The Hindu Business Line : Pay for road use

No amount of road widening, flyovers or multi-level parking seems enough to tackle traffic congestion in urban centres. Road infrastructure and maintenance eat into a large share of the taxpayers' money, yet everyday commute is anything but pleasant.

As cities abroad wake up to the idea of `traffic demand management' (TDM), Ashok Datar, who has conducted detailed studies on Mumbai's urban transportation systems, thinks road pricing is "an idea whose time has come." In fact, he is even ready with the blueprint of a package.

TDM looks at mobility as a means to an end, rather than an end in itself, thereby boosting transport efficiency while reining in vehicular traffic. In prioritising `human' movement over that of motor vehicles, it seeks to promote high-value, low-cost travel.

Among other measures, it recommends the use of inexpensive technologies to monitor road usage and charge for the usage. The revenue can be used to strengthen the network of alternative modes of travel. It's much like how smoking is being curbed by making it less convenient.

As Datar says, "Instead of pinning hopes on simple solutions like toll and cess, Mumbai needs to raise the cost of ownership of automobiles to check their surging population."

While doing his M.A. in Economics at Stanford University, Datar studied public finance under eminent professors like Kenneth Arrow, John Gurley and Paul Baran. That sparked his keen interest in public finance and urban utilities.

He worked for 18 years at senior positions in private companies. During his travels abroad, he honed his understanding of urban transportation systems and road pricing. Later, as part of a Mumbai NGO — Network for Transportation Alternatives — his studies showed that effective management of `parking' can generate substantial revenues, contain road congestion and improve traffic. While studying the use of Mumbai's JJ flyover, Datar was further convinced of the need for TDM. "The obsession with flyovers is strange," he says. "At the JJ flyover, 50 public buses passing underneath take 40 minutes to cross the distance, while only one allowed to pass above takes 2 minutes. Why not open up the flyover for more buses to make them more attractive?"

When motorists pay for driving on a particular roadway or using a certain parking space, it not only helps fund roadway costs and transportation programmes, it also reduces congestion by encouraging alternative modes of travel.

"From 1964 to 1995, Mumbai only had studies on urban traffic planning and improvements," says Datar. "It was only from 1995 that the city witnessed some supply-side measures addressing suburban rail infrastructure, flyovers, sea link and east-west corridors." Mumbai residents routinely blame the city's soaring population for all its ills. But, points out Datar, while the population has grown 1.8 per cent annually from 1981, the car and two-wheeler population has surged 5.5 per cent and 18 per cent respectively annually.

He says that while cars were only three times cheaper than 2-BHK apartments in 1975, now they are 16 times cheaper, fuelling affordability and aspirations among the burgeoning middle class.

While petrol costs, annual road tax, and public transport costs have grown 14, 10 and 13 times respectively over the same period, car maintenance costs have risen a meagre 1.5 times, thanks to refined technologies. But, surprisingly, the hourly parking charge has remained stagnant at Rs 5 since 1990, irrespective of the location, car size or hour of the day. "The proportion of free to paid parking is approximately 50-to-1," says Datar.

"While prices of cars and fuel are generally equal across most countries, levels of congestion and development of public transport differ radically." While Mumbai tops in road congestion, there are barely any demand constraints in the form of user fees.

The problem is compounded by lack of administrative credibility, he says. "Car owners are unwilling to part with money as they feel it will get lost in general administration," he says. "We need to explain that such measures can achieve higher productivity, lower pollution and lower congestion for all."

To begin with, he suggests that authorities identify meaningful projects for funding and ensure that the funds are spent in a transparent, justified and time-bound manner. "We need to establish a magnetic card-based database for drivers and cars with new standardised number plates using luminous paint," says Datar. "These number plates could be issued when people pay the one-time registration fee. Using the car number, they can pay through their credit card or into the designated bank."

The objective is to reduce the number of cars by 5-10 per cent over two to three years, improve the quality and width of roads, earmark parking spaces and provide dedicated bus lanes.

His package recommends:

* Annual tax of 1 per cent of the original purchase value for eight years and 2 per cent thereafter. Ban vehicles older than 15 years (with vintage exceptions) on the roads.

* Raise the one-time tax from 4.5 per cent to 15 per cent initially. Get users of older cars to pay the differential amount with an adequate concession. Relate the tax base to the price, thus making it less expensive for the aspiring middle class to get the first car, as against the high-priced second car for the upper middle class.

* Adopt a universal pay-and-park policy, promote orderly use of road space and force car users to think twice before bringing a car to a location. Put up yellow boxes to announce paid parking. Classify locations according to importance and traffic; raise parking charges to Rs 10-20 and levy additional toll depending on car size.

He also recommends paid parking in parallel and intersecting lanes, 60-second free parking on high-traffic roads with fewer than six lanes, and 20-60-minute slots in shopping and other select areas. "The locations could be identified by an external agency and a high-power committee could approve parking proposals based on clear guidelines," says Datar. "The contractors could bid at or above a minimum reservation price, at least 60 per cent of the full utilisation value. This could be paid in advance for three months."

Datar expects these measures to create 25,000 eco-friendly work opportunities and increase the number of parking lots to 5,000 with over one lakh spaces. "The contractors could also collect fines in designated areas from those who throw dirt, debris or garbage."

The current system of towing vehicles is not only expensive, it also creates nuisance. Privatisation will enable "continuous, low-cost and highly motivated patrolling, freeing the police for traffic management." But the best part of these fees is that they will let users demand performance.

The thought is enthusing, given that a 10-20 per cent reduction in the number of cars could improve the speed of buses and taxis by 10 per cent, increase their load factor by 20 per cent, boost mileage, and improve their profitability. This will also enable taxis and buses to offer an air-conditioned ride at only 10 per cent higher price.

"BEST is very effective, but incurring losses because speeds are down from 21 to 12 kmph and the average load factor has dropped from 72 to 55 per cent in the last two decades. Mumbai dwellers bother more about speed than comfort."

Also, taxi charges in Mumbai are high due to dismal utilisation. "Taxis are a better option because they don't block parking space. But can you believe that taxi charges above 15 km in Singapore are the same as those in Mumbai?" Although the fees are intended more to bring in discipline, Datar predicts augmented annual revenue of over Rs 700 crore and additional parking fees of Rs 100 crore. As Todd Litman, founder of the Victoria Transport Policy Institute, says, "The next big thing in transportation is not a new mode or service... perhaps it is an incremental approach that consists of management innovations that result in efficient use of existing transportation systems."

Picture by Vivek Bendre

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