53314 TRANSPORT NOTES ROADS AND RURAL TRANSPORT THEMATIC GROUP THE WORLD BANK, WASHINGTON, DC Transport Note No. 38 November 2009 Planning and Implementation of Road Use Charging: Options and Guidelines Jung Eun Oh, Svetlana Vukanovic and Christopher R. Bennett ____________________________________________________________________________________ Road use charging is used by agencies for activities ranging from revenue collection, through demand and environmental management. It is applied on individual road segments, such as an expressway, or over geographic areas, such as zones in a city or even an entire country. When a government is considering implementing a road use charging system, it needs to consider four broad issues: (i) the technology to adopt; (ii) how it will be operated; (iii) how compliance will be enforced; and, (iv) the social impact of the system. This transport note addresses each of these four issues, and presents guidelines towards implementing a successful road use charging scheme. This note was produced by the World Bank's Europe and Central Asia Transport Unit to share the current state of knowledge with its clients. ___________________________________________________________________________________ 1 Introduction Road use charging (RUC) 1 consists of imposing various forms of fees or taxes on access to, or use of, road infrastructure. At its simplest level, it consists of collecting tolls for using a section of road or vignettes for access to a part of, or the entire, road network in a country. At its most complex level, it can use satellite technology to calculate cost for users Figure 1.1: RUC related definitions based on the distance traveled, the type of vehicle, and the location and type of roads For the purposes of RUC, it is useful to used. It allows for the road owner/operator to differentiate between the two situations charge for internal as well as external costs of where RUC is applied: infrastructure. Road segments: Charges are made for RUC can be used to raise revenues only, or as travelling on specific segments of the road a more sophisticated mechanism to influence network, such as tunnels or along user behavior. For example, in London, the motorways; and, introduction of congestion charging reduced Zones: Charges are made over an area, traffic levels by 15 percent and congestion by for example portions of a city or even an 30 percent by shifting users to public entire country. transport (Transport for London, 2008). 1 RUC on specific segments has been used for The term "road use charging", instead of "road user charging", is used to define what to charge, rather than many years. As technology has advanced in who to charge. It emphasizes a direct linkage between recent years, zone pricing has become more the charge and the actual use of road infrastructure. On feasible and attractive. the other hand, "road user charging" includes charges on potential road users that are not reflective of their use, such as vehicle registration fees, vehicle excise taxes, For agencies considering implementing RUC, and so on. there are a number of issues which need to Page 2 Transport Note No. TRN-38 November 2009 be considered beyond the technology for RUC objectives: Whether the RUC is to successful implementation: be used to raise income or to address congestion or environmental issues; and, Charging technology: How the RUC is to Type of network to be covered: be collected; Whether RUC is to be applied to specific Operations: The organizational structure road segments or for an area/zone. and the `back office' elements of the system--how users will pay the charges, 2.1 RUC on Road Segments how they will be remitted to different participants, and how the system will be Road segments, such as motorways, tunnels, maintained and improved; and bridges, have a long history of RUC, Enforcement of user compliance: How which is also called "tolling". Tolls are compliance will be ensured; and, typically collected through a `closed' system, The social dimension: How the system i.e. an access-controlled network, wherein can be introduced and get public support, road users are charged based on the locations how to set the appropriate charge level, where they enter and exit the road. An `open' and how to mitigate the negative impact system charges vehicles at selected road on certain users. sections irrespective of their entry/exit points. 2 A closed system generally sets its The purpose of this note is to provide an rates proportionate to distance traveled on a overview of the above listed issues as well as toll road and there are few opportunities to of available technologies. It also contains avoid payment. Open systems are less guidelines for selecting the most appropriate expensive to implement, since entry/exit RUC solution for a given local situation. control are not required, but are not as effective at collecting revenue since not all vehicles must pass through the collection Figure 1.2: Various aspects of RUC using points. They also do not charge equitably for electronic toll system the distance traveled. SOCIAL DIMENSION RESPONSIBLE AGENCIES 2.2 RUC for Zones The most common example of RUC for zones is urban congestion charging such as applied in London and Singapore. More recently, it has been adopted by cities such as Milan, Italy for reducing vehicle emissions. RUC in zones generally follows one of two different approaches: Cordons: Charges are made when entering and/or leaving a zone; or, Area: Charges for driving within a zone RESPONSIBLE AGENCIES irrespective of the number of entries and exits. 2 Technology Options for RUC 2 There are a variety of different technology Another related terminology, "Open Road Tolling", refers to an Electronic Toll Collection (ETC) system options to charge for road use. The selection wherein users pay tolls without stopping or slowing of the appropriate technology depends upon down, and thus, can free-flow. This paper avoided this two key factors: term, which is particularly used in North America, and instead, categorized such systems under ETC. Page 3 Transport Note No. TRN-38 November 2009 The charges can be applied in a variety of congestion charging or Highway 407 in ways: Toronto, Canada. It allows for various payment options. For entrance/exit from the zone; Microwave and Infrared: The OBU For the time spent in the zone; and/or communicates with roadside gantries. For the distance travelled in the zone. Example: Czech open road system, Stockholm congestion charging, tunnels Box 1: Terminology and bridges. · CCTV: Closed Circuit Television Satellite with GSM: The OBU identifies · DSRC: Dedicated Short Range the specific location on the network and Communications the distance travelled by using GPS. · ETC: Electronic Toll Collection Charges are deducted from a pre-paid · GPRS: General Packet Radio Service card or charged to an account. Example: · GPS: Global Positioning System Germany, for all trucks above 12 t. · MTC: Manual Toll Collection Satellite with Smartcard: The OBU · OBU: Onboard Unit measures the distance, often with a · RFID: Radio Frequency ID tachograph, and GPS verifies the distance which is recorded on a smartcard. 2.3 Trends in Technology Microwave is used for enforcement. Example: Switzerland for all trucks above As shown in Figure 2.1 (Siemens, 2007), 3.5 t. there is a pronounced trend away from 3 manual tolling towards electronic and satellite Table 2.1: Technology comparison based tolling. Manual tolling is mainly used on Capital Operating Reliability Privacy legacy road segment based systems in cost cost (accuracy) concern Video Low High Medium Medium developed countries, and is still common in Microwave/ many developing countries. Infrared Medium Low Medium Low Satellite + High Medium High High GSM Satellite + Medium Medium Low High Smartcard high high 3 Operational Considerations RUC requires several operational and administrative functions to meet its policy objectives and business needs. Generally, a central system, also called a back-office, Figure 2.1: Tolling Trends needs to be established to conduct such functions. Key functions of a central system Satellite based tolling is still in its early stages can be categorized as follows: while microwave/infrared tolling is a mature, established technology. 2.4 Overview of Technologies 3 This table provides a generalized comparison, which may vary depending on the scope and type of a RUC The technologies can be divided into two scheme. For example, privacy concerns may not be an groups: video, which reads license plate issue if charges are applied only for commercial vehicles. numbers and all others which require `on- Also, the capital cost of the microwave option can board units' (OBU). increase and be significantly high if applied for a large area. Other criteria to be considered may include scalability, flexibility, interoperability, etc. Video: CCTV linked to license plate recognition software. Example: London Page 4 Transport Note No. TRN-38 November 2009 3.1 User Account Registration and Management In manual systems, calculation of fees and transactions generally occurs at toll booths Depending on its scope and charging policy, a (PoS), although a prepay system, such as the RUC system may require identification of issuance of prepaid passes/coupons, is also individual users/vehicles. In such cases, a an option. On the other hand, the vignette user account registration system must be system is solely based on prepayment and established and managed. Types and involves no instant charging or payment. Its amounts of information to be stored and payment service thus, in most cases, can be managed in a user account vary, depending merged into existing taxation systems. on whether segment- or zone-based pricing is applied and the type of technology used. ETC schemes can operate either as prepay, post-pay, or as a blended system. A customer Manual toll collection (MTC): User can deposit a certain amount into the OBU accounts are not required, except when prior to use of roads where charges apply; discounts or subsidies are offered to regularly receive invoices and pay them; pay specific users. at petrol stations or wherever OBU readers Vignette: Usually does not require user are installed; or a mixture of the above. An accounts since it is generally based on example of how this was done in New Zealand vehicle registration system. is at www.tollroad.govt.nz. ETC: User account registration is required upon acquisition of an OBU (either Segment-based and fixed-rate charges are through purchasing, renting with deposits, normally straight forward to calculate. Only or pilot deployment at no user cost). vehicle type information needs to be captured Enforcement may be necessary to make from the OBU and verified. Tariff rate sure that an OBU is correctly informed of information stays in the central system. the identity of a vehicle to which it is attached. It is to prevent fraud in variable Payments become more complicated in zone- toll systems, where toll rates vary based systems and/or when the toll rates depending on vehicle types and, in some change by location and/or over time (either in cases, configuration of specific vehicle a pre-timed manner or based on traffic type, such as emission levels, weight, and conditions). Under these schemes, charging the number of axles. data in terms of the amount of usage (i.e. distance-traveled or time in an area) must be To minimize the possibility of fraud, many captured separately for different locations existing systems allow only authorized and/or times of day, and total fees must be agencies to install OBUs. Nevertheless, calculated by applying the appropriate rates. establishing and maintaining correct physical With success of such pricing schemes largely links between registered vehicles and their depending on the accuracy of detection OBUs can be logistically challenging (Pickford technologies, a backup system is often and Blythe, 2006). necessary to identify and correct errors. 3.2 Payment Service and Customer In order to minimize the possibility of Relations identification errors, a payment service authority may need to develop a customer Payment service consists of the translation of profile of travel patterns in addition to the chargeable road use into billing information, above detection technologies. As practiced by subsequent actual financial transactions, and many credit card companies, demand profiles handling of any inquiries and complaints can be used to detect anomalies or errors. In related with accounts. There are largely four such case the payment service authority can arrangements for the payment service: (i) exercise discretion to correct fees (Pickford point of sales (PoS); (ii) prepayment (debit and Blythe, 2006). However, this may have account); (iii) post payment (credit account); critical privacy implications. and (iv) a blended system. Page 5 Transport Note No. TRN-38 November 2009 The payment service authority should also be 3.5 Tariffs and Demand Management equipped with the capacity to provide adequate information to customers, to handle Before implementation, it is a planning/policy complaints and inquiries regarding accounts issue to determine the initial toll levels of a information and billing data, and to resolve road segment or an area. However, once the potential claims. project is launched for implementation, the central system may need to track actual 3.3 Operational Management responses of traffic demand to pricing signals, and to introduce necessary adjustments in toll Regardless of the type of RUC used, the levels to manage demand. continuous management of the system is necessary to ensure adequate maintenance of In many countries, when toll roads are facilities and equipment, detect problems, and operated by a private concessionaire, the report system performance to the agencies contracts normally include a clause that concerned. In addition, action plans for allows the operator to adjust toll rates disaster recovery should also be in place. The reflecting inflation, for example on the basis cost of the operational management varies by of consumer price index. However, such geographical scope and technological clauses should be included with caution, configuration of a RUC system. It has been supplemented with a contractual instrument reported that many developing countries to protect the public interests. experience higher than envisaged operational costs due to the lack of capacity within the Box 2: Turn-Key Solutions implementing institutions. Therefore institutional arrangements should take into Due to the challenges of implementing all account available capacities, and capacity aspects of RUC, from installing the technology building should be emphasized. It is generally to establishing the back-office and other accepted that economies of scale apply for support systems, some agencies have the system's operating cost (DfT, 2004). adopted a `Turn-Key' approach wherein a vendor supplies, installs and operates the 3.4 Data and Information Management system on behalf of the agency for an agreed time upon annual fee, usually calculated as a A central system needs to have the capacity percentage of the revenue. This can be an to collect, store and analyze a vast amount of attractive solution, particularly when there is traffic information that will be collected during limited or no experience with RUC in the the operation of a RUC scheme. The more agency. sophisticated the technological configuration of the system, the more detailed traffic information can be collected. 4 Enforcement of User Compliance Even the simplest segment-based fixed-fee In the context of RUC, compliance means a system, however, can record and trace traffic state in which the driver pays a charge for volume by time of a day, day of a week, and usage of road according to regulations. so forth. More so, a nationwide distance- Compliance is critical for the revenue based pricing scheme using GPS technology collection and financial stability of the will collect traffic volume and travel speed services provided. Costs of enforcing user information for every link within the compliance vary depending on the scope and subjective area, during different times of a technology of RUC. day. When well-managed, the traffic database can be utilized in various ways, including Experience shows that although road users detection of anomalies in operation, traffic generally understand that compliance is management, demand analysis, incident necessary, in order to maintain a high level of detection, etc. compliance, an effective enforcement system is needed (EC DG TREN, 2005). Thus, to Page 6 Transport Note No. TRN-38 November 2009 maximize compliance, institutional support is moving traffic can be highly effective. Such required in the following areas: activities should be carefully organized given trade-offs between the effectiveness Enforcement and control mechanisms; (probability for a violator to be caught) and and the costs (number of staff-hours). The toll The national legal and regulatory enforcement entities should be vested with framework. the necessary authority in order to monitor compliance of payment (see below). This The following provides "operational" rather mechanism is usually used in combination than a legal or enforcement perspective. with technical measures described above. 4.1 Enforcement and Control Mechanisms 4.2 Legal and Regulatory Framework In order to allow effective and efficient Physical barriers (manual or automatic) enforcement, the following should be defined are traditional approaches that allow only under the legal framework: prepaid vehicles to enter tolled segments or areas. This approach forces authorized The criteria on which a violation becomes customers to stop (manual) or to slow to a a fraud since this dictates how it will be near-stop (automatic), which causes losses in handled; and travel time and, especially in the case of ETC, Operator's access to necessary negates some of the speed and capacity information and to ability to enforce benefits of electronic tolling. corrective measures in case of violation. Although such mechanisms control access to The legal framework of RUC should lay out tolled roads, they do not prevent a variety of unambiguous definitions of different types of frauds (e.g. ticket swapping) and abuse of non-compliance, including violation, fraud, methods used to deal with non-payers (e.g. and aggravated fraud, and their acknowledgement of debt). In manual consequences. Differences lie in the intention systems, one of major concerns is internal of such behaviors, frequency or the fraud, i.e. collected revenues are not properly accumulated number of violations committed recorded in the system. Systems with by a violator, and total financial amount automatic barriers rely on vehicle outstanding. The framework should be identification and classification devices to approved by relevant legislative body. In ensure that users were making appropriate order to avoid congesting the judicial system, toll payments, identifying violators it is recommended that simple cases of immediately. The reliability of these devices violation are dealt with outside the judicial should be regularly maintained and improved. system. However, any violation and fraud There are still other types of fraud which that is not followed by a repayment within a difficult to address, such as driving closely prescribed period of time should be treated as behind a vehicle in front ("petit train"), an offence where the offender is subject to license plate hiding/swapping, etc. legal proceedings. Automatic License Plate Recognition Generally, efficiency and effectiveness of (APR) can be used as a primary enforcement enforcement can be improved by granting the mechanism in most ETC systems. It can be operator the legal authority to (EC DG TREN, fully or semi automated, where the latter is 2005): more reliable. One barrier is that many Inspect vehicles which are required to pay jurisdictions require significant changes in charges; legal and regulatory frameworks to permit Stop and immobilize an offender's vehicle APR-based enforcement. on their own networks, for the purpose of investigating a violation; Physical presence of authorised toll Issue and apply a compromise penalty to enforcement entities (e.g., operator's offenders corresponding to the amount of employee, police patrol) at toll gates and in unpaid charge plus reasonable Page 7 Transport Note No. TRN-38 November 2009 administrative costs or, at least, to require offices should also be protected against the offender to sign an acknowledgement unauthorized entry and access. of a debt; and Report offenders to the district 4.3 Internal Fraud administration authorities and initialise prosecution process. Independent monitoring and control mechanisms are needed to check if all charges have been collected and stored at In situations where the private sector appropriate rates, in order to identify internal operates the network, these functions can be frauds. Control of charging operators should performed only by employees that are trained and certified by relevant public authority. In ideally be done by independent body or, a government agency. Traffic detectors at toll the case of APR, operator should be given the authority to: gates are one example of a parallel data collection system which enables independent Identify the registered owner of a vehicle vehicle counting and classification. Data by accessing (under same conditions for collected in such a way can be crosschecked all operators) national and, if possible, with the data from collected revenues. A international vehicle licence plate secure on-line central system coupled with its database without starting any formal legal back-up would reduce possibilities of proceedings; manipulating the charging data, since the Ensure that a picture of a violation with data are transmitted in real time. When fiber licence plate information is admissible as optic cables are not available, the GPRS evidence for the purposes of enforcement; technology can provide relatively inexpensive Stipulate the registered owner of the on-line communication. Video surveillance of vehicle as being responsible for any employees at tolls is another additional violations unless they nominate another means of control. Videos should be monitored person as the driver at the time of the randomly and/or in cases where some violation; and irregularities have been observed. Allow that operator does not have to identify himself/herself before issuing the 5 The Social Dimension infraction. Despite its added-values to the society in A prerequisite for successful functioning of terms of increased system efficiency and such system is possession of up-to-date stability of revenue stream, a RUC initiative licence plate database. For prevention, the often faces opposition from the public. Public operator may need to create a database for opposition has, in some cases, led to users who are known to have repeatedly canceling of tolling initiatives (e.g. offended the system. If legally allowed, the Cambridge, Edinburgh, Manchester, New database should be made available to all Jersey). Public acceptance of a RUC project operators for effective enforcement. depends on the following aspects: National justice departments should Characteristics of a charging scheme in cooperate in matters relating to the treatment terms of its affordability and fairness; of toll collection offences. Where cross-border Effectiveness of a RUC scheme in enforcement is involved, international achieving its intended objectives, such as collaboration is required, usually through financing of new infrastructure and bilateral agreements. congestion mitigation; Reliability and security of technology, The status of violation data should be defined including the level of privacy protection; in the national law--ideally under regulations and of data protection law. All information should Public perception, awareness, and be signed electronically, encrypted separately familiarity of transport issues, new and transmitted to the central offices via a technologies, and RUC schemes. dedicated, secure data line. The central Page 8 Transport Note No. TRN-38 November 2009 5.1 Impact of RUC on Various Users regressivity of RUC, which in purely financial term favors the wealthy over the poor, can be RUC schemes have different implications for mitigated or eliminated by a revenue different stakeholder groups, particularly in allocation strategy. A revenue allocation two dimensions--socio-economic group and system that provides less expensive modes to geographic location. users (i.e. public transit) can be viewed as cross-subsidy from automobile users Affordability and socio-economic equity (generally the wealthier) to public transit centers on how RUC schemes impact different users (the poorer). income groups in terms of costs and benefits. Typically the social equity concerns involve the belief that RUC costs and benefits favor 5.2 Effectiveness and Efficiency of RUC those who can afford to pay road tolls or congestion charges without altering their A RUC project will gain a greater level public travel patterns. For example, a review of the acceptance when it achieves its objectives Stockholm experience in 2006 found that such as congestion mitigation, generation of while wealthy men represented 4 percent of revenues to recoup new construction costs, the drivers, they paid one third of the total etc. (USDOT, 2006). In many projects, initial fees (Sena, 2007). Removed from rush hour skepticism and opposition often turned into traffic were those who refused or who could support and favor, once a RUC scheme was not afford to pay the charges. proven to be effective in tackling the existing transport problems (e.g. Stockholm, Indeed, lower income groups typically spend California). a higher proportion of their income on transportation and are the most vulnerable if Another key success factor, especially in the transport costs increase. It is important case of congestion charges and zone-based during design phase to introduce system, is to work in favor of market countermeasures to relieve the burden on the efficiency, instead of undermining it. When most impacted users. Adverse impacts of RUC there are only limited travel options available, on lower income groups can be mitigated by imposing high charges on key routes will providing specific benefits or alternative significantly lower the benefits to captivate travel options (e.g. discounts, time travelers, and consequently, the overall differentiated charges, public transport welfare of the community. On the other hand, services, alternative roads, etc.). high charges on certain road sections are justified if they are appropriately priced for Geographic equity relates to the location of their marginal benefit, while more affordable RUC schemes and how the boundaries impact options are available for users with lower different groups, particularly in zone and willingness to pay. cordon tolling schemes. It is believed that those persons with relatively easy access to Concerning the above, it is critical at the the facility are more likely to benefit from initial design stage to set appropriate charge RUC. In addition, RUC can influence the rates taking into consideration their impacts relocation of businesses, land use and value, on the market. Finding appropriate toll rates etc. The nature and extent of economic is often a complex task that requires intensive impacts resulting from RUC are highly analysis of current trip patterns, user dependent on the structure of the pricing characteristics, opportunity costs, and scheme, the characteristics of the road availability of options. network and the area. The service provider should investigate such impacts at the design 5.3 Cost, Reliability and Security of phase. Technology The impact of RUC on social and geographical The primary technology-related issues in RUC equity also depends on how the revenues are systems include: (i) delays associated with allocated. In particular, the presumed paying the charges and enforcing collection, Page 9 Transport Note No. TRN-38 November 2009 and (ii) preventing corruption which reduces However, experience has given some total amount of collected revenues. On the important lessons towards increasing public other hand, main technology-related acceptance and the likelihood of success: challenges of RUC systems are noted in the following areas (USDOT, 2006): Political support is the critical success factor for a RUC project. Implementation of the RUC System entry costs: The OBU cost can scheme usually takes a long period of time be a barrier for some users to enter a and it is important that there is stable political system. High costs can cause resistance support toward it during the entire process. or delayed decisions by users, especially when the benefits are not clear or viewed A pilot project is an easier and less risky lower than the costs. In many countries, approach to test public acceptability of a RUC the public sector has subsidized initial project. If the actual experience with the deployment of OBUs to encourage system is positive, then users tend to change participation. their perception and attitude relatively easily. Reliability: Users often worry that the In addition, failures in small pilot areas have equipment could fail and result in lost limited impacts on overall public acceptance, charges, incorrect fines, or cheating. The and lessons from it can be useful for a reliability will improve by pairing a broader implementation. supporting technology that can detect abnormal outputs of the primary system. A public awareness campaign, both prior It is also important to create a responsive to and during implementation, can be a and efficient complaint handling system tool to improve public understanding of the and inconsistency resolution scheme. RUC. The implementing agency should Privacy: One of the major concerns of develop a communication strategy detailing road users on ETC systems is that their contents, media, target audience, and time privacy may be jeopardized. This is rooted frame. Key information to publicize includes in a perception that a system can trace objectives, rationale, technology, costs, and individual trip information, which can then benefits of a system. The key issue is that the be used or sold for unintended, potentially public wants to see value. This is critical commercial, purposes. Contrary to because without a good understanding of a common beliefs, a system can be project, the public tends to focus on the designed to not allow details of trip increased costs and complexity of the tolling itinerary to leave individual OBUs. The and fees. It is often more effective when such information can also be protected legally information is provided in the context of through data protection laws. broader transport strategy. 5.4 Public Perception and Attitude The communication strategy should focus on how a RUC can contribute to resolving There is no one-size-fit-all solution to win transport problems. Public acceptance is public acceptance towards RUC, and more likely to increase when transport users can generally, resolving transport issues. As view a RUC project as a solution to current shown in Table 5.1, there is always public transport issues, and especially when it is opposition, particularly towards Cordon/Area clear that the revenues are linked to specific pricing (Zmud, 2007). uses. RUC projects have been particularly well received by the public where traffic Table 5.1: Public Opinion by Type of RUC congestion was a severe issue affecting a Majority Majority large group of people. Therefore, the Type of RUC Support Oppose implementing agency should identify specific HOT Lanes 73% 15% issues (e.g. congestion) and how the project Traditional Tolling 71% 26% will address them (e.g. by diverting peak hour Express Toll Lanes 62% 23% traffic). Zone/Cordon Pricing 32% 53% Private Ownership 0% 60% Page 10 Transport Note No. TRN-38 November 2009 Transparency in revenue allocation plays Payment service and customer a key role in winning public acceptance. relations unit (PSCR), which manages General distrust in revenue gathering user accounts, charges and collects bills, authorities or in government causes great and manages customer relations; and opposition to the RUC initiative. The Data collection and demand implementing agency should adequately management unit (DCDM), which document and publicize all relevant financial collects and processes charging data, information, including flows of revenues and feeds the charging data to PSCR, ensures outcomes of investment made using the data security, and analyzes traffic data for revenues. Reducing other tax burdens, as purposes of demand management. well as explaining benefits of the proposed use of revenues to the users and community, As a first step to implement a RUC scheme, tends to positively influence user satisfaction. the implementing government agency should lay out the structure, scope of tasks, and A road project will gain public support when required resources in terms of the number of its impacts on transport and economy staff and budget for each functional unit. are periodically monitored and Details of such arrangements and evaluated. Also, the system should be requirements vary by scope and technology flexible enough to be adjusted when found options of a RUC scheme. necessary through the regular monitoring and evaluation. 6 A Path to Full Implementation This section offers some general guidance towards the implementation of RUC. Step 0 ­ Project Objectives and Scope Prior to implementation, the agency needs to clearly identify the goals, objectives, and scope of a RUC project. Only on the basis of this the most appropriate implementation plan can be established. A plan to implement a simple revenue raising scheme is fundamentally different from that for demand management. A schematic decision tree to determine scope and technology option of a project is presented in Figure 6.1. This figure represents general guidance, and for each specific case it is necessary to make detailed analysis in order to develop the best approach for the specific implementation. Step 1 ­ Development of institutional structure and requirements This paper proposes an architecture Figure 6.1: Decision Tree for project scope consisting of three functional units. and technology System installation and operation unit The diagram schematically depicts the (SIOU), which builds, installs, deploys, essential questions to be asked to select the operates and maintains facilities and most appropriate RUC technology for specific equipment; circumstances. One of the first considerations should be the scope of a RUC scheme-- Page 11 Transport Note No. TRN-38 November 2009 whether a segment or an area--for which separate concessions for each unit with their different technologies have certain partnership provisioned, or (iii) a turn-key advantages and disadvantages. If an area is concession with a joint venture or system to be charged, satellite-based or other ETC integrator. Figure 6.2 schematically suggests solutions are appropriate, depending on a general process of selecting procurement available resources, agency's capacity, and methods. complexity of a scheme. In segment charging, MTC or ETC could be used. The A decision on the procurement strategy choice on the most appropriate one will should be made by considering existing in- depend on any RUC system(s) already in house capacity of the implementing agency, place, their characteristics, as well as on available funds, risks involved in projects, available resources and ICT literacy. industry landscape, (i.e. capacity and the level of competition), value for money, (i.e. In addition, requirements for road users economies of scale and scope), and should also be determined, including whether interoperability challenges. For example, in or not to mandate account registration and the case of a small-scale segment-based installation of OBUs, whether to be based on pricing scheme, integration of the PSCR and prepayment, post-payment or a blend DCDM can result in higher value for money system, whether and to whom to allow toll due to economies of scope across the two exemption or discounts and how to manage units. In a zone-based urban pricing scheme their accounts, etc. or when in-house capacity is very limited, a turn-key option can bring in maximum Step 2 ­ Implementation of pilot projects economic efficiency, provided that there is sufficient competition within the industry. On For many systems around the world, the other hand, a turn-key option is known to especially for ETC systems, pilot deployment increase associated risks, especially in cases has been a very effective tool in many of large-scale zone-based schemes (DfT, aspects. It has helped with assessing 2004). economic feasibility and technological viability, evaluating project risks, assessing adequacy of developed architecture and requirements (Step 1), identifying potential stakeholder issues, raising public awareness, and developing and selecting competitive and cost-effective procurement strategies (Pickford and Blythe, 2006; Sorensen and Taylor, 2005; Whitty et al., 2006). Deployment and implementation of pilot projects involve the establishment of a task team, selection of pilot segments or areas, public advertisement to vendors and operators, and recruitment of participants (road users). The performance and issues identified during the pilot deployment should be documented to inform the full-scale implementation plan. Step 3 ­ Procurement strategy Functional units (e.g. SIOU, PSCR, and DCDM) can either be contracted separately or integrated, and thus, largely three Figure 6.2: Decision Tree for procurement procurement options are considered: (i) method public financing (in-house procurement), (ii) Page 12 Transport Note No. TRN-38 November 2009 In the face of project risks and commercial 7 References profits, the implementing public agency should exercise leadership in protecting the Bowerman, A. (2008). "Learning to Walk before public benefits. In particular, a procurement We Can Price: the Costs and Benefits of RUC strategy that encourages market competition Policies". Economic Affairs, Institute of Economics should be developed, and quality of products Affair, V28, No.1 and services should be contractually Department for Transport (DfT) (2004). Report on managed. To address key public concerns, Implementation Feasibility of DfT RUC Policy the public agency should incentivize operators Scenarios and proposed Business Architecture. or joint ventures (integrators) to (i) provide Available for download from streamlined and user-friendly account http://www.dft.gov.uk/pgr/roads/ registration and management systems; (ii) introtoroads/roadcongestion/feasibilitystudy/studyr handle enquiries and complaints efficiently; eport/ (iii) properly manage facilities and equipment, (iv) have a disaster management strategy in EC DG TREN Expert Group 3: EFC Enforcement, Recommendation on Enforcement (including cross- place, and (v) keep the tariff at reasonable border enforcement) of the European Electronic levels. Toll Service, 2005 Step 4 ­ Start-up demand management and IBTTA VES Work Group, Toll Violation Enforcement retrofitting Action Guide, 1999 As experienced in most ETC systems, demand Pickford, A.T.W and Blythe P.T. (2006). Road User of OBUs peaks at the initial stage of Charging and Electronic Toll Collection. Artech implementation causing temporary House, Inc., Norwood, MA overloading and delay, and consequently can Sena, M. (2007). If Not Tolls Then What? Thinking jeopardize service quality. Therefore, a Highways Vol 2, No 4. strategy to proactively respond to the initial demand should be prepared either by the Sorensen, P.A. and Taylor B.D. (2005). Review and public sector or a private concessionaire. A Synthesis of Road-Use Metering and Charging complete penetration of an ETC system can Systems. Transportation Research Board, take up to ten years as in many European Washington D.C. cases (Pickford and Blythe, 2006), since the process involves retrofitting of vehicles, Transport for London, Congestion Charging Impacts Monitoring, 6th Annual Report, July 2008. revision and updates of regulations and Available for download from standards, and cross-border issues. http://www.tfl.gov.uk/assets/downloads/sixth- annual-impacts-monitoring-report-2008-07.pdf Step 5 ­ Operations and maintenance US Department of Transportation (USDOT), FHA, The physical and operational components of a Issues and Options for Increasing the Use of RUC system should be maintained at a Tolling and Pricing to Finance Transportation satisfactory quality. As mentioned above, Improvements, Final Report Work Order 05-002, system performance should be contractually 2006 managed with clearly defined targets. Whitty, J., Svadlenak, J. and Capps, D. (2006). Public Involvement and Road User Charge Step 6 ­ Scaling-up and interoperability Development. Oregon Department of Transportation, Salem, OR In light of the trans-Europe RUC agenda (EC DG TREN, 2005), a system that can be easily Zmud, J. (2007). The Public Supports Road Pricing scaled-up and interoperable is more cost- if ... Thinking Highways Vol 2, No 4. efficient in the long-term than otherwise. In this respect, it is important to use well- established and proven ITS architecture and pre-defined communication protocols.