Policy: Implementation Costs & Time

Implementation Costs

Table 2-2 summarizes implementation costs for different cities that have implemented urban congestion charging.

Table 2‑2. Implementation costs for various congestion charge schemes based on actual and estimated data

Source: CfIT, 2006a; EEA, 2008

Only London and Stockholm have actually implemented cordon based congestion charges whereas other figures are estimates based on feasibility studies. It is difficult to draw direct comparisons due to differing factors among each city including size, economy, and schemes. Nevertheless, the estimates reveal an average implementation cost of around £232 million. In the high range, Cardiff estimates are £500 million although this includes a whole package of supplementary demand management measures. The low estimate is for Shanghai of £9 million, which maybe attributable to differences in economy and only recent experience with the actual costs of implementation. Both case evidence and estimated figures however indicate an average implementation cost of approximately £232 million for a large urban centre.

Another important point is the potential cost savings that can be captured with congestion charging to offset implementation and operational costs. For example, an ancillary impact of congestion charging is increased road safety which can be translated into cost savings. Transport for London estimates that the scheme is responsible for between 40 - 70 additional accidents saved per year translating into benefits between £5 - 10 million per year (TfL, 2005d in Santos and Fraser, 2007).

Implementation Time

Estimating a feasible time for implementation necessarily depends upon site-specific conditions. Case evidence suggests that public acceptance would be the primary barrier for implementation along with high outlay costs. However, evidence from London suggests that a congestion scheme is cost effective where operating costs totalled £289 million with a total income £592 million creating net revenue of £303 million (TfL; 2007; Sherrington and Moran, 2007; EEA, 2008). This means the initial investment for scheme infrastructure and human resources could be paid off in five years (EEA, 2008). Moreover, technology is no longer considered a significant barrier for enforcement of a charging scheme (Proost and Van Dender, 2001) suggesting that the primary barrier lies with public acceptance and political will. Nevertheless, based on case-evidence from London and Stockholm a congestion charge could be fully implemented within 5 years.