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Transcript of 1 Motoring Towards 2050 Roads as Utilities? The need for institutional reform Stephen Glaister...
1
Motoring Towards 2050
Roads as Utilities?
The need for institutional reformStephen Glaister
Imperial College London and Director RAC Foundation
LSE, 19 January 2009
www.racfoundation.org 2
The Utilities in Britain
Telecommunications
Gas
Electricity
Water
Railways
www.racfoundation.org 3
1947 – 1979 Nationalised Industries
Common features:
Strong public interest considerations
Natural monopolies (networks)
Owned and controlled by the State
Claimed to be inefficient and poor quality of service
www.racfoundation.org 4
Conservatives under Mrs. Thatcher
Desire to
encourage forces of competition
economic efficiency (labour costs)
meet consumer needs
reduce size of the State
Later…
promote private shareholding
raise cash for the Treasury (reduce taxation)
www.racfoundation.org 5
Competition in a natural monopoly??
1. Separate the distribution network from supply of service
2. Sell network to private shareholders
for-profit monoploy, subject to regulation
3. Promote competition for supply over the network by private enterprises
4. INDEPENDENT, public interest regulation
Telecoms, Gas, Electricity, Water, Rail
Consumer pays a fee for use
Fee determined by independent regulator
publicly declared principles:
economy, efficiency, fair return on capital,
fund capacity investment
Consumer protection: eg Quality of Service is published and debated
Direct connection between value to consumer and investment in capacity
For roads we have little of this:
Individual cannot hold provider to account
For Rail there is now a coherent strategy
High Level Output Specification (HLOS)
Statement of Funds Available (SoFA)
Independent Regulator to adjudicate that it all adds up
[High speed rail proposals will have to be shown to be good value for money, genuinely good environmentally affordable by the taxpayer (!)]
There is no HLOS or SoFA for roads!
The Government’s rail strategy has
Defined level of capacity increase
(much of it local commuting and in London area)
A definition of who will pay
a balance between passengers and national taxpayer
What would HLOS and SoFA look like for roads?
Why don’t we have them??
We do pay for our roads
www.racfoundation.org 9
0
5
10
15
20
25
30
35
1975 1981 - 82 1986 - 87 1996 - 97 2006 - 07
£ b
illio
n
GB Roads: taxes (ex VAT) and government spending (2006 prices)
Fuel duty
Other taxes
Local roads National roads
Road users do pay charges!
Road tax is a substantial charge for use of system
What are the principles?
to raise general Exchequer revenues?
to incentivise efficient use of the system
including carbon & environmental concerns?
to fund investment in capacity?
Little info on what you get for your money (Q of S)
www.racfoundation.org 11
Relentless traffic growth(source: Road Statistics 2007, DfT)
www.racfoundation.org 12
Why congestion has got worse
0
200
400
600
800
1000
1200
85 87 89 91 93 95 97 99 01 03 05
Nu
mb
er
Year
English Trunk Road Construction 1985/6 - 2006/7
Route Kms Lane Kms
www.racfoundation.org 13
Growing demand for roads
Between 2005 and 2041: Population will grow by at least 11% Most growth in the E, S and London Incomes will double Number of cars will increase by 44% Road traffic demand up by 43%
DfT forecast 29% by 2025
www.racfoundation.org 14
Government agrees!National Traffic Forecast (2008)
Will current proposals deal with the roads problem?
Hard shoulder running
Better roads management
Travel Demand Management
Local road pricing schemes
…. etc.. I doubt if they will
www.racfoundation.org 16
The problem for the fututre
Population growth 2001-21
and 2021-41
-10% or less
-5% to -10%
-1% to -5%
+1% - -1%
1% t 5%
5% - 10%
10% or more
www.racfoundation.org 17
RAC Foundation estimates 2005 – 2041 (fuel at £1.50/litre)
AREA
Car trips% growth 2005-2041
Vehicle Kilometres% growth in demand
2005-2041
GREAT BRITAIN 24 37
Scotland 11 23
North East 16 31
North West 20 34
Yorkshire & Humber 25 40
West Midlands 21 32
East Midlands 27 41
East 28 46
London 31 41
South East 25 39
South West 28 44
Wales 19 31
www.racfoundation.org 18
Speed change (%) 2010-41Speed change (%) 2010-41 Traffic change (%) 2010-41Traffic change (%) 2010-41
www.racfoundation.org 19
Model: Sources
DfT FORGE 2010
Tempro
Generally, official DfT parameter values
Elasticities from our previous research
Model structure from previous work for Independent Transport Commission
Road type
www.racfoundation.org 20
Road Type Conurbations Other Urban Rural
1 Motorway N/A Motorway
2 N/A N/A Trunk Dual A
3 N/A N/A Principal Dual A
4 Trunk A Trunk A Trunk Single A
5 Principal A Principal A Principal Single A
6 B and C Rds B and C Rds B Rds
7 Unclassified Unclassified C & Unclassified
Urbanisation
www.racfoundation.org 21
Area types Description Population12 Inner 3 Outer 4 Inner Conurbation5 Outer Conurbation6 Urban Big > 250,0007 Urban Large >100,0008 Urban Medium > 25,0009 Urban Small > 10,00010 Rural
Regions
www.racfoundation.org 22
Northern
Yorks and Humberside
North East
Eastern
South Eastern
West Midlands
South Western
East Midlands
North Western
Wales
Scotland
Time of the week
www.racfoundation.org 23
Period Day Time Period Day Time
1 Mon-Fri 00:00 - 06:00
2 Mon-Fri 06:00 - 07:00 12 Saturday 00:00 - 09:00
3 Mon-Fri 07:00 - 08:00 13 Saturday 09:00 - 14:00
4 Mon-Fri 08:00 - 09:00 14 Saturday 14:00 - 20:00
5 Mon-Fri 09:00 - 10:00 15 Saturday 20:00 - 24:00
6 Mon-Fri 10:00 - 16:00
7 Mon-Fri 16:00 - 17:00 16 Sunday 00:00 - 10:00
8 Mon-Fri 17:00 - 18:00 17 Sunday 10:00 - 15:00
9 Mon-Fri 18:00 - 19:00 18 Sunday 15:00 - 20:00
10 Mon-Fri 19:00 - 22:00 19 Sunday 20:00 - 24:00
11 Mon-Fri 22:00 - 24:00
six journey purposes:HBW Home based work
HBEB Home based Employers Busines
HBEO Home based Essential Other
HBDO Home based Discretionary Other (
NHBWEB Non Home based Work/Employers bus.
NHBDO Non Home based Discretionary Other
LGV Light Goods Vehicles (less than 3.5 tonnes gross weight)
Rigid Rigid Heavy Goods Vehicles
Artic Articulated Heavy Goods Vehicles
PSV Public Service Vehicles (Buses/Coaches)
Rail
www.racfoundation.org 24
g = p + v (1/s) + ww + t + ...
xi = xi exp { j ij (gj - gj)}
www.racfoundation.org 25
www.racfoundation.org 26
Time values scaled with regional incomes
www.racfoundation.org 27
www.racfoundation.org 28
Roads and Reality
Strategic Road Network: Trunk roads in Britain + some rural principal roads Targeted Prog. of Improvements up to 2015/16
included Additional capacity 2010 to 2041 considered
200 Lane Km pa increments up to 800 LKm pa
With and without ‘Efficient’ Road Pricing Pattern of improvements similar to Eddington
www.racfoundation.org 29
The alternatives
Let congestion continue to grow unchecked
Build & widen roads without reforming pricing
Reform pricing and heavily restrain demand
To reform pricing to improve efficiency
AND additional capacity to preserve mobility
www.racfoundation.org 30
Roads and Reality
Efficient Road Pricing:Replaces existing motoring taxes with A carbon tax on fuel (14p litre) A distance based charge reflecting
congestion harmful emissions road track costs accidents
www.racfoundation.org 31
Roads and Reality
No extracapacit
y
+200Lkm
pa
+400Lkm
pa
+600Lkm
pa
+800Lkmpa
No pricing
Gross benefit to society Base 7.48 12.75 16.42 19.55
Cost of additional capacity Base 1.48 3.0 4.44 5.61
Average benefit:cost ratio of scenario Base 5.1 4.3 3.7 3.5
Marginal benefit:cost of additional capacity - 5:1 3.5:1 2.6:1 2.7:1
Efficient pricing
Gross benefit to society 22.33 28.29 32.72 36.12 38.38
Cost of additional capacity 0 1.48 3.0 4.44 5.61
Cost of charge collection 4.5 4.5 4.5 4.5 4.5
Average benefit:cost ratio of scenario 5.0 4.7 4.4 4.0 3.8
Marginal benefit:cost of additional capacity and collection
5.0:1 4.0:1 2.9:1 2.4:1 1.9:1
Costs and benefits - £bn p.a.
Road pricing deals with congestion
Extra capacity restores mobility
Both are needed to do the job – a policy package
600 Lane Km pa justified with OR without pricing
This is not excessive by historical standards
www.racfoundation.org 32
Carbon: Follow through principles of
Stern and Eddington
www.racfoundation.org 33
Decide what the price of carbon should be
Ensure everybody pays it
Secure Transport’s correct position in carbon reduction hierarchy
Do road and rail appraisals properly and use them…
Congestion vs carbon
www.racfoundation.org 34
On current values
Congestion is a bigger problem than carbon
Carbon will be reduced by Implementation of better technology More sensible pricing
Fuel duty already over-prices carbon?
carbon = 14p/litre duty = 60p/litre
The objections: carbon
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
0 200 400 600 800
Annua l la ne inc re ments, stra te g ic roa ds
% c
hang
e in
GB
fuel
con
sum
ption
No pric ing With pric ing
www.racfoundation.org 35
Effects on fuel consumption and carbon emissions
www.racfoundation.org 36
Predictability of journey times
As the network gets closer to capacity
Average journey times increase (classic congestion)
Variability of journey times increase.
Conventional appraisal has only considered the average
www.racfoundation.org 37
People and business becoming upset about variability
Public attitude research
Eddington, DfT research.
Quality of service to the user
www.racfoundation.org 38
PSA Journey reliability target
An attempt to represent variability by
Journey time on the slowest 10% of journeys on a sample of about 90 routes.
Target was to improve this by the end of the three years ending March 2008.
www.racfoundation.org 39
T
www.racfoundation.org 40
Problems
The measure is difficult to understand and almost impossible to explain to the public
It is highly aggregated by: Time of day Road type Location 12 month moving average
There are technical failings
An important research area
Conclusions
GB is a rich nation …
… unable to bring itself to spend the resources necessary
for adequate transport infrastructure
More infrastructure implies more spending!
Roads: the only public utility to be provided by a purely administrative process with little regard for value to users
Pricing, taxation and investment to be moved away from
the Treasury’s economic and political priorities
and towards
transparent transport policy-related considerations
Reconsideration of the principles behind road taxation
must be a part of this
? Time and distance-based pricing as part of a tax reform and investment package?
A realistic, long term national roads strategy
Governance reform
Some lessons taken from the other public utilities ?
New and independent authorities could be a useful part of future reform.
We need better measures of quality of service
This would facilitate the necessary rebuilding of trust between accountable bodies and users.
www.racfoundation.org 44
PSA measure for one route
www.racfoundation.org 45
T
The underlying data
Section-by-section measurement
gives more useful data?
(scales have been adjusted to indicate contribution of each link’s contribution to PSA1)