AITPM 5Oth Anniversary Conference, Sydney

AITPM 50th Anniversary Conference, Sydney

Rationale for a CBD Cordon Pricing Scheme for Sydney

By Mike Veysey, Stephen Bargwanna and Dr Tim Brooker

July 2016

Contents

• Road Congestion Pricing v CBD Cordon Pricing• London is Calling!• Our Cordon Boundary• The Time is Right!• The Pitt Street Mall model

Contents Cont’d

• Social equity matters• Examples from other cities• Cost benefit considerations• Preliminary revenue estimates• Where can the surplus go?• Conclusions

1. Road Congestion Pricing v CBD Cordon Pricing

• Roads demand management!• Many calling for action• A big bite for government• The CBD is a simplified approach, an easier bite• Others are doing it – London, Stockholm, Milan & Singapore

2. London is Calling!

• Mayor campaigned for introduction in 2000• Massive urban amenity improvements, new investment and

vitality achieved• The effective operation of the London scheme is evidenced by

– A 20% reduction of automobile traffic in the first few months of the scheme, a reduction of about 20,000 vehicles a day;

– Most motor vehicle drivers and occupants changed to public transport, in London’s case particularly bus;

– Average travel speed on roads in the CBD increased by 37%;– Peak period delays declined about 30%;– Bus congestion delays declined by 50%;– Bus ridership increased 14%;– Taxi travel costs decreased by 20 to 40% due to reduced delays;

2. London is Calling! Cont’d– Some increase in motorcycle, moped and bicycle travel;– Net annual revenue is substantial, 173 M pounds 2014/2015;– The video camera numberplate recognition technology which enforces the

system in London (very much like a cross between a NSW speed camera and a NSW toll collection point), after some teething problems, now works very well; and

– Similarly the various alternative payment systems are considered effective for the 110,000 motorists who pay by them every weekday between 7 am and 6:30 pm.

• Overall major public and land owner support for scheme

3. Our Cordon Boundary (north)

3. Cordon Boundary (south)

3A. Cordon Principles– There needs to be free bypass routes so people who are now needlessly

driving through the CBD have a good reason not to do so (to avoid $10-$15 toll), the most obvious ones being the Cross City Tunnel, the Western Distributor and the Eastern Distributor;

– There needs to be some exemptions to the toll, or discounts. The cordon will only work if people perceive to be disadvantaged to an unreasonable degree are catered for;

– The cordon need to be enforceable by video cameras and a number plate recognition technology, already proven successful in other cities;

– The enforcement regime needs to be successful, as it has been in London, which has a fee, a multiple of that fee if not paid, and a reduction of that (higher) fee if paid within two weeks, and massive increases if not paid after a month;

– Payment systems should be user friendly, in London an increasing number of people choose to pay by a mobile phone text message.

4. The Time is Right!

• CBD is already well served by Public Transport

• Massive investment underway and planned for George Street light rail and new metro heavy rail

• Unless action is taken - city roads will jam up post light rail implementation

• Sydney is now a recognised world city – it needs to continue to evolve to compete

4. The Time is Right! Cont’d

• It is a GDP powerhouse of the national economy

• Great cities are made by bold strokes

• Once we didn’t have:– Roundabouts – Street closures – Speed restriction zones – Pedestrian malls– Toll roads

5. The Pitt Street Mall

5. East Market Street Now

5. East Market Street, Post Cordon!

6. Social Equity Matters– General exemptions in London are:

• Motorbikes with or without sidecars and mopeds;• Emergency vehicles;• National Health Service Vehicles;• Vehicles used by people that are disabled;• Taxis and Hire Cars;• Buses;• Breakdown organisations (such as NRMA in Sydney); and• Various other Government organisations, such as armed forces vehicles.

– Residents are given a discount

7. Examples from Other Cities

Congestion Cordon Charges in Stockholm, London and Milan

Location Charge in 2015 Charge in 2015

City Local Currency In $ AU

Stockholm 35 (Kroner) 6.00

London 11.5 (Pounds) 24.00

Milan 5.0 (Euros) 7.75

Source: Douglas Economics (2016)

7. Examples from Other Cities

Summary of city traffic and revenue responses

City Proportion of Traffic exempted from charge

Traffic reduction Effective revenue reduction

Stockholm 15% 20% 24%

London 35% 36% 55%

Milan 24% 15% 20%

Source: Douglas Economics (2016)

7A. Comparison of Cordon Areas

City Km2 approx.

London 40

Stockholm 26

Milan 23

Sydney (proposed) 3

8. Cost Benefit ConsiderationsCost Benefit

Conservative • Extra travel cost for “evicted” through travel

• Increased transit capacity • Increased transit crowding

• Shorter travel times for remaining car users

• More reliable travel times (including deliveries)

• Fuel taxes to government (etc)• Capex• Opex and maintenance

• Improved air quality• Health benefits including

walking and safety

Potential ValueCapture

• Improved value of publicly owned buildings & assets

• Increased rents & value of private building stock

• Increased rates to council• Increased stamp duty to

government• Overall improved city

international competitive profile, eg for conventions/exhibitions etc

8a. Cost Benefit Considerations Cont’d

London Scheme Costs & Revenues

Total (NPV) over 5 years Per operating year

Start up costs 180 M pounds 36 M pounds

Operating costs 320 M pounds 64 M pounds

TOTAL COST 500 M pounds 100 M pounds

Charge revenues 690 M pounds 138 M pounds

Penalty revenues 110 M pounds 22 M pounds

TOTAL ANNUALISED REVENUE

800 M pounds 160 M pounds

Source: Todd Litman of the Victoria Transport Policy Institute (“London Congestion Pricing – Implications for Other Cities”), 24 November 2011

8a. Cost Benefit Considerations Cont’d

London Scheme Net Revenue 2014/2015

Income 257.4 M pounds

Toll facilities and traffic management (80.7) M pounds

Administration, support services and depreciation

(4.2) M pounds

Net income from Congestion Charging 2014/2015

172.5 M pounds

Source: Transport for London Annual Report 2014/15

9. Preliminary Revenue Estimates

• Potential gross traffic revenue (all through traffic removed)– 87,500 vehicles x $10/day x 250 week days = $219 million

• Further traffic reduction factor of 20% reduces gross revenue to $175 million

• Assume London/Stockholm operating costs of 30% gross revenue gives net annual income = $120 million

10. Where can the surplus go? Some options

• Public Transport– Expansion of the Light Rail network along Parramatta Road and potentially to the Bays Precinct; and– Improved ferry services and infrastructure particularly to Bays Precinct, White Bay Cruise Terminal

and Power Station.

• Road Investments– Buying out the existing toll on the east-west Cross City Motorway, which would be necessary to

maximise the potential diversion of east west through traffic away from the surface city streets, and to prevent unacceptable future traffic outcomes on the remaining alternative toll free east west routes south of the Sydney CBD such as Cleveland Street;

– Rationalisation of current parking space levy; and– Consolidation centres for delivery vehicles.

• Streetscapes and Urban Amenity– streetscape improvements to benefit residents, businesses, workers and visitors such as along Bridge

and Market Streets which with reduced through traffic, tree planting and widened footpaths could be a fine street; and

– Widening footpaths in Chinatown that are regularly and dangerously over capacity.

11. Conclusions

• The Sydney CBD is a great place to implement transport pricing reform in our simplified Cordon Pricing Scheme

• The public needs a gradual education. Other cities and countries have maintained public support by starting with limited schemes

• The technology to achieve the CBD scheme is readily available and the community is more likely to support transport pricing reform in general, when a small scheme is demonstrated to work effectively

• Current and future planned public transport projects will meet the demand mode shift created by reduced traffic flow and the increased attraction of alternative travel modes

• If it does not occur, CBD car traffic will grow and adversely affect the George Street Light Rail operations at intersections

11. Conclusions Cont’d

• Approximately $120 M net revenue annually for other public transport, road investment and CBD urban amenity projects

• The current CBD parking space levy can be reduced or abolished

• The Sydney public are well used to toll technology and want traffic congestion reduced

• Now is the time:– Government agencies and lobby groups want equitable road pricing– Billions are being spent on public transport to the CBD– Governments want creativity and innovation

• To be a leading world city Sydney needs imaginative thinking