Electronic Road Pricing: ‘Delay no more’ vs “Yes, but…”

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Greenies and government want a green light for ERP. The transport sector, however, has serious concerns about how the programme is implemented. It may be that a deal can be done.

Photo credit: Chris Lusher


Electronic road pricing is a double-edged sword. This time, the government looks determined to make something happen. It will have to make a choice between pushing forward an effective but unpopular ‘tax’ and making compromises with angry road users, including powerful voters in the transport sector.

On one hand, there seems to be a consensus among policy insiders and advocates that it can help tackle traffic congestion. On the other hand, it has never been popular among the driving public.

The latest consultation on an Electronic Road Pricing (“ERP”) Pilot Scheme for Central and its Adjacent Areas ended last month. Hong Kong’ has had jaw jaw on ERP implementation as early as the 1980s, but previous attempts to implement the congestion charge were shot down in face of strong public opposition. But this time, it may have a fighting chance.


Charge’em all!

Civic Exchange, a prominent Hong Kong-based think tank, is giving its full support to the concept of ERP implementation. Stressing a need for the Government to implement the scheme in an urgent and comprehensive manner, the independent public policy think tank stressed in its submission that it is an “effective means to manage transport demand and to reduce traffic congestion.”

Simon Ng, Chief Research Officer for Civic Exchange and sustainable transportation expert, says Hong Kong is in urgent need of transport demand management tools.

“The Government had, in the past, treated traffic congestion as an capacity issue. In other words, it tried to estimate the growth rate of the number of vehicles on the road, and calculated the expansion of road space needed in accordance. That was proven inefficient.” Mr Ng says, “More importantly, it is unsustainable as road space is scarce and may squeeze nearby pedestrians and open space.”

“According to Government statistics, 90% of Hong Kong people’s journeys were taken on public transport. This means that we actually have a sound public transport system, and yet the issue of traffic congestion deteriorates,” Mr Ng says. “Traffic congestion is after all about scarce road space, and there are many things the Government can do to prevent vehicles from entering a particular area at a particular period of time. If you can’t increase the supply of road space, then you should turn to altering people’s behaviour.”

Mr Ng of Civic Exchange.

The submission represents a side that backs congestion charges based on economic principles such as efficiency and external costs. As Mr Ng puts it, there are costs of traffic congestion in the form of time delays, vehicular emissions and traffic noise, which are caused by actions of motorists who inflict these conditions (known as externalities) on others. This leads to driving being underpriced, as the cost of these externalities is borne by individuals not benefitting from drivers’ use of the roads.

“The most important message that road pricing can deliver is that motorists should take into consideration the full cost of driving and not just fuel price or parking fee. This will also echo the user pays and polluter pays principles,” Mr Ng says. “Given the logic, no exemption should be granted except for emergency vehicles, as least not for the early stage of the scheme, while the charge rates should be set according to the efficiency of different types of vehicles as road users, with a road-usage priority given to double-decker buses or trams over private cars and taxis.”


Liberal Party: Yes, but….

This “Delay No More” stance is controversial. Frankie Yick of Liberal Party, who represents the Legislative Council transport constituency, notes that 70% of the respondents in a recent survey (ch) (of which 27% of respondents are drivers) are against ERP.

But Mr Yick’s stance isn’t absolute. The Liberal party line lies somewhere in the middle.

“In principle, the Liberal Party will not object to the ERP Pilot Scheme, as such a policy can indeed deliver some 10% reduction in traffic. But there are a number of prerequisites [for us to support the government’s final proposal],” Mr Yick says.

“The first prerequisite is that there has to have an easy alternative route to nearby areas, in the form of the Central–Wan Chai Bypass scheduled for completion in 2017/18 in this case. So the scheme should not be implemented until the bypass is available, or it would be unfair to those who want to drive from East to West [and vice versa] as right now getting through Central is effectively the only route.

“Secondly, the Government should step up law enforcement against illegal parking, loading and unloading. Take the yellow box junctions, for example. It seems that fewer motorists really care about the signs even though the laws are there. So why doesn’t the Government strengthen its law enforcement first?”

Transport lawmaker Frankie Yick outlining the three prerequisites.

“Thirdly, there should be more orchestrated policies over toll levels of the three harbour tunnels, in particular the Western Harbour Crossing and the Cross Harbour Tunnel. With the huge differential in toll rates between the two tunnels, there is no synergy to divert traffic. That’s why I have been proposing that the Government should buy the Western Harbour Crossing as well so that the toll levels of all three tunnels can be adjusted in a more orchestrated manner.

“These methods may be proven effective enough to cope with traffic congestion, and the ERP can be put in place if turns out otherwise,” Mr Yick elaborates. “The Liberal Party has long stood against prohibitive taxes and won’t rule out voting down the ERP scheme if we see no positive signs from the Government to look into the three prerequisites.”

Mr Ng is no fan of the transport lawmaker’s order of priority. “We are not saying that ERP can solve traffic congestion once and for all, but the fact is that it has been proven effective and should be introduced the earlier the better…It is normal for motorists to object to the proposal, but right now they are underpaying for using road space,” he says. He goes on to suggest that one way to ease public discontent is to have the Government clarify how it is going to spend the revenue from the congestion charge.

“As shown in other countries, introducing road pricing usually fills the government’s wallet. We suggest the Government should invest the money into, for example, better infrastructure for accessible public transport,” Mr Ng says.


Parking In vs Parking Out

Both Mr Ng and Mr Yick agree that parking policies should be formulated in a way that supplement other measures to tackle congestion. Their answers as to how it should be formulated, however, are poles apart.

For Mr Ng and his team, parking policies should be utilised as another transport demand management tool. “If you raise the prices for car-parking and control the number parking lots in areas with serious congestion problems, for example, a rational decision maker will less likely enter the zone because of the increased costs.”

The Liberal Party lawmaker calls for exactly the opposite. He in particular stresses a need to set up more parking lots for commercial vehicles. It may be better to let the bosses leave their cars in carparks than having their chauffeurs on the road, as they are going to enter the zone anyway. “Just take the closure of the Middle Road Car Park as example; are there fewer cars in Tsim Sha Tsui now after the closure? The answer is ‘No’ and with even more serious congestion. People will come and buy – and you want them to come buy.” He says, “What the Government should do instead is to step up their efforts in establishing a ‘Smart City’, whereby people can easily search online for nearby car parks that still have empty lots.”


The art of exemption

Whether public transport should be exempted is another issue of immense difference between the two sides, and as representative of the transport sector, it is hard for Mr Yick not to stand for exemptions for most except private cars.

“As far as I know, the transport sector has been rather disinterested in the consultation of the scheme probably because they believe that they will be exempted, with the exception of taxi organisations who are reacting strongly against it. And I think the taxi organisations do have a point to make, because no vacant taxi will enter the congestion charge zone,” Mr Yick says. “For cargo vans, there is no prominent industry organisations to speak for them. But I think those transporting water carboys and office supplies should have the scheme on their radar as they are more likely to enter the zone during peak hours in the morning.”

One should expect the whole transport sector coming out in protest of the scheme if things go Civic Exchange’s way. But as Mr Ng notes, it is not surprising that the Government will have to make compromise at some point considering the 18 seats from transport industry and another 18 seats from wholesale and retail industry in the Election Committee for the Chief Executive.

“For one thing, to set a line for exemption is itself a complicated matter. If you exempt one vehicle type, people will start asking why the others are not exempted, and the more you exempt, the less effective the ERP scheme will become,” Mr Ng adds. “It’s the principle [of rationalising the full cost of driving] that is the most important at this stage, and refinements, including possible exemptions, can be talked through after it is put in place.”