Wednesday 26th Jul 2017 - RUC Magazine

Coming to a city state near you

Features

Scott Wilson analyses the recent government report on road pricing in Hong Kong

Congestion pricing in Hong Kong seems like a no-brainer, and the authorities in Hong Kong, both before and since the “hand-over” back to China, have acknowledged this formally and informally. Both the north side of Hong Kong Island and Kowloon have such high-densities of people and public transport usage that pricing those roads would appear to deliver enormous benefits from reduced congestion and pollution, with alternatives – certainly for people movement – obvious. The added benefit in Hong Kong is that most public transport does not require subsidy. The network of bus and mini-bus services operates commercially, all with integrated smartcard ticketing. Growth in demand is met by operators investing themselves. Even the metro system pays for itself, and there has been ongoing investment to expand it supported by revenue from property development at station sites.

Options for road pricing in Hong Kong were comprehensively considered in the late 1990s, to the point that the closed Kai Tak Airport site was used for technology trials including GPS for distance, time and location based road pricing. Options were revisited twice since then. On both occasions the Hong Kong Government has rejected the idea for political reasons. New roads and metro lines have continued to be built, but a report in December 2014 from the Transport Advisory Committee recommends that road pricing be looked at again.

The report states that average road traffic speeds have fallen by 11 per cent in 10 years and air quality has worsened, which is partly attributable to congestion. The report concluded that traffic congestion has five recurrent causes in Hong Kong:

•    Physical and spatial constraints to expanding road infrastructure make it impossible to add capacity to meet demand, with scope for additional capacity becoming severely limited (expecting around 0.4 per cent an annum expansion in road length by 2020)

•    Size of the vehicle fleet continues to grow, at a rate of around 3.4 per cent an annum in recent years

•    Competing use of road space generates network delays, such as the loading and unloading of trucks, pick up/set down of buses, taxis and cars, and vehicles circulating for kerbside parking. All of these activities interfere with smooth traffic flow

•    Illegal parking and stopping, exacerbated by parking fine penalties not increasing by inflation

•    Road works, whether to maintain the highway or in relation to infrastructure underneath the highway

Measures proposed to address these issues run across the whole range of road pricing measures, including ownership taxes, fuel tax, parking charges and road pricing itself. Measures include:

•    Increase the first registration tax for all newly registered vehicles and annual licence fee, including for “environmentally friendly petrol private cars”, which have a concession, to reduce the growth in vehicle ownership.

•    Tighten up the category for “environmentally friendly petrol private cars” reflecting that they still contribute to congestion. This can be done by continually lifting the standard to reflect the latest technology

•    Fuel tax on diesel should be reintroduced, as diesel is tax free, but petrol taxed at HK$6.06 per litre (€0.72 per litre). This incentivises a shift to diesel, which should be removed

•    Increased parking meter charges (these have not increased in 20 years, but inflation in that time would have added 40 per cent to them) as they are significantly underpriced compared to commercial parking facilities and encourage circulation of vehicles looking to park

•    The central district of Hong Kong should be a pilot site for a congestion charge scheme following completion of the Central-Wan Chai Bypass, with early public engagement on how it should be implemented

Longer term, the report proposes a more technology led approach to parking, including real time information on parking vacancies to minimise time spent looking for spaces. The report also proposes incentivising on-street loading and unloading of freight during off peak hours, through electronic road pricing and more park and ride facilities at stations.

Local newspaper, The Standard, reports that the Financial Secretary is unlikely to support increasing taxes on owning cars as the issuing of the report in December has apparently meant new car sales have increased 10 per cent as motorists seek to avoid the higher first registration tax. However, it would be interesting to see Hong Kong pilot congestion pricing at Central, and progressively expand it, perhaps through zonal charging and ultimately distance based charging. Central has intensive provision of public transport both underground, numerous bus services and the iconic trams, which operate on an average frequency of 90 seconds during weekdays. As such, it is not difficult to find public transport options especially on the northern side of Hong Kong Island and in Kowloon. Cars remain much more convenient for the other side of the island and much of the new territories.

The report itself justifies charging a central zone as follows:

(a) Central District is the central business district of Hong Kong. It plays a strategic and symbolic function in our society
(b) Severe road congestion often occurs on the main road sections in Central, sometimes causing grid-lock in the surrounding road networks, affecting neighbouring districts
(c) The commissioning of central wanchai bypass will provide an alternative route for motorists to bypass the charging zone

The geography and conditions seem ideal for an intelligent, and dynamic form of electronic road pricing. It remains to be seen whether the Hong Kong government is willing this time to proceed.

The project would have an effect of bypassing the space depicted in figure 2, bearing in mind that the highlighted area is very rough, and not indicative of what the charging zone would be. Careful design is required as to where a charging zone would be located to the south along the base of the peak. However, this would certainly be expected to include Connaught Road or Gloucester Road through to Queens Road.

A survey of 9010 people was carried out as part of the study, of whom 3010 were drivers of some description (car, taxi, goods vehicle or bus). The results indicated that 62.7 per cent of those surveyed supported the idea of electronic road pricing. Among vehicle drivers (including bus, truck and taxi drivers) support was 51.9 per cent. A more detailed breakdown of the survey is interesting, as it shows that those most opposed are taxi drivers and goods vehicle drivers, whereas bus drivers are most supportive. Private car drivers remain more supportive than opposed.

The way forward

It would appear that the politics around road pricing in Hong Kong may not be too difficult, although a lot of effort will be needed to get taxi drivers and goods vehicle drivers onside. For them, it could mean selling reductions in delays. It could mean better provision of taxi stands and loading zones at appropriate times and making sure that any pricing differentiates by time of day to encourage more off peak driving. Using some of the net revenue for some road improvements would also not go amiss.

Looking at past reports on Hong Kong road pricing one option is to go further and have multiple charging zones or even to charge by distance, time and location. The latter has the potential to be more nuanced and fair, but the whole package needs to be considered. Just charging more without recycling some of that money back to users of the network through improvements or offsetting other taxes may be the trick that is missing to get widespread acceptance of a measure that should significantly improve traffic conditions, and pollution, in Hong Kong.

Article taken from the April 2015 issue of RUC Magazine