ERP is an inconvenient option but should not be omitted

To charge or not to charge – that is the question. (Photo credit: Jeni Zhi)

(Content paid for and supplied by HK Roadside)


To charge or not to charge – that is the question posed by the government to Hong Kong people when contemplating congestions in the central business districts (CBD). It is believed that by implementing an Electronic Road Pricing (ERP) scheme, in which road users are required to pay a fee to enter a defined zone in the CBD during the peak hours, congestion can be reduced because those who are unwilling to pay will avoid making unnecessary trips.

ERP, first proposed for Hong Kong in the 1980s, has never been rid of controversies and public objection. Critics focused predominantly over the issues of privacy and the lack of enforcement of existing traffic regulations.

Around the world ERP has been adopted by a handful of major cities and considered by some others. It has been regarded by and large as a success that can curb congestion. Yet, one must not omit Hong Kong’s own circumstances which may suggest otherwise.

ERP is a straightforward demand-supply regulation. Because the “supply” of road space is limited and its “demand” is high, economic principle dictates that in order to decrease demand, the cost for obtaining road space needs to be raised, so that road users will re-evaluate the benefit of using the road against the total cost imposed on them, eventually resulting in a change of traffic pattern.

Also, because of the negative “externalities” incurred by congestion, road users who “take part” in congestion should compensate for them. Negative externalities refer to those undesirable side effects of congestion, such as noise and air pollution, occupation of urban space and wasted time. These side effects are then suffered by the entire society. Therefore it is the responsibility of the government to implement the necessary measures to redistribute the social cost and hopefully alleviate the situation.

By the same token, public transport users should be rewarded for their more efficient use of road space as opposed to private car users. For example by enhancing service level of railway and bus services and discounting fare.

So much so for the theory, but could ERP reduce congestion in reality? According to foreign examples, traffic flow can be reduced and driving speed increased, at least for the first year of implementation. There is no evidence that it does not work altogether.  But there is no all-rounded approach, in terms of effectiveness, practicality and protection of privacy, has been put into force yet.

There are different ways of charging in ERP systems around the world; and the government is proposing two options: one option is to charge road users every time for crossing the toll points on the boundary of the zone, known as “cordon based” mechanism; the other is to charge road users for entering the charging zone on a daily basis, known as the “area-based” mechanism.

The cordon mechanism could adjust charge rate according to traffic conditions (the more congested the more expensive). Under this mechanism, however, drivers might risk being charged more than once within a short time period due to a limited choice of routing. It could also lead to irritating driving practices such as slowing down before passing the cordon.

As for the area-based mechanism, a flat rate is levied throughout the payment period and valid for the same charging day which is easier to execute. However, its drawback is that it does not discourage use of roads after a vehicle has paid the fee for the day, drivers may even “economise” the charge by making more unnecessary trips.

None of these mechanisms could charge road users according to the distance travelled within the charge zone, hence its precise contribution to congestion. A “distance-based” mechanism would require tracking of vehicle’s exact movements, which in spite of technical feasibility, would be an easy target for critics on privacy.

Singapore is upgrading into a distance-based charging system scheduled for 2020, hinging on a satellite tracking method. The Singaporean authorities claims that privacy can be guaranteed by controlling the nature of information collected so that road users can remain anonymous. But should it be transplanted to Hong Kong, given the public distrust towards the government, people may find it hard to accept anything that could constitute a violation of their personal privacy.

Clearly, the real challenge to ERP is neither theoretical nor practical. It is a political one. Apart from privacy concerns, no road users would advocate for an additional financial burden on driving – on top of all other costs, including the first registration tax (FRT), high parking fees in urban areas, and so on. While for those who could potentially benefit from it, like bus passengers, few of them know about ERP, let alone supporting it. In fact, politicians seldom take an anti-motorist stance, as that could be catastrophic to their popularity.

Worse still, the government has not mentioned explicitly how the revenue generated from ERP will be used. In foreign ERP schemes, revenues are usually earmarked either for improving public transport service or investment in transport infrastructure. But for the Hong Kong government, it intends to use the ERP gains to pool all kinds of revenues into the government treasury for central allocation. This could raise the issue of over-taxation, especially from right-wing economics advocates, since government reserves are already abundant.

Another argument against ERP is that a more stringent enforcement of traffic regulations could be just as effective as ERP in alleviating congestion. Regular road users blame illegal parking, boarding, and alighting to be the fundamental causes of congestion in the CBD. The police and traffic wardens issue fine tickets only at a random and infrequent basis, thus nurturing a culture of disregarding traffic regulations among frequent drivers.

But taking a step back, should ERP be refuted and shelved, the society will continue to suffer from the consequences of congestion and will have to pay the cost indirectly, which are more tremendous to be accounted for than ERP itself. Tackling congestion would benefit the whole society, though it may not be welcomed by everyone.

To be fair, the government has already stretched its arms, at least at the policy level, to reduce traffic and curb congestion. For instance, the FRT is imposed on new vehicle purchases in order to discourage car ownership – yet it has seen a dramatic hike during the past decade due to compounded economic and societal causes. Besides, fuel tax is levied to discourage overall car usage; but it does not address car use in CBD and congested road sections. Not to mention the complicated public transport system, which is already overloaded. Other measures such as legislating new car registration quota per capita and car usage restriction by odd-even number plates are too cumbersome to be considered. As such, it is down to ERP as a tool to proactively regulate road usage patterns.

There is little dispute that, before ERP is rolled out, traffic management measures should be stepped up to provide immediate relief to the most congested roads. One possible measure is a substantial increase in traffic regulating personnel at congestion black spots.

But such efforts cannot outrun the growth in traffic demand generated by the rise of population and development density in an extremely constrained urban road network. More systemic and potent policy instruments have to be put into action to cope with the worsening situation.

It seems sensible to suggest that ERP should work to achieve its goal in large. Nevertheless, it cannot be stressed enough that caution must be taken when it comes to designing the system, so to minimize its nuisance to road users.

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Sensible Transport

Sensible Transport is a group of local transport professionals concerned with the sustainable development of urban transportation system in Hong Kong.”]