India’s urban centres today suffer from rising private vehicular traffic. The negative consequences are visible. From changing patterns of vehicle ownership, to businesses looking to relocate because of losses caused by a drop in productivity, the story of India’s traffic is not a pretty one.
Since we have nearly one vehicle per household, everyone is forced to bear the consequences. With a growing middle-class and easier financing for vehicle purchases, it’s time the country takes stock of the situation in real-time and does something about it.
The concept of a congestion charge is simple – if you are entering an area that is congested, you pay for it. It can be seen as something like the surge price in the case of ride-sharing, where fares are increased when the demand outpaces supply. It’s the equivalent of an entry fee when entering a high congestion zone, such as a central business district (CBD) or the city centre.
Globally, London is the best-known example while Singapore was the first to introduce it. Other major cities such as New York and San Francisco have toyed with the idea in the past decade. Closer home, Delhi has also contemplated implementing it, mainly due to the failure of its flawed “odd-even plan”.
But why congestion pricing? Why not tax vehicle owners more?
The answer to these questions lies in a simple concept: paying en masse versus paying per use. A congestion charge is equivalent to a road toll charge. Toll collection enables better infrastructure, with lower taxes. India’s highway network, while certainly not the world’s best, has improved appreciably over the last 15 years, mainly due to toll collection, as opposed to higher taxes.
Tolling ensures that those who use the road primarily, pay for it, as opposed to everyone paying partially for a road that they may never use in their lifetime.
Similarly, a congestion charge applies only to those users who want to enter the congestion zone, as opposed to everyone living in the state paying money for better transport in a city far from them.
The core difference here is that if cars are taxed higher to discourage their purchase, it puts some people at an unfair disadvantage – the rich will continue to pay their taxes and use their cars while the middle-class will be disadvantaged by such a scheme, much like in the odd-even case, where the rich can afford to buy two cars, one odd-numbered, one even.
Instead, if we begin to charge vehicles every time they wish to enter a certain zone, it will allow vehicle owners to use their vehicles only when they need to.
Here’s a simple example:
Let’s assume that in a certain city, a locality – say, the CBD – is a congestion-prone region due to the large concentration of businesses operating out of the area. If vehicles are taxed at a higher rate, a person who may never travel to the crowded CBD but is travelling all the way across the city for work, will have to pay a larger price for the car even if they travel through less congested regions. However, if there is a congestion charge for entering the CBD, they will have to pay that additional amount only when entering the CBD.
Most cities in India can have their congestion zones spread out incrementally as we progress to the core areas of the city. For radial cities like Bengaluru, the congestion charge can begin at a base fare on crossing, say, the NICE Peripheral Ring Road. The next zone can be at a place like the Outer Ring Road, where the charge doubles. On reaching areas closer to the city centre, it can shoot up by higher multiples. Further, if a partial refund is offered to vehicles that exit the congestion zone within a certain period (say, two hours), then it would encourage people to conduct their business faster and exit the zone. This would ensure that those who regularly land up at the CBD for work (a full working day) will not take their cars out unless it’s very necessary.
For linear cities like Mumbai, the congestion charge can start at the entry-exit toll plazas and the next increment can happen near Sion-Mahim, which is the border between Mumbai city and its suburbs. It’s also here that the city’s buses differentiate between city and suburban fares and from where auto-rickshaws are barred from traversing further south.
The rationale behind a congestion charge here is to charge users based on the road space occupied or consumed by them, which could otherwise have been used by a bus or a car-pooling service. Over time, the congestion charge will evolve into a user fee for using any road, because the issue does not lie with people owning vehicles, but with them taking their vehicles out.
An important point to note here is that the primary purpose of the congestion charge is to reduce congestion arising from the presence of too many vehicles, especially privately owned ones. While London provides a discount to car-pooling services and electric vehicles, the latter still constitutes as a private vehicle and must not be exempted from paying any charges.
Further, to prevent more congestion, collection of a congestion charge must be electronic. London uses cameras that take pictures and then recognise the number plates on vehicles, something that would not work in India due to non-standard number plates. The Centre made it mandatory for all new vehicles to come with a FASTag radio-frequency identification (RFID) tag in December and cities must make optimal use of it. The E-ZPass in the United States is used for several non-toll transactions including parking at Pittsburg airport and even as a payment system at several drive-through restaurants. Notably, it was set up in New York City to allow officials to monitor traffic based on when a vehicle enters and exits certain areas. This would be an additional benefit on an electronic congestion charge, and the data of vehicular movement can later on be sold to those wishing to make use of it for navigational applications.
Congestion pricing and public transport
As Swarajya editorial director R Jagannathan writes, no public transport policy will work if vehicle owners are not disincentivised relative to public transport. For congestion pricing to work, the public transport network needs to be strong enough for people to avoid taking their vehicles out. An oft-repeated phrase of public transport operators, the ‘Park and Ride’ concept, has till date not been successful – because of the ‘one size fits all’ approach that public transport has been slotted into.
For public transport to succeed, it needs to attract people by providing flexible options such as premium services, optimal timings, and better routes.
London uses money from the congestion charge collection to raise funds for public transport and has reported an increase in patronage of buses and trains due to the charge.
Where does the money go?
This is a crucial question for India, where the quasi-federal structure sees different forms of transport being handled by different agencies and at various levels. For instance, in Mumbai, buses are operated by the city, the metro, and the monorail by the state of Maharashtra and the suburban rail by the Centre. To solve this, the Centre, state, and concerned municipal bodies need to set up a special purpose vehicle (SPV) that will collect the money from the congestion charge and then distribute it to related agencies.
The money collected needs to be used properly, and not just for laying roads. It needs to be spent in setting up proper, usable pedestrian infrastructure, connectivity between two or more adjacent transit centres, cycle lanes, bus shelters, streetlights, and procuring better buses. Given the cash crunch in our cities, forcing them to use dilapidated buses or rely on central schemes like the erstwhile Jawaharlal Nehru National Urban Renewal Mission (JnNURM), procuring newer buses using the collection from a congestion charge needs to be given a serious thought.
At the end of the day, public planners need to realise that the road belongs to everyone, including those who don’t have their own vehicle.
Srikanth’s interests include public transit, urban management and transportation infrastructure.
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