005)
http://www.ce.utexas.edu/prof/kockelman/public_html/TRB05CBCP.pdf

Technology Companies:
Mitsubishi Heavy Industries (MHI) is promoting their toll systems internationally.  The company implemented Singapore's tolls called Electronic Road Pricing (ERP) in 1998. It is a flexible variable pricing scheme covering entries into the central business district and travel on most expressways and arterials in the island state.

The system is managed by a state agency - Land Transport Authority - which sets toll schedules by time of day at different gantries as part of traffic management designed to keep traffic moving. Tolls are adjusted every few months. MSI Global is a state owned consultancy spun off from the LTA. (excerpted from Toll News.)

Congestion pricing implementation sites (with technology used for each case)
2005   
2005 Regional Value Pricing Corridor Evaluation and Feasibility Study
Chapter three (available online as a PDF via the link below) has some useful information on technologies and regional legislation.  http://www.nctcog.org/trans/mtp/valuepricing/Chapter3.pdf
Full report/webpage:  http://www.nctcog.org/trans/mtp/valuepricing/

Toronto, Canada: www.407etr.com
New York, New Jersey, United States:  Tri-State Transportation Campaign www.tstc.org
Houston, Texas, United States www.hou-metro.harris.tx.us/KATY.HTM
California FASTRAK:  http://www.bayareafastrak.org/
About California’s integrated Fastrak system:  http://www.thetollroads.com/home/getfastrak.htm

The feasibility of FAIR lanes for the New York metropolitan area is examined in this Federal Highway Administration report
http://www.fhwa.dot.gov/policy/otps/fairlanes.htm

Evaluation of Leeway congestion pricing program in Florida
http://www.cutr.usf.edu/its/varprice.htm

Description of the Toronto, Canada, Highway 407 project
http://www.407etr.com

A description of San Diego's Interstate 15 Express Lane Program
http://a