Supplement to

etc
THIN KING
HIG HW AYS
Volume 2 Issue 3
Sep/Oct 2007

etc
The international road pricing review

Orski, Borras & Grush on congestion

charging: “New York has the chance to
either be the first city to do it right or the
last city to do it wrong”

Bern Grush on waiting for Galileo
Mark Garrity on smart DSRC OBUs
Stefan Hoepfel on a trip around the world
Simon Albutt on ITS and ETC
Bob McQueen on rewarding the good
Blum & Fific on Germany’s PPP plans
Sayeg & Bray on congestion optimisation
Steinar Furan on intelligent road pricing
Aguigui & Hewitt on basic ETC principles
Paul Wadsworth on implementation
AND
Vibeke Ulmann on India’s five new toll roads

the

INTELLIGENT
Policy • strategy • technology
• finance • innovation • implementation
choice • integration • interoperability
 
 
   
      
    !    
     !
# 
        "   

!
         !
     
 


        ! !

      !


      
!


 Foreword Thinking

Kevin Borras

Shall we decide to be
Kevin Borras is
publishing director
of H3B Media and
editor-in-chief of
Thinking Highways
indecisive... or not?
and ETC, etc. To Stockholm starts. Manchester says yes. Cardiff is
contact him email
kevin@h3bmedia.com thinking about it.The Netherlands gets a bit twitchy.
New York says yes.Then no.Then maybe...

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
Kevin Aguigui, Simon Albutt, Michael
Blum, David Bray, Sascha FIfic, Steinar
Furan, Bern Grush, Melissa Hewitt,
Stefan Hoepfel, Bob McQueen,
Ken Orski Phil Sayeg, Mark Garrity,
Viebeke Ulmann Paul Wadsworth
I think it’s fair to say that
quite a lot has happened in
the road pricing arena in the
last six months.
It’s also fair to say that we
have deliberately not covered
all of them in this issue of ETC,
etc. We simply don’t have the
space, largely because this
publication has to be smaller
than the issue of Thinking
Highways that it accompanies,
and we would rather do justice
to 13 stories then give scant
regard to 20.
However, this opening
gambit is really for anyone
who questions our decision to
publish ETC, etc twice a year.
“Is there really so much to
talk about that you can fill two
magazines a year with road
pricing, congestion charging
and electronic toll collection
articles?” comes the question
with a greater degree of
regularity than you’d expect.
Enough for two? Six articles I
received for this issue had to
be held over and it was pretty
much the same total for our
Web Design
Code Liquid
Visualisation
Tom Waldschmidt
Conferences and Events
Odile Pignier
Subscriptions and Circulation
Pilarin Harvey-Granell
Financial Director
Martin Brookstein Managing Director/CEO
Editorial and Advertising
H3B Media Ltd,
15 Onslow Gardens,
Wallington,
Publishing Director
Surrey
SM6 9QL, UK
Tel +44 (0)870 919 3770
Fax +44 (0)870 919 3771
Email info@h3bmedia.com www.h3bmedia.com
first issue of 2007 in April. year. Take a look at the
The fact that we could have speaker programme on pages
very easily made this a 104- 34-36 and you’ll see for
page issue speaks volumes for yourself that this really is no
this sector of the advanced ordinary event. If you want to
traffic management industry. see endless streams of
We very much hope that you manufacturers, suppliers and
appreciate the diversity of the consultants talk about how
stories that we chose to great they and their products
include. Those articles we are, then this is not the event
couldn’t use have not gone to for you. There’s plenty of
waste, though. We are others you can attend if you
producing a bespoke road want that.
pricing review in time for our Of course, our event has
UK Road Pricing Think Tank in sponsors but each of them has
November which will welcomed the chance to
originally have a limited print involve themselves in
run but then all the pieces will politically- and socially-
get posted onto our website. charged debate.
Talking of the Think Tank “This style of event has long
(which as editor I am been needed as a way to
contractually obliged to do, communicate and get the
but as publishing director I discussion flowing,” said one
drew up that contract so the recently paid-up attendee.
temptation to say no to myself When one of your event’s
was surprisingly hard to sponsors thanks you for giving
resist), by the time you read him the opportunity to express
this it will be almost upon us. his views and not just advertise
It’s really taken and indeed his company’s services, you
changed shape since we first know you are on to a good
conceived the idea earlier this thing. See you there. 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
US$50 (North America). Distributed in the USA by DSW, 75 Aberdeen Road, Emigsville PA
17318-0437. Periodicals postage paid at Emigsville PA. POSTMASTER: Send address changes to
THINKING HIGHWAYS, 401 S W Water Street, Suite 201B, Peoria IL 61602.
Although due care has been taken to ensure that the content of this publication is accurate
and up-to-date, the publisher can accept no liability for errors and omissions. Unless otherwise
stated, this publication has not tested products or services that are described herein, and
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.
© 2007 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
publication without the written permission of the publisher is strictly prohibited.
Printed in the UK by Stones The Printers

www.h3bmedia.com ETCetc Autumn 2007 01

 Tailored solutions
for individual needs

Road user charging

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.
Siemens – Your high performance partner for the road ahead.

www.siemenstraffic.com
 D rg
on

To ET W

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of NO
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CONTENTS

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is gis dia
COVER STORY

su te .
es r co
04 It’s a big question to ask, but Bern Grush
wonders we why need to wait for Galileo to
deploy GNSS-based road user charging
GNSS

Why wait for

Nationwide Road-User Charging using only GPS is
possible by 2009. This article will outline the tech-
nologies, business methods and roles to make this
possible.

Galileo?
The smartest way to deploy a road user charging
(RUC) program is to satisfy Nobel Economist William

m
Vickrey’s rules for congestion pricing. The most critical
among these rules describe Time, Distance and Place
(TDP) charging – specifically basing charges on when a
facility is used, how much is used, and where it is used.
TDP-RUC is the fairest and most effective all-in-one
approach to the triple problem of road finance, traffic
congestion and automotive pollution. The arguments for
this have been made so often and so well that they are
now self-evident to anyone who has given this any seri-
ous thought.
The qualified successes of the Singapore/London/
Stockholm cordon-style systems are very limited – and
these systems demand an exorbitant front-end outlay
for their constrained capability. These are crude time
(e.g., 0600-1800) and place (e.g., Central London)
systems that do not recognize a critical component of
congestion pricing: distance travelled. Since there are
as yet no area-based systems that provide all three com-
ponents, we have no more satisfied Vickrey’s conges-
tion pricing tenets than Conestoga wagons is a
transcontinental railway. London and Singapore (and,
one would suspect, Stockholm) know this and continue
to seek technology to enable full TDP pricing.
There are only three things needed to deploy a RUC
program that satisfies Vickrey’s TDP rules for conges-
tion pricing: technology, political will and a suitable
business process.

Coming to a city near you...

Infrastructure-free satellite-based technology for full
TDP operations in harsh GPS signal environments is
available now. While a few companies have made this
claim, teams from my company, Skymeter Corp, have
demonstrated accurate, reliable, gapless, multipath mit-
igation in the inner urban cores of London, Toronto,
Montreal, Singapore and New York (See Figure 1). We
will soon run more tests in other cities.
Certainly Galileo is absolutely critical to EU naviga-
tion and safety-of-life applications, but Galileo’s value
relative to congestion pricing will be in system and sig-
nal redundancy, and a new level of accuracy that will
enable a parking meter - even in urban canyon.

Galileo is critical to EU navigation and safety-of-life

applications but, says BERN GRUSH, we no longer
need to wait for it to deploy GNSS-based Road User
Charging - even in the dreaded urban canyon.
(That grinding sound you can hear is the gnashing
of numerous sets of teeth in Brussels)

46 Autumn 2007 ETCetc www.h3bmedia.com www.h3bmedia.com ETCetc Autumn 2007 47

GERMANY
10 Michael Blum and Sascha Fific on the role of
public-private partnerships in German road
infrastructure financing

SMART THINKING
16 Just how intelligent are the ITS systems in the
road pricing arena, asks Steinar Furan

PROGRAMME DESIGN
20 Outcome-based ITS programmes are the future
for road pricing schemes, says Simon Albutt
p52
NEW YORK CITY
24 Ken Orski and Kevin Borras look at the facts,
figures and opinions behind the Big Apple’s
congestion pricing plans THE FUTURE, part 2
48 Kevin Aguigui and Melissa Hewitt on the
36 New York’s sustainability plans - could they basic, fundamental principles of congestion
become unsustainable, asks Bern Grush pricing

EVENT PREVIEW ROAD USER PRICING

32 H3B Media’s 1st UK Road Pricing Think Tank 52 Paul Wadsworth on how road pricing schemes
can have multiple positive impacts on the
CONCEPTS AND IDEAS community
38 Bob McQueen on rewarding good driver and
travel behaviour OPTIMISATION
Concepts and Ideas Concepts and Ideas
58 How is Australia looking to define congestion
Behave
priced tolling schemes, for example, in which drivers
pay higher tolls at peak congestion times. In return, they
receive better service. This can be likened to promising
the aforementioned child dessert if he or she eats their
broccoli.
Positive reinforcement, on the other hand, reinforces
optimisation? Phil Sayeg and David Bray
yourself explain
what a child is doing right rather than concentrating on
what a child is doing wrong. Child psychologists and
good parents have known all along that positive rein-
forcement increases the likelihood that the behaviour
will be repeated. It supports the child’s positive deeds
and qualities through enthusiasm, descriptive encour-
agement, and natural, logical rewards.
So here’s the crazy thought – can we define a radically
positive reward system that provides a positive incen-
tive for great travel behaviour? In other words, take what
the psychologists have learned and apply it to transpor-
BOB MCQUEEN and PROFESSOR KAN CHEN have tation. This really appeals to me as I have a fascination
for looking over the fence at other industries and enter-
been mulling over an interesting question that prises to see what lessons we can learn, practices we
they would like to share with you- should we can modify and adopt and technologies that we can
use.
reward good travel behaviour?

GLOBAL ISSUES
Positive traveler rewards
The tricky part in providing a positive rewards system is
It’s helpful every once in a while to step back from determining where the revenue or resources for the
our day-to-day world, take a look at the big picture rewards will come from.
and envision the future. Consider the scenario in which a traveler receives a
Those of us in the transportation industry have a ten- reward for, say, traveling at off-peak highway times or
dency to get caught up in day-to-day traffic manage- carpooling or taking transit instead of driving. The
ment issues. We would do well to ask some basic reward from a public transportation agency could be,

64 Stefan Hoepfel’s Phileas Fogg-like whistlestop

questions like, “What are the fundamental issues we’re for instance, use of a prime parking spot at a transit sta-
facing and how can we use wisdom and experience to tion. Or a reduced toll cost. Or a free ride on a transit
solve them?” system. The reward scheme could be based on points,
It doesn’t get much more fundamental than basic much the same as many “loyalty programs.” In the retail
human behaviour. Travelers in our transportation sys- world, loyalty programs are structured marketing efforts
tems are exhibiting a facet of their fundamental human that reward, and therefore encourage, behaviour that is
needs and desires. They need to get from one place to potentially of benefit to the issuer.
another and, not unreasonably, they want their trip to be In a “congestion avoidance rewards” program, the
safe and convenient. Can the transportation industry issuer’s (i.e. the transportation agency’s) overall benefit

world tour of electronic toll collection projects

build a new model based on managing human behav-
iour? I think we can agree that good public behaviour
includes being aware of the environment, using good
manners, and making choices that balance individual
needs with a respect for others’ needs. Why not reward
good public behaviour?
The dominant paradigms
Since February 2003, the City of London has charged a
fee for driving private automobiles in its central area
during weekdays as a way to reduce traffic congestion
and raise revenues to fund transport improvements. Put
in another way, drivers choose if they want to pay a
higher fee to drive their own vehicle into an urban zone
or use less-expensive public transit instead.
This approach has proven to be highly successful in
effects. At the same time, a new revenue stream has been
established by way of the congestion charge fees and
this can be used to make transportation even better.
a positive reward system. At a very naïve level, the type
of reward system that we are currently implementing
would be getting better use of existing roadway capac-
ity. The two desired outcomes would be to increasing
the peak-travel-time spread, and to promote a modal
shift to transit or HOV (high occupancy vehicle) lanes.
Here’s how it would work.
Leveraging ETC data
For the past decade or so, the huge push in the tolling
industry has been to design, install, and operate elec-
tronic toll collection (ETC) systems – in which tolls are
paid automatically via radio communication between a
transponder in a vehicle and a receiver at the toll
booth.
A similar big push has been to get the traveling public
to use ETC in lieu of cash. In some locations, ETC repre-
sents upwards of 65 per cent of the tolls paid. That means

London, Singapore and more recently Stockholm and
has created a “virtuous circle” of positive effects in each
of these cities. Transportation professionals now have a
very effective mechanism to manage demand, achieve
the desired results and avoid any undesirable side
It strikes me that if we can have such an amazing suc-
cess with what is essentially a somewhat negative reward
system: consumers pay (with a negative impact on their
wallets) for the costs they impose (greater congestion
on London’s streets), then could we do even better with
serves as a negative incentive to use resources effi-
ciently, much the same way that a child is given a “time
out” if he or she behaves badly.
US value pricing implementation has indicated that a
positive reward model could work. Consider variable-
INDIA
that well over half of the vehicles on a toll system are
now equipped with transponders.
ETC has certainly reduced congestion at toll plazas.
The big push in the future will be mining ETC data and
using it to win the overall war on congestion. An offer

46 Autumn 2007 ETCetc www.h3bmedia.com www.h3bmedia.com ETCetc Autumn 2007 47

68 Five new toll roads are set to open soon in

IN MY OPINION India. Vibeke Ulmann talks to project
42 Intelligent thinking can solve our congestion manager Manoj Dave
problems, suggests Mark Garrity. Who would
have thought it? 72 Advertisers Index
Nationwide Road User Charging using only GPS is
possible by 2009. This article will outline the tech-
nologies, business methods and roles to make this
possible.
The smartest way to deploy a road user charging
(RUC) program is to satisfy Nobel Economist William
Vickrey’s rules for congestion pricing. The most critical
among these rules describe Time, Distance and Place
(TDP) charging – specifically basing charges on when a
facility is used, how much is used, and where it is used.
TDP-RUC is the fairest and most effective all-in-one
approach to the triple problem of road finance, traffic
congestion and automotive pollution. The arguments for
this have been made so often and so well that they are
now self-evident to anyone who has given this any seri-
ous thought.
The qualified successes of the Singapore/London/
Stockholm cordon-style systems are very limited – and
these systems demand an exorbitant front-end outlay
for their constrained capability. These are crude time
(e.g., 0600-1800) and place (e.g., Central London)
systems that do not recognize a critical component of
congestion pricing: distance travelled. Since there are
as yet no area-based systems that provide all three com-
ponents, we have no more satisfied Vickrey’s conges-
tion pricing tenets than Conestoga wagons is a
transcontinental railway. London and Singapore (and,
one would suspect, Stockholm) know this and continue
to seek technology to enable full TDP pricing.
There are only three things needed to deploy a RUC
program that satisfies Vickrey’s TDP rules for conges-
tion pricing: technology, political will and a suitable
business process.

Coming to a city near you...

Infrastructure-free satellite-based technology for full
TDP operations in harsh GPS signal environments is
available now. While a few companies have made this
claim, teams from my company, Skymeter Corp, have
demonstrated accurate, reliable, gapless, multipath mit-
igation in the inner urban cores of London, Toronto,
Montreal, Singapore and New York (See Figure 1). We
will soon run more tests in other cities.
Certainly Galileo is absolutely critical to EU naviga-
tion and safety-of-life applications, but Galileo’s value
relative to congestion pricing will be in system and sig-
nal redundancy, and a new level of accuracy that will
enable a parking meter - even in urban canyon.

Galileo is critical to EU navigation and safety-of-life

applications but, says BERN GRUSH, we no longer
need to wait for it to deploy GNSS-based Road User
Charging - even in the dreaded urban canyon.
(That grinding sound you can hear is the gnashing
of numerous sets of teeth in Brussels)

04 Autumn 2007 ETCetc www.h3bmedia.com

 GNSS

Why wait for

Galileo?

www.h3bmedia.com ETCetc Autumn 2007 05

GNSS

Figure 1a: This is from an August 2007 test of a beta OBU in NYC, the red points are from an off-the-shelf, high-sensitivity receiver
from μ-blox, arguably one of the best navigation-grade GPS receivers on the market. The blue points are from a Skymeter OBU. These
points represent the first of three stages of processing that do not require map-matching. The final result of processing provides a
repeatable, integrity characterized, non-refutable toll calculation (not shown)

Processing methods that we have developed already assumptions are thus:

provide the required accuracy and evidentiary assur-
ance demanded for CBD-GNSS tolling applications.
There is no longer any technical reason to wait for
Galileo.
Clearly, sufficient political will is
apparent in many places besides Lon- “The three things
don, Stockholm, Singapore and Dubai.
The Netherlands and now Manhattan needed to deploy
are two evident examples. I am per- an RUC program:
sonally aware of several other cities
that are seriously looking at this. It will technology,
blossom in numerous cities and regions political will and a
following on the heels the first success.
Perhaps your particular city or country suitable business
will wait for stronger or more progres- process”
sive leadership before you can see the
benefits to mobility and air quality in your city.
What is left to develop, then, is a suitable business
process that requires minimum government expendi-
ture to initiate.This article describes a system that would
cost a road authority a fraction of the cost of the London
Congestion Charge system to establish. The possible
1) The use of Global Navigation Satellite Systems such
as GPS (and later Galileo) for positioning (hence no
fixed roadside infrastructure);
2) A resolution for privacy concerns;
3) The guarantee of accurate, relia-
ble and repeatable tolling charges;
and
4) availability of an evidentiary-
weight record of road use that is non-
refutable in the event a use-charge is
challenged.
Given these assumptions are satis-
fied – and they can be – we divide
motorists into three classes: fully com-
pliant motorists with an operational
on-board unit (OBU); occasional
motorists (e.g., visitors) who intend to comply with the
charge scheme but who do not have an on-board meter;
and motorists who do not wish to comply. We call these
OBU users, guests and evaders respectively. The busi-
ness process we propose will set up three self-funding
workflows one for each of these three types of motorists.

06 Autumn 2007 ETCetc www.h3bmedia.com


Figure 1b: This is a January 2007 test of an earlier (alpha) device in London, England. Here red is μ-blox and green is Skymeter
See Figure 2 on page 08 for an overview of the proposed
business process.
Pricing service role (OBU users only)
Rate setting: The first step in this process is that a road
authority, mostly likely a department of transport, sets
out the pricing requirements – how much will be charged
for which types of vehicles at which places and at which
times.
Map preparation: A system then ingests these pricing
requirements to generate a “pricing-map” – a geo-
coded database that holds this information in a way that
can be used to calculate subsequent bills.
Data collection: A suitable OBU mitigates multipath
signal error, establishes integrity measures and com-
presses path and time information.
This trip data is forwarded to a rating “If you use
service that can generate a billing
feed. This can be done privately or
Toronto’s Highway
anonymously depending on what a 407 more than once
road authority will allow.
Health assurance: This same OBU
every couple of
forwards information about its operat- months, it’s worth
ing condition to a device health status
service. This is used to determine
renting a tag”
whether the device is operational,
jammed, tampered, shielded, power-low, etc. This infor-
mation is used to establish device status, warn the
motorist via lights on the device, send citations, and
so on.
Bill generation: A rating service or billing engine
compares this trip information to the pricing map, and
generates a bill itemized for each tolling authority
whose infrastructure was used by the respective vehi-
cles since the last billing cycle. This is in turn formed
into a mass billing feed to a billing service that can be
operated in tandem or independently of the rating
engine. The OBU pricing contractor would be permitted
to retain a portion of the OBU tolling revenue (well under
10 percent) to pay for the OBUs and the data services. As
this same service vendor is able to increase service rev-
enues from parking and PAYD insurance (all handled by
the same system), the relative cost to the road authori-
ties should contunue to drop. Since the capital costs to
www.h3bmedia.com
GNSS
set up this system are already dramatically reduced
compared to a tag and beacon system, a transportation
authority can expect to invest far less up front, and to
spend far less to operate such a system.
Guest management role
Guests are defined as motorists without an operational
OBU to record and establish electronic charges, but who
are willing to comply with the charges. Guest payment,
associated directly to a vehicle’s licence/number plate
can be handled in several ways: phone, web, kiosk at
local convenience stores, etc.
While motorists reluctant to use a meter can use a
Guest Pass, these passes are intended as a way for occa-
sional visitors, tourists and those with a meter under
repair to pay without penalty or cita-
tion. Such payment, made in advance,
would be modest, perhaps equivalent
to slightly more than an average daily
meter payment. But guest fees for any
one vehicle must increase over time to
prevent abuse: motorists using facili-
ties frequently, but on a guest basis
would soon find an OBU far less expen-
sive to use than daily or weekly passes.
This is similar to the pricing arrange-
ment on Toronto’s 407 which charges a processing fee to
process your number plate each time you use the high-
way without a tag. If you use that highway more than
once every couple of months, it’s worth renting a tag.
Payments for Guest Passes are voluntary and motor-
ist-actuated. A contractor to handle this subsystem
would operate payment systems (online, call center,
SMS); manage fulfilment “(in the event physical passes
or OBU rentals are needed)); provide an enforcement
feed of temporarily “paid” license plates for the enforce-
ment contractor (below); set up and maintain signage;
handle marketing to users and visitors both locally and
abroad; receive payment and make residual payments
to the road authority that has authorized the contract.
Excepting the activity of maintaining road signage, all
of these activities parallel those of managing cellular
phone distribution and billing, so such a business would
be in a position to execute this.
ETCetc Autumn 2007 07
GNSS

Figure 2: This is a highly simplified overview of a full business flow. The core enabler, “Pricing Data” (in the gold boxes) is concerned
with the on-board-unit and its network support. The Rating Engine and the Health Check capabilities are likely to be in the same
datacenter – but are very important to distinguish. The full system includes handling guests, evaders, billing and collection. This can
be managed by a single integrator, a consortium or by a government who acts as prime directly managing four major contracts:
pricing, enforcement, guest passes and billing/collection.

08 Autumn 2007 ETCetc www.h3bmedia.com


Enforcement role
Enforcement is necessary for three types of evaders
and can be handled by a combination of mobile and
handheld licence plate recognition (LPR) devices.
Intentional evaders who have neither an OBU nor a
Guest Pass (previous sections) will be discovered via
mobile LPR on a random basis and will receive citations.
This is analogous to receiving a parking ticket, rather
than a citation for a moving violation. Intentional evad-
ers who have a tampered OBU are known to the data
centre by plate number via the health-check subsystem.
A tampered OBU has a specific light (LEDs) configura-
tion for driver notification and easy handheld LPR cap-
ture when the vehicle is moving slowly near intersections
or parked.
Good stations to discover such evaders are places
where vehicles stop momentarily to discharge or pick
up passengers or any form of public parking facility.
Users of anonymous OBUs that are tampered are also
discovered via handheld LPR and physically ticketed or
booted, as permitted in the respective jurisdiction. In
this case, the vehicle licence plate is not known prior to
discovery of the offence, due to anonymity.
Unintentional evaders are those whose OBU has failed,
or whose prepaid account has been
exhausted and who have not noted the “The only person
LED failed-status indicator (this may
not be accidental, but that is unprova- who may need to
ble). While there are remedies for this, audit location
the point is that these motorists must
be issued a citation unless they have information
purchased a Guest Pass while waiting relative to a
for an OBU replacement.
Citation rates and amounts need to specific bill is the
be balanced to ensure that evasion motorist himself”
management encourages OBU (or
Guest Pass) adoption and is at least
self-funding after program expenses of mobile and
handheld LPR vehicles, collections, labour, etc., as is
best practice for parking enforcement.
Mobile and handheld units will be updated in near-
real time with license-plate lists of valid OBU users and
valid Guest Passes – i.e., there are data connections
among the three services: OBU Users, Enforcement, and
Guest Pass. The tolling authority must decide whether
the vehicle must be stopped or whether a citation may
be mailed to the evader.
As an exception, a few fixed LPR gantries can be stra-
tegically placed on major routes on the inside edges of
the charging area. These can be used for guests who
intend to pay and choose to enter under one of those
gantries. This registers them for the day and automati-
cally bills the account attached to their number plate,
saving those guests the trouble of calling, visiting a
kiosk, or going online to order a pass.
Billing service role
Billing, CRM and Collection: Financial and customer
management issues may be best handled directly by
government. This is especially true if the fees are
described as a tax rather than as a user-charge. Regard-
www.h3bmedia.com
GNSS
less of whether handled directly or through a proxy, col-
lection is made easier if the motorists understand that
registered entitlement to drive a vehicle on chargeable
roads may be denied if use-charges go unpaid. Hence,
there should be a direct and apparent connection
between a department of transportation and motorists
relative to collection.
The business process described here is neutral to col-
lection agency so long as the authority to collect fees is
backed by firm rules regarding government registra-
tion of vehicles with unpaid use-charges.
Strong privacy and anonymity
Another key value of this business and workflow archi-
tecture is that strong privacy is easy to implement. In
addition to encryption and access security that would
be demanded by any such payment service application
there is an additional burden of preserving location pri-
vacy. Fortunately, there are two solutions.
Strong privacy is provided by ensuring that the entity
doing the pricing service role (the yellow boxes in fig-
ure 2) has no access whatsoever to the personal infor-
mation of the vehicle registrant. All pricing transactions
are tagged with an OBU account number and do not
require motorist or vehicle ID. As well,
no location data is required by the bill-
ing service. In other words, there is
never a database to associate both
location and personal information.
The only person who may need to
audit location information relative to a
specific bill is the motorist himself.
This information can be made availa-
ble online or via kiosk via a motorist
controlled password associated with
the OBU number.
Full anonymity is provided by allow-
ing a motorist to acquire a numbered OBU with cash and
without identification (except to state the vehicle-class
that the meter will be mounted on to prevent someone
attaching a meter for a lower-fee class of vehicle). As
the vehicle is driven, the pre-paid account is decre-
mented. LEDs on the OBU say when money is low and
when it reaches zero. An anonymous OBU with no cash
reserves is the same as having no OBU, hence enforce-
ment and guess-pass schemes then apply.
2009: a satellite odyssey
Given GPS-based technology that provides a reliable
evidentiary record,fledgling political will that is increas-
ingly evident in some cities and countries, and a busi-
ness process that dissipates huge up-front costs, there is
nothing in the way of time, distance and place road user
charging deployment one year from deciding the pro-
gram. 2009 TDP-RUC is now as easy a target for such
leaders as the 2003 TP-RUC was for Mayor Livingstone’s
London Congestion Charge in 2001. E
Bern Grush is chief scientist at Skymeter
Corp, based in Toronto, Canada.
bgrush@skymetercorp.com
www.skymetercorp.com
ETCetc Autumn 2007 09
The Herrentunnel near Lubeck under construction (above) and
in operation (right)

Double
Deutsch
In Germany the public authorities are responsible
for the planning, financing, construction, mainte-
nance and operation of expressways (Autobahns)
and Federal roads (secondary network). Planning
and public budget are codified on a long-term basis
within a national transport infrastructure plan, the
so-called Bundesverkehrswegeplan (BVWP).
By means of benefit-cost analysis and consideration of
environmental impacts, projects for road-, rail- and
waterway infrastructure are identified and labelled as
“urgent requirements”. Since the fulfilment of the infra-
structure demand is restricted by the public household,
not all economically reasonable infrastructure projects
Are public-private (with a Benefit-Cost Factor >1) can be considered as
partnerships the salvation urgent requirements.
for overcoming financing In fact, the current BVWP of 2003 with a planning hori-
zon until 2015 and a budget of €150 billion only allows
deficits for German road road infrastructure projects to be realized which pos-
infrastructure ask SASCHA sess a Benefit-Cost Factor >5.2. This is also the result of
the politically desired equal treatment of road and rail
FIFIC and MICHAEL BLUM transportation which restricts the needed budget for

10 Autumn 2007 ETCetc www.h3bmedia.com


Herrentunnel toll plaza
road infrastructure even more. Additionally, quotas for
the 16 Federal states avoid that the existing budget is
allocated efficiently. Need for action definitely exists
because 30 per cent of national roads are not fully oper-
ational (last surveyed in 2000)1 and about 15 per cent of
engineering works (bridges, tunnels, etc.) are in critical
or even insufficient condition 2.
A commitment against political arbitrariness
Germany’s road infrastructure is traditionally financed
by taxes on mineral oil and an annual tax on motor vehi-
cles. The overall income of these taxes amounts to about
€44 billion per annum, of which “only” about €17 billion
are spent on road infrastructure (including non-national
roads as well3) . Since the beginning of 2005 the German
state also generates revenues (about €3 billion in 2006)
from the distance-based tolling of Heavy Goods Vehi-
cles (HGV) on expressways and selected federal roads.
The Electronic Toll Collection (ETC) system replaced
the Euro-Vignette and represents a further step from tax
financing to user-based financing in Germany. It is often
said that the introduction of the ETC system for HGVs
did not increase the budget available for road infra-
structure, because tax revenues, once designated for
the road sector, were cut off simultaneously. However,
these critics appear somewhat narrow-minded because,
according to German legislation, the introduction of a
charge instead of a tax guarantees revenues earmarked
to the specific sector on a long-term basis.
The institutional framework for PPP
Already in the 1990s Public Private Partnerships (PPP)
were regarded as a solution to reduce the financial defi-
cit of Germany’s road infrastructure. The general idea of
PPP is for private investors to take over planning, financ-
ing, construction, maintenance and operation including
all the incorporated risks. In case of road infrastructure
the refunding should normally result from fee revenues
paid by the users of the respective infrastructure.
The objectives of PPP are, firstly and foremost, the
inclusion of private capital which should enable infra-
structure projects to be realized faster and independent
from restrictions regarding the public household. Sec-
www.h3bmedia.com
Germany
ondly, one expects more cost efficiency, a higher trans-
parency of the performance, an optimal risk allocation
and an operation which aims directly at the needs of the
user4. In Germany, the so-called F-Model and A-Model
were developed to open the road transportation sector
for PPP. Subsequently, both models will be described
and evaluated. By the way, with the “Functional Building
Contract” another variation of PPP is used for road infra-
structure, but it does not include any components of user
financing.
F-Model : for crystal ball professionals?
On the basis of the “Bundesfernstrassenprivatfinan-
zierungsgesetz”, since 1994 private investors have
been allowed to take over planning, financing, construc-
tion, maintenance and operation of bridges, tunnels and
mountain passes which belong to expressways. After 30
years of operation the private investor is committed to
hand over the infrastructure to the public authority in a
quality which is determined in the operating contract. It
depends on the time of the political decision to use an
F-Model for financing an infrastructure project whether
the private investor may have an influence on the tech-
nical design of the project. Therefore, the F-Model can
either be regarded as DBOT- (Design-Build-Operate-
Transfer) or BOT-Model (Build-Operate-Transfer).
To refund his costs the private investor is allowed to
charge a tolling fee for all users of the infrastructure.
Additionally, the public authority may “push” the opera-
tor by providing a maximum of 20 per cent of the overall
investment sum. The costs covered by the public sub-
sidy may not be incorporated in the calculation of the
toll rate.
Since 1994 two F-Model-projects have been awarded
to private investors and the construction of both objects
is completed. The operation of the “Warnowtunnel”,
which saves commuters travelling to Rostock up to 30
minutes, began in September 2003. The “Herrentunnel”
of the city of Lübeck was opened for traffic in August
2005.
Currently, three more projects are designated to be
conducted as F-Models, but tendering is delayed mostly
because of drawn-out planning approval procedures.
ETCetc Autumn 2007 11
Germany
Manual toll collection at
the Warnowtunnl
Warnowtunnel
The tender process for the Warnowtunnel started at the
end of 1994. In July 1996 a project corporation was
awarded with the project. The current associates of this
corporation are the French Bouygues Construction
Group and Australia’s Macquarie Infrastructure Group.
The overall investment sum added up to €219m from
which about 12 per cent were public subsidies.
The toll for using the Warnowtunnel
is differentiated between several vehi- “The main
cle types (depending on the number of modification was
axes and height of the vehicle) and
summer and winter months. At the the extension of
beginning of the operation the toll var- the concession
ied from €1.50-2.50 for passenger cars
and €7.50-17.50 for HGV and busses. duration to 2053”
This range includes available discounts
for frequent users5.
However, instead of estimated 20,000 vehicles per day
the traffic volume only reached about 7,500 vehicles per
day. This forced the project corporation and the respon-
sible public body to readjust the level of the tolls start-
ing in January 2007 (€1.70-2.80 for passenger cars and
€8.50-13.00 for HGV and busses6 ).
However, the main modification was the extension of
the concession duration to 2053. This addition of 20
years should give the project corporation the opportu-
nity to refund its investments properly, although accept-
ing a considerable delay in time. Currently, the traffic
12 Autumn 2007 ETCetc
volume averages considerably over 10,000 vehicles
per day7.
Herrentunnel
This tunnel project was tendered as an F-Model in 1997
to replace the dilapidated bridge called “errenbruecke.
In 1999, the contract was awarded to a consortium con-
sisting of the two German construction companies
Hochtief and Bilfinger & Berger.
The financing model of the Herren-
tunnel differs considerably from a nor-
mal F-Model described above,
because in this case 51 per cent of the
overall investment sum (€176m) were
provided by public subsidies. The rea-
son: the federal state of Germany was
obliged to fund the replacement
investment for the Herrenbruecke anyway and, there-
fore, agreed to co-finance a tunnel project (which was
favoured by the city of Luebeck) amounting to the costs
the construction of a new bridge would have created8.
Similar to the Warnowtunnel, the estimations of traffic
volumes for the Herrentunnel were overcast. After the
start of the operation in 2005 the tunnel was used by
21,000 vehicles per day – 16,000 vehicles less than esti-
mated at time of the contract signing9. As a reaction the
toll was slightly increased, passenger cars being
charged with €1.10 and HGVs with €8.8010. Discounts
for frequent users are available.
www.h3bmedia.com
 Germany

Approach to the Warnowtunnel

A-Model – still only pure theory
In contrast to the F-Model the A-Model is not legally
codified. Instead, it was developed by the German “Min-
istry of Transport, Building and Urban Affairs” sup-
ported by external consultants11 and is in force since
2001. It provides the opportunity to outsource the lane
extension of an expressway section (typically 40-60 km)
with already four or six lanes to a private investor.
This investor shall be responsible to take over plan-
ning, building and financing of the additional lanes. Fur-
thermore, the investor commits to operate and maintain
the whole expressway section for 30 years. In return for
the incurred costs the private operator receives, on the
one hand, the revenues resulting from the tolling of
HGVs for this section.
On the other hand, the public authority provides sub-
sidies (to a maximum of 50 per cent) to compensate for
the costs created by all other vehicles (shadow tolling).
The level of the public subsidy is the main criteria for
the bidding competition.
After the introduction in 2001, 12 projects were identi-
fied as potential A-Models. But later the number was
reduced to five projects, two of them were recently
awarded. The first project concerns the extension of a
37km long section of the A8 expresswaybetween Munich
and Augsburg. Operator will be the private consortium
Autobahnplus.The second project is part of the express-
way A4 in the Federal state of Thueringen.

Mission accomplished?
PPP experiences from other sectors/countries show a
cost saving potential up to 20 per cent compared to con-
ventional provision by the state. This generally depends
on whether efficiency gains resulting from Life-Cycle-
Cost optimization are able to outweigh higher costs for
financing or transactions in the course of renegotiations
with the client. With only two completed F-Model-
projects a cost-comparison on any terms seems rather
inappropriate. Unfortunately, the two projects were also
planned without comparing the alternative costs of pri-
vate and public provision12.
However, it can be stated that the contractual design of
F-Models offers few incentives for the private operator
to work cost-efficiently because all costs are basis for
the calculation of the toll rate which is adjusted accord-
ingly every couple of years. Given the
small number of completed/planned “The contractual
PPP-projects in Germany, the effects
on the public transportation budget design of F-Models
can be neglected. The same applies offer few incentives
to A-Model-projects, also because
private operators are refunded with for the private
parts of the income of HGV tolling operator to work
which have to be withdrawn from the
public transportation budget. cost-efficiently”
Realization period
Experience proves that the objective of better time effi-
ciency can definitely be achieved after the political
decision to handle a project using PPP is finally made.
The Warnowtunnel presumably would not even exist
today because it did not belong to the projects identi-
fied as urgently required within the BVWP. Another pos-
itive aspect is the ability of private investors to speed up
the planning process. It took the project corporation of
the Herrentunnel a record time of only six months to
complete all necessary approval documents12.
Risk allocation
Optimal risk allocation means that the involved parties
bear the respective risks they can miti-
gate best. But the design of the F- and
A-Model prevents the achievement of
this objective because besides the
project costs, the private investor has to
take over the risks for traffic volume as
well. The costs of the project are mostly
controllable, however, the demand
risks i.e. the amount of users willing to
pay, cannot be mitigated in a better
way than by the public client. Within
the F-Model, the calculation method for the tolling fee is
fixed, therefore, leaving the private operator no chance
to influence or induce the demand on the price side.
Because financing costs weigh heavily in the begin-
ning of the operation, the tolling fee starts on a rather

www.h3bmedia.com ETCetc Autumn 2007 13

Germany
high level14 which is not helpful to get users accustomed
to user-based financing.
Regarding the A-Model, the options to influence the
traffic volume is even worse. The toll rates for HGVs are
regulated on federal level and the private operator pos-
sesses few possibilities to make the quality of the serv-
ice visible to the users.
As an A-Model investment only refers to a defined
number of sections, accounting for only a portion of the
chosen trip, service improvements on a certain part of
the trip may have little chance to increase the willing-
ness to pay. Eventually, of course, it is questionable if the
volumes for freight transport are predictable over an
operational period of 30 years.
Room for improvement
Though the intention to include private capital for the
financing of road infrastructure is judged positively, the
use of PPP should not be rushed either. Possible PPP-
projects should be selected carefully and cost compari-
sons between public and private provision adopted as a
rule.
As explained the transfer of the traffic volume risk to
the private investor presents a huge deficit in the design
of the A- and F-Model. Instead, this risk should stay on
the side of the public client and the private investor
could be paid a fixed price for his services. This would
increase the incentives for the contractor to work more
cost efficiently. Heading in this direction is the so-called
“Availability Model” where the private operator is paid
for the number of lanes being kept
accessible for the users. “An extension of
It seems obvious that the profitability
of tolled road infrastructure objects
user-paid financing
leaves a lot to be desired if there exist based on the whole
parallel routes which are free of charge.
It should be questioned if the estima-
road network
tion of traffic volumes presents a com- should be the
mon problem within the benefit cost
analysis of road infrastructure, or if the
preferred solution”
proven discrepancy is mainly caused
by a wrong perception of the user’s willingness to pay.
Generally, an extension of user-paid financing based
on the whole road network should be the preferred solu-
tion. Existing monopolies can be regulated, e.g. by using
the price-cap model.
Conclusion
The analysis has shown that the utilization of PPP-mod-
els does not have the ability to solve the financial chal-
lenges of Germany’s road network. At best, the options
enable time savings because projects can be realized
earlier or, in case of the Warnowtunnel, at all.
Under the current institutional framework PPP will
remain a niche option to finance road infrastructure in
Germany. Nevertheless, the public authorities have to
learn from the past mistakes by not only eliminating the
deficiencies of the existing PPP-models, but of the over-
all approach of infrastructure planning and financing as
well.
Currently, Germany profits from a positive economic
14 Autumn 2007 ETCetc
situation. But it is foreseeable that the next economic
slump will put the pressure on the social security sys-
tems even more than the last time. Traditionally, politi-
cians react by cutting investments in favour of expenses
for purposes of consumption. It is the opinion of the
authors, that over middle-term only the complete
change from tax- to user-based financing will assure
that Germany’s road network can be extended and kept
in its quality.
To avoid a displacement of traffic from expressways to
the secondary road network a distance-based ETC-sys-
tem for all vehicles is only reasonable if it is applied on
the whole road network. Both from a technological and
an economic point of view, such a system cannot be
implemented within the next 10 years. Therefore, it is
often correctly suggested to bridge this period using a
vignette-system. E
References
1 BMVBS (2002): Straßenbaubericht 2001, p.9.
2 BMVBS (2006): Straßenbaubericht 2005, p.9.
3 Pöyry Infra GmbH (2007): Nutzerfinanzierung: Straße
– Wohlfahrtsökonomische Einschätzung und Einbindung
in die Finanzierung der Straßenverkehrsinfrastruktur,
p.15.
4 Deutsches Verkehrsforum (2003): Betreibermodelle
für die Straßeninfrastruktur - F- und A-Modell im Fokus,
p.1.
5 Dornier Consulting GmbH (2006): Erfolgsfaktoren
und Bewertungsmöglichkeiten von PPP-Projekten für
Verkehrsinfrastruktur, pp.62.
6 www.warnowquerung.de/tarife.
html, data retrieved on 4 September
2007.
7 www.macquarie.com.au/au/mig/
assets/traffic.htm, data retrieved on
31 August 2007.
8 Beckers,T (2005): Die Realisierung
von Projekten nach dem PPP-Ansatz bei
Bundesfernstraßen, p.163.
9 www.wikipedia.org/wiki/Herren-
tunnel, data retrieved on 4 September 2007.
10 www.herrentunnel.de/maut.html, data retrieved
on 4 September 2007.
11 Martens, C.-P. et al. (2004): Gutachten zur Erarbei-
tung der Muster eines Konzessionsvertrages und Rege-
lungen für die Ausschreibung/Vergabe von Konzessionen
für das Betreibermodell für den mehrstreifigen Auto-
bahnausbau (‘A-Modell’).
12 Beckers, T. (2005): Die Realisierung von Projekten
nach dem PPP-Ansatz bei Bundesfernstraßen, p.160.
13 Kulle, B. (2007): Verkehrsinfrastrukturfinanzierung
aus Sicht der Privaten, in: Öffentliche vs. Private (Straßen-)
verkehrsfinanzierung, Ifmo, p.50.
14 Beckers, T (2005): Die Realisierung von Projekten
nach dem PPP-Ansatz bei Bundesfernstraßen, p.173.
The authors can be contacted via email at:
sascha.fific@dornier-consulting.com
michael.blum@dornier-consulting.com
www.dornier-consulting.com
www.h3bmedia.com
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xxxx

Just how
smart is this
technology
anyway?

Anyone who works with electronics knows that a

Q-Free’s STEINAR FURAN
wonders exactly how
intelligent ITS systems,
especially those prevalent in
the road pricing arena,
actually are
transistor has a will of its own. If anything consists of
two or more transistors, the circuit has a soul. The
good engineer might, however, wonder if the tran-
sistors really are intelligent, as they oscillate and
fume by themselves.
There is no guarantee that a circuit or a construction is
smart, even if it is made up of millions of transistors. The
same goes for computer systems. An enormous amount
of code lines does not necessarily mean that the compu-

16 Autumn 2007 ETCetc www.h3bmedia.com


ter is performing well. As a computer is able to perform
errors and even repeat them and reproduce errors at
impressive speeds, the results of a complex computer-
ized system can be pure anarchy. A relevant question in
this regard would be: “How do we make sure that our
computerized systems are working in an intelligent
manner?” In this article, the topic will be discussed and
some possible paths shown.
ITS solutions have contributed to important results
when it comes to improving traffic management and to
www.h3bmedia.com
Smart Thinking
making the daily life of citizens better. The success of
good ITS solutions however means that many actors
would like to call their solution an “ITS solution”. To
bring some common sense into this scene, it is very
tempting to set a definition for a genuine ITS solution, a
suggestion might be:
Intelligent Transport Systems are systems character-
ized by the following properties:
• The system relies partly or entirely on the use of
information originating from other sources than the ITS
solution itself;
• The system makes available results from its opera-
tion so that these results can easily be used by other ITS
solutions;
• The system operates under conditions where the
system owner has granted rights for others to use some
of the data generated by the system.
Intelligent on the inside
ITS, applied in a proper manner, can provide great sav-
ings for the society, the individual user and for the envi-
ronment. To be able to reach the goals of less pollution,
no congestion and a significant reduction in traffic acci-
dents, ITS will have to be used extensively. The vital key-
words to make this happen are “interoperability” and
“standardization”.
Interoperability in this context means that the owners
of ITS make legal and commercial arrangements to
allow for the exchange of data between the ITS solutions.
Standardization means adherence to international
standards, securing that the systems are technically
capable of exchanging data. The requirement seems
simple, but experience from the last decades shows that
while it is easy to achieve technical interoperability
through standardization, the commercial and legal
agreements for interoperability have been more diffi-
cult to reach. The Nordic countries of Sweden, Denmark
and Norway have been able to do this with their com-
mon electronic toll collection solution named ‘EasyGo’.
The project is a brilliant example of real interoperabil-
ity, as it allows all users to use the foreign services with-
out any additional actions from the user’s side.
Soft sell
So how do we at Q-Free contribute to the realization of
projects like EasyGo? Q-Free has, unlike some other
actors, never really paid much attention to a particular
technology. Q-Free’s approach has always been to first
determine the true requirements of each solution, then
to select the technology best fit for each case and finally
to strictly comply with standardized architectures and
interfaces.
A side effect of this has been that Q-Free has always
been in the forefront when it comes to presenting new
products to be used in the solutions. Q-Free deployed
the first commercial 5.8 GHz system in Portugal in 1995,
the first commercial large scale 5.8 GHz DSRC system in
Austria in 1998 and the first fully automated ANPR charg-
ing system in Stockholm in 2006. The common factor in
all these projects is that they all strictly adhere to an
open standardized architecture.
ETCetc Autumn 2007 17
The Future
Future perfect or tense?
What will that bring for the future? Q-Free sees that the
good, efficient system solutions will utilize different
technologies. New features will be offered, bringing
new business opportunities for the customers. Further-
more, efficient solutions will be using state-of-the-art
technology. Q-Free has a number of such inventions
cooking in the oven, so what could we expect here?
The road user charging systems and congestion
charging systems have successfully been using DSRC
technology. In these systems, security
and processing capacity are para- “When money
mount and the DSRC technology is enters the
very well suited to handle these chal-
lenges. Over time, the mass-produced equation, DSRC is
unit has enabled a considerable price often the only
cut in this technology, making DSRC
available to small systems. Obviously, logical answer”
in conventional toll collection systems,
DSRC will remain a stable and preferred foundation for
the system solutions for many years still. When money
comes into the equation, DSRC is often the only logical
answer.
Some clients demand more services than only making
a payment for a service. In particular, this is valid for the
fleet management systems, where the information
exchange between the vehicle and the roadside is more
complex and where in-vehicle data processing capac-
ity could be desirable. Here, systems based on naviga-
tion are logical choices, but a navigation unit alone
cannot perform all the tasks here. For such systems to
become “intelligent”, they will have to be able to use
information available and, if people other than the driver
18 Autumn 2007 ETCetc
need to benefit from the system, it must be able to make
its data available to others.
Q-Free’s strong initiative in the development of CALM-
technology is a clear signal that many new intelligent
transport systems will be offered in the future. These
will use GNSS navigation and broadband communica-
tion besides offering new means of data presentation
and human interfaces. Q-Free believes that within this
technology lies a considerable potential for saving lives
and making traffic more efficient. The fundamental key
to an intelligent transport system solution here is open
interfaces. Open interfaces have been secured in the
DSRC-segment as the customers have applied the
DSRC-standards. The same is valid for other applica-
tions, and it is fundamentally important that also these
systems strictly adhere to international standards and
architectures. Failure to do so will inevitably mean that
the solution becomes “unintelligent” hindering future
integration with other solutions. In a correct implemen-
tation, a GNSS-based system can bring interesting
opportunities. If the solution is made incorrectly, the
system will become unproductive and chaotic.
Licence to detect
ANPR has been available for many years, but only
recently the performance of the system has been suffi-
cient to rely on the automatically decoded number. In
former systems, the video image would be manually
inspected before a user would be charged. Q-Free’s
technology is enabling a fully automated use of ANPR
for direct user charging, thus making a huge cut in the
operational cost. In areas where the risk for fake license
plates is low, the use of ANPR is a very efficient solution
for systems requiring identification only.
As time goes by, copycats enter the market trying to
push a particular technology rather than finding the
right solution.Typically, these will offer copies of yester-
day’s technology, often with interfaces that don’t comply
with standards, wrapped up in a mod-
ern packaging. For the customer, this
results in difficulty making the right
choice when flooded with new techni-
cal gadgets.Well maybe or maybe not.
For the customer, the important thing
is to always remember the purpose of
the solution and to define this purpose
within the context of stable interna-
tional standards. The customer should keep his focus on
what is important, namely the functions, the interfaces
and the cost. Keeping that focus, the customer can be
relatively sure that he is on the right track.
At Q-Free, we have been making intelligent transport
systems with different technologies the last twenty
years. Through a number of projects, Q-Free has proven
its ability to enhance functionality and integrate the
solutions with other technologies and systems.
These are examples of true intelligent transport sys-
tem solutions. We will maintain our focus on the right
solutions, meaning that the market will see many new
technological inventions applied in a smart way for
future systems. E
www.h3bmedia.com
Programme Design

The fairer
six
The future for ITS
programmes,
says SIMON ALBUTT,
is outcome-based

Finding innovative solutions to complex problems
is what many organisations implementing intelli-
gent transportation systems (ITS) set out to do. But
often, when there are multiple projects involved in
an ITS Programme, solutions can easily end up far
more complex than is warranted by the problems
they were designed to solve.
It doesn’t have to be like that. The way to avoid this is
to ensure your programme is based on outcomes. This
means knowing what outcomes you
want to achieve and using this to drive “The key difference
and steer the programme and its con- between an
stituent projects. This is easy to say but
harder to do in practice. outcome and an
This article offers some practical output, is the real
insights into how to design an ITS pro-
gramme that is truly “outcome- world aspect of an
based”. outcome”
Six principles
In designing an outcome-based ITS Programme, there
are six fundamental principles that will help you
succeed:
1. “Healthy teams make fertile ground for innovation”
2. “Outputs matter, outcomes matter more”
3. “We want the same things”
4. “Perception is not always reality”
5. “Focusing on the outcome allows flexibility when
things change”
6. “Measurement and Governance are your friends.”
“Healthy teams make fertile ground...”
Ensuring that ITS programmes address
the real needs of road users and Gov-
ernment organisations is a complex
challenge. Experience shows that pro-
grammes that are driven by the end
goal or desired outcome rather than
just by the project task is a way of main-
taining the team’s focus on the impor-
tant issues – this is essential to providing
the climate in which innovation can
flourish.
Coupled with an inclusive design policy that allows
multiple members of the team, including those with
operational experience, to have a say permits the

20 Autumn 2007 ETCetc www.h3bmedia.com

 Programme Design

design of real world solutions in the most innovative way,

and gains substantial buy-in from the community.

“Outputs matter, outcomes matter more”

The key difference between an outcome and an output,
is the real world aspect of an outcome. An outcome may
be enabled by a project but that project will not be the
only thing that is required. For example, an outcome for
a speed camera installation programme might be a
reduction in vehicle speeds at accident blackspots.
The cameras might be installed and the public might
be aware of the accident statistics for a particular road
junction. The installation and the public awareness of
the facts would both be “outputs”.
But without a change in attitudes amongst drivers the
scheme will not address the desired outcome – Figure 2: Multiple projects will lead to multiple outomes
a reduction in accidents and casualties. No project can
deliver this change in attitudes alone – although things
can be done to influence drivers and to alter behaviour. “We want the same things”
But ultimately the outcome is dependent on a range of Those involved in designing and delivering ITS pro-
factors, some of which are outside of the project’s direct grammes all want to deliver a similar list of outcomes.
control. These tend to fall into several categories of overall pol-
One might take the attitude that if the outcome cannot icy objectives. In the sphere of road travel and demand
be determined, focusing on it is a waste management, for example, most pro-
of time. Conversely, putting effort into “One might take grammes are seeking to achieve
projects that do not deliver the required improvements in tackling:
results is similarly futile.
the attitude that if • Congestion,;
Practical experience of running pro- the outcome • Sustainability and environment;
grammes based on clearly defined • Vehicle-related crime;
outcomes, demonstrates that subtle
cannot be • Accidents and casualties;
changes in the programme’s imple- determined, • Fraud (thereby improving the rev-
mentation will affect the outcomes. enue raised from a scheme);
Clearly, the practical project delivery
focusing on it is a • Equality of access and commercial
still needs to take place – planned and waste of time” opportunity.
delivered to specification, to time and Addressing these, in whole or in part,
to budget. is not straightforward. Practical implementation of this
There are many ways to achieve the project result and technique requires that these strategic outcome goals
some will support the desired outcomes better than are broken down into more tactical and operational out-
others. comes in support of overall aims.

“Perception is not always reality”

Any potential ITS scheme will address these outcomes
to a greater or lesser degree. Speed camera installa-
tions are principally focused on safety (although the
public perception of the policy purpose is different),
whilst the Central London Congestion Charge is focused
on tackling congestion with a side benefit of raising rev-
enue that can be addressed at public transport thereby
reducing congestion still further. Interestingly the cur-
rent proposal to charge large vehicles more would
address the environmental/pollution angle more than at
present, if implemented.

“Focusing on the outcome...”

Typically any intervention addresses more than one
outcome and designing a programme to address a par-
ticular objective will have side effects on other outcome
objectives, which may support or detract from pro-
grammes already in place to address those aims.
The end objectives need to be constantly reviewed
Figure 1: The ITS outcomes and the progress towards the desired end goal under-

www.h3bmedia.com ETCetc Autumn 2007 21

Programme Design
Figure 3: Governance models for an outcome-based
programme.
stood. Projects that focus on delivering a specification
in the absence of the desired outcome that specification
is designed to address will fail when the environment
changes.
Defining and designing programmes in outcome
terms and driving projects within those
programmes within an overarching
governance structure allows flexibility
“Each desired
to be introduced whilst still maintain- outcome led to a
ing control. It is of course necessary to
define what each project is designed
project which
to do and to specify early on how it must focused on
do it – without such a specification the
project would deliver very mixed
improving the
results. agency’s
However, allowing a challenge to the
project scope if it is no longer in the
performance”
best interests of the organisation is
entirely proper and permits the most effective course of
action to be taken to address the objectives in place.
“Measurement and governance...”
A key step in any programme of this type is the measure-
ment of results so that the effectiveness of the steps can
be continuously assessed. As well as informing the pro-
gramme management, this also allows the readjustment
of interventions to be carried out to ensure the optimal
benefit.
Many projects start off being very focused but grow
until their scope is unmanageable. Experience of large
scale programmes shows that collections of small
projects delivering incremental benefits often leads to
much better results – the projects are easier to plan and
the results are much clearer. A tiered governance model
where projects fit within an established programme of
work with appropriate management controls can help a
great deal to address this.
22 Autumn 2007 ETCetc
Figure 4: An outcome value chain for addressing road safety
On target
The principal objective was an improvement in road
safety, achieved through more – targeted enforcement
activity by a relatively small number of enforcement
officers – the focus was to improve the effectiveness of
those personnel.
Targeted enforcement required
access to better information at the
roadside, which in turn necessitated
the right analysis to be done to sup-
port better decision making. Each
desired outcome led to a project,
which was focused on improving the
agency’s performance against the
specific outcome. Together the pro-
gramme delivered a substantial
improvement in the effectiveness of
the traffic examiners.
The Six Principles of Outcome-Based Programme
Design will not give you a short-cut for “by-passing” all
the hard work of ITS programme design and delivery.
But they will stop your solution from becoming more
complex than the problem it is trying to solve. And they
will help you cope with the unexpected and get closer to
the outcomes you seek to achieve. E
Simon Albutt is an Associate Director at Consulting
Stream Limited, a world leader in the design and imple-
mentation of multi-disciplinary programmes, with a
strong history of engagements in the ITS arena.
Simon’s career has focused on large programmes in
the public and transport sectors, including outcome-
based programmes in the area of targeted enforcement
leading to significant improvements in roadside safety.
He can be contacted via email at
simon.albutt@consultingstream.com
www.h3bmedia.com
Dr. Ondrej Pribyl, Product Manager, Key Account
“Forget all you ever knew
about Weigh-in-Motion.
We combine high precision
measurement with free flow.”
Precise weight measurement with
digital image documentation under
high speed free flow conditions for
fully automatic enforcement solves
overweight vehicle problems like
larger risks in traffic and damages
to the road.
ROBOT Visual Systems GmbH
Opladener Strasse 202
40789 Monheim, Germany
Tel. +49 (0) 21 73 - 39 40 - 190
Fax +49 (0) 21 73 - 39 40 - 234
info@robot.de
www.robot.de
JENOPTIK Group.
New York City
Definitely
maybe
KEN ORSKI and KEVIN BORRAS examine the facts, figures and
thinking behind New York City’s consistently headline-making
plans to implement a congestion pricing scheme
Behind the celebratory headlines announcing the
Federal award of US$354m to New York City lies one
little noticed fact: the bulk of the federal grant can-
not be spent on the implementation of a congestion
pricing scheme.
Most of the Federal grant is funded with dedicated
transit dollars which federal law requires to be spent for
transit-related purposes. That is why all but a fraction of
the grant will be devoted to bus-related improvements
(US$213.6m), an initial phase of a Bus Rapid Transit
system (US$112.7m) and a regional ferry service
(US$15.8m). Only US$10.4m has actually been ear-
marked for equipment and installation necessary to
make congestion pricing work.
That equipment includes a computerized system and
hundreds of cameras to monitor traffic, charge motorists
24 Autumn 2007 ETCetc
using E-ZPass and pursue drivers without E-ZPass
through a photographic license-identification- and-bill-
ing system. (It gets worse: only US$1.6m of the grant is
made immediately available; the remainder is to be
released only upon legislative approval of a traffic
reduction plan within 90 days of the opening of the next
session of the New York State Legislature - roughly the
end of March 2008. But that’s another story.) In its appli-
cation to the Federal government, the city requested
US$179m in Federal dollars toward the cost of this instal-
lation whose total cost is estimated at US$223m.
Red faces
Mayor Bloomberg is now faced with an embarrassing
task of coming up with US$169m in extra money to
implement the congestion pricing plan - money that is
www.h3bmedia.com

not in the budget and that the Mayor did not anticipate
having to spend. Fortunately there may be a way out of
his dilemma. The Federal grant does not specify that the
reduction must be realized through the imposition of an
areawide congestion pricing fee. It merely requires the
city to reduce vehicle miles traveled (VMT) in the con-
gestion pricing zone by 6.3 per cent and to use pricing
as the principal mechanism to achieve this reduction.
Tolling the currently free East River bridges might
accomplish substantially the same result.
An E-ZPass toll collection system could be installed on
those bridges at a small fraction of the cost of imple-
menting a fully fledged areawide pricing system. And
while a US$6 or US$8 toll on the East River bridges might
not achieve precisely the same reduction in traffic as the
Mayor’s plan had promised, it might come close enough
to satisfy the conditions of the Federal grant.
After all, the objective of the federal Urban Partner-
ship Program is to demonstrate that tolls and pricing
work to reduce congestion, not to prove that they can
achieve some arbitrary reduction in VMTs.
In his press conference, Mayor Bloomberg said that he
was open to new ideas. Tolling the East River bridges in
place of the costly and burdensome congestion pricing
plan is one such idea he can ill afford to ignore.
So, what’s next for NYC?
As was expected, the New York State legislature took the
first step on 25 July towards the possible implementa-
tion of congestion pricing in Manhattan by voting to
establish a “New York City Traffic Congestion Mitigation
Commission.” The Commission, in the words of the bill,
is to “undertake a review and study of plans to reduce
traffic congestion within the City of New York... includ-
ing but not limited to issues relating to the implementa-
tion of the traffic congestion mitigation plan to be
developed by the Mayor...”
The bill also establishes a rigorous timeline for the
development, review and approval of the traffic mitiga-
tion plan, with 1 April 2008 as the target date to give the
www.h3bmedia.com
New York City
City the green light to proceed with implementation of
the traffic mitigation plan. The vote was 122-16 in the
Assembly and 39-19 in the Senate in favour of the
legislation.
The establishment of the Commission marks an initial
step in what promises to be a complicated and conten-
tious process whose outcome is difficult to predict. The
plan to implement congestion pricing in Manhattan has
to clear two major hurdles.
The first is to obtain a federal grant under the US DOT’s
US$1.2billion Urban Partnerships program. The Albany
bill stipulates that the program cannot proceed unless
the City obtains at least US$250m in funding - either in
the form of a single federal grant of US$250m or with a
federal grant of US$200m to be supplemented by a City
commitment of US$50m. The federal commitment must
be in place by 1 October (the day after this issue goes to
press) and the city commitment by 31 December.
Mitigating circumstances
The second hurdle facing Mayor Bloomberg’s conges-
tion pricing proposal is of a more substantive nature. It
involves both convincing the 17-member politically
appointed Congestion Mitigation Commission that con-
gestion pricing ought to be a key element of its overall
congestion mitigation implementation plan while simul-
taneously persuading three independent politically
elected bodies - the City Council, the State Senate and
the State Assembly - to adopt the implementation plan
substantially as proposed by the Commission.
The bill, which uses the term “congestion mitigation”
rather than “congestion pricing” in its title, empowers
the Commission to come up with alternatives to area-
wide congestion pricing.
However, the bill stipulates that the adopted conges-
tion mitigation measures must produce at least a 6.3 per
cent reduction in average VMTs, as promised in the May-
or’s original plan. Such a reduction might possibly be
accomplished by tolling the aforementioned East River
bridges.
ETCetc Autumn 2007 25
New York City
Obtaining Federal Financial Support
The US Department of Transportation is now faced with
a difficult decision. It must decide whether New York
City has met the conditions of the Urban Partnerships
program and qualifies for a federal grant under that pro-
gram. The Department has stipulated from the very out-
set that applicants must show evidence of having the
authority to move forward with their proposed pricing
strategy. New York City currently lacks such authority.
The City will obtain authority to act only if and when the
City Council and the State Legislature approve the
implementation plan recommended by the Congestion
Mitigation Commission.
The consent will come at the end of March 2008 at the
earliest. By selecting NYC for an award despite its cur-
rent lack of authority to act, the DOT would open itself to
accusations of favouritism, since it had disqualified
other candidate cities, such as Los Angeles, precisely
because they offered to “study” rather than implement
congestion pricing.
The quandary from the Federal perspective comes
from the fact that the NYC project offers
a unique opportunity to demonstrate “NYC offers a
the concept of areawide (cordon) con- unique opportunity
gestion pricing. It is generally agreed
that New York City offers the most to demonstrate the
favourable venue for such a demonstra- concept of
tion. A congestion pricing showcase in
Manhattan could significantly enhance areawide, cordon
the political legitimacy of this concept congestion pricing”
and accelerate its public acceptance
throughout the country - an avowed
policy goal of US DOT leadership. There may also be
some discomfort in denying an award to an important
“client” such as New York City, although the DOT would,
however, be on solid ground in defending a decision to
turn the City down because of its inability to meet the
program’s eligibility criteria.
A possible way out of this dilemma is for the Depart-
ment to employ the mechanism of a “pre-implementa-
tion grant” under the discretionary Value Pricing Pilot
(VPP) Program. An award of US$200m in the form of a
pre-implementation grant would enable the New York
initiative to go forward without damaging the Urban
Partnerships program’s selection criteria. The proceeds
of the pre-implementation grant could go toward pro-
viding financial support to the Congestion Mitigation
Commission and funding the City’s activities prepara-
tory to implementing the Commission’s recommenda-
tions (as, for example, improving bus service.)
The second hurdle
At each stage of the process, opponents of congestion
pricing will have an opportunity to challenge the
Mayor’s proposal, question his assumptions, offer
amendments to his plan and propose other traffic miti-
gation alternatives .
“Real questions are going to be asked and answered,
whether the mayor likes it or not,” says Assemblyman
Richard Brodsky, a sharp critic of the Mayor’s plan. Ech-
oed John C. Liu, Chairman of the City Council’s Trans-
26 Autumn 2007 ETCetc
portation Committee, “Speaker Christine Quinn and I
and our colleagues in the Council will be looking very
carefully at the issues involved. We have local constitu-
ents who are very concerned about the impact that con-
gestion pricing will have on their neighbourhoods.”
The latest Quinnipiac poll tends to support the law-
makers’ concerns. It shows NYC respondents to be
against congestion pricing by a margin of 52 per cent to
41 per cent (Manhattan voters support it 59 per cent to
37 per cent).
A far from easy pass
Challenges may be expected to many aspects of the
Mayor’s proposal. Among them are the proposed north-
ern boundary of the charge zone (63rd Street), the pro-
posed schedule of fees, the number and nature of
exempted categories of drivers, the nature and timing
of transit service improvements, ways of handling traffic
and parking at the periphery of the zone, methods of
collecting fees from drivers that do not have E-ZPass,
and the possibility of substituting a targeted tolling
component for a citywide congestion
fee. The Commission may also want to
raise the larger question of the impact
of congestion pricing on residents of
other boroughs and of suburban juris-
dictions. Finally, there’s the possibility
of a lawsuit challenging the plan on
the grounds it lacks an environmental
impact statement, an eventuality that
could seriously delay implementa-
tion.
“I am afraid the final outcome may bear little resem-
blance to what Mayor Bloomberg had in mind,” one local
elected official who considers himself supportive of the
Mayor’s plan told us. What he meant was that a number
of things could still derail or seriously modify the con-
gestion pricing plan or delay the start of implementa-
tion. Adding further uncertainty is the fact that 2009 is a
mayoral election year. Congestion pricing could well
become a volatile electoral issue.
Implementation timeline
Since the last edition of ETC, etc was published in April,
a number of important milestones have been reached
and further goals been set.
26 July 2007: The state legislature approves A9362, a
bill to establish the New York City Traffic Congestion
Mitigation Commission, a 17-member body appointed
by the Governor (3 appointees), the Mayor (3), City
Council (3), State Senate Majority Leader (3), State
Assembly Speaker (3), Senate Minority Leader (1), and
Assembly Minority Leader (1).
1 August 2007: The Mayor submits a congestion pric-
ing plan to the Commission. The Commission may hold
hearings and consider a variety of options before pro-
ducing an “Implementation Plan.”
8 August 2007: US DOT announces finalists in the Urban
Partnerships Program. US DOT must award New York
City at least US$200m or the deal is off.
1 October 2007: The NY State DOT and the Metropoli-
www.h3bmedia.com
 “Not another road pricing
conference!”

www.h3bmedia.com/tnetworx/ruc.cfm
New York City
tan Transportation Authority submit At each stage of the
comments on the Mayor’s plan, includ-
ing additional capital required by the process, opponents
plan. US DOT must “commit” at least of congestion
US$200m or again, the deal is off.
By 31 January 2008: The Commission pricing will have an
votes on an Implementation Plan. opportunity to
By March 28, 2008: The City Council
must vote on the Implementation Plan, challenge the
and sends a “home rule message” to the Mayor’s proposal”
state legislature indicating the outcome
of its vote.
By March 31, 2008: The New York State Assembly and
Senate will vote on the Implementation Plan.
What does the community think?
Transportation secretary Mary Peters has stated the
New York City would receive only US$1.6m initially. The
balance of the money would be made available “as soon
as the proposal has been made and legislation is in
place that would allow that proposal to proceed, but that
must occur not later than 90 days after the 2008 legisla-
tive session convenes in New York.” Effectively, that date
is the end of March 2008. Supporters and opponents of
congestion pricing immediately began to react to the
federal announcement.
United States Representative Joseph Crowley, Demo-
crat of Queens, said in a statement:
“This Federal funding will help make New York a
cleaner, greener and healthier city for our children.
These critical resources will finance major mass transit
enhancements that will vastly improve the day-to-day
lives of Queens and Bronx families. It will also establish
28 Autumn 2007 ETCetc
New York City as a leader in the effort
to preserve our environment for
future generations.”
Walter McCaffrey, a former city
councilman from Queens who has
been coordinating opposition to the
mayor’s plan, said in a statement:
“If the goal truly is to reduce traffic,
the city has a moral and legal obliga-
tion to seek any and all alternatives
before adding a new tax scheme to
overburdened New Yorkers. Further,
the plan foresees less than an 8 per cent improvement in
traffic density, with the bulk of the federal funding ear-
marked for the city to spend on other priorities. The fact
remains that the overall congestion tax and vehicle sur-
veillance plan still can - and should - be derailed by the
various legislatures if its proponents fail to prove the
plan will not cause our citizens, especially those so vig-
orously opposed in the outer boroughs, an onerous
expense and disruption. At all times, the public’s best
interest should be in the driver’s seat, and we will keep
our hazard lights on to continue warning all New Yorkers
to the problems ahead.”
Kathryn S Wylde, the president of the Partnership for
New York City, the city’s leading business group, which
supports the mayor’s plan, said in a statement:
“In selecting New York City for the Urban Partners
Program, the federal Department of Transportation has
allowed us to meet the threshold criteria established by
recent state legislation for implementation of a compre-
hensive program to reduce traffic congestion and
improve mass transit in the region. The Partnership has
www.h3bmedia.com
 “This is the same people
saying the same things as
last time. At least I can get
some sleep...”

www.h3bmedia.com/networx/ruc.cfm
New York City
documented the high cost of excess traffic, which results
in losses of more than US$13billion and 50,000 jobs each
year from our regional economy. Federal funding pro-
vides the carrot that will help pay for new buses, faster
subways and the other measures required to incentivize
people to get out of their cars and on to public transpor-
tation. This is a tremendous breakthrough in the strug-
gle to achieve a more efficient, mobile city.”
Marcia Bystryn, executive director of the New York
League of Conservation Voters, said in a statement:
“This is great news for anyone who breathes in New
York City and the metro area. Today’s
vote of confidence from the federal gov- “This is great news
ernment is proof-positive that PlaNYC for anyone who
is the best way to clean our air, reduce
traffic and improve mass transit. The breathes in New
next step is for all sides to come together York City and the
and craft the best implementation plan
possible.” metro area”
Robert D. Yaro, the president of the
Regional Plan Association, said in a statement:
“New York has taken a major step forward on its way to
solving its congestion problem. With the agreement
from the federal government to partner with the City
and State on a pilot congestion pricing program, we are
one step closer to reducing New York’s growing traffic
challenges and raising critical funds for transit improve-
ments our region so desperately needs. Although the
Federal award is for congestion pricing in Manhattan,
the impact - both in terms of reduced traffic loads and
30 Autumn 2007 ETCetc
improved transit alternatives - will benefit the rest of the
City, Long Island, the Lower Hudson Valley and North
Jersey. We look forward to working with the new Con-
gestion Pricing Mitigation Commission to make this
reality.”
Assemblyman Rory I. Lancman, a Queens Democrat,
released a statement noting that allowing US$10.4m to
implement congestion pricing appeared to be allocated
in the US$354m total. Noting that Deputy Mayor Daniel L
Doctoroff had estimated that implementation would cost
US$225m, Lancman asked,“Who is going to pay the rest
of the US$225m?” He added, “This
conditional award fails to live up to
the Mayor’s promises. Not only does it
seem to leave NYC taxpayers footing
the bill to implement the Mayor’s con-
gestion price tax, but at least insofar
as the Mayor intends to spend the
money, it leaves outer borough com-
muters who would jump at the chance
to use mass transit no better off at all.” E
Additional reporting by Irvin Dawid (Planet Citizen)
and Michael Grynbaum (NY Times).
This article contains interpolations from two issues of
Innovation Briefs, the urban mobility newsletter
edited by C Kenneth Orski.
Visit the website at www.innobriefs.com
www.h3bmedia.com
NOT JUST ANOTHER ROAD
PRICING CONFERENCE.
This is the 1st UK Road Pricing Think Tank organised by H3B Networx, the events
division of H3B Media, publishers of Thinking Highways and ETC, etc.

C Learn how to make your road pricing scheme publicly acceptable from public affairs
and advertising experts.

C Listen to the industry’s best speakers talk about the policy, strategy, technology,
implementation, interoperability, integration and innovation - the issues that REALLY
affect the road pricing sector.

C Take part in genuine debate and help to shape the future of road pricing.

C Find out how road tolling schemes in the UK, USA, Canada, Sweden, the Netherlands,
Germany, Norway and France were funded, financed and operated and how that can
apply to your scheme.*

27-28 November 2007

Mercedes-Benz World, Weybridge, Surrey

For more details visit

www.h3bmedia.com/networx/ruc.cfm
or email odile@h3bmedia.com

You can also register for your FREE copy of

Thinking Highways at www.h3bmedia.com

*(Not to mention the innovative

networking opportunities, speed thinking
session, gourmet dinner, Loire Valley
wine-tasting and a whole host of H B Media
other attractions.)
 The 1st UK Road Pricing
Think Tank
Tue 27/Wed 28 November 2007
“I’M NOT GOING TO ANOTHER ROAD PRICING CONFERENCE UNTIL ...”

...27 November 2007. Selling The Idea: The 1st UK Road Pricing Think Tank is a different kind of conference altogether. In fact, it’s not
really a conference at all in the traditional sense. Across the two days there will be intense, interactive debates, forums and problem-
solving sessions focusing on policy and politics, funding and finance, interoperability and integration, implementation and innovation.
Experts from not only the road pricing, congestion charging, road user charging and electronic toll collection sectors, but also from
the spheres of advertising, public affairs and finance will help you make YOUR scheme publicly acceptable.

THINKING DIFFERENTLY
What road pricing needs is a positive spin. Drivers need to be told why it’s a good idea and that by paying to use the roads they are
making a positive contribution to society. But how best to get this message across? Our advertising expert will explain how to con-
vince the public that road pricing is something they want and need. “You are selling them a product
and it’s a product they must have. Once you have sold them the idea, you are on to a winner.”
Financial analysts and risk assessment specialists will share their experiences of how they applied
their expertise to various tolling projects and how they are relevant to yours, while experts from
the petrochemical industry will explain how the two sectors are inextricably linked in Germany and
how it’s a link that needs to be more adroitly exploited in the UK.
Another innovative feature will see representatives from the major political parties in the UK
engage in a free-form Question & Answer session with local authorities, original equipment manu-
facturers and suppliers. This ‘Town Hall’ format will be co-hosted and moderated by former BBC and Sky News presenter Nici Marx
(pictured) and Kevin Borras, H3B Media’s publishing director and editor-in-chief of its Thinking Highways and ETC, etc magazines.

more >>>

“Selling
the Idea”
 www.h3bmedia.com/networx/ruc.cfm
LOCATION, LOCATION, LOCATION
No serious event organiser would ever attempt to promote one of its seminars solely on the back of the venue,
but in Mercedes-Benz World, we have a stunning location in store. Recently built within the grounds of Brooklands
Motor Museum, one of the UK’s first motor racing circuits, it possesses not only the finest conference facilities avail-
able (including a cinema that we will make good use of) but it also houses the biggest collection of Mercedes-Benz
and Maybachs in Europe and a magnificent array of visitor attractions.
Delegates will have full use of what Mercedes-Benz World and Brooklands has to
offer (not that you’ll have that much time to explore) and an opportunity to take
a spin on the skid pan and high-speed track in a top of the range Mercedes.
Have a look for yourself on the website: www.mercedes-benzworld.co.uk

Mercedes-Benz World, Brooklands,

Weybridge, Surrey, KT13 0SL, UK
A SPEAKER PROGRAMME
TO SHOUT ABOUT
“A stellar line-up of speakers” is not usually a claim that holds
very much water. We think you will agree that in the case of the
1st UK Road Pricing Think Tank we can use the word “stellar”
with a fair degree of justification.
DAY ONE: 27 November 2007
10.00: POLICY AND POLITICS part 1
Steve Norris, former Conservative Minister for Transport, UK
Jenny Jones GLA, Green Party/Mayor of London’s Green
Transport Advisor, UK
Peter Vine, Congestion Charging, Transport for London, UK
TBA, Department for Transport, UK
Luke Blair, London Communications Agency, UK
Representatives from the event’s sponsors, Siemens,Thales, Q-Free,
Kapsch and Booz Allen Hamilton will be invited to respond to the
points raised in the Policy and Politics session
12.00: FINANCE AND FUNDING
Andy Graham, White Willow Consulting, UK
Bob McQueen, Senior Road Pricing Advisor, PBS&J, USA
Paul Wadsworth, Capita Symonds, UK
Jack Opiola, Booz Allen Hamilton, UK
Simon Albutt, Consulting Stream, UK
14.30: PROBLEM SOLVING
Daryl Dunbar, British Telecom 21CN Portfolio Development, UK
Eric Sampson, Chairman, ITS UK
Andrew Pickford, Transport Technology Consultants, UK
Jack Opiola, Booz Allen Hamilton, UK
Bern Grush, Skymeter Corporation, Canada
David Hytch, LogicaCMG, UK
Ian Catling, Ian Catling Consultancy, UK
16.30: DELIVERING STOCKHOLM
Birger Höök, Swedish National Road Administration, Sweden
Jamie Houghton, IBM, UK
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18.00: SPEED THINKING
Day one will be rounded off in style with a novel Speed Thinking
session. Similar in format to the idea of speed dating, this session
will see a panel of eight experts answering pertinent questions
from delegates in a series of two-minute on-the-spot inter-
views. When the time is up, a bell will ring and it will be another
delegate’s turn to ask a question. Fun, maybe, but this unique and
informal networking opportunity could lead anywhere.
19.15: LOIRE VALLEY WINE-TASTING SESSION
and GOURMET DINNER
DAY TWO: 28 November 2007
09.30: INNOVATION AND THE FUTURE
Phil Blythe, Professor of ITS, Newcastle University, UK
Bern Grush, Skymeter Corporation, Canada
Daryl Dunbar, British Telecom 21CN Portfolio Development, UK
Wiebren de Jonge, TIP Systems/Vrije Universiteit, Netherlands
Eric Wurmser, Egis Projects, France
Representatives from Vodafone, Orange and O2 have been invited to
take part in a mobile communications forum as part of the
Innovation and The Future Session
11.15: TIF ROUNDTABLE DISCUSSION
Representatives from Manchester, Norwich, Cambridge, Greater
Bristol and the aborted West Midlands bid will take part in a lively
Transport Innovation Fund debate
14.00: POLICY AND POLITICS part 2
Tom Antonissen, International Road Federation -
Brussels Programme Centre, Belgium
Tim Hockney, London First, UK
Jenny Bird, Institute of Public Policy Research, UK
Richard Bourn, Transport 2000, UK
Dr Andreas Kossak, Kossak Consultancy, Germany
Paul Watters, Automobile Association, UK
Representatives from the event’s sponsors will be invited to respond
to the points of view put forward in the Policy and Politics session
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15.45: PUBLIC ACCEPTANCE AND “POSITIVE SPIN”
Paul Watters, Automobile Association, UK
David Pearson, InnovITS, UK
Jack Opiola, Booz Allen Hamilton, UK
Russell H Smith, Richmond Strategic Management, UK
Birger Höök, Swedish National Road Administration, Sweden
Richard Harris, WSP, UK
Duncan Matheson, PA Consulting, UK
Andrew Pickford, Transport Technology Consultants, UK
Jamie Houghton, IBM, UK

17.00: TOWN HALL FORUM

All speakers will be invited to take part
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Meanwhile,
back in NYC

As New York’s congestion

pricing indecision shows signs
of resolution, BERN GRUSH
wonders if sustainability could
become unsustainable

36 Autumn 2007 ETCetc www.h3bmedia.com


The New York City Economic Development Corpo-
ration (NYC-EDC) is soliciting expressions of inter-
est from vendors and consultants regarding
provision of services for NYC’s intended Congestion
Pricing Electronic Toll Collection (ETC) system.
The assumed, but apparently not absolutely fixed,
technological approach for the system is the E-ZPass
tag and beacon system that has operated for some years
regionally in the New York area and other US regions.
This would be complemented with license plate recog-
nition (LPR) cameras to enforce payment from motorists
that elect not to use E-ZPass.
At first, this approach makes some sense:
• E-ZPass is already installed in more than 70 per cent
of vehicles that enter Manhattan, hence motorists are
familiar with it.
• LPR cameras work with relative accuracy in London,
Stockholm, Toronto and other pricing applications.
No pros without some cons
On the other hand, however, the E-ZPass approach has
drawbacks:
• It is infrastructure-heavy. This means high capital
expense, intrusion on NYC’s urbanscape, and exposure
to vandalism – all of which are acknowledged in the
RFEI.
• It is expensive. The costs of such infrastructure will
leave less money to fund much-needed transit addi-
tions. In London, it cost £2.40 to collect £5 and this led to
an increase in the congestion charge to £8. (The two
congestion zones in London use a similar number of
camera gantries as is suggested in the NYC RFEI. We
cannot point to a comparison to Stockholm, since this
peninsular-based city required only 18 gantries, less
than 10 per cent of what the NYC RFEI suggests.)
www.h3bmedia.com
New York City
• It is complex. The complexity of performing partial
tolling in an area that is already partially tolled will
require a system of physical, social and monetary excep-
tions (plus a rebate scheme), whose complexity far
exceeds anything in either London or Stockholm.
• It is unambitious. The RFEI traffic reduction goal of
6.3 per cent within the charging zone will do little to
ease congestion in New York City. The goal needs to be
at least twice that in order to meaningfully impact bus
congestion, bike safety and air quality. Without a sig-
nificant drop in bus congestion and bus delays, conges-
tion charging would not have worked in London and
may not work in New York.
• It is inflexible. Once the system is in place, changing
the zone boundaries – i.e., adding or removing a street
or new area – will be prohibitively expensive. While no
system can be perfect, designing-in inflexibility at the
start diminishes the value of the investment.
• It is not extensible. When the time comes to
congestion-price part of the boroughs, new gantries
would have to be installed at a similar, new expense.
This is in clear evidence in London where the first zone
cost just under US$300m and the second zone has cost
the same.
• It is not scalable. The NYC system, slated to serve
1.4m vehicles, will serve nine times more customers
then the original London system on an equivalent
number of gantries. Hence a gantry failure (say, due to
vandalism) will generate nine times the loss-volume as
would a similar failure in London.
• It risks evidentiary gaps. If an enterprising citizen set
up a website to report failed gates, motorists without
tags may be able to evade charges more readily.
The cons win 8-2. It’s clear, surely, that we need to find
a better technology scheme. E
ETCetc Autumn 2007 37
Concepts and Ideas

Behave
yourself
BOB MCQUEEN and PROFESSOR KAN CHEN have
been mulling over an interesting question that
they would like to share with you - should we
reward good travel behaviour?

It’s helpful every once in a while to step back from

our day-to-day world, take a look at the big picture
and envision the future.
Those of us in the transportation industry have a ten-
dency to get caught up in day-to-day traffic manage-
ment issues. We would do well to ask some basic
questions like, “What are the fundamental issues we’re
facing and how can we use wisdom and experience to
solve them?”
It doesn’t get much more fundamental than basic
human behaviour. Travelers in our transportation sys-
tems are exhibiting a facet of their fundamental human
needs and desires. They need to get from one place to
another and, not unreasonably, they want their trip to be
safe and convenient. Can the transportation industry
build a new model based on managing human behav-
iour? I think we can agree that good public behaviour
includes being aware of the environment, using good
manners, and making choices that balance individual
needs with a respect for others’ needs. Why not reward
good public behaviour?

The dominant paradigms

Since February 2003, the City of London has charged a
fee for driving private automobiles in its central area
during weekdays as a way to reduce traffic congestion
and raise revenues to fund transport improvements. Put
in another way, drivers choose if they want to pay a
higher fee to drive their own vehicle into an urban zone
or use less expensive public transit instead.
This approach has proven to be highly successful in
London, Singapore and more recently Stockholm and
has created a “virtuous circle” of positive effects in each
of these cities. Transportation professionals now have a
very effective mechanism to manage demand, achieve
the desired results and avoid any undesirable side
effects. At the same time, a new revenue stream has been
established by way of the congestion charge fees and
this can be used to make transportation even better.
It strikes me that if we can have such an amazing suc-
cess with what is essentially a somewhat negative reward
system: consumers pay (with a negative impact on their
wallets) for the costs they impose (greater congestion
on London’s streets), then could we do even better with

38 Autumn 2007 ETCetc www.h3bmedia.com


a positive reward system? At a very naïve level, the type
of reward system that we are currently implementing
serves as a negative incentive to use resources effi-
ciently, much the same way that a child is given a “time
out” if he or she behaves badly.
US value pricing implementation has indicated that a
positive reward model could work. Consider variable-
www.h3bmedia.com
Concepts and Ideas
priced tolling schemes, for example, in which drivers
pay higher tolls at peak congestion times. In return, they
receive better service. This can be likened to promising
the aforementioned child dessert if he or she eats their
broccoli.
Positive reinforcement, on the other hand, reinforces
what a child is doing right rather than concentrating on
what a child is doing wrong. Child psychologists and
good parents have known all along that positive rein-
forcement increases the likelihood that the behaviour
will be repeated. It supports the child’s positive deeds
and qualities through enthusiasm, descriptive encour-
agement, and natural, logical rewards.
So here’s the crazy thought – can we define a radically
positive reward system that provides a positive incen-
tive for great travel behaviour? In other words, take what
the psychologists have learned and apply it to transpor-
tation. This really appeals to me as I have a fascination
for looking over the fence at other industries and enter-
prises to see what lessons we can learn, practices we
can modify and adopt and technologies that we can
use.
Positive traveler rewards
The tricky part in providing a positive rewards system is
determining where the revenue or resources for the
rewards will come from.
Consider the scenario in which a traveler receives a
reward for, say, traveling at off-peak highway times or
carpooling or taking transit instead of driving. The
reward from a public transportation agency could be,
for instance, use of a prime parking spot at a transit sta-
tion. Or a reduced toll cost. Or a free ride on a transit
system. The reward scheme could be based on points,
much the same as many “loyalty programs.” In the retail
world, loyalty programs are structured marketing efforts
that reward, and therefore encourage, behaviour that is
potentially of benefit to the issuer.
In a “congestion avoidance rewards” program, the
issuer’s (i.e. the transportation agency’s) overall benefit
would be getting better use of existing roadway capac-
ity. The two desired outcomes would be to increase the
peak-travel-time spread, and to promote a modal shift to
transit or HOV (high occupancy vehicle) lanes. Here’s
how it would work.
Leveraging ETC data
For the past decade or so, the huge push in the tolling
industry has been to design, install, and operate elec-
tronic toll collection (ETC) systems – in which tolls are
paid automatically via radio communication between a
transponder in a vehicle and a receiver at the toll
booth.
A similar big push has been to get the traveling public
to use ETC in lieu of cash. In some locations, ETC repre-
sents upwards of 65 per cent of the tolls paid. That means
that well over half of the vehicles on a toll system are
now equipped with transponders.
ETC has certainly reduced congestion at toll plazas.
The big push in the future will be mining ETC data and
using it to win the overall war on congestion. An offer
ETCetc Autumn 2007 39
 Concepts and Ideas

could be extended to travelers with ETC transponders

that consistently drive at peak travel times like the morn-
ing or afternoon commute. The offer would be struc-
tured like this: “change your traveling behaviour so that
you avoid driving at peak travel times and we’ll reward
Computer Recognition Systems
you.”
For example, we determine that there are 3m vehicles
per day entering a city and that 10 per cent of them are
traveling at the very peak travel time.We target this cus-
tomer group and ask them if they would like to partici-
pate in a congestion rewards program. We sign the
willing up to the program, monitor their travel, suggest
changes, and reward them when we document the
changes using our electronic system.

Motivation
Would a rewards program reduce congestion on major
urban highways? Again, we can rely on the fundamen-

eyes of a HAWK

 
 tals of child psychology to help explore the answers.
For instance, a parent needs to understand which reward
will be most effective for his or her child. Will the prom-
ise of one extra hour of GameBoy time entice your son to
quit teasing his sister for a week? Or will it require the
promise of two extra hours?
Some focus groups and a pilot test with a smaller
number of travelers would be useful to test the elasticity
of the rewards program: what number of points per pos-
itive behaviour – or what suite of rewards – will influence
traveler behaviour?
In the larger scheme, how many travelers need to be
enrolled in the rewards program to reduce congestion
 "! significantly? Most studies show that reducing the
number of peak time travelers by as little as10 per cent

!!!"!
would have a significant impact on congestion.
!! !! Customer loyalty programs are a multi-billion-dollar
#! !
industry worldwide – with significant cross-over
between points and rewards. The transportation indus-
try could widen its reach by offering positive traveler
!!! !
behaviour points to select loyalty program operators in
 !!!!!!  exchange for advertising that program – much the same
!!!! way as purchasing groceries can accrue frequent-flyer
!!!
miles.

HOV, HOT, and what’s FAIR

 

     There is no question that HOV lanes put more people on
Hawk kindly supplied by The Hawk Conservancy Trust



 each square foot of highway. There are HOV lanes in
nearly every major metropolitan area in the US. The
     problem is that the HOV lanes are typically underuti-


 

  lized. They have spare capacity.
Some transportation agencies are considering selling
   this spare capacity to travelers that are willing to pay
  extra for the privilege of using the HOV lanes. HOV
   lanes then become “HOT” (high-occupancy toll) lanes.
HOT lanes reward bad behaviour by encouraging peo-
www.crs-vision.com
ple to drive. The mitigating factor, though, is that HOT
 " #'&$)"!&"!)(%& % lanes generate revenues that are applied to transporta-
%#"!%)"%)*)"! )*) $%)*)) tion improvements.
& )
) )

))  $
$$ $
 %#  “FAIR” (Fast and Intertwined Regular) lanes are a
USA: Davin Optronics Inc hybrid of the two. The FAIR concept moves the industry
334 Ebenezer Road * Knoxville * TN 37923
t: +1 (865) 769 8010  $

$
$ closer to a congestion avoidance rewards program.
#! %!  FAIR lanes are being considered in California and other

40 Autumn 2007 ETCetc www.h3bmedia.com

 Concepts and Ideas

locations. Multiple freeway lanes are separated by

pylons and striping into two sections: fast lanes and
regular lanes. The fast lanes are electronically tolled
express lanes. In the regular lanes, travelers with trans-
ponders are awarded credits equal to a percentage of
the toll rate in the adjacent fast lanes.

Parallel worlds
FAIR lanes offer flexibility and choice, two things most
consumers value in their day-to-day transactions. But
some in the transportation industry might ask, “Why
should we pay a reward for what people are already
going to do?” On any given day, a traveler is either in a
hurry or not in a hurry. They either choose to spend
money for the toll or they don’t. In the FAIR concept,
rewards are proffered to those who are not in a hurry or
don’t have toll money. Why?
Consider an analogy with carbon trading, which is a
widely popular administrative approach to improve air
quality by providing economic incentives for achieving
reductions in the emissions of pollutants. Highway con-
gestion is like air pollution. Fewer cars (like less par-
ticulate matter in the air) mean better highway traveling
conditions (better air quality).
Carbon trading works by setting an overall limit or
cap on the amount of a pollutant that can be emitted
(much like a highway has a maximum vehicular capac-
ity). Companies or groups that emit the pollutant are
given credits or allowances that represent the right to
emit a specific amount. Companies that pollute beyond
their allowances must buy credits from those who pol-
lute less than their allowances or face heavy penalties.
In effect, the buyer of a credit is being fined for pollut-
ing, while the seller is being rewarded for having
reduced emissions. Thus companies that can easily
reduce emissions will do so and those for which it is
harder will buy credits that reduce greenhouse gasses
at the lowest possible cost to society.
Hopefully these fairly radical thoughts on how we
might approach congestion pricing in the future will
stimulate some thoughts and perhaps even provoke you
into a dialogue or debate about them. There could be
many issues and barriers associated with positive
rewards congestion pricing, but just ask yourself a ques-
tion – if someone asks you to do something are you more
likely to do it and do it well if you are rewarded?
So, should we reward good travel behaviour or not? E

Bob McQueen, C.Eng. MICE, is Senior Vice President &

Senior Advisor at PBS&J and an internationally recog-
nized expert in the field of ITS.

He is currently serving as Senior Advisor to the San

Diego Association of Governments, providing expert
level consulting and advice on the application of
advanced technologies to transportation, the selection
and use of management solutions for transportation
operations and the development of innovative business
models for technology operations.

Bob can be reached at bobmcqueen@pbsj.com

www.h3bmedia.com ETCetc Autumn 2007 41

In My Opinion

Charge
of the
smart
brigade

According to MARK GARRITY, some clever, lateral thinking is

in order if we are to solve the increasing problem of
congestion

42 Autumn 2007 ETCetc www.h3bmedia.com

 In My Opinion

“Rush” hour has long been something of an ironic,

contradictory term for the commuter. Congestion,
with its concomitant effects of pollution and eco-
nomic stagnation is a tangible, major problem that
cannot be solved by a single solution.
Our transport infrastructure faces long-term chal-
lenges that need to be addressed by a portfolio of ITS
solutions that will eventually integrate our transport
choices. The introduction of road pricing, whether it be
an area congestion scheme or time/distance/place-
based tolling, as one of these solutions is a frequently
debated, highly emotive issue and never more so than
now. The challenge, both politically and socially, as
always, is public acceptability.
Can the public be persuaded to think of a road as just
another form of public transport for which a fare should
be paid? Can we take the step to a vision of a “personal”
mobility payment system that merely adds a road to the
choice of getting from A to B, with financial incentives to
encourage a switch from road use to public transport
alternatives?
Quite possibly, when weighed in the balance of grid-
lock and pollution damaging local economies and the
environment and restricting our freedom of movement.
But any solution will have to be fair, trusted and conven-
ient. And thereby hangs the tale.

A road pricing scheme, but not as we know it

Existing and emergent road pricing schemes, tradi-
tional gate-line toll applications and area congestion
schemes, are based on component technologies,
selected and integrated to meet particular local objec-
tives with discreet business and legislative models.
With a wider deployment of demand management-
focused road pricing expected in the next 5 to 10 years,
the debate has evolved to encompass many interoper-
ability issues, and industry is being challenged to come
forward with more cost-effective, innovative solutions.
The predominant component technologies for cap-
ture and enforcement in the arena, Dedicated Short-
Range Communications (DSRC) and Automatic Number
Plate Recognition (ANPR), are almost at the commodity
price point, so the issue turns to billing and customer
service. Assuming that a charge structure for a scheme
is deemed fair and appropriate by its effected constitu-
ency it falls to technology to make it easy to pay.
Smart cards, especially contactless smart cards, are
rapidly becoming the preferred registration and
payment means for public transportation worldwide.
They bring very high flexibility in terms of product def-
inition and user product profiling, they are operationally
efficient, user-friendly and most importantly enable
elegant interoperability solutions in complex multi-
stakeholder and multiple transport mode environments.

www.h3bmedia.com ETCetc Autumn 2007 43

In My Opinion
The immense success of Transport for London’s Oyster
card and the national-scale interoperable public trans-
port e-ticketing solutions using contactless smart cards
being deployed by Thales Transportation Systems in
the Netherlands and Toronto, Canada are a perfect
illustration of these advantages. However, the road
domain lags behind public transport with respect to
smart card exploitation. The introduction of smart cards
in urban congestion charging schemes will enable sig-
nificant progress in a number of areas, compared to the
existing solutions based only on ANPR or dedicated
card-less DSRC OBUs:
• It would favour the multi-modal use of transportation
and bring the operators new means of demand man-
agement based on dynamic tariffing, through the con-
sumer’s view of a simple, unified payment means;
• It would open the door for an economically efficient
coupling of various services linked to the vehicle and
the user such as parking, petrol stations or car wash
amongst others;
• It would ease interoperability with other congestion
schemes or tolling schemes as cards are much more
easily configured and updated than OBUs.
“The technology exists today. There are regulatory
and legislative barriers but these will be addressed in
the years to come,” says Pierre-Antoine Benatar, Mar-
keting Director at Thales Transportation Systems.
Technical challenges and “Can the public be
current solutions
Contactless smart card technology is persuaded to think
perfectly mature. However, coupling it
with the pre-dominant tolling technol-
of a road as just
ogy (DSRC) raises a number of chal- another form of
lenges. DSRC devices are battery
powered and contactless cards are
public transport for
power-hungry by comparison. Fortu- which a fare should
nately this problem can be solved,
operating in close vicinity, namely the
be paid?”
card being introduced into the OBU
casing, with a minimum reduction in battery life.
Some contactless cards have a high security level,
requiring the presence of Secure Access Module (SAM)
in the reading equipment. This can also be solved tech-
nically by fitting appropriate SAMs in OBUs if desired.
The cost of the SAMs is however quite significant com-
pared to the OBU cost, and their use would require sig-
nificant modifications to the DSRC OBUs production
lines.
Contactless cards’ real-time processing capabilities
are not adequate for free flow vehicle transactions, even
at urban speeds. This has been tackled by recent stand-
ards (ISO 25110 draft), and different solutions of ‘cach-
ing’ or buffering the card data enabling the real-time
constraint to be allocated to the DSRC communication,
with an off-line process taking place between the card
and the OBU for toll payment.
Interoperable on-board unit configuration
DSRC OBUs are very convenient for vehicle-to-
infrastructure communications, but they need specific
44 Autumn 2007 ETCetc
and expensive equipment for configuration and are not
regulated by international standards at this juncture.
The basic functionality of the card would of course be
around the account settlement usage, but it could also
provide an elegant means of updating the data configu-
ration of the OBU. This would mean that when a given
user wants to extend the use of his congestion charge
tag to another scheme – perhaps a public transportation
one, he might contact the scheme operator, who would
in turn either:
• Mail the user a new card that would be prepersonal-
ised for the public transport domain, and contain OBU
configuration information as well.
• Transfer the relevant data to dedicated retail points
of sale, and update the user’s card with the configuration
data.
• This avoids a caveat in the DSRC schemes roaming,
and is certainly convenient and appealing for both the
users and other DSRC scheme operators.
User roaming
Consumer demand to be able to switch from one vehi-
cle to another will probably be significant, from existing
experience on DSRC systems around the world. Future
roaming from one scheme operator to another in a
national or international context is another thing
altogether.
The current generation of OBUs rely
on a one-to-one relationship between
the vehicle and the OBU and due to the
price of the OBU, this creates a barrier
to wider acceptance from the public if
you have to buy a tag for each vehicle
you drive.
It is technically feasible to configure
an OBU with a multiple vehicle registra-
tion record association but this would
cause some technical performance
problems when associating a DSRC
transaction and a license plate image at
the charging point increasing operational overheads
for scheme operators.
With a card-based OBU, the OBU-vehicle association
may remain one-to-one, with the OBU containing vehi-
cle specific characteristics such as the emissions class
or other such classification, whilst the card would be
configured with driver-specific payment information,
including discounts/exemptions and so on enabling
easy vehicle-to-vehicle roaming of any given driver.
The price barrier of multiple OBUs remains in such a
case although in time such technology will probably
become part of standard in-vehicle technology from the
car manufacturers.
Expected evolutions
Affordable card-linked DSRC OBUs will be commer-
cially available from several vendors in a two-year
timeframe.
The next step would be the use of high security cards,
with corresponding SAMs becoming part of DSRC OBUs.
If this is to be at a reasonable price, the SAMs definitely
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 Intertoll Europe is an Independent Toll and
Motorway Infrastructure Developer and Operator

Our mission is to
■ Successfully develop
and manage motorway
infrastructure projects;
■ Pursue road user charging,
tolling and allied activities
as a specialist integrator and
operator;
■ Effectively manage the diverse
activities necessary for the
operation and maintenance of
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Our services include:

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 In My Opinion

need to be integrated into the OBUs circuit boards,

which will only happen if the first simple versions lead
to a significant commercial market.
High security is not really critical for pre-paid or
account-based congestion charge schemes as such
(DSRC security is probably sufficient) but will almost
certainly be required to extend the use of the card to
multiple services where credit services would be ben-
eficial. In the longer term, two possible evolutions may
be of interest.
GNSS OBUs should become affordable for use in light
vehicles, and this brings a large conceptual difference,
since the GNSS charging model is essentially an off-line
post-processing of charge data, so the real-time pay-
ment concepts of smart card + DSRC are not transposed
as such.
Rapid development in the service features of mobile
phones and the generalisation of Near Field Communi-
cation (NFC) capabilities may provide an alternative to
the card + DSRC combination, provided NFC services
comprise some communication medium adapted to
moving vehicles – DSRC for instance.
This business service model would couple a conges-
tion charge scheme with mobile telephone industry,
which has already moved into the mass market and the
billing principles are trusted or at least ignored by the
consumer.

A demanding public
The most obvious one in the short term is parking. Many
of the regions investigating congestion charging in the
UK are considering an expansion in park and ride facili-
ties as one of their congestion-related demand manage-
ment options.
Coupling a DSRC congestion scheme with parking
fee payment and bus fares all on one smartcard, where
a driver can chose to drive into town but if he elects not
to, he get discounted parking and cheap bus fares – this
really starts to look like integrated transport!
Taking a quick glance at the marketing dynamics of
the loyalty card industry you can begin to see all sorts of
possibilities. In truth, additional services are only lim-
ited by imagination the will for agencies and transport
operators to cooperate and the competitive business
models of other industries not traditionally associated
with road pricing.

To end at the beginning

So, going back to the original question: Can the public
be persuaded that a road is just another form of public
transport for which a fare is paid? Technology develop-
ments can only provide part of the solution. Multi-modal
public transport smart cards are here today. We have
discussed some of the technical challenges but it is a
small conceptual step to integrate this technology into
road pricing solutions.
The remaining challenge is, essentially, a political
one. E

Mark Garrity is Director of Revenue Collection

Systems at Thales

www.h3bmedia.com ETCetc Autumn 2007 47

Economies
of s(c)ale
KEVIN AGUIGUI and MELISSA HEWITT look at
the basic principles of congestion pricing

Join us on a journey back in time to Economics 101.
In that 500-seat, echoing auditorium, those of us not
sleeping off yesterday’s all-night study session
learned the basics of the principle of supply and
demand (that in a competitive market, basic supply
and demand principles guide successful business
models).
While the fundamental principle applies to goods in
particular, a similar model underlies service industries,
infrastructure and public services. Whether you con-
sider a road as a “good” or a “service” congestion pric-
ing provides a business model that allows fixed
infrastructure to adapt to fluid and ever-increasing
demands. Opponents would say that roads should be
accessible to all; that so-called “Lexus Lanes” mean that
only the well-to-do will have access leaving behind the
less fortunate. While at face value, this may appear to be
the case, there are different factors which influence that
this perception is not accurate. Before tackling this
issue, let’s start with the basics.
What is it?
There are many different articles and reports and ongo-
ing studies about congestion pricing, or road pricing, or
value pricing, or even variable pricing. They are all
derived from the tolling concept, or what we refer to
simply as congestion pricing.
The truth is that they all mean the same thing: charge

48 Autumn 2007 ETCetc www.h3bmedia.com


motorists some monetary amount to gain access to a
roadway. The amount that is charged could be depend-
ent on a host of different things including length of travel
on the facility, time of day, congestion levels, type of
vehicle being driven, or any combination thereof. There
are hosts of other reports with much more detailed and
definitive definitions, but do we care? It doesn’t matter
how one looks at it, the basic concept is to charge motor-
ists for driving on a facility.
Benefits?
The concept of congestion pricing can have several dif-
ferent benefits aside from the obvious one of generating
revenue. Because it is a “pay for service” concept, fewer
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Toll Finance
people will use it and thus one benefit is reduced delay
on the facility itself which in turn results in increased
travel speeds. The cause for these benefits is the shift-
ing of trips either to another non-tolled facility or shift-
ing on times of travel. The other outcomes include
reduced emissions, increase reliability for other modes
like transit and for some situations a decrease in safety
related accidents.
It has been reported that many congestion pricing
projects outside of the United States have been able to
pay for themselves… and more. For example, in Singa-
pore, it has been reported that only 12 per cent of the
revenue generated is needed to pay administration
costs, and that Norway generates up to five times the
revenue required to maintain the toll system. This clearly
demonstrates the financial feasibility of congestion
pricing. However, just because one is financially feasi-
ble does not mean that the public will accept it.
Why do it?
We like to think of the answer with another question:
Can we afford not to do it? At its root, congestion pricing
is intended to be a demand management strategy. We
have all this demand for use of the existing roadway
infrastructure, and with fewer and fewer new roadways
being built, we need a way of controlling the demand.
With the ever increasing frustration from people sitting
longer and longer on congested roads, if the demand is
not controlled, this frustration will continue to increase.
For congestion pricing, its success depends on many
different variables, much of it is not technology related.
These include implementing effective marketing strat-
egies, gaining public acceptance and support, and
ensuring that with a facility slated for congestion pric-
ing, that there are other travel alternatives or alternate
routes. As many studies have found, congestion pricing
is the most effective when people have travel alterna-
tives, alternate routes, alternate departure times, transit,
or ridesharing. This way people can choose to travel
during less-congested times if they feel it’s not worth
paying to drive into the priced area during congested
periods.
One of the clear benefits of congestion pricing
systems is that the revenues that are generated from
congestion fees can be used to fund significant trans-
portation improvements or maintenance activities, like
better transit service, road improvements and bicycle
and pedestrian projects.
Who does it?
Congestion pricing systems and schemes are typically
implemented by the highway agencies or local trans-
portation officials. Sometimes other levels of govern-
ment are involved in the approval process (for example,
in the US, federal law restricts tolling on the Interstate
Highway System).
In the San Francisco Bay Area, there has been a lot of
good press about the success in garnering funds under
the Urban Partnership Program (UPP). This national
strategy to reduce congestion is based on the four Ts:
Tolling, Transit Investments, Telecommuting and
ETCetc Autumn 2007 49
Toll Finance
Technology. A large part of the region’s success in
securing the funds was highlighting a variable tolling
program in the proposal. For San Francisco, this includes
the Doyle Drive approach to the Golden Gate Bridge.
A substantial amount of funds will go towards the instal-
lation of tolling equipment and reconstruction of the
roadway. Moreover, the concept of value pricing and
tolling using High Occupancy Toll (HOT) Lanes appears
to have the necessary momentum and support from the
transportation officials and politicians.
Other projects in the San Francisco Bay Area that are
based on the concept of congestion pricing include the
HOT Lanes projects on I-580/680, I-880, and the
I-580/680 FAIR Lanes Project (FAIR stands for Fast and
Intertwined Regular). One of the approaches being
looked at is the concept of FAIR Lanes along with
Dynamic Ridesharing.
This is in response to having complementary meas-
ures with value pricing to increase the public’s accept-
ance of the value pricing concept. Using web-based
and telephone-based systems, dynamic ridesharing
would enable users to find carpool partners on a near
“real-time” basis. Because casual carpooling is already
an acceptable form of commuting in the Bay Area, this
new type of ridesharing is expected to be more readily
acceptable in the Bay Area than elsewhere. The net
result is expected to be cost and time savings (with free
use of express lanes), and added benefits including
reserved premium parking spaces at Bay Area Rapid
Transit stations. These projects have a lot to offer the San
Francisco Bay Area, especially since we were just rated
the second worse in the nation in congestion delays,
second only to Los Angeles.
Economics 101
Now let’s finish the discussion we started with on the
idea of congestion pricing being the “Lexus Lanes” of
the roadway. In our view, this is not only inaccurate, but
50 Autumn 2007 ETCetc
it appears to be carried on the premise that no one will
be able to afford the tolls. It is true that tolls add costs to
driving, but the case that this makes roads inaccessible
by low income users is only a perception.
The cost of driving today consists of numerous cost
items: purchase of a vehicle, cost to maintain the vehicle
and/or the depreciating value, cost of gas, and cost of
delay. As gas prices rise, shipping and trucking compa-
nies operate on tighter profit margins, and the costs of
the goods that we purchase every day increase. We
experience daily and in every facet of our lives the cost
of our failing infrastructure. One can spend over US$200
per month on gas used to get to an office to earn enough
to pay over US$5 a gallon for milk three times a week. In
the midst of this cycle one’s commute can be as long as
three hours a day tied up in the mayhem of a broken
down transportation system.
A tally of the cost of driving, according to the Texas
Transportation Institute’s Urban Mobility report is about
one week’s worth each year. In other words, traffic
delays cost the typical commuter one week’s worth of
pay. Not cheap. So who are those unfortunate ones who
can afford this cost, but not the cost of a toll? Add to this
the cost of delay and we would say that every person in
a car during the peak periods is already paying the
price.
Compare this with the scenario of congestion pricing
with the factor of the toll cost added and the reduced
delay cost subtracted. The net effect is a reduction is the
cost of driving. Voila – capitalism at work. Incidentally,
the only component of equation one that is not supply/
demand driven is the infrastructure.
There is the view that the use of the public roadway
infrastructure is a basic right. While it is a public infra-
structure, the use of it by vehicles is not a right. Driving
a motorized vehicle is a privilege, not a right with the
law requiring all drivers to have a driver’s license. Thus,
it is a privilege to use the roads. So, while we agree that
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government should be responsible for providing basic
rights, we are not of the same opinion that the public
roadway infrastructure is one of them.
Needs must
There are all kinds of other services and goods like
electricity and water that are supplemented for those
individuals and families in need. These services are still
provided at a cost to those people in need. Those who
are more fortunate are not subject to the supplemental
program, and thus they pay more for the same set of
services. It our opinion, why should roads be any differ-
ent? In the case of congestion pricing, it is fair that some
pay a higher price for the use of the roads because it is a
choice and a privilege and not a right.
There is also the view that congestion pricing is a form
of “double taxation” where people who pay taxes and
tolls are getting hit twice. However, this view is some-
what uninformed and naïve. The price for those people
who use the road typically includes the value of their
own time plus the operating costs of their vehicle. But
when one considers the other costs outside of the indi-
vidual motorist, the picture becomes a little clearer.
There are the delay costs that peak period drivers
imposed on other users by slowing travel speeds result-
ing in the deterring of travelers and shipments of goods
(the most valuable time) and the wasting of large
amounts of other people’s travel time.
Moreover, those drivers sitting in congested traffic
HOW EUROPE
WORKS
1st European Road
Pricing Think Tank
4 April 2008/Intertraffic Amsterdam
H B Media thinking
highways
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Toll Finance
also impose pollution costs not covered by gas taxes.
Despite the magnitude of the costs imposed by com-
muter vehicle users, they are not charged for these costs.
Thus, we feel that separate congestion charges are
appropriate.
Conclusion
We all should understand the true costs of congestion
and delay. Putting it in perspective, if we lose a week of
work per year, but paying a toll to use a facility that could
save us a fraction of that time, it wouldn’t take an econo-
mist to figure out that congestion pricing has a definite
net monetary benefit. We all want better roads, better
services, better goods, better everything, but there is a
cost and if paying a toll will help providing a better
transportation infrastructure, then we’re all for it! The
challenge now is to be able to deliver the improvements
within an acceptable time frame after the congestion
pricing is implemented. This will have to be the topic
for another article. E
Kevin Aguigui, PE, CSEP, is Senior Systems Engineer
with Kimley-Horn & Associates in Oakland, CA
and can be contacted via email at
kevin.aguigui@kimley-horn.com
Melissa Hewitt is Senior Systems Planner at Kimley-
Horn & Associates’ Los Angeles, CA office and can be
contacted via email at melissa.hewitt@kimley-horn.com
luis@h3bmedia.com
www.h3bmedia.com
ETCetc Autumn 2007 51
Road User Pricing
Choice not
charging!
The debate on implementing road user pricing
began with a bang earlier this year with an online
petition and continues to build as motorists ques-
tion a perceived road network ‘tax’ when there
appears to be few viable alternatives.
Meanwhile, Local Authorities are taking time in con-
sidering their approach to the potential powers granted
them in the Draft Transport Bill and the funds available
from the Transport Innovation Fund.
You do not have to be a transportation professional to
realise that congestion is beginning to strangle our
economy, our quality of life and our environment. The
once gloriously predicted future of ‘hover cars’ on giant
automatic networks has become a depressing reality of
gridlock, fumes and overheated engines on our daily
commute to work.
Unfortunately, it seems that the public debate on the
matter has been solely focussed on ’how much’ and the
perception that the ordinary motorist will be almost
taxed off the road by a covert levy. This has meant that
we have moved away from the central point – that there
is simply far too much congestion on our roads and it
has to be tackled.
52 Autumn 2007 ETCetc
Of course, it’s not only the delays in dropping the kids
off at school, or the hour taken to drive three miles across
town on the way to work, it’s also the environmental
damage – the noise and the choking air quality - that is
pushing us towards a potential abyss.
That 25 per cent of UK greenhouse gas emissions
come from vehicles already on our roads is a sobering
thought but the Department for Transport (DffT) figures
are even more worrying - 33m registered vehicles on
the road in 2005 (a rise of 7m since 1996); by 2015 con-
gestion could be 25 per cent worse; one in five cars on
urban roads at 0850 during school term time is on the
school run; and one in four car journeys is less than two
miles. This bleak outlook was further reinforced by the
Eddington report which estimated that by 2025, conges-
tion could cost all road users between £22-24billion
more than today.
A change of thinking
The real crux of the matter is that road pricing on its own
will solve nothing – it can only happen as part of a wider
overhaul of public transport infrastructure in our urban
areas. There’s no point making the humble driver pay to
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 Road User Pricing

PAUL WADSWORTH assesses the issues and

demonstrates how it is possible to successfully
finance and implement road pricing schemes
while revolutionising public transport and
revitalising urban centres…

www.h3bmedia.com ETCetc Autumn 2007 53

Road User Pricing

use city roads at peak times if public transport infra-

structure from bus to rail, cycle path to pedestrian walk-
way, isn’t safe, clean and reliable.
A step change, with real, up-front investment in the
infrastructure, pioneering technology, real-time infor-
mation on the choices, and incorporating road user
pricing, can encourage commuters to change their
habits and enable the highway network to contribute
significantly to the community.

Innovative approach to fulfilling local needs

The Transport Innovation Fund established by the DfT to
incentivise local authorities in developing and deploy-
ing, “smarter, innovative, local and regional transport
strategies”, rewards those authorities looking beyond
‘soft’ demand management (travel planning, car shar-
ing etc) to measures such as road user charging as part
of an integrated package.
However, Local Authorities will need to consider inno-
vative funding mechanisms and models for delivery
and operation if they are to successfully implement a
real step change in public transport infrastructure. Of
course, the problem is that there are many competing
pressures on public finance and, although transporta-
tion is still a top five funding priority for most town halls,
it is not at the top.
Nevertheless, there is the option of a holistic, “not for
profit”, partnership model that can provide the required
up-front funding for an upgraded public transport sys-
tem that facilitates a behavioural change in commuters’
transport habits, while aiding urban regeneration on the
wider scale.

How it can be done

This innovative solution is based around a simple
premise – take out a significant partnership loan to fund
an overhaul in public transport infrastructure (the
amount being specific to the local requirements). This is
then repaid through increased public transport usage,
park and ride facilities, parking tariffs, and road pricing
at peak travel times in areas of heavy congestion.
It is estimated that the average city can raise over £1bn
in this way. The important point is that the loan pays for
upfront investment in public transport, cycle lanes,
pedestrianisation,travel information and other improve-
ments that will help facilitate a change in travel habits,
thus reducing congestion and promoting wider commu-
nity regeneration. A key political and public sticking
point of providing alternatives to car travel prior to the
introduction of RUP is thus eased.

Example scenario
An average British city typically has around 200,000
people with approximately 40,000 vehicles entering it
each day during the ‘peak’ 0700-1000 period.
The first stage is to analyse traffic patterns. A unique
overview of the city’s traffic patterns is required, detail-
ing traffic mix and volumes. The size and shape of the
charging zone needs consideration, the peak and off-
peak charges,residential exemptions,business charges,
design and placement of park and ride sites, bus lanes

54 Autumn 2007 ETCetc www.h3bmedia.com

Systems from Kapsch TrafficCom for Urban Road User Charging, nationwide HGV schemes, Road
Pricing, City Charging, Area Tolling or simply electronic fee collection. Whatever system you need,
make sure it’s from Kapsch TrafficCom. | www.kapsch.net

Britain has it.

Australia has it.
Chile has it.

Soon
Czech Republic
will have it too!
 Road User Pricing

and other transport infrastructure need evaluation to

form a complete transport solution. The key point is that
a unique, flexible solution must be provided for each
urban area, enabling the Local Authorities to adapt its
solution to their specific congestion problems.

“There is the Considerations

option of a holistic, Travel information communicated across all modes of
travel is a highly manageable and it is a vital part of an
‘not for profit’, overall RUP strategy. For example, before a journey even
partnership model begins, mobile phone technology, linked to a state-of-
the-art traffic management system, can help travellers
that can provide plan their journeys, choosing when it is best to travel
the required and how. Travellers are able to ascertain the best route
or mode of transport, the best time to travel, the pre-
up-front funding” dicted journey time, the amount of pollution, the cost,
and even the journey’s safety in terms of security, clean-
liness and reliability.

The benefits
The benefits of reducing traffic using road pricing and
improved public transport infrastructure are well under-
stood and have been demonstrated in London and
Stockholm. Our experience of the London congestion
scheme tells us that there is a short period of adjustment.
After an initial change in habits, people begin to under-
stand the new cost of travel, a more steady state pattern
begins to emerge as commuters seek and settle on
using other options such as public transport, cycling
and walking hence lessening their reliance on cars and
greatly reducing congestion.
As road space is freed up, the highway network is able
to support continued growth and new areas within a city
can become more attractive to investors and businesses.
A safer, cleaner and more reliable public transport sys-
tem brings improved mobility to all, particularly socio-
economic groups who rely on such services. City centre
management becomes a real possibility with the ability
of authorities to bring an integrated approach to man-
agement of the city environment including road space,
public transport, bus lane and parking enforcement,
security, pollution, and the management of information.
Such approaches will support economic regeneration.

Broadening horizons
Road pricing in the UK will continue to be much maligned
while we limit its horizons, seeing it as a standalone solu-
tion that simply charges motorists to use busy roads at
peak times. However, by using it as part of a wider, more
ambitious, revolution in public transport infrastructure
and city centre management, we are looking at a key
enabler of a modern, integrated, sustainable transport
network that will help regenerate communities across
the country for decades to come. E

Paul Wadsworth is a Director of Road User Pricing at

multidisciplinary consultants Capita Symonds.
As part of the Capita Group, it worked on the
implementation of the London Congestion Charging
Scheme and is currently involved in the Cardiff
Transportation Partnership

www.h3bmedia.com ETCetc Vol x No x 57

Optimisation

58 Autumn 2007 ETCetc www.h3bmedia.com


The pursuit of
emptiness
Transport planners can learn a lot from industry when
charged with optimising congestion, say PHIL SAYEG and
DAVID BRAY
Increasing congestion and associated excessive
pollution, greenhouse house emissions and energy
use are all typical concerns to government policy
makers and communities anywhere.
Congestion is increasing and its rise appears inevita-
ble both temporally and geographically. Discretionary
travel such as recreation is increasing and there are
increasing quantities of high value and time sensitive
freight on our roads. Increasing congestion is associ-
ated with unstable traffic flow, which in turn results in an
increasing number of incidents (non-recurrent conges-
tion) with consequent negative traffic effects. Con-
sciously or otherwise, congestion is often used as a
policy instrument – with good or bad consequences for
the economy.
Many of the transport strategies prepared by govern-
ments’ transport planners are limited in their impact as
they do not usually show an in-depth understanding of
the transport and land use market in which people and
firms make location and travel decisions and in which
government interventions need to be made (Bray,
2002).
Consequently, Bray argued that these strategies could
be improved by a detailed understanding of:
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Optimisation
• The nature of decisions by individuals and firms with
respect to land use and transport; and
• Mechanisms by which policy interventions may influ-
ence behaviour.
We contend that transport planners who normally
work in the public sector, either directly as employees
or indirectly as consultants, can improve their knowl-
edge of appropriate strategies and interventions by
observing the behaviour of industry such as logistics
firms and shippers (eg manufacturers and major agri-
cultural producers).
The purpose of this article is therefore to:
• Identify lessons that transport planners can derive
from industry and how congestion can be ‘optimised’;
• Show how transport planning can be made more rel-
evant by taking advantage of the potential of Intelligent
Transportation Systems (ITS).
‘Optimise’, for the purposes of this article means:
• Intervention measures by government to reduce
congestion to an optimal level; and
• Response of an individual or firm to minimise the
impact on them with flow-on positive impact if, for exam-
ple, real-time information leads to avoidance of unduly
congested areas and routes.
ETCetc Autumn 2007 59
Optimisation

Effect of congestion
The consequences of excessive congestion for private
motorists are additional and more variable travel time
and frustration. For freight transport, the consequences
are more substantial. Congestion will affect industry
through factors such as:
• Higher vehicle operating costs, labour costs and
freight damage;
• A higher cost of obtaining inputs and serving mar-
kets;
• Reduced reliability for delivery of inputs and distri-
bution of finished goods; and
• Reduced access and scale economics, which
increases input costs and the cost of production.
Research findings also provide other insights into the
effect of congestion and industry response:
• Weisbrod et al (2003) showed that congestion does
raise industry costs (in complex ways) and results in
suboptimal outcomes (eg effects on access to special-
ised labour, economies of scale);
• Runhaar et al (2004:38) report the results of several
studies that suggest that unreliability is a more serious
problem than an increase in average travel time;
• Studies indicate that adaptation of transport opera-
tions such as less frequent deliveries and higher stock
levels was the main response to rising congestion;
though
• McKinnon (1998:1) indicated for UK “delays…
increase the amount of inventory in transit on the road
network …likely to be a minor item.”
Table 1:
Slow and unreliable travel adds to industry costs, Lessons for transport planners
especially where just-in-time inventory management is
used. An increased number of trucks may be needed to Lessons from industry
carry the same quantity of freight, and higher levels of
stock need to be held to insulate businesses from unreli-
able delivery of supplies. • Firms respond to congestion in different ways – they have
The consequences of the increase in transport costs different degrees of freedom and interest.
should not be exaggerated because transport accounts
for only a relatively small share of the total production
cost of goods. Nevertheless, in an internationally
competitive environment, any additional cost causes a
• Logistics firms make tactical decisions and shippers make
loss of competitiveness and hence has detrimental
periodic medium-term strategic decisions.
consequences.

Freight transport’s significance

At 9 percent of GDP and with an estimated value of
A$57billion (€35billion) in 1999-2000 (Industry Steer-
ing Committee 2002), Australia’s logistics industry • Logistics firms and operators optimise what they can control
appears slightly more efficient than in Europe and USA. within total supply chain using technology where benefits are
Perhaps more importantly in Australia, transport is esti- felt at bottom line – investments are not for show.
mated to represent the largest single component of total
logistics cost at 3.6 per cent of GDP or A$22.8billion in
1999-2000. Nevertheless as a whole, non-transport • Logistics firms and operators value real-time information on
activities were estimated to be more economically sig-
traffic conditions and state of inventory because they need
nificant than transport at 5.4 per cent of GDP. The rela-
reliability.
tive higher share of non-transport costs in logistics is
also evident for Europe.
Logistics is generally considered to comprise four,
interrelated activities: transport1; warehousing; inven-
tory; and administration and order processing. As a con-
sequence, freight transport cannot be addressed in

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Implications for transport
planners
• “One size does not fit all”. ITS can facilitate selectivity in
regulation and provision of information allowing individuals and
firms to optimise their response (ie choice).
• Outsourcing affects concerns and priorities, and results in lags.
• Tactical improvements are rational, straightforward and suited
to ITS.
• Effecting strategic change requires sending the right signals, eg
pricing, land use (to influence location decisions), road and traffic
management, etc.
• Focus on things that can be controlled.
• Agencies have scope for use of ITS technologies to improve
the efficiency of the network and to influence demand in a
desirable way.
• Reliability and other attributes of congestion (eg emissions)
are important not just average speed.
• Transport policies may improve the reliability, quality and safety
of travel with little impact on average speed.
• Real-time information on network conditions – actual current,
forecast and historical can be used for planning and optimisation
purposes by agencies, logistics firms and motorists.
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Optimisation
isolation, but rather is a part of logistics which is in turn
integrated with the entire modus operandi of business.
Nevertheless, transport is still important because its
cost and convenience will have a bearing on where
businesses locate, where they source their materials,
how they manage their material and products, the trans-
port modes that are used, and the types of transport
services used. Changes in these factors will affect the
relative mix of transport and other resources that are
used by companies. It is possible for the detrimental
effects of transport inadequacies to be amplified, for
example late delivery of materials needed for just-in-
time based production can cause disruption to the entire
production process.
The four categories of logistic cost will be influenced
by a range of factors, including the extent to which ware-
housing is centralised (rather than being dispersed).
Using a larger number of warehouses reduces transport
costs because distribution to the warehouses can be
undertaken with larger vehicles and the cost of distribu-
tion from the warehouses involves shorter travel dis-
tances. However, administration, inventory and storage
costs rise with use of a larger number of warehouses.
Total logistic costs can be minimised by selecting the
appropriate number of warehouses.
Due to competitive pressures, industry (shippers) and
hence logistics firms, in developed countries with fairly
open markets, are constantly seeking to reduce logis-
tics costs. As in Europe over the late 1980s to early 2000s,
Australian logistics costs declined due to deregulation,
improved vehicle design, use of larger trucks, outsourc-
ing and more efficient fleet management. Having
achieved these savings, in Australia the focus has shifted
to non-transport components of logistics, especially as
the lower transport costs and more efficient transport
practices support innovation and new non-transport
logistic practices to occur (EPS/ PAS 2005).
This appears to explain why despite rising interurban
and urban congestion, the logistics industry has in
recent times been now more concerned with improving
the efficiency of non-transport components of logistics
as a means for securing lower costs and improved qual-
ity. For example, Coles Myers one of Australia’s major
retailers, has reduced the number of their distribution
centres from 48 to 24, including 13 to serve the biggest
consumer areas.
Overall for Australia, then, it is concluded to date that:
• There is no strong evidence to date that traffic con-
gestion on roads is causing businesses in general to
change their transport, location and other logistic deci-
sions, and some evidence that significant rises in con-
gestion may still not do so;
• Business is not homogenous, and some businesses
will be more sensitive to congestion than others; and
• transport costs are still significant, and rising traffic
congestion will increase them yet further, with detri-
mental effects on business performance.
Possible industry response
In addition, firms have a variety of strategies they can
adopt to cope with congestion including:
ETCetc Autumn 2007 61
Optimisation
You are entering a
congestion charging zone
But fortunately we don’t have
any congestion.
Have a nice day.
• Switching from road to rail which generally occurs to
a modest extent;
• Changing the type of vehicle used, for example mak-
ing greater use of smaller, nimbler trucks in some
instances and use of larger trucks to gain scale econo-
mies in others;
• Re-timing trips to less congested times and routes;
• Holding greater inventories to account for unrelia-
bility;
• Whifting risk to others eg by subcontracting on fixed
price terms;
• Relocating activities, including sources of materials
and intermediate goods, the location of manufacturing,
and the number and location of warehouses.
Based on the observations of how industry behaves in
the face of congestion some key lessons for transport
planners are set out in Table 1.
Role of ITS in optimising congestion
Intelligent transport systems can:
• Complement pricing measures which in turn may be
most appropriately delivered by ITS technologies by
providing timely and accurate information to individu-
als and firms on road network conditions (eg perform-
ance measures such as length and variability of trip
times and incidents) and parking;
• Permits individuals and firms to respond in the way
that is best for them;
• Assist in managing access and use of the network on
a more selective basis;
• Allow more efficient use to be made of the transport
system;
• Increase vehicle (car and bus) speeds hence increas-
ing their perceived attractiveness.
Particular ITS opportunities would include:
• Complementing/ delivering pricing – from individ-
ual toll roads to network-wide pricing;
62 Autumn 2007 ETCetc
• Access control eg London congestion charging;
heavy vehicle charging, Germany;
• Intelligent Access Project, Australia;
• Bus lanes, managed lanes, USA (HOT lanes);
• Bus/truck lanes (uncommon), truck/transit lanes
(possible but likely low acceptability to public);
• Advanced multi-modal traveller information systems
making use of real-time information;
• Integrated traffic control:
• Middle of day peaks... variable… less predict-
able... perhaps more scope for dynamic intelligent
traffic systems;
• Integrated traffic control recognising traffic
control/ incident management and real-time informa-
tion now intimately related due to expected rise in non
recurrent congestion;
• Bus and truck fleet management;
• Bus contract compliance; and
• Market driven applications – to allow motorists to
optimise their own situation (ie there is an economic
rationale);
• consumerisation of navigation – being bought
as beneficial;
• Location-based services which incorporate
real-time information... there are consumer benefits by
definition as they choose to purchase services;
• Pay-as-you-drive insurance.
The reality of it all
How much real-time information do we need? Compre-
hensive real-time information seems desirable and “as
much as possible” is probably better. Technologies to
develop and disseminate real-time information are now
commonly available (mobile phones 3G etc, Internet).
But while some real-time information services may
develop of their own accord experience to date is that
they are likely to be limited due to the difficulty of com-
www.h3bmedia.com

mercialising them.
Are governments doing enough given to promote real
time travel information services given real-time infor-
mation should have wider benefits than the individual?
In Australia, the answer is “Yes” as most State road agen-
cies which provide basic ITS infrastructure that captures
real-time information provide basic data to third parties
at cost only.
Conclusion
ITS can be used for enhancing efficiency of supply and
influencing demand in a somewhat selective way. ITS
complements pricing and traditional traffic manage-
ment approaches and can provide information to allow
firms and individuals to optimise their travel with likely
flow-on wider benefits. New ITS developments which
rely on real-time information offer enhanced potential
and are worthy of increased consideration by transport
planners. E
Phil Sayeg, Policy Appraisal Services Pty Ltd
(p.sayeg@uq.net.au)
David Bray, Economic and Policy Services Pty Ltd
(david.bray@epservices.com.au)
References
1 Transport cost includes all relevant costs including
the extent to which congestion may cause transport
costs to rise.Even moderate congestion may not increase
real vision
Inspiring reality
www.h3bmedia.com
Optimisation
overall transport cost greatly depending on the charac-
teristics of a firm’s transport task.
Bray, D (2002),“Urban traffic congestion – do transport
strategies help?” Article published in Smart Urban
Transport magazine, September (original version of
article published in proceedings of the 2002 BTRE
Transport Policy Colloquium).
Bray, D (2003), “Road pricing issues and options,”
Article published in Smart Urban Transport magazine,
February.
Economic and Policy Services and Policy Appraisal
Services (2005), “Exploring the relationship between
accessibility and the viability of industry and trade,”
Prepared for Brisbane City Council.
Industry Steering Committee of the Freight Transport
Logistics Industry Action Agenda (2002) Freight Logis-
tics in Australia - An Agenda for Action, May
McKinnon, AC (1998) “The Impact of Traffic Conges-
tion on Logistical Efficiency”, Institute of Logistics
Research Series, Heriot-Watt University, September
Policy Appraisal Services (2006), “Sketch Plan –
Traveller Information,” Prepared for Main Roads,
Queensland
Runhaar ,H and van der Heijden, R (2005) “Public pol-
icy intervention in freight transport costs: effect on
printed media logistics in the Netherlands”, in Trans-
port Policy no 12
Weisbrod, G, Vary, D and Treyz, G (2002) “Measuring
the Economic Costs of Urban Traffic Congestion to Busi-
ness”, Transportation Research Board Annual Meeting
Can you see it ?
ÒSmartÓ highways steering drivers to better,
safer routes ... tolls adjusting to trafÞc
demand ... transit systems integrating
seamlessly into the community ...
innovations that push the industry forward?
By applying our experience and creativity
to todayÕs difÞcult mobility problems,
and by building partnerships based on
respect and trust, PBS&J is helping
transportation agencies bring visions
like these to reality every day.
Visualize the future. Then call PBS&J.
OfÞces throughout the US
pbsj.com ¥ 800.477.7275
ETCetc Autumn 2007 63
Global Issues
A global
business
STEFAN HOEPFEL goes around the ETC world in 1300 words,
visiting standards, innovation, interoperability and
nationwide tolling along the way
The Prussian Army was resoundingly defeated in
the twin battles of Jena and Auerstedt in 1806. But
only hours before these battles, no one could have
imagined that such a thing could possibly happen.
Wasn’t the Prussian Army battle-hardened? Hadn’t it
won fame and honour? And wasn’t it the best army in
Europe? Hadn’t these Frenchmen only been successful
up until this point, and shouldn’t their triumphant
progress now finally be stopped? No, things turned out
very differently, as the history books tell us. This power-
ful new army, with its unconventional tactics – at least by
the standards of those days, was fast, manoeuvrable, and
could do more than just move ahead, line abreast.
Now, what has that got to do with tolling? Basically,
nothing at all really. But, on the other hand, the German
electronic toll collect system is known throughout the
world. It has been in existence for just 36 months - 36
months which might have changed the world of road
user charging.
But one thing at a time. Mobility is almost unquestion-
ably the key to a nation’s prosperity and growth. For
good mobility, we need to have not only railroads but
also excellent road networks. However, these are now
having to carry ever higher traffic volumes, and need to
be maintained, widened or even rebuilt. In short, one
has to be able to afford to finance them.
On the other hand, we’re always wanting more infor-
mation. The same applies in everyday life as it does on
the road. Road users would be grateful to know about
current traffic conditions, and control centers would be
glad to have more reliable traffic control and guidance
capabilities. Third parties would also be thankful for
more information. They could then offer road users their
services on the basis of the information they had
obtained.
64 Autumn 2007 ETCetc
And now the electronic toll has entered the game.
Multi-lane, free-flow systems have become standard
over the years. But only those countries with sufficient
space and low labor costs can afford such large-scale
toll stations.
I would now like to mention two distinct systems. On
the one hand, there is the microwave-based 5.8GHz
DSRC (Dedicated Short Range Communications) tech-
nology and, on the other hand, the satellite-based GNSS
(Global Navigation Satellite System) technology.
DSRC is an integral part of the electronic toll world.
Canada’s Highway 407 and Melbourne’s City Link are
outstanding examples of two different approaches to
barrier-free toll systems. In this article I would like to
concentrate on nationwide systems, as this is the only
level at which I can see real potential for discussing the
pros and cons of these two technologies.
Yes, but what have we got, exactly?
DSRC has been tried and tested repeatedly, and it works.
As one advertising slogan put it, “Wwe’ve got it”. I am
sorry about this but I just can’t identify with that last
statement. “We’ve got it.” That’s all very well but are we
thinking about other possible uses for it? Aren’t most of
us now using satellite signal positioning for our naviga-
tion system – and wish to have things like dynamic route
guidance?
Can we nowadays afford to do without the information
being generated by millions of vehicles? Isn’t there
enough incentive for controlling our chronically con-
gested roads by varying the charges on specific roads
according to the route, time of day – and thus smoothing
out traffic peaks? Wouldn’t it help our efforts to reduce
air pollution if we could control vehicles of specific envi-
ronment classes in an intelligent manner, and reward
www.h3bmedia.com
 Global Issues

“I just can’t
identify with the
advertising slogan
‘We’ve got it’.
That’s all very well
but are we thinking
about other uses
for it?”

www.h3bmedia.com ETCetc Autumn 2007 65


those who move out of congestion? Isn’t one of the goals
of the current safety debate to improve safety by track-
ing the progress of hazardous goods along their routes?
This list could be extended almost indefinitely.
At the price level, the discussion of pros and cons is
determined by two simple variables: DSRC tags which
are, as before, cheaper than the on-board units used for
satellite supported tolls. However, the latter are becom-
ing considerably cheaper, and are only about half the
price they were three years ago.
Moreover, DSRC systems are an indispensable part of
the communication with road-side equipment. That is
the gantries and beacons, that one can’t do without, but
which make the overall system considerably more
expensive. This eliminates the price advantage of tags
over on-board units. Operational and back office costs
should be about the same in both systems, as the proce-
dures subsequent to data collection are similar.
Both systems are also greatly affected by the complex-
ity of the route network and the number of vehicles. As a
rule of thumb, one can say that the advantages of the
GNSS system become increasingly clear as complexity
increases. When it comes to the number of vehicles, the
economies of scale in the production of on-board units
also have to be taken into account.
There’s still no large scale system based on satellite
technology. However, those that are planned are looking
closely at the use of so-called value-added services, if
not as an integral part then as an option. To sum up, the
flexibility of a GNSS system, its intrinsic capability for
third-party data use, and its capability for unlimited
expansion of the toll area make it, all in all, superior to a
pure DSRC system for nationwide application.
Reliability-central
Returning to our starting point, the long-propagated
Galileo satellite system will be coming into operation
much, much later than planned.
The world’s only satellite-based toll system so far is
66 Autumn 2007 ETCetc
the German one, and it has now been running faultlessly
for three years. Moreover, navigation devices are in
strong and increasing demand, and fleet management
systems are now in common use, at least among larger
shipping companies.
And what else has happened? Another European
country has introduced a nationwide turnpike system,
with the result that a DSRC-based system is now in oper-
ation.Was, here again, the source of revenue considered
more important than the use of information?
One can hope that the system was selected to the best
of knowledge and belief. But how reliable is this system?
It’s probably generally pretty good, but the press
reported that its toll performance had dipped to
94 per cent in September. By way of comparison, the
press also stated that the reliability of the German satel-
lite supported system was 99.7 per cent in August.
But, as I see it, what primarily makes this decision
unfortunate is that it represents a missed chance. A
chance that could have been used for more than merely
raising revenue. It could have become a beacon for
future-oriented technologies.
Now, what’s the rest of the world doing?
Australia is thinking pragmatically. Transurban, their
largest turnpike operator, is not considering giving up
its DSRC-based toll - far from it. They have realized that
GNSS can co-exist parallel with existing schemes, and
that this technology can be introduced step by step.
Japan is going its own way within the scope of its so-
called SMARTWAY project. Here, a GNSS-compatible
on-board unit will be able not only to collect and trans-
mit information but also to receive data from road oper-
ators and third parties. This is intended to satisfy not
only drivers’ needs for information and but also their
interest in entertainment, which is very strong in Japan
and Korea. The DSRC tag will continue to be used paral-
lel to this for levying the electronic toll.
The Road User Charging (RUC) project (“Anders
Betalen for Mobiliteit”) is progressing in the Nether-
lands. On the basis of their approach, which has been
discussed very openly, we can assume that, by 2012, we
will be seeing for the first time a country in which eight
million vehicles are using a highly efficient satellite-
based system.
Have the switches already been thrown?
I think that the next four months are going to be very
interesting, as two European countries are currently
planning to introduce a nationwide toll. We’ll have to
wait and see whether this time one or both countries
decide to use satellite technology.
We can only be certain of one thing, using the existing
infrastructure has always been cheaper than building a
new one.
Well, now what actually happened after the twin bat-
tles of Jena and Auerstedt? Napoleon won, the Prussians
capitulated, and had to reduce the size of their army
considerably. And Napoleon paid his respects at Fred-
erick the Great’s tomb just a few days later. E
stefan@hoepfel.de
www.h3bmedia.com
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India
Fifth
amendment
One of the world’s leading providers of fibre optic
transmission equipment designed for CCTV surveillance
operations has won a contract to supply five new toll roads
in India.VIBEKE ULMANN spoke to MANOJ DAVE, Head of O&M
(Roads) at Larsen & Toubro Ltd, the company subcontracted
by the National Highways Authority of India (NHAI) for the
new projects
Larsen & Toubro Limited (L&T) was founded in Bom-
bay (now Mumbai) in 1938 by two Danish engineers,
Henning Holck-Larsen and Soren Kristian Toubro.
Both of them were strongly committed to developing
India’s engineering capabilities to meet the
demands of industry. Today L&T has evolved into a
technology, engineering, construction and manu-
facturing company and it is one of the largest and
most respected companies in India’s private
sector.
The company has been subcontracted to execute the
engineering work for the National Highways Authority
of India’s (NHAI) five new toll roads. Adding almost 300
km to the Indian Highways system, the toll roads are
located in different parts of the country. Four of them are
contracted on a Build, Operate & Transfer (BOT) basis.
For practical reasons, each of the projects is associated
with individual subsidiary companies and in the follow-
ing information the projects are referred to by company
name.
Manoj Dave, head of roads at L&T describes the back-
ground for the projects:
“Firstly there is the Larsen & Toubro Panipat Elevated
Corridor Limited, awarded by NHAI on a BOT basis cov-
ers widening the existing four lane portion of the stretch
between 86km and 96km. The project covers Panipat
68 Autumn 2007 ETCetc
city, on national highway no.1 (NH1) in the state of
Haryana and will comprise a six-lane elevated structure
covering road crossings, city bus stand and skylark
tourist complex as well as widening and construction of
peripheral lanes. The total length of the project is
10km.
“The Larsen & Toubro Interstate Road Corridor Lim-
ited awarded by NHAI covers design, engineering, con-
struction, development, finance, operation abd
maintenance of the 264km to 340km segment referred
to as Plalanpur-Swaroopgunj, National Highway no. 14
(NH-14) in the state of Gujarat & Rajasthan. Total length
of the project stretch is 76km.
“Thirdly we have the Larsen & Toubro Vadodara
Bharuch Tollway Limited project - awarded by NHAI for
increasing to six lanes the stretch between 108/700km
and 192/000km, referred to as the Vadodara to Bharuch
section of NH-8 in state of Gujarat on BOT Basis. Total
length of the project stretch is 83.3km.
“The Larsen & Toubro Krishnagiri Thopur Toll Road
Private Limited project was awarded by NHAI on BOT
basis. The project covers 94km (end of proposed
Krishnagiri Flyover) to 156km stretch (Thumpipadi),
plus improvement, operation and maintenance of the
156km (Thumpipadi) to 163.4km segment (Thopurghat)
on NH-7 in the state of Tamil Nadu. Total length of this
www.h3bmedia.com
 India

 
 

   



 

 
  
  
   

   

  
 
 
  

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India

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70 Autumn 2007 ETCetc www.h3bmedia.com


project portion is 69.4km.
“Finally there is the Larsen & Toubro Western Andhra
Tollways Private Limited. This Project was awarded by
NHAI on a BOT basis covering the 80.05km (Jadcherla)
to 135.4km segment (end of the proposed Kotakatta
Bypass) on NH-7 in the state of Andhra Pradesh. Total
length of the project stretch is 55.419 km.”
Pan, tilt, zoom, control
Each road is supervised by one control room and all the
projects called for a CCTV solution with Pan-Tilt-Zoom
(PTZ) cameras as well as a number of variable message
signs, automatic traffic counter-cum-classifiers and
metrological stations etc. All of the signals are to be
routed back to the individual control rooms which in
some cases are located several kilometers away and the
control room operators further require real time control
of the PTZ camera movements.
Dave explains, “There were a number of reasons for
selecting the AMG 3700 system for the projects. Most
notably they all called for a dual redundant system for
real time uncompressed video transmission and the
ability to cope with multiple add-on modules via Ether-
net. We needed this capability over all the project
stretches, irrespective of normal or redundant path of
data transmission, without additional equipment or
repeaters. The SNMP compliant network management
for remote fault monitoring, reporting and diagnosis,
was also a must. All of this was something the 3700 sys-
tem handles without any issues.
“As I mentioned, the backbone network is dual redun-
dant and each AMG field unit will have four fibres con-
nected, 1 Tx 1 Rx for Primary ring and 1 Tx 1 Rx for
Secondary ring. The Ethernet capability of the AMG
equipment was an important factor because there are
www.h3bmedia.com
India
stretches on the projects where we do not have cameras
installed. However, instead of using dedicated Back-
bone devices the other equipment such as variable
message signs, automatic traffic counter-cum-classifi-
ers, metrological stations etc. at those locations will con-
nect to the nearest AMG field unit’s Ethernet port via a
media converter.
“In particular the Ethernet capability comes in handy
at the Larsen & Toubro Interstate Road Corridor Limited
project where we have 2 toll plaza and using the Ether-
net capability means that we can share data between
them,” Dave concludes.
Build, operate, transfer, integrate
Although the end client ultimately is the National High-
ways Authority of India (NHAI), L&T have won the con-
cessions for a period of 15 to 20 years including the
construction period on the BOT based projects. Outside
of being responsible for design, engineering, construc-
tion, development, finance, operation & maintenance of
the roads and their facilities, L&T will also be responsi-
ble for toll tollection and traffic management, two of the
prime activities, over the length of the concession peri-
ods, post construction.
For the 76km stretch on the Plalanpur-Swaroopgunj
section on National Highway no. 14 (NH-14) in the state
of Gujarat & Rajasthan, L&T is responsible for design,
engineering, construction, development, finance, oper-
ation & maintenance of the road and its facilities, but the
toll collection shall be done by the NHAI.
The Data Transmission systems on all five new toll
road will be installed, tested and commissioned by
L&T’s Electrical Business Group (EBG) along with their
systems integration partner, Croatian firm Telefon
Gradnja. E
ETCetc Autumn 2007 71
  
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Advertisers Index
Ascom .......................................................69
Aselsan ......................................................41
Capita Symonds ......................................69
Computer Recognition Systems..........40
Consulting Stream ..................................56
GMV ..........................................................19
H3B Media Road Pricing Think Tank........
........................................... 27, 29, 31, 32, 34
IET..............................................................72
Image Sensing Systems...........................67
Intertoll .....................................................46
Kapsch TrafficCom .................................55
OSI ............................................. back cover
PBS&J .........................................................63
Q-Free .......................... inside front cover
ROBOTVisual Systems ..........................23
Satellic ............................inside back cover
Siemens .....................................................02
Thales ........................................................15
Transurban ...............................................45
TRMI..........................................................71
Vitronic ....................................................71

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72 Vol 1 No 1 ETC etc www.h3bmedia.com