ETC, etc December 2008

Advanced transportation management

policy • strategy • technology finance • innovation • implementation

integration • interoperability

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ONE SMALL STEP FOR MAN, ONE GIANT LEAP FOR ROAD USER CHARGING...Joaquin Cosmen Schortmann and Bern Grush herald the launch of GMAR

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The international road pricing and electronic toll collection review

Supplement to

Volume 3 Issue 4December 2008

THINKINGHIGHWAYS

Xxxxx

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Data Collection andTransmission

No, really. It could.Things could definitely be worse.

Given that the entire civilised world seems to be suffering from the effects of a massive financial meltdown where even countries go bust (it was always thought to be a bad omen when banks announced redundancies but we’re now at a stage where Iceland’s entire banking sector has collapsed), we’d like to offer you some form of refuge from the gathering storm. We’re nice like that.

It can’t be all gloom and doom now can it, if this issue of ETC, etc is anything to go by. The electronic toll collection and road pricing market would seem to be pretty vibrant if the articles we’ve included here are a good indication of the health of this particular sector.

The exhibition floor of November’s ITS World Congress in New York was certainly not lacking in companies from this neck of the woods and although the week was rightly dominated by the VII demos on 11th

Editor-in-Chief Kevin Borras Sales and Marketing Luis Hill, Tim Guest Design and Layout Phoebe Bentley, Kevin Borras Sub-Editor and Proofreader Maria Vasconcelos Senior Editorial Advisors Bern Grush, Jack Opiola, Andrew Pickford, Harold Worrall Contributors to this issue Leonardo Anceschi, Joaquin Cosmen Schortmann, Robert Edelstein, Steinar Furan, Andy Graham, Bern Grush, Mike Hayward, Michael Kosic,Miguel Angel Martinez Olague, Dave Marples, Duncan Matheson, Bob McQueen, Ken Philmus, Norbert Schindler, Paul Vorster

ETC etc,, a twice-yearly supplement to thinking Highways, is published by H3B Media Ltd in the UK. ISSN 1753 4348 Thinking Highways is published quarterly in two editions – North America and Europe/Rest of the World - and is available on subscription at £30/€40 (Europe/RoW) and US$50 (North America). Distributed in the USA by DSW, 75 Aberdeen Road, Emigsville PA17318-0437. Periodicals postage paid at Emigsville PA. POSTMASTER: Send address changes to THINKING HIGHWAYS, 13705 North Ivy Lake Road, Chillicothe, IL 61523, USA.

Although due care has been taken to ensure that the content of this publication is accurate and up-to-date, the publisher can accept no liability for errors and omissions. Unless otherwise stated, this publication has not tested products or services that are described herein, and their inclusion does not imply any form of endorsement. By accepting advertisements in this publication, the publisher does not warrant their accuracy, nor accept responsibility for their contents. The publisher welcomes unsolicited manuscripts and illustrations but can accept no liability for their safe return.

© 2008 H3B Media Ltd. All rights reserved. The views and opinions of the authors are not necessarily those of H3B Media Ltd. Reproduction (in whole or in part) of any text, photograph or illustration contained in this publication without the written permission of the publisher is strictly prohibited.

Printed in the UK by The Manson Group

Cheer up, it could be worseThe ETC, etc guide to not letting the global economic downturn apply to you.

01ETCetc Vol 3 No 4www.thinkinghighways.com

Foreword Thinking

Managing Director/CEO Luis Hill

Publishing Director Kevin Borras

www.thinkinghighways.com

Kevin Borras is publishing director of H3B Media and editor-in-chief of Thinking Highways and ETC, etc. To contact him, email [email protected]

Avenue, there was a more than healthy ETC-flavoured representation and some of the more energetic sessions were congestion pricing-oriented.

By the time you have finished reading our fifth iteration of ETC, etc you will, I’m sure, be mightily relieved that the world has looked down the back of the global sofa and found enough money amidst the amorphous balls of fluff and peas (if the back of my sofa is any indication) to keep investing in measures to solve the burgeoning weight and environmental impacts of traffic.

Bern Grush and Joaquin Cosmen Schortmann, for instance, are looking at the just-established GNSS Metering Association for Road User Charging (GMAR) to quickly become the association for ‘our’ section of the global navigation satellite systems market. Their article, “We Have Lift Off” goes into the great detail on pages 4-8 but the bottom line is simple: without financial support none

Visualisation Tom Waldschmidt Conferences and Events Odile Pignier Subscriptions and Circulation Pilarin Harvey-Granell Financial Director Martin Brookstein Editorial and Advertising H3B Media Ltd, 15 Onslow Gardens, Wallington, Surrey SM6 9QL, UK Tel +44 (0)208 254 9406 Fax +44 (0)208 647 0045 Email [email protected]

of this is ever going to get off the ground (literally in their case). Talking of finance, as we were, Ken Philmus and Bob McQueen have both written stirring pieces about a cashless future (a deliberate one, not in the Icelandic sense). Ken focuses on how much it costs, in toll transaction terms, to handle money while Bob laments the end of the toll booth, the one point of contact a toll operator has with its customers.

Add into the mix Norbert Schindler’s fascinating opinion piece, Steinar Furan’s look at the roots of the age-old interoperability issue, Bob Edelstein’s PPP warning, Duncan Matheson’s EETS plea, Mike Hayward’s footballing analogies, Leonardo Anceschi’s Italian lesson, Miguel Martinez’s Dutch experience and Andy Graham’s Top of the Pops pastiche (not to mention Grush and Kosic’s take on accuracy) and you have several hours worth of distraction from the impending disaster... E

Cover Story

Vol 3 Issue 4 ETCetc46 www.thinkinghighways.com

Cover Story

47ETCetc Vol 3 Issue 4www.thinkinghighways.com

BERN GRUSH and JOAQUIN COSMEN SCHORTMANN are working together to establish GMAR as the primary association for the GNSS road tolling sector. But what is GMAR? What does it stand for? And who else is involved?

We both presented papers at the New York ITS World Congress in November 2008 and while there we heard from a considerable number of speakers about the use of global navigation satellite systems (GNSS) to meter road use for tolling.

We observed that while there are many areas of agree-ment regarding the direction this tech-nology is headed and the reasons why it will eventually dominate, no other speakers mentioned the need for a defined set of performance require-ments for road charging systems. We believe this issue is a critical one to those authorities seeking to acquire such systems. We also think this is critical to the health of our fledgling industry.

To this end, our two companies, GMV and Skymeter, have collaborated to establish an industry association, GNSS Metering Association for Road Use Charging (GMAR), with the purpose of defining critical perform-ance requirements for these systems.

The demand for road use charging (road toll-ing) is increasing. Whether for reasons of sus-tainable funding, congestion management, green house gas curtailment or concerns for dependence on oil, the likelihood is very high that most roads in many countries will be tolled

in the next two decades based on when and how much they are driven.

While there are a variety of ways to configure such tolling systems, there is no known method of managing this vari-

ety or volume of tolling activities that is more flexible or cost effective than metering tech-nologies based on global navigation satellite systems (GNSS) such as GPS and Galileo.

“GMV and Skymeter have collaborated to

establish GMAR”

We have lift off...

COVER STORY04 Bern Grush and Joaquin Cosmen Schortmann

on the background, launch and objectives of GMAR

CASHLESS TRANSACTIONS (take 1)10 Ken Philmus on the hidden (and rising) cost of money in the toll collection world

ITALY14 Convincing the Italian public that congestion

charging is a good idea is no easy task, as Leonardo Anceschi explains

INTEROPERABILITY18 Steinar Furan looks at some historical parallels

to find where the difficulty in realising the concept of interoperability originates

SOUTH AFRICA20 Dr Paul Vorster on how South Africa is giving a

much-needed makeover to its public transport fare collection system

COMMENT23 It’s Pricing versus Charging, there’s five minutes to go and it’s 0-0. Mike Hayward talks

us through the closing stages PUBLIC PRIVATE PARTNERSHIPS26 Dr Robert Edelstein searches for PPP’s consistency of purpose OPINION PIECE30 Norbert Schindler’s observations on the current state of play in the tolling market,

informed by his enlightening week in New York in November

ROAD USE METERING36 Michael Kosic and Bern Grush define exactly

what is meant by ‘accurate’

CONTENTS

CONGESTION CHARGING42 Andy Graham counts down the congestion charging top 10 DUTCH ROAD PRICING46 Miguel Angel Martinez Olague reflects on the

ABvM from an industry standpoint

CASHLESS TRANSACTIONS (take 2)50 Bob McQueen, with handkerchief at the ready,

steels himself to bid a fond farewell to two of his favourite things. Toll booths... and cash

TECHNOLOGY54 We have the technology but what are we

going to do with it? Dave Marples hopes that reinventing the wheel isn’t part of the plan

COMMENT58 Duncan Matheson on the European Commission’s commitment to EETS 64 Advertisers Index

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Cover Story


BERN GRUSH and JOAQUIN COSMEN SCHORTMANN are working together to establish GMAR as the primary association for the GNSS road tolling sector. But what is GMAR? What does it stand for? And who else is involved?

We each presented papers related to GNSS tolling at the New York ITS World Congress in November 2008 and we were pleased that a considerable number of others there spoke about the use of global naviga-tion satellite systems (GNSS) to meter road use for tolling. We observed that there is general agreement regarding the direction this technol-ogy is taking and we heard reasons why it will eventually dominate.

Unfortunately, no other speakers mentioned the need for a defined set of performance requirements for road charging systems. We believe this issue is a critical one to those authorities seeking to acquire such systems. We also think this is critical to the health of our fledgling industry.

To this end, our two companies, GMV and Skymeter, have collaborated to establish an industry association, GNSS Metering Association for Road Use Charging (GMAR), with the purpose of defining critical perform-ance requirements for these systems.

The demand for road use charging (road toll-ing) is increasing. Whether for reasons of sus-tainable funding, congestion management, green house gas curtailment or concerns for dependence on oil, the likelihood is very high that most roads in many countries will be tolled

in the next two decades based on when and how much they are driven.

While there are a variety of ways to configure such tolling systems, there is no known method of managing this vari-

ety or volume of tolling activities that is more flexible or cost effective than metering tech-nologies based on global navigation satellite systems (GNSS) such as GPS and Galileo.

“GMV and Skymeter have collaborated to

establish GMAR”

Cover Story


We have lift off...

Cover Story

Vol 3 No 4 ETCetc06 www.thinkinghighways.com

The observationAs of the end of 2008, there are a number of GNSS-based systems on offer, only one of which has been proven in extended operation. For numerous reasons, independ-ent of the purpose of GMAR, the market place demands more than one such system design and more than one system manufacturer. These systems are new, compli-cated, expensive, and can be arranged in a number of ways – some of which may not yet be known. The GNSS road-metering methods currently deployed and prom-ises being made are various and difficult to compare.

Worse, benchmarking efforts are also variable and not comparable across tests that have been made. As an example, two refereed tests, one in 2006 in Western EU and another in 2008 in Asia, showed two products from two companies with average pricing variation of 0.86 per cent and 0.7 per cent, respectively. Each was the top performer in their test context – London and Seoul. Unfortunately, there is no way to ascertain whether these two “scores” are comparable, nor is it possible to prove that these two scores would be predictive in other urban environments. This means that a procurer would have to undertake another battery of tests and even then might be unsure of the applicability of those tests throughout their intended geography of application.

The newness, size, and criticality of this market leads to complex specification, tendering, bidding, analysis, procurement, and validation. Ultimately, the creation of effective service level agreements (SLAs) is at risk.

The opportunityTo reduce this risk, GMAR is developing a critical set of performance requirements as a guide to both buyers and vendors. These are intended for use throughout the process from specification through the lifetime of an SLA so that performance-related features and charac-terizations can be mutually understood, described and validated by all parties including any independent party that may be engaged to compare, certify, accredit or negotiate during and after the acquisition process.

This set of principles will encompass, at least:1. The development of definitions, language and

glossaries (borrowed from existing work where possi-ble) that sets common communication among vendors and buyers of GNSS-related systems that include meter-ing for road use.

2. To set qualitative and testable performance requirements, against which products and services may be compared. We believe that these performance requirements are particularly critical for defending evi-dentiary weight, and potentially legal admissibility. Further, GMAR will describe qualitative and testable standards of performance for the technology to protect privacy.

3. The definition of test frameworks so that such systems can be validated with respect of the specified performance requirements. The definition of the way a requirement is validated is as important as the defini-tion of the requirement itself.

These principles address several elements funda-mental to the success of a GNSS road-use metering sys-


Cover Story

tem. These technology-mediated elements must be in place in order to provide a reliable, liability-critical, payment-metering service that is acceptable to govern-ments, road providers and motorists who will rely on them.

Other program elements such as fairness and cost effectiveness, while critical to acceptability and system success, are beyond GMAR’s scope. Furthermore many other important system and program issues, such as interoperability, data and system interfaces, and the like, are already described in existing standards such as CEN/ISO 17575, CESARE IV, and RCI. These will not be discussed, except by reference in a GMAR guideline.

The outlineThe first three definitions we are concerned with are performance requirements analogous to the Position, Navigation and Time (PNT) system performance param-eters: Accuracy, Integrity, and Availability. The fourth PNT parameter, continuity, is essentially subsumed under availability for GMAR’s purposes and is not required in this formulation. For the purposes of this guideline, these three reliability requirements will be framed in terms of charging rather than the source framework of a PNT system.

This is a critical distinction for two reasons: first, a mobility payment metering service must either aug-

ment or otherwise manage the error budget for naviga-tion-grade GNSS to address site-specific errors in preparation for road-use charge calculations, and, sec-ond, because the requirements for system reliability are independent from the technology used to ensure that reliability. Because there may be any number of ways to augment GNSS to develop a liability-critical road-use meter, the description of these performance require-ments needs formal mathematical definitions and associated test frameworks rather than design advisories.

These tests must be able to compare systems that rely on different underlying technology methods, i.e., regardless of whether they depend on techniques such as map-matching or dead-reckoning and so on. Such tests must be described so as to be executed by an inde-pendent third party, and whose analysis both buyer and vendor can agree on.

• Charging Accuracy. In a PNT system, position error (i.e. the difference between estimated position and actual position) varies dynamically with the time and place depending on many factors. Thus Accuracy is usually statistically characterized and a commonly accepted parameter is the 95th percentile of the posi-tion error distribution; this parameter is usually also referred to as the 95 per cent error where error means the difference between estimated positions and actual


positions. In an RUC system, we propose to use an analo-gous definition but in this case applied to the relative charging error magnitude. Thus Charging Accuracy is defined as the 95th percentile of the charging error dis-tribution (i.e. the charging error magnitude that 95 per cent of the RUC charges fall within), where relative charging error means the difference between the RUC system-computed charge and the actual charge due divided by that actual charge due.

• Charging Integrity. Integrity metrics extend system accuracy characterization. While Accuracy and Integrity are complementary, they are critically differ-ent parameters. While Accuracy provides a statistical characterization of the error distribution, when this dis-tribution is not Gaussian, Accuracy does not provide any guarantee that the error in a particular measure-ment is below a certain limit. Thus Integrity measures the trust which may be placed on the correctness of information supplied by the total system. In the case of a RUC system we propose to use a definition analogous to another used by the PNT community: Charging Integ-rity is defined as the probability (close to 1) with which the system can ensure that for a given charge the rela-tive error is below a specified positive limit (to guard against overcharging).

In the case of a time-distance-place charging system with different charging fees per zone, integrity involves two different and essential requirements: on one hand the capacity to identify that relative charging error is not above a certain value (e.g. 0.1 per cent of the true value) with a very high probability (value to be set by the authority). On the other hand, the system must ensure

that the probability of the false identification of a zone (i.e., the user is falsely identified as having been within the zone when he was not) is even lower.

• Charging Availability. In a PNT formulation, availability is the probability that the system is provid-ing position data within required accuracy and integrity requirements at a given time and place. For a road-use meter we propose to define Charging Availability as the portion of time in which the RUC system is delivering charges within required accuracy and integrity require-ments. As an example, one of the critical system ele-ments to be addressed under the rubric of Charging Availability is the irksome matter of “time to first fix” (TTFF). These three concepts will be further refined and mathematically formulated in order to be able to use them for validation purposes.

The reason road authorities, system/service provid-ers and road users need to specify charging accuracy, integrity and availability is because that is the only way to protect their interests, limit liability and provide non-refutability for the scheme charges. In other words, while charging accuracy and availability are essential to ensure to both the authority and service provider that most vehicles are detected and correctly charged on average, charging integrity ensures the user and the authority that it is almost impossible for there to be large overcharges on any particular bill.

The validation of the performance requirements that is essential for the acceptance and later certification of the system is a complex process since the actual performance of the system depends on a set of variables that change with time and that cannot be

Cover Story

JCS

“GMAR is developing a critical set of performance

requirements as a guide to buyers and

vendors”

controlled. This is of special concern for GNSS-based systems.

The design of trials is a critical procedure for system validation. Because performance is affected by the physical context of the vehicle (whether it is in urban/road scenarios, whether or not it entered a zone where special tariffs apply, etc) trials should cover a broad variety of scenarios. For example, a major concern is related to overcharging associated with incorrect iden-tification of a zone (e.g. to erroneously apply a higher tariff to a vehicle that is not using a particular infrastruc-ture), trials should specifically assess the performance of vehicles while proximate, but outside those zones.

However, for testing of some critical performance var-iables – specifically those failing very infrequently, trials may be insufficient as the amount of data required to validate them would be large and costly. Thus, some trials may have to be complemented with other valida-tion means that could include a design analysis. In this way, validation could involve the combination of trials, analysis, and other testing means simultaneously.

Other critical components, to be defined and testable, for such systems to be acceptable to most governments and motorists include:

• Fraud Resistance which ensures that physical or electronic tampering with on-board equipment is either not possible or is remotely detectable. This covers: jam-ming, shielding, removal, spoofing, data alteration, and other potential measures and countermeasures.

• Privacy which will be defined as a spectrum, including absolute anonymity, virtual anonymity, enforced privacy, voluntary privacy, and transparency. Characteristics for each level of privacy will be pro-vided, but the choice of privacy level to be enjoyed is a matter of policy and preference, which we will not comment on.

Next stepsUpon completing a more detailed initial draft of the core principles for this guideline, by the end of 2008, we will invite six or eight credible experts – from industry, gov-ernment and universities – to review this draft. This step will not only invite a critique of what has by then been drafted, but also any missing, technically addressable elements that are not managed in any other existing standard or draft standard. Hence, the outline described here may not be complete.

With this second draft, we will open membership in GMAR to any entities with an interest in GNSS-based road-use metering by the end of the first quarter of 2009. We expect that the second draft will be further critiqued and modified by this membership. This will help guide our industry to greater maturity. E

Bern Grush is Chief Scientist at Skymeter ([email protected]).

Joaquín Cosmen Schortmann is CEO Advisor at GMV ([email protected])


Cover Story

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Cashless Transactions


Money is expensiveWho needs cash? KEN PHILMUS on cashless transactions versus the ever-rising cost of money

Ralph Waldo Emerson said, “Money often costs too much.” Though I’m reasonably certain he was not referring to the cost of hiring someone to block a roadway with a pike in order to collect a toll, he was spot-on in describing why cashless tolling should eventually be the norm on virtually every tolled, highway, bridge, tunnel, and managed lane.

The unnecessary cost of using hard currency in toll plazas is only one reason cash-based systems should be abandoned in favor of cashless, barrier-free toll- revenue collection.

Money is good. I am rather fond of it, an affection I share with every transportation agency in the world that is charged with the expensive responsibility to build, rehabilitate, or maintain transportation infrastructure. When it comes to collecting money on a mass scale in the form of tolls, though, there have been some recent advances that should be and are being given their due.

Since its inception not much more than a decade ago, electronic tolling has come a long way, benefiting agen-cies and their customers alike. And now barrier-free, cashless tolling is rapidly attaining viability; it is provid-ing transportation agencies with tremendous advan-tages, including greater net revenue potential, enhanced safety, improved congestion management, and future flexibility. While there are some legitimate concerns about the effectiveness, efficiency, and revenue impacts of cashless tolling, those concerns really should be put to rest.

Plazas take their tollFor many years cash collecting toll plazas were a given, an essential design element for every toll facility. But toll plazas create issues and problems that are inherent whenever you place an impediment in a roadway that has vehicles traveling at high speeds. First, there are safety and congestion concerns.

Designed to be as safe as humanly possible, toll pla-zas must still handle fast-moving cars as they slow and switch lanes. This process is neither simple nor safe. In addition, because all traffic must stop at the toll plaza,

congestion often ensues. As electronic tolling was intro-duced into toll plazas this became even more compli-cated. While congestion was generally reduced because some vehicles could now flow through toll plazas at higher speeds, this exacerbated the safety issue of mixed-speed vehicles needing to find their way with each other.

Barrier-free, cashless electronic tolling virtually elim-inates both of these issues. And with traffic no longer required to stop and then go at toll plazas (after either cash or electronic toll collection), barrier-free tolling will also improve local air quality in the immediate vicin-ity of the former toll plaza - and perhaps even regionally. But there’s more. Toll plazas cost money. They cost money to build. They cost money to operate. And they cost money to maintain and renovate. These are not insignifi-cant costs. Look at the costs from an operational stand-point alone.

Capital gainsIn addition to the up-front capital costs of plaza design and construction, tollbooths and plazas must be staffed and maintained. And those plazas do not operate with toll collectors alone. Toll plazas also require personnel to handle security, maintenance, and currency removal. There are also significant operational costs that extend well beyond the life of the toll plaza itself (particularly when pensions and health care costs of toll collection staff are factored into the equation). But please don’t misunderstand me. Barrier-free tolling is no panacea either, and it does not happen for free.

Barrier-free tolling does entail its own capital expenses. From the installation of considerable elec-tronic equipment and communications networks to the demolition of the old toll plaza, barrier-free tolling is not free or even necessarily cheap, at least not initially.

However, given the greatly reduced operating costs it affords, the flexibility it engenders, and the funds it saves on cash-based plaza rehabilitations or replace-ments, barrier-free tolling can more than pay for itself in a very short time.



“Toll plazas cost far from

insignificant sums to build, maintain,

renovate and operate”

The toll of a new machineBarrier-free tolling is not a good idea; it’s a great one. But every technology implementation has its complications. However, the issues posed by cashless tolling should not negate its implementation; they can usually be over-come. Here’s how.

Traffic engineering geometry has generally treated toll plazas as sacrosanct. In the design of many roads and facilities, traffic has been made to stop before enter-ing a bridge, tunnel, or road segment, limiting the flow of traffic to and through that asset. With the toll plaza removed, a particular asset’s geometry may not be able to handle traffic flow-ing at higher speeds. But toll plazas are also not the only way to decelerate traf-fic; there are other, safer ways.

Obviously, each facility needs to be carefully reviewed to ensure that unsafe conditions will not be created by remov-ing the toll plazas. Geometry will not even be an issue for many roadways. Security, however, might be.

It is whispered that mechanical engineers make weap-ons and civil engineers make targets. Unfortunately, in this post–September 11 world, that old joke could prove to be all too true. Bridges, tunnels, and other infrastruc-ture are primary terrorist targets. And toll plazas have served as de facto security checkpoints since the attacks of September 11, 2001. Though we must maintain effec-tive security at all times, keeping toll plazas solely for security reasons is shortsighted. Through analysis,

design, and improved operational methods, even more effective, cost-efficient strategic security solutions can and should be developed and implemented.

Converting to a cashless system can certainly raise human resource con-cerns. Cashless systems do not need the same staffing levels as cash-based toll collection requires. But for existing

facilities there are equitable ways to implement cash-less systems without unduly affecting staff. First, a sig-nificant number of staff can be reduced through attrition. Next, through retraining and reassignment, a significant number of staff can be used in “back of the house” oper-ations for enhanced toll evasion control, security, or cus-tomer service.

Labor union contracts, where they exist, can make this difficult - but they can be negotiated. Of course, each



“Traffi c engineering

geometry has generally treated

toll plazas as sacrosanct”



agency must fully address union concerns and adhere to whatever collective bargaining agreements are extant. However, implementing a cashless system should be used as an opportunity to work with unions and employees to improve the system for everyone. Treating staff as stakeholders and helping them invest themselves in the new technology can provide untold dividends for all parties, including greater job security for the staff.

Of course, such labor issues would not encumber new toll roadways that are starting from scratch, since they don’t initially have any cash collection employees on staff to contend with.

The best til lastI have saved what are perhaps the two most significant issues for last: the increased potential for losing toll rev-enue, and the potential threat to privacy.

In the traditional cash-collection/barrier system, “rev-enue leakage,” as toll evasion is called, was virtually nonexistent. Unless a driver was willing to crash through a barrier, avoiding a toll was virtually impossible.

Today things are different; many barriers have been removed. So the implementation of either a hybrid cash and electronic system or the ultimate fully cashless, bar-rier-free system gives many jurisdictions great concern about the potential for losing revenue through toll avoid-ance. Those fears are maximized when there is no cash option at all for the customer to utilize. Fortunately, tech-nology that can belay those fears is advancing rapidly.

Through developments in optical reading technology, smart license plates, cashless tag systems, and GPS and vehicle infrastructure integration, toll avoidance will largely become a thing of the past - especially when combined with effective legislation that is designed to discourage toll avoidance. Being able to read license plates and track users directly to their bank accounts or credit cards can ensure that users pay all tolls and congestion-pricing charges instantly. In some jurisdic-tions where these technologies are used today, car own-ers cannot even register a vehicle if they have a significant outstanding toll debt. These systems work, and they are improving every day. Although no system is foolproof, revenue leakage will become less of an issue as more and more systems convert to a cashless, barrier-free collection approach, supported by concur-rent improved technology and legislation.

Private thoughtsThen there is the issue of privacy. I like my privacy. And I believe that everyone has a right to her or his privacy. But when it comes to tolling, congestion pricing, and rev-enue collection via a license plate, RFID tag, or GPS sys-tem, privacy should be viewed as a legislative issue, not an infrastructure, technology, or transportation agency issue. Yes, with these technologies there is a greater ability to track vehicle movements. And yes, that is something that potentially could be used against some-one in a court of law; however, the same could be said about the transaction records for a credit card purchase or a cell phone call or a swiped identification badge.

The reality in our world today is this: unless you are com-pletely “off the grid,” you’re completely on the grid. So the issue is not whether technology can track a person, but who can access that information.

When I was in charge of the E-ZPass cashless tag sys-tem at the Port Authority of New York and New Jersey, information about who used that infrastructure facility (and when) was automatically tracked. But the only time we ever released any information about how a tag was used was through a court subpoena. The privacy issue is all about legislation. It is not about technology. And transportation agencies looking to implement these systems should go to great lengths to partner with local legislatures to ensure privacy protections are in place and in practice.

Why less cash is more moneyIn addition to the key advantages mentioned previously, there are a few additional benefits provided by cash-less, barrier-free tolling. Things change. And when a transportation agency wants to change its tolling rates, doing it in a cashless, barrier-free system is an order of magnitude easier than with a cash-based system. With a cashless system, it is simply a matter of adjusting soft-ware that is already designed to accommodate that pur-pose. Also, cashless systems provide great flexibility if an agency wishes to implement variable pricing, con-gestion pricing, or any other present or future strategy involving price-sensitive changes.

Finally, cashless systems also provide what may be the best marketing information a transportation agency could obtain. In a cashless system, the agency would have the means to identify, and be in direct contact with, all of its customers and through data generated by its electronic toll collection systems, an agency can better understand and meet the overall needs of its customers.

The road less hassledMoney is good. And tolls are just monies properly col-lected for a given service. But tolls mean more than that. For centuries, they have helped build massive infra-structure projects around the world. Travelers paid a toll to use the Susa-Babylonian Highway more than 2,700 years ago, and the one constant behind tolling has not changed - the ever-present desire to improve the proc-ess, to make roads and bridges flow better (while still collecting user fees for that service). Cashless, barrier-free tolling is another important step in that continuum. While by no means a panacea, it is a better way to con-duct the business of tolling. It is a great idea whose time has come. Though much has changed since a guard with a pike blocked the road until a toll was paid, the desire to improve the process is stronger than ever. And cash-less, barrier-free tolling is the latest method for carry-ing out that desire. E

Ken Philmus was National Director of Toll Services at AECOM and has recently joined ACS where he will be Managing Director of Transportation Services and Systems.

[email protected]


It’s 6:00am and I’m in a cab heading towards Bir-mingham Airport. No traffic jam, no tailbacks, no-one angrily sounding their horn. The cab is running fast and I’ll probably be early. Of course I will, it’s 6.00am - but why isn’t it always easy as that?

Recently I attended Thinking Highways’ European Congestion Management Think Tank in Birmingham, UK, where one of the speakers talked about Traffic Demand Management (TDM), presenting it as “the solu-tion”, providing the ability to handle a congestion prob-lem before it arises and to influence the drivers’ behavior. In theory it looks perfect and easy to intro-duce, but it is not always like that. The problem is that many municipalities haven’t the strength (both from an economical and a political point of view) to introduce all the necessary measures foreseen by TDM. In contrast there are transport ‘paradises’ in Europe, thanks to the introduction of real policies for sustainable mobility.

All these paradises have adopted a scheme to control and manage vehicular access to city centres by identify-ing vehicles accessing the area and fining those which attempt at entering without being in possession of a valid permit. They are generally referred to as conges-tion charging and management schemes.

Some of them involve a pricing mechanism, i.e. pro-viding drivers with the possibility to purchase the right of access, others simply the verification of the access rights (e.g. for residents or special categories). That’s where the name ‘congestion charging’ comes from after all...

Why congestion charging?Congestion charging is a concept derived from market economics, regarding the use of pricing mechanisms to charge the users of public assets (in this case the use of the streets) in exchange of the negative externalities generated by the demand in excess of available supply (traffic congestion). The main issue is, that throughout the world, countries are fighting a losing battle in build-ing enough roads to meet the growing demand of cars (from 20 per cent of developed countries up to 35 per cent for emerging countries in 10 years).

When demand exceeds supply, that shortage should be corrected by charging the equilibrium price rather than shifting it down by increasing the supply. Usually this means increasing prices during certain periods of time or at the places where congestion occurs.

According to the economic theory behind congestion pricing, the objective of this policy is that road users should pay for the additional congestion they create, thus encouraging the redistribution of the demand in space or in time, or shifting it to the consumption of alternative transport means, for example transferring capacity from private to public transport.

The Autostrade experience Autostrade per l’Italia is known as a toll road conces-sionaire and operator, with a long tradition of system integrator and technology supplier, at both national and international level. During the last 20 years, it has con-tributed to the development of the ITS market by imple-

Against demons

Congestion Charging

Autostrade’s LEONARDO ANCESCHI on how to sell the idea of congestion charging to the public... the Italian public in particular


menting successful projects which are referred to as benchmarks by the entire market.

It was the first concessionaire in Europe to introduce 5.8GHz electronic tolling, when launching the TELEPASS system in 1989, still the largest electronic toll system in Europe with the more than 6m users which, equipped with a small on-board unit, perform each day over 4m toll transactions along the near-6,000 km of the Italian motorway network. By means of the subsidiary Europ-pass LKW-Mautsystem, it also introduced in Austria the first nationwide free-flow electronic tolling system in 2004, a benchmark for the entire market, by setting up in time and budget a very complex system and operating it smoothly since operation start.

The word “interoperability”, at a national level and between urban and interurban schemes, is well known to Autostrade per l’Italia since the mid-1990s, when the national interoperable toll motorway scheme (among 23 concessionaires) was established and when several projects were launched in order to increase the diffu-sion of the ETC technology and a service integration between urban and interurban schemes.

Besides the national interoperable tolling scheme based upon TELEPASS, a pilot project for an integrated payment service was launched in Florence in 1995, under the name VIAPASS, with the objective of promot-ing the integration among different transport services (motorway, buses and parking) in the metropolitan area, based upon a pre-pay Smart Card.

In the following years, congestion management

schemes were introduced by several cities in Italy, such as Florence, Siena, Pisa, all historical cities character-ized by aesthetic constraints. All these schemes make use of TELEPASS ETC and ANPR technologies to man-age access control to a limited zone, handling a list of authorized users (residents, disabled people, hotels cli-ents and so on) and enforcing vehicles which enter with-out valid access rights.

Taking Florence as an example, over 60,000 vehicles access daily the congestion zone; the evidences col-lected upon violating vehicles result in the generation of 3,800 enforcement notices issued per day. From the analysis of the traffic volumes after the introduction of the scheme, there has been a reduction of the traffic of about 12 per cent, an increased number of available parking spaces, and greater efficiency of public trans-

Congestion Charging

freedom and their “perceived” acquired rights. Users tend to emphasize bad effects (charging) before under-standing the good effects (congestion reduction), which in any case only manifest themselves in the mid- to long-term.

Public acceptance, together with appropriate legisla-tive tools, need to be achieved before developing these schemes into full congestion pricing schemes. The way is long and it’s mainly based on consultation/communi-cation among all stakeholders, to explain the full picture and to reach public acceptance.

Case studies concerning other successful congestion charging schemes, with actual benefits in terms of reduced traffic volumes and a reduction in the environ-mental impact of those vehicles, including emissions, noise, parking, and public transport benefits, may sup-port the process.

Referendum? Survey?A referendum is a huge risk, but also a strong way of legitimising the scheme. First of all Municipalities must explain to citizens why “doing nothing is not an option”.

It is a matter of marketing a product, where the prod-uct is sustainable transport, an improvement in public transport efficiency and finally the congestion charging scheme as a means to handle and re-distribute (where possible) congestion. The objective is not to demonize cars, but to prefer more sustainable forms of mobility.

If you ask citizens whether they are in favor of Conges-tion Charging or not, the answer will be (obviously) negative, as indicated by the negative result of the Edin-burgh road tolls referendum using a very confusing question: “The leaflet enclosed with this ballot paper gives information on the Council’s transport proposals for Edinburgh. The Council’s ‘preferred’ strategy includes congestion charging and increased transport investment funded by it. Do you support the Council’s ‘preferred’ strategy?”.

I also found a very interesting telephone survey con-ducted by The Manchester Evening News to gauge pub-lic support for a congestion charging scheme. The results were mixed and strongly depend on the survey question, so with the more articulated one (“Is conges-tion charging a price worth paying to get £3bn of Gov-ernment cash to improve public transport in the region – including the expansion of the Metrolink to Ashton under Lyne, Oldham and Rochdale, as well as South Manchester and Manchester Airport?”) the result was positive. I concluded that the way attempted by Man-chester seems good; a straightforward ‘yes’ or ‘no’ ques-tion was the easiest to understand, accompanied by accurate neutral information explaining the proposal.

Tomorrow a long peak-time queue is waiting outside for me… e

Leonardo Anceschi is Urban Traffic

Solutions International Account at Autostrade per l’Italia S.p.A. in Italy.

[email protected]

Congestion Charging

port, providing commuters with better transport alter-natives and in general satisfaction by residents.

The above-mentioned schemes included only limited charging mechanisms, as they are based upon the veri-fication of the access rights which certain vehicles – by their own nature – have to enter the city centre; only in some cases users are offered the possibility to purchase such access rights. Full charging mechanisms were not implemented at that stage: the introduction of such auto-matic congestion schemes is considered as the first step, with congestion pricing being considered as a second step option, to be confronted with the user acceptance.

Technology is not the problemThe technology is not an issue; there are several proven technologies which can support the introduction of such schemes. On the other hand it is of utmost importance to design the best technical and operational solution which fits with the local context, in order to avoid that such solution becomes an issue for the acceptance and sus-tainability of the scheme. In the selection of the techni-cal solution we should learn from the urban myth in which NASA spent millions of dollars developing an “astronaut pen” which would work in outer space while the Soviets solved the same problem by using pencils. Although the story is false, the moral is to keep it simple and use previously proven technology.

A congestion charge scheme is a complex system and according to my experience the biggest criticality (beyond politic and communication) is the enforcement system. During the last few years we have concentrated our efforts in developing a system with the objective of minimizing the lost transactions and we finally reached the outstanding result of only 0.0010 per cent lost trans-actions for automated transits. Is it really necessary? In this case, probably not.

The best solution is a mixture of proven technologies, because in most situations you cannot force citizens to adopt an OBU, so you can track the frequent users with an OBU (for which transactions are safer and cheaper) and an Automatic Number Plate Recognition for occa-sional users and for enforcement purposes.

In Italy we have mostly adopted a pragmatic solution, taking into account the topology of Italian streets, with the access/charging points being arranged into a sin-gle lane configuration. It is obvious that a multilane con-figuration is required (and feasible) where the carriage -way is larger. In most cases we have introduced the use of on-board units for frequent users, providing efficient management and potentials for interoperability with the toll motorway schemes; users equipped with an on-board unit valid for city access may use it also along the motorway, by registering for this other scheme. In some cases, especially with small size and low traffic schemes, we have also adopted ANPR only schemes, which have shown adequate results as well.

So why is it so difficult?It’s difficult from a political point of view to introduce a congestion pricing scheme, as it is perceived by the road users as an additional constraint, limiting their


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Interoperability has become a kind of a buzz-word in the ITS industry. Several actors appear on the scene promoting interoperability as a kind of a new invention and a brilliant idea that probably should qualify for a Nobel prize. It is a pity that there is no Nobel prize for interoperability though.

Now, how unique is the concept of interoperability in reality? What does interoperability really mean? How difficult is it to even-tually reach this dream, this vision of a world where everything is interopera-ble? Let’s spend a few minutes trying to figure out what we are really up against.

To begin at the beginningEver since human beings figured out that trade was a good idea, interoperability has been an issue. The first ones starting to exchange cows, found out that it was indeed possible to exchange for instance six sheep for one cow. More obvious challenges occurred when oxcarts had to be traded for one cow, two sheep and half a dozen chickens. Not that it is very difficult to maintain a system classifying the value of objects into cows, sheep, chicken and so on, but it is utterly impractical to carry the valuables from one part of the country to

another. Eventually a smart person figured out that the concept of money would solve this problem. Suddenly, one had achieved an interoperable concept where oxcarts could be traded for pottery, wood for fish and so on through a simple interoperable payment scheme known as money.

For a few moments, the world was again in balance, until another smart guy invented the ship and another one worked out what it could be used for. With the concept of international trade, suddenly a new challenge appeared as one would try to sell, for instance, Norwegian wood for payment in pounds Sterling.

Now, the challenge wasn’t related to the physical size of the wallet, as Brit-

ish currency is considerably more compact than a cow, but the guy from Norway would face a challenge when he tried to make the British currency work at home, as nobody really knew the value of British currency.

(The intelligent reader will now see that some oppor-tunists went to the trouble of inventing the banks, that would effectively rip off a piece of the value of every currency exchange transaction).

So the concept of exchange was invented and the world was again an orderly place.

“With the concept of international

trade a new challenge appeared”

Interoperability

Transaction ManInteroperability is a great idea that has had a troubled life so far. It may be a difficult word to type but is it really such a difficult thing to put into practice, asks STEINAR FURAN

Interoperability


Cattle-readySadly, peace doesn’t last for a great deal of time as along comes the electronic means of payment. Besides offer-ing payment services through the use of accounts con-taining GBP, €, NOK or another of the world’s hundreds of currencies, these devices suddenly also offered “cow and oxcart-style” payments as one of their services. Not literally, as you’d either need a tiny cow or an enormous electronic transponder, but still in the same fashion as the electronic services offered period subscriptions, specific discount arrangements, loyalty schemes and so on. Most people would probably say that a period sub-scription is still money as you will have to pay a mone-tary amount to receive the benefit.

This is correct, the challenge is not related to the fact that the money pays for the cow. The challenge arises when you try to retrieve a part of the cow to pay for another service.

Central issueSo now we have reached the core of the interoperability issue. Looking at a banknote, one will find that it carries some distinctive features, such as intricate drawings, UV-coloured imprints, watermarks, security films and an identification number.

These serve the purposes of creating trust that the

banknote is indeed genuine and the identification number allows the issuing bank to uniquely identify each individual note. This is done to secure that the mean of payment can be trusted. The purpose of having a trusted mean of payment means that one does not need trust between the market actors to interact. I don’t need to trust the gas station owner to buy gasoline from him and he does not need to trust me in order to sell me gasoline. As long as I receive my gasoline and he receives his payment, both parties are comfortable and happy.

This means, that from these examples, we can charac-terize an interoperable payment system with the follow-ing properties:

1: THE MEAN OF PAYMENT MUST BE TRUSTED. This is a legal issue, as it sets requirements for how to protect the mean of payment against fraud and to define what would be found to be sufficient protection against fraud. Having defined that, this also sets the rules for determining when a proof of usage exists, thereby pre-venting repudiation.

2: THE COMMERCIAL TERMS FOR USE MUST BE AGREED. All issuers of means of payment must agree on the terms of use of their mean of payment in other issuers’ systems. In line with the bank fees for handling exchange of currency, there must be rules for accepting claims and rewarding the original issuer for the use of the service in “foreign” systems.

3: THE MEAN OF PAYMENT MUST BE “READA-BLE” TO THE FOREIGN SYSTEM. This is a technical question and the answer to that question is simple: As long as the technology is specified, it can be used. Simi-lar to a banknote: As long as I can see it and touch it, I can use it.

And now for the good news...Sometimes companies announce that they are bringing new, fantastic interoperable products to the market. It would be unfair to say that these statements are false, but they are at best only telling one third of the story, namely the fact that it is indeed possible to use the device (which shouldn’t be amazing in itself, really). The rest of the story, the two-thirds that define the legal framework for the usage and the commercial terms for the use of the service, still isn’t mentioned. Although one out of three sometimes is considered fairly good, this is not so for interoperability.

Interoperability starts with a legal basis, continues with agreements on commercial terms and settles with technical details. So this is bad news for anyone trying to tell the world that new technical inventions will cater for interoperability, but it is good news for anyone that really wants to achieve interoperability.

After all, the technology is there the moment the other two are in place. As Meatloaf so succinctly put it, two out of three ain’t bad. e

[email protected]

South Africa

A glimpse of the future

Electronic fare collection in South Africa is moving to the regulation phase, says DR PAUL VORSTER

www.thinkinghighways.comVol 3 Issue 4 ETCetc20

Fare and squareThe South African Minister of Transport, Mr Jeff Radebe, issued Notice 1241 in Government Gazette 31491 dated 7 October 2008 in terms of section 5(6) (c) of the National Land Transport Transition Act, 2000 (ACT NO. 22 of 2000). In this he gave notice of his intention to issue the Regulations for the Requirements of the Electronic Fare Collection in the schedule.

The deadline for written comments on these Require-ments expired on 7 November 2008. After considering such comments as have been received, the final regula-tions will be issued and form the basis of South Africa EFC deployment.

The draft regulations say to achieve an integrated EFC system for public transport that is interoperable nation-ally, the following principles apply as a minimum:

• EFC must be made through any bank issued fare media where “fare media” is defined as payment instrument issued by a participating bank based on EMV specifications and conforming to the requirements of the EFC data structure. Bank issued fare media also means a fare collection system which comprises:

o A payment instrument distribution network and value loading infrastructure;

o An electronic payment transaction clearing and


Public transport infrastructure and supporting sys-tems have moved to the top of the transport agenda in South Africa. Hosting the FIFA Soccer World Cup in South Africa in 2010 has given this a further boost with several mega-projects in progress.

The Department of Transport has published draft electronic fare collection (EFC) regulations. The set of regulations is the result of work by the Department’s technical team who consulted widely with interested parties in South Africa and abroad to obtain input into the EFC policy and draft regulations. A specialist trans-port consultancy, Techso (Pty) Ltd was contracted to manage the project, lead by Dr Johann Andersen and ably assisted by Keith Smith (payments specialist, Keith Smith Consulting) and Neil Frost (SAHA).

Says Ibrahim Seedat, Director Public Transport Policy in the Department of Transport: “Developing public transport to a level where it provides a real and practical option for commuters is a national imperative. Elec-tronic fare collection (EFC) will play a critical role to achieve this.”

According to Seedat a key objective is to achieve an integrated EFC system for public transport that is inter-operable nationally. To achieve this the South African Department of Transport is developing a policy frame-work to guide EFC implementation countrywide and to assist provincial and metropolitan governments and their service providers towards interoperability.

To facilitate the widest possible comment as input, ITS South Africa hosted two workshops on the topic at the request of the Department of Transport. The workshops were attended by a record number of delegates from local and international parties representing consult-ants, equipment suppliers, systems integrators and so on.

South Africa

Clockwise from top page xx: Centurion, Pretoria, Rosebank, Rhodesfield, ORTIA and Marlboro

User paysAnother guiding principle is that occasional or infre-quent passengers of public transport services, which have implemented EFC may be able to obtain a prepaid single trip ticket from the public transport operator who is providing the service or any third party operating in conjunction with that operator. Provided that the pre-

paid single trip ticket is issued exclu-sively for the redemption of the single trip public transport service by that operator, this prepaid single trip ticket may consist of any appropriate fare media and does not necessarily have to be a bank issued fare media.

In the transportation data system for those public transport services that have implemented EFC, public trans-port data must be collected electroni-cally through the EFC system concurrently with the payment or

redemption transaction.The relevant sphere of Government takes ownership

of the data collected through the EFC system. Data must be collected for planning and operational purposes and must include data per transaction on location, fare and passenger.

The database must enable the extraction of suitable data by the local, provincial and national spheres of gov-ernment for planning, monitoring, subsidy management and related purposes.

The data must comply with the MOIS for information systems in government, where “MOIS” means Minimum Interoperability Standards for information systems in the public service, which are issued in terms of Regula-tion B.1 of Part III of Chapter 5 of the Public Service Reg-ulations, as published in Government Notice No. 1346 of 1 November 2002.

The EFC system must be flexible to accommodate fare structures based on local needs, but must be aligned with any national fare policy, which may be adopted form time to time.

The EFC system must comply with the relevant stand-ards endorsed by the STANSA SC71H Committee or, if there are no such standards, international non-proprietary open-standards to ensure interoperability and compatibility as contemplated in section 5(6)(c) of the Act.

Legacy electronic fare collections, which do comply with these requirement, must be either upgraded or phased out. “Legacy EFC system” means any existing, fully operational electronic fare collection system of which the banking industry does not form part of through any bank issued fare media. After date of publication, all new EFC systems in public transport services must comply with these requirements. Any legacy electronic fare collection system must be upgraded to comply with these requirements, or be phased out within five years from the date of publication of these requirements. e

Dr Paul J Vorster is CEO of ITS South Africa. He can be contacted via email at [email protected] or visit the

website at www.itssa.org

South Africa


settlement function;o A payment transaction initiation and accept-

ance infrastructure and acquiring function; ando Associated information systems utilized for the

management and analysis of fare schedules and data so collected and their conversion into information.

• EFC must be interoperable through all partici-pating banks;

• Clearing and settlement of payment transactions must take place through the National Payment System in accordance with the National Pay-ment System Act (act 78 of 1998).

• Banked passengers must be able to use bank issued fare media obtained as a result of their relation-ship with any participating bank;

• Unbanked passengers must be able to obtain prepaid stored value bank issued fare media from a partici-pating bank or a third party card issuer operating in conjunction with the participating bank;

• The payment system must adhere to the bank-ing and payment regulatory framework; and

• The EFC data structure must be loaded onto all bank issued fare media. “EFC data structure” means the EFC Data Structure, which utilises specific tags on the EMV chip of the bank issued fare media for electroni-cally recording and retrieving public transport-related data.

“Public transport data must be

collected electronically

concurrently with the payment or

redemption transaction”

Vol 3 No 4 ETCetc22

South Africa is keen to move on from its primitve fare collection systems

23ETCetcc Vol 3 No 4www.thinkinghighways.com

The debate around road pricing and congestion charging (or is it road charging and congestion pric-ing) in the UK grows ever more topical.

In recent weeks we have seen the press cover stories about impending government announcements, each with long lists of reasons why the imminent schemes are flawed and an equal number of organisations lining up to ensure these schemes never happen. However, the basic problem still exists which is that road space - in the short term at least - is finite and demand continues to grow especially in peak hours.

Inter-urban journey times we are told are becoming more reliable through improved and more active traffic management, although road users still experience significant delays and unreliability, particularly in the crowded South East of England.

Growing economies generally pro-duce increased levels of mobility of people and goods and resulting traffic congestion, and the economic slow-down at the moment may be a useful temporary diver-sion or blip on the graph of rising demand. The cost of congestion to our economy we are told runs into bil-lions.

A USP, PDQSo what’s the answer ? Well, a few years ago there was much talk of integrated demand management as the way forward. This was to be achieved by a mixture of

investment in public transport, active traffic manage-ment, additional road network capacity on key strategic routes and yes, road pricing. The first three have and are being taken forward but the last one is more difficult and clearly less popular. The road pricing/congestion charging element of demand management has, apart from in central London at least, not been implemented. In marketing terms, we haven’t yet seen a proposition that customers will buy.

However, we know the benefits exist. They have been proven by traffic modellers and transport planners. There is some debate over what level of pricing would

reduce peak demand enough to make a difference to journey time reliability, but the M6 toll road’s proposition is understood by most motorists intui-tively and those that use it at least are prepared to pay for the privilege of a less congested alternative.

A question of marketingI often hear colleagues and friends say:

“As a motorist I don’t agree with pricing or paying more tax for using the roads” and I have to say I have some sympathy with this view. Road pricing, it would seem, isn’t a marketable proposition. Or is it ?

Let’s consider that other great ‘free’ resource, the air. In general and by analogy, why is it as consumers we don’t expect not to pay for airtime for our mobile phones, and in many cases we don’t even bother to check the cost of

All to play for

MIKE HAYWARD reports from the Travel Demand Management Cup Final where Pricing are taking on Charging...

Comment

“The congestion charging element

of demand management has

not been implemented”

a call? The debate at the recent Thinking Highways’ Euro-pean Congestion Management Think Tank in Birming-ham, UK, got me thinking. Is there a truly market based model that could sort this whole pricing versus free for all question. The problem with most road pricing propo-sitions to date is that the pricing is determined by the owner or operator of the road network and not truly by customer demand. If a road is tolled there is only one vendor of the road space and therefore generally no choice. This immediately sets the user community against the proposition as they equate the price to a tax and all the issues that go with taxation. So we have road charging and not pricing.

A subtle propositionBroadly speaking there are two ways to conceive of charging for road use. i.e. there are two possible customer propo-sitions, which are the charging proposi-tion and the pricing proposition. In the first, the charging proposition, the cus-tomer pays a charge largely determined by the policy of the government or road operator. There is no choice for the cus-tomer either about which service pro-vider to use or which price to pay and, consequently, there is a relatively high operating and enforcement cost to ensure customers pay. Most current schemes seen in Europe broadly fit this model.

However, a second model can be conceived where demand for road space directly determines the price paid by the user. The road operator or government would not directly set the charge for road use, instead the price for road use would be determined by a mar-ket. Road use becomes a tradable commodity, through the selling of time slots, pricing is value driven rather than policy driven although some policy objectives can equally be met through regulation of the market. The payment of charges is also decoupled from the road operator reducing overheads and enforcement costs. Demand for road space determines price.

More questions than answersSo are we trying to answer the wrong question about road user charging and should we simply let the market decide? Perhaps, road space should be considered sim-ply as a commodity, in the same way that say copper or

Comment

platinum are. After all the value is already calculated indirectly by organisations and ‘priced-in’ as part of transportation costs within the overall price of products or services. The ‘price’ for most other commodities is determined by spot markets and not by individual organisations or governments. Continuing the analogy for a moment, you could see for example a coach company or a haulier might want to ‘buy forward’ his road space for the next year or so, whilst someone with less time critical require-ments may accept to travel in the cheapest time slots. Roads where demand for access is highest would auto-matically be traded at higher prices in the market than say rural Motorways. Congestion pricing, but with the price determined by actual customer demand.

Each type of road user might buy his road space through different vendors e.g. trade/wholesale versus retail. In this model there would be more than one vendor for the same road space. Service providers would buy road space in the market and sell it on their customers. i.e. instead of paying a toll, the road user receives a mobility bill at the end of the quarter from his chosen service provider. A bit like a mobile phone bill - although hopefully a bit

more understandable. Another side effect would be to make transportation costs more directly visible to cus-tomers and for example promote locally sourced goods.

So the answer, in theory at least, could be to let market pricing regulate demand. I am sure economists, taxa-tion experts and the like can think of hundreds of rea-sons why this wouldn’t work, or even how it could work, but from the customers’ viewpoint it sounds a more acceptable proposition than a fixed per mile charge or - as many would call it - tax. It is even possible within a market driven model to conceive bulk buying of slots by government e.g. for schemes to provide concessionary rates for the over 60s, key workers, emergency vehicles and so on. Result: Pricing 3, Charging 0. One problem exists though, which is that a new excuse for being late could emerge as follows: ‘I was three hours late because forward selling of M25 slots caused an accident...’ E

Mike Hayward is principal of Transport Logic Ltd. He can be contacted via email at

[email protected]


“So are we trying to answer the wrong

question about road user charging

and should we simply let the

market decide?”

Public Private Partnerships


Public-private partnership contracting for ITS: it’s time to heed the operations and maintenance omens, says DR ROBERT EDELSTEIN

Benjamin Disraeli said: “The secret of success is consistency of purpose.” That sentiment ably cap-tures the secret to handling public-private partner-ship projects involving intelligent transportation systems (ITS) especially when focusing on the criti-cal operations and maintenance function.

The question has changed from an ‘if’ to a ‘how’. Pub-lic-private partnerships (P3s) are no longer just abstrac-tions, nebulous arrangements that may “someday” happen in the United States. They are happening now. And their prevalence will only increase. From this point forward, the mission is to determine how best to imple-ment them; but implementations to date have produced mixed results.

In a 2005 report, Deploying and Operating Integrated Intelligent Transportation Systems, the Federal High-way Administration (FHWA) had this to say about P3s: “While such partnerships may help to reduce the costs and risks associated with ITS applications, they have not met the high expectations many originally had for them. In general, these partnerships fell well short of their intended goal of enabling public agencies to provide high-quality traveler information through partnering with the private sector under a viable and profitable business model.”

A key element of the shortfall has been operations and maintenance (O&M). But why? According to the FHWA report, “O&M costs are a major and often overlooked challenge to realizing and optimizing ITS benefits.”

The FHWA is right. And when it comes to ITS, and more specifically O&M for ITS projects delivered through the P3 model, the issue centers almost exclusively on consistency.

P3 ITS EsperantoMany hands can make for light work. But each of those hands must understand exactly what the other hands are doing and how they’re doing it. And they must all function together seamlessly, presenting a coherent face to the public at large. For that reason, it is essential that P3 contractors be on the same page as their public-sector counterparts. Let me explain.

With ITS projects, many roadways will become seg-mented. One section will be operated, controlled, and maintained by the public sector; the next segment might be handled by a private-sector contractor; and so on down a given road, segment by segment. Without con-sistency, that can lead to serious fragmentation, mis-communication, and uneven, mediocre service at a time when customer expectations are rising, right in con-junction with toll rates. To prevent that from happening, states must plan P3 procurements with great care, and with a discerning eye on consistency. But rather than continue in the abstract, here is a specific illustration.

FDOT and I-595: leading by exampleIn my home state of Florida, the Florida Department of Transportation (FDOT) is in the process of awarding a P3 procurement for the I-595 corridor. A 10.5-mile roadway project, the I-595 Corridor Improvements Project includes reconstruction of original lanes, the addition of auxiliary lanes, a new reversible express-lanes system in the I-595 median, and the resurfacing of the I-595 mainline.

The project was initially expected to cost approxi-mately US$1.5billion but the state has roughly half that amount available. Under traditional practices, it would take the state about 20 years to obtain the additional funding. However, through a P3 contract, the FDOT can get the work done in five years. The P3 procurement is unusual, though, in that the private-sector entity will not control or collect tolls. FDOT will retain that authority and function, providing the private-sector entity with an “availability payment” of approximately US$60-70m per year. The actual payment will be tied to the contrac-tor’s ability to meet agreed-upon performance meas-ures. So, what is the FDOT asking the P3 contractor to do?

Specifically, the FDOT seeks to procure a public-private partner to “design, build, finance, operate, and maintain an urban interstate highway, including frontage roads; to construct and resurface the I-595 mainline, including the addition of auxiliary lanes and Turnpike Inter-changes (and all associated improve-ments to adjacent cross-roads, frontage roads and ramps); and to construct a

new express lanes system in the I-595 median.” This example perfectly illustrates the value of consist-

ency: FDOT is stipulating in the procurement specifica-tions that the P3 contractor must use FDOT’s SunGuide software for its O&M. Developed by the state, SunGuide software is used for the state’s seven regions, as well as for the Florida Turnpike. However, the state is imposing one additional restriction on use of the software. Should any SunGuide upgrades be necessary, or any additional modules need development, the P3 contractor must pay for that as well. Given that the project includes the estab-lishment of reversible lanes, something that the state hasn’t developed for SunGuide yet,the P3 contractor will most certainly have to bear that cost. But the state is absolutely right in requiring SunGuide’s use, for two reasons.

First, the devices that control the road-based cameras, signs, and detector systems must all use the same soft-ware to efficiently monitor and operate the road. But it’s equally important that they use the same software so that when information is entered into the system there are no lags, mistakes, or miscommunications. A great many subtleties and nuances are associated with soft-

“It is essential that P3 contractors be

on the same page as their public-sector

counterparts”



Perfect partners

portation. Consider the price of gasoline five years ago as compared to today’s price. A P3 contract must take into account the potential for change.

Performance criteria for the private-sector partner should be indexed to reflect the region being served. If a DOT is meeting certain performance criteria and those criteria change on a year-to-year basis because of external factors (cost of living increase, price of oil, etc.), appropriate consideration must be extended to any pri-vate-sector partner. It should be written into the contract that performance measures will be adjusted to address these anomalies on an annual basis. From the price of gas to insurance to inflation, these elements need to be negotiated as part of any P3 deal and factored into the agreement. Of course, the same heed should be paid to consistency when establishing the parameters for adjustable performance measures.

Preventing a staff defectionFinally, there is a very serious issue concerning O&M staffing. State DOTs spend years hiring and training staff to operate and maintain their systems. P3 contractors should definitely not treat this state work force as a recruiting pool. From the state’s perspective, losing staff can be devastating after such a great investment has been made for recruitment and training. So poaching that staff will not win the contractor any friends in the DOT. The same is true for any private firms that have contracted with a DOT over time. But there is another way.

Rather than pilfer staff, P3 contractors should consider finding a way to use the existing consultants and con-tractors already operating a given system. By finding a way to incorporate existing expertise, P3 contractors can often achieve considerable savings by exploiting intellectual capital that is already extant. Of course, it must fit into the P3’s cost structure, but there is great benefit in doing this. It is much easier to establish con-sistency and trust if the P3 contractor brings to the table people with whom the DOT is already comfortable.

P3 or not to P3? That’s not even a questionIt has changed from an if to a how. The bottom line, given the funding shortfalls we face, is that we need P3 projects to help build and upgrade our infrastructure. But that does not mean that we should rush blindly into P3 con-tracting. Quite the contrary: this is a time for crafting smart, efficient agreements that benefit all parties. And when it comes to using P3 for ITS projects - and particu-larly their O&M components. Disraeli was right. E

Dr. Robert Edelstein, P.E., PTOE, is a vice president of AECOM Transportation; he also directs the firm’s ITS

operations. He has accumulated 35 years’ experience in ITS, traffic engineering, and transportation planning,

completing assignments in over a dozen states as well as abroad. A licensed professional engineer registered in

five states, he also holds a Ph.D. in transportation plan-ning and engineering, and is certified as a professional

traffic operations [email protected]



ware that is this complex. Parallel qualifications, train-ing, and uniformity of use are essential to ensure that every user is on the same page. Without consistent train-ing and qualification levels, disparities can surface. And disparities in an ITS system can bring the integrity of the entire system into question. Ultimately, that can be dan-gerous.

Another important reason for uniformity concerns performance measures. P3 partners must meet or exceed certain performance criteria in the execution of any P3 contract. In this particular procurement, the yearly P3 payment hinges on the contractor meeting established performance measures. Based on the level of quality established by the FDOT over many years, these measures are neither capricious nor arbitrary. To apply them accurately, though, every stakeholder must be on the same page, using the same software and hav-ing received the same training. To accurately gauge a P3 contractor’s performance, it is critically important (for both the public and private-sector partners) that apples are being compared to apples.

Dynamic message signs (DMSs) are another area that demands consistency. At present, most DMSs relay sim-ple information through straightforward lines of text. That needs to change. As highways evolve, DMSs are evolving as well. DMSs should soon be using graphics and symbols to provide information about variable pric-ing, toll rates, lane status, alternate routes, and other information useful to the traveler. Motorists will be mak-ing lightning-quick decisions about routes and other alternatives based on this next generation of dynamic signage. The potential for motorist confusion could be great if there is a lack of consistency. That is not a small issue.

Obviously there is a safety issue here. Any confusion on the road is potentially dangerous. So symbols and graphics must be straightforward, accurate, and easy to understand. Next, if motorists are paying a premium to use a stretch of road and that road is not clear for use, as a DMS may have indicated, those drivers will not be happy customers. Aside from the risk of not meeting performance measures, faulty or misleading informa-tion affects a DOT’s reputation as well as the functional value that a HOT lane or tolled facility brings to a sys-tem. The issue of consistency and conformity when cre-ating a DMS lexicon is serious, and must be addressed in any P3 venture.

From interchanges to operational quality to incident messaging to service patrols to open-road policies, consistency throughout a P3 contract can determine whether a contractor meets performance measures and ultimately receives the full payment available. It also protects a DOT’s service quality and reputation. It can also save lives. Consistency issues permeate practically every aspect of ITS O&M, and must be comprehensively addressed in the procurement contract. Consistency is that important.

P3 contracting: a non-static thingIn being consistent, one must also be realistic and flexi-ble. Things change, especially when dealing with trans-

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Opinion Piece


Challenging conventional wisdom

I attended this year’s ITS World Congress without many expectations, concentrating mostly on repre-senting Siemens Electronic Tolling, part of the new Mobility Division.

The attendance in the exhibition hall exceeded expec-tations, and I had some interesting discussions with many familiar faces – as well as with a number of new faces. On Thursday afternoon, once we had everything packed up, I took the bus to Boonton, New Jersey, the town where I grew up. It’s always an impressive sight, especially at night, to get out of the Lincoln Tunnel and look out across the Hudson River at the Man-hattan skyline. At that moment I began to reflect on the many discussions I had during the Congress.

If you observe the market very gen-erally, you might get the impression that the electronic tolling industry hasn’t made any major breakthroughs over the past few years. In contrast to the telecommunications industry, where I originally came from, new tech-nological approaches in the area of tolling are rarely embraced with any noticeable amount of enthusiasm.

It appears that many tolling industry leaders prefer to maintain the status quo. Key decision makers (usually within state-owned organizations) also have the obvious tendency to avoid risks and go with proven solutions rather than trying something new. A British consultant

proposed a curious thesis over a glass of beer on our stand: in the telecommunications industry, everyone struggles to be the first to deploy the newest technolo-gies, while in the transportation sector, everyone wants to install only what has been done before.

In New York I encountered a number of common views on tolling technologies that I would like to challenge:

• Tag and beacon technology is the industry standard and is here to stay. At best, at least in the United

States, there is a choice of whether to increase the functionality of such micro-wave-based systems for more or less the same price (5.9 GHz), or to maintain the same (or slightly reduced) function-ality with significantly reduced costs (i.e. by introducing sticker tags).

• Automatic Number Plate Rec-ognition (ANPR) cameras don’t get the best results and are only really useful to enforce tag and beacon systems.

• Satellite-based systems are far too complex and too costly to be imple-mented on a large scale and it will take

a long time until the technology matures enough for it to be deployed in nationwide tolling schemes.

Tag and beaconIn the United States, tag and beacon systems are enjoy-ing increasing popularity as interstate standards, such as E-Z Pass, make electronic payment far more efficient

NORBERT SCHINDLER’s time in New York for the ITS World Congress was far from wasted. Not only did he get to revisit the town in which he grew up but a number of discussions he had while at the Javits Convention Center saw him head straight for his laptop upon his return. This just in...

“US tag and beacon systems are increasing in popularity as

interstate standards make

electronic payment far more effi cient”

Opinion Piece


than manual payment at toll plazas. Yet toll plazas still exist (and continue to be built) and, typically, there are still physical barriers at the E-Z Pass lanes which open automatically when you slow down to 5 mph and get your tag read successfully. There are a few cases of multi-lane free flow implementations in the US, but they are far and few between and not necessarily viewed as being very successful projects. In Europe, a few micro-wave-based systems supporting multi-lane free flow tolling have appeared in the last few years. As effective as some of these systems may be, there is nothing really revolutionary about the use of microwave technology any more. It will also take many years before you can drive throughout Europe with a single tag.

The technology is proven and is basi-cally user-friendly and the tags are rel-atively cheap and easy to install. You just have to make sure the tag is changed after a few years when the battery power runs out. For occasional users, the whole business of registration and purchasing a tag is often not worth the trouble. The over-head involved in tag distribution, tag replacement, lost tags, or the phenomenon of users leaving the tags in their glove compartment (which can lead to an occa-sional read when passing a beacon) are issues which are not often spoken about. In other words, “bad reads” are probably not as infrequent as many would like to believe. That’s why you have cameras placed next to many (or in some cases all) beacon installations at the roadside, for enforcement purposes.

Carrot and stickerIn the US, the industry struggles with the question about whether sticker-tags will eventually take over. They are much cheaper to produce and distribute, very easy to stick on windshields, and there are no batteries to worry about. Existing roadside infrastructure can easily be used for sticker tags. The other main alternative being discussed is the deployment of tags using the 5.9 GHz bandwidth. For the end-user, there isn’t much difference

to the existing 915 MHz tags, but there are a number of added features that could, for example, improve road safety.

There have been significant investments made in the 5.9 GHz technology for the Vehicle Infrastructure Inte-gration (VII) program. Yet nobody can realistically fore-cast when, if ever, VII will become readily available. There is a great deal of roadside infrastructure neces-sary to get this kind of system to work effectively, and this bears a huge price-tag. It’s not clear who should pay for all of this, and 5.9 GHz would also have to operate in parallel to the existing 915 MHz technology for an extended transition period.

During the technical sessions in New York, there was even some speculation that satellite-based solutions could be deployed during a transition phase until there was enough 5.9 GHz equip-ment built up on the ground! Of course, once satellite technology is used to achieve VII functionality, it would be hard to argue the need to further invest

in roadside equipment.

ANPR camerasThere is a significant revolution taking place at this very moment. ANPR cameras are being used to identify vehi-cles and levy a tolling fee on all vehicles liable to pay. This is typically set up in a multi-lane free flow environ-ment. Existing toll plazas may eventually be torn down and replaced by high-quality cameras which catch every passing vehicle, making traffic delays for tolling a thing of the past.

The microwave advocates will claim that you will never get as many positive reads on license plates as you can with a tag and beacon system. Although this could be true, it is easy to forget that the installation of tags and beacons is a significant overhead that may, in many cases, exceed the benefits of deploying all this extra microwave hardware. What’s more convenient than ordering a tag and installing it in your vehicle? The answer is simple: no tag at all! And since most roadside

Opinion Piece


“Existing toll plazas may eventually be

torn down and replaced with high-quality cameras ”

All

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equipment includes cameras anyway (to enforce correct tag usage), why not rely on them completely?

There are video-based tolling solutions being estab-lished in Texas, for example, and other states will prob-ably follow suit. Of course, you will never get 100 per cent “positive reads” on an ANPR camera, but you don’t get them with tags either. However, positive reads are typically well above 90 per cent by ANPR cameras being deployed for tolling and congestion charging schemes. Furthermore, with a camera, you always get a picture of potential violators that you can use for manual checking. With a bad tag read, there’s nothing you can do (unless you have a camera next to the beacon taking pictures, of course).

When the City of Stockholm decided to try out con-gestion charging for six months in 2006, it was decided to use both microwave and camera equipment at the roadside. After the trial, it was shown that the camera reads were so good that the microwave equipment, which was already paid for, yielded only marginally better identification of vehicles than cameras alone. It was decided to forego the use of tags altogether, since the added operational costs did not warrant their use. Once the system started permanent operation last year, tags have only been used to identify a limited number of vehicles which are exempt from the charge. Hundreds of thousands of unused tags are probably gathering dust somewhere in a warehouse in Stockholm.

Satellite-based tolling solutionsIn the US, satellite-based solutions have been exten-sively tested in the states of Washington and Oregon.

In Baltimore, hundreds of volunteers have just been recruited to participate in a federally funded study on the use of satellite technology, and other urban areas around the country will follow.

Trials of satellite-based tolling systems are also very popular in Europe. Extensive trials have been con-ducted for several years in the United Kingdom (with no end in sight), and also the Netherlands started doing the same in mid-2007. Holland is preparing to build the most extensive road user pricing system in the world, involving over 8m vehicles on the entire Dutch road net-work of more than 130,000 kilometers. Singapore also completed a series of trials last year, a very challenging environment considering the numerous skyscrapers and the inevitable “urban canyons” which usually ham-per good GPS reception. In each of these trials, up to a dozen technology suppliers were tested.

The outcome of these various trials is always the same: satellite-based technology works, it is suitable for auto-mated electronic tolling, and the platform allows a level of flexibility that cannot be matched by any other tech-nology to date. Nevertheless, more trials are being pre-pared at this very moment. In New York, I was asked whether Siemens would be interested in participating in trials in the Czech Republic and in Sweden. The Swedes sweetened their proposal with the prospect of being able to present the test results at the next ITS World Congress in Stockholm next year.

Now, don’t get me wrong, trials can be a lot of fun, and it’s nice to have an environment in which you can test your latest technological developments. Siemens has been working on satellite-based electronic tolling for

Opinion Piece

many years, and we don’t hesitate to point out the advan-tages of this technology. We may be very partial on this subject, I will readily admit that. But by now it is abso-lutely undeniable that satellite-based tolling is more than mature.

For four years now, there has been a tolling system in operation right in the middle of Europe, using satellite technology. Over 700,000 vehicles have been equipped with GPS-based “On Board Units”, the tolled motorway network exceeds 12,000 kilometers, and a very nice sum of money is generated by this scheme, year after year. In fact, I would say that €3billion of annually gener-ated revenue is a very handsome amount of cash.

Has the German truck tolling scheme ever failed in its four years of operation? No, it actually hasn’t. Were there any problems getting the system up and running? Yes, there were. But considering the sheer magnitude and complexity of the system, and the fact that nothing like this was ever done before, I would think that the German and French companies involved (as well as many who were closely watching on the sidelines) learned some valuable lessons in proc-ess. In fact, I would dare to say that the initial problems in getting the system operational had little to do with the technology itself and it is highly unlikely that the kinds of problems faced in Ger-many would be repeated elsewhere.

Just this year, there was this great new airport terminal launched at Europe’s busiest airport, with plenty of fanfare. This prestigious project was planned for nearly two decades. Such a project, costing US$8.5billion, is of course significantly larger than the tolling scheme in Germany.

I doubt that anyone would claim that the launch of Heathrow’s Terminal 5 went smoothly but I have yet to hear anyone in the business of building airports say that the use of new technology was to blame for the prob-lems. My guess is that the construction of modern air-port terminals around the world will not come to a halt due to this unfortunate experience.

The future is nowThe good news is that satellite-based tolling systems are finally starting to catch on. Not just trials, but real systems which generate real revenue. Next year, Slova-kia will not only introduce the Euro as its currency, but will also start implementing a satellite-based scheme on its motorways and first-class roads to toll all trucks over 3.5 tons. The GPS-based On Board Units (OBUs) will be mandatory and much easier to install than their pred-ecessors in Germany. These units will cost about half as much as the German ones and you can be sure that the cost of satellite-based units will reduce significantly over the next few years.

The Czech Republic introduced its microwave-based tolling scheme in 2007. Within months of launching the system, the Transportation Minister appointed an expert group to investigate how to best deploy satellite tech-nology on its road network. It was found that the cost of building up microwave infrastructure for tolling the

Opinion Piece


first-class road network would hardly pay for itself, so the originally planned toll road network was cut in half.

Slovenia, the smallest country in the European Union, one with many years of tag and beacon experience on its motorways, is about to issue a tender for a nationwide truck tolling scheme. Rumour has it that they will join the ranks of Germany and Slovakia in building a satellite-based solution. In a month or two, France will announce a tender to introduce tolling on all trucks over 3.5 tons on its entire first-class road network. Even though France has Europe’s most extensive tag and beacon system established on its motorways, there is no doubt that this new tolling scheme will be based on satellite technol-ogy. The Dutch are pressing forward with their ambi-tious nationwide scheme and their neighbors in Belgium are currently moving towards a very similar tolling scheme. You can guess which tolling technology is being considered in the home of the European Capital...

In the next few years, we will witness the complemen-tary effect of a large installation of satellite-based OBUs

being produced for much less money than now. Most of us were able to wit-ness how quickly mobile phones evolved since they were first commer-cially introduced in the 1980s. Almost everyone has a mobile phone now, and I doubt there are many people inhib-ited to use one due to the price of the phone itself. Before long, most vehicles

will be equipped with OBUs and eventually vehicle manufacturers will offer integrated satellite-based toll-ing equipment just as they offer built-in navigation sys-tems today.

True, satellite-based units will probably never be as cheap as microwave tags. But we certainly can’t expect the cost of building and maintaining roadside equip-ment to ever drop significantly. On the contrary, ambi-tious programs such as VII call for even more infrastructure than what is currently in place just for electronic tolling. With a satellite-based platform installed in the vehicles, you can have the benefit of value-added services without any significant increase in hardware costs. And since the underlying technolo-gies, GPS (and later also Galileo) and GSM are stand-ardized, interstate and international system interoperability will be much easier to deal with.

I am already looking forward to the next ITS World Congress in Stockholm. I’m particularly fond of that beautiful city which I got to know during my years in the telecommunications industry. But that alone is not the reason for my enthusiasm. I am confident that a year from now there will be much more talk about the para-digm shift currently underway in our electronic tolling industry. And I will recall that curious remark compar-ing the telecommunications industry to the transporta-tion industry and smile. The electronic tolling market is indeed a very dynamic and fascinating area to be involved in. E

Norbert Schindler is Global Sales Manager for Siemens Electronic Tolling. He can be contacted via

email at [email protected]

“The electronic tolling market is a very dynamic and

fascinating area to be involved in”

B R I N G I N G T O G E T H E R T R A N S P O R T A T I O N S O L U T I O N S2009

NOVEMBER 17-19, 2009 SÃO PAULO, BRAZIL EXPO CENTER NORTE

www.transpoquip.com | [email protected]

Three main themes: Management & Operations; Safety & Security; User Comfort

The biggest event in Latin America for transportation infrastructure for Airports, Ports, Rails and Roads

The Brazilian economy remains strong and the government has confirmed that the investmentsand privatizations in infrastructure will proceed despite instability of global markets

Transportation infrastructure is a priority for Brazil and other Latin American countries toenable growth and to host FIFA World cup in 2014 and Olympic Games in 2016

Industry authorities use the event as a platform and organize strong parallel site programwith annual meetings, conferences and forums for all transportation infrastructure modalities

Expo Estádio, the event for equipping and managing stadiums and sport facilities, will beorganized in parallel to TranspoQuip Latin America

Metering


Just how accurate is accurate?

Accuracy is the art of being at or near the true value. But the true value of what? BERN GRUSH and MICHAEL KOSIC look at the accuracy of road-use metering

Metering


In the near future we will begin to bill operators of motor vehicles for when, how much and where they drive (Time, Distance and Place road-use charg-ing).

To do this, we expect to use an in-car meter and likely one that uses GPS or an equivalent position-and-time technology. Such devices, called TDP meters, will be turning weak radio signals originating high in the atmosphere that are attenuated, deflected, and reflected into a bill that will be debited or charged on a monthly basis. To make this work, TDP meters will have to do much more than “just” read GPS or Galileo positioning signals in order to accurately charge users. This begs the question: just how accurate is accurate enough”?

Measuring upMeasurement and metering are critical engineering sciences that demand a high standard of care, test and docu-mentation. When you pay for water, electricity, a tank of gas, or 100 grams of chocolate, you make the assumption that you are getting exactly what you paid for – perhaps a little extra in the case of the chocolate but when your nurse is filling a syringe or drip-feeding your arm, you are at the mercy of accurate metering devices and their competent use by the practitioners delivering the substances.

Table 1 shows the levels of accuracy we have come to expect for some common things we meter. While we see a general trend of accuracy above 95 per cent, we can

see there is not a single standard acceptable error tolerance (variance). Time, which is one of the most fundamental things we measure, admits very little error and we always seek more and more accurate devices – atomic clocks with an error of 10-14 are far more accurate than the watches listed in this table (10-5). On the other hand, the metering of blood sugar levels cur-rently tolerates a 20 per cent error.

One might conclude that glucose levels are not par-ticularly critical or that our health is not particularly sen-sitive to this measure [unless, of course, you are diabetic - ed], but in the case of blood sugar levels, we simply do not know how to make an affordable glucose meter that is more than 80 per cent reliable.

We can also see from Table 1 that many of the more common things we pay for such as water, food, and elec-tricity are measured with a reliability exceeding 98 per cent. Because we are interested in road use metering, it is natural that we study the error toler-ance for odometers. Why is it so high at 4 per cent? Is it because it is a volun-tary standard? Or is it because there

are sufficient variances in driving behaviour, wheel radius, slippage on wet pavement and so on that make it difficult to design an affordable metering device that is able to make sufficiently reliable measure-ments to reach 98 per cent?

Certainly, odometer readings are very important when determining a lease buy-out

“Measurement and metering are

criticial engineering sciences that demand high

standard of care”

Table 1: Accuracy standards for commonly metered items (within their normal operating ranges)Electricity Meter, Residential (Canada) 98.5%Glucose Meter (Blood Sugar Level, US-FDA) 80%Grocery Scale (or non-automatic weighing device) 99%Natural Gas, Residential (UK) 98%Odometer (Society of Automotive Engineers Voluntary Standard) 96%Speedometer (Society of Automotive Engineers Voluntary Standard) 98%Water Use, Residential (US) 98.5%Wristwatch 99.994%

Metering


these 2006 trials was billing accuracy. After all, this is what really matters; trip distance and proximity to the road are just a means to that end as well as providing evidentiary credibility. TfL reported from 11.8 per cent to 6.7 per cent for average billing error rates, with the best performance being 0.86 per cent.

The conclusion the authors draw from this TfL study is that a least one tested unit showed great promise and that our industry is on the verge of producing reliable TDP meters.

This summer, as part of the Connected Urban Devel-opment Program, our firm worked with Cisco Systems in Seoul, Korea to test a TDP meter that is specifically designed to be “liability critical”. In other words, rather than enabling a navigation-grade GPS chipset with a processor for map-matching and price calculation and memory for recording trips and trip costs, this TDP meter takes advantage of a number of constraint differ-ences between tolling and navigation that provides for greater position accuracy, lower data costs, faster processing time and no requirement for map-matching to “repair” positioning errors. The promise made for

this TDP meter is “same-trip, same charge.” Its design goal is 0.2 per cent average billing error and 2 per cent maximum billing error on any trip over 5km (shorter trips generally have a higher relative error).

A suite of four test journeys within two simulated “pricing zones” was

designed to channel test vehicles through the worst urban canyon in Seoul. Multiple vehicles each equipped with two “Financial-Grade” TDP meters and one “Navi-gation-Grade” TDP meter travelled over 1000km dur-ing several days of tests, for a total of 3087 km of meter testing.

The results of these trials over four test journeys (routes) are in Table 2. The navigation grade TDP meter performed similarly to the majority of the meters in the 2006 TfL trials with an average billing error of 4.25 per cent and a worse-case error of 14.3 per cent (over-charge). The financial-grade TDP meter showed con-siderable improvement, with an average billing error of 0.7 per cent and a worse case error of 3.3 per cent (over-charge) - this time in the same error range as the best-

or when selling a used vehicle. In this case, the odome-ter becomes “liability critical” as Honda learned in the Spring of 2007 when it lost a class action suit based on evidence that odometer inaccuracy prematurely ended customers’ auto leases and service warranties. Honda refunded lease mileage overage charges and repair bills that should have been covered under warranty. At the time of settlement, Honda was expected to pay out over US$20m. At the same time, Honda resolved to design to “zero error” in place of the -1 per cent to +3.75 per cent odometer error they had specified prior to this, based on a voluntary standard from the 1970s.

If we are going to measure something on which an economic exchange will be based - such as road user charging - unnecessary measurement errors will not be accepted. Specifically, if a TDP meter underestimates charges, the road provider who ultimately depends on that revenue for building and maintenance (and profit in the case of a PPP) will not be satisfied. On the other hand, there is no motorist who would elect to use a meter that overcharged. A few minutes at eagerodometers.com sets an expectation for how “eager” TDP meters might be greeted by class action suits.

TDP metering system testsTests for TDP meter accuracy since the general availability of high-sensitivity GPS chipsets in consumer-grade navi-gation devices (~2003) still show a high variability in results. The most extensive public tests made to date were those run and published by Transport for London in 2006 (available online as Distance Based Charging: Report on Transport for London’s (TfL) GPS UBU Trial). This battery of tests shows the tested TDP metering devices to have accu-racy rates for road-segment identification (a proxy for distance) ranging from 98.6 per cent down to 83.6 per cent. Some of this variability in error depended on which map-matching software was being used - which is, in itself, a red flag.

TfL went on to report average journey length error rates from 10.5 per cent to 5.4 per cent depending on map-matching software. The best performing system showed a journey length error of 0.82 per cent over the sampled drives. But the key measure TfL looked at in

route length in km 8.7 8.05 7.25 32.25 Trips

Fin-grade trips (145 total) 31 36 40 38 2075 total length

Nav grade trips (75 total) 19 19 20 17 1012 total length

Fin-grade min billing error -2.1% -1.1% -1.7% 0.2% -2.1% worst min

Fin-grade mean price error -0.9% -0.3% -0.8% 0.8% 0.7% absolute weighted mean

Fin-grade max billing error 0.8% 3.3% 0.9% 1.7% 3.3% worst max

Nav-grade min billing error 0.1% 1.2% -0.3% 2.0% 2.0% worst min

Nav-grade mean price error 3.6% 4.3% 5.1% 3.9% 4.2% absolute weighted mean

Nav-grade max billing error 8.8% 10.4% 14.3% 7.7% 14.3% worst max

Route 1 Route 2 Route 3 Route 4 Summary

Table 2: 2008 Cisco-Skymeter tests in Seoul, Korea

“On the other hand there is no motorist who would elect to

use a meter that overcharged”

Metering


in-class in the 2006 TfL trials. Navigation-grade TDP meters generally overestimate charges by variable amounts. That would be easy to manage if the variations in billing estimates were small. Unfortunately, that is not the case and it is that variability that makes navigation-grade meters unreliable for tolling.

In addition to a small average error (we propose 1 per cent or less as a standard for RUC billing errors), our industry will also require a small maximum error, and for that we propose less than 2 per cent or 3 per cent on 99 per cent of journeys.

Decision theoryWhether the designer of a charging scheme thinks in terms of distance travelled within an area or of charges applied to specific road-segments, the goal is to have uniform accuracy throughout a charging area. However, GPS can be quite inaccurate inside our cities where buildings block and deflect signals or in landscapes where rock cuts or foliage can block or scatter signals. This makes uniform accuracy difficult to achieve.

But accurate positioning of a vehicle is only the means to an end. What we really want to meas-ure is: How much money is owed - and to whom? Put another way, we really seek only three things: a way to relia-bly charge a motorist the correct amount, a way to assign that money to the correct road provider and a way to prove the charge was correct in the event a motorist refutes the bill.

Until now, a majority of GPS meter tests addressed two simple questions: How close is the position estimate to the road the vehicle is actually on , i.e., what is the aver-age or range of distance from the road (position error), and how close is the computed trip distance to the actual distance travelled. Of course, there are several factors that complicate these simple questions.

We also make the simplifying assumption that tests are made on roads that are accurately surveyed and whose distance is correctly known. In that case, it is con-ceptually simple to drive with a TDP meter, monitor position and distance travelled and compare those val-ues against the “truth” for accuracy and consistency. But it is also possible to drive a vehicle near such accurately surveyed roads and this can lead to problems – espe-cially when using map-matching.

For example: what happens when we drive from a tolled road into a new, unpriced subdivision that is not yet updated on our map? Or drive on an unmapped (and unpriced) farm laneway parallel to a priced interurban highway? Or drive into an untolled parking lot or drive-

way from a tolled road. A TDP meter must do much more than correctly measure on the roads it recognizes.

The process of determining where a vehicle is and to whom money is owed can be viewed as a simple deci-sion theory problem. In two-state decision theory, the world is divided into two categories: the thing you are looking for and everything else. We then have four pos-sible outcomes at every instance: a Hit, a False Alarm, a Miss, and a Correct Rejection. Table 3 illustrates this for a tolled road near a non-tolled road, but this also applies to two proximate roads operated by two different author-ities. A perfect meter would provide the numeric ratios

as given in the table in parentheses.

Paying by the meterSticking with a simple instance of two kinds of roads, tolled and not tolled, and assuming that all tolled roads have the same price and the same provider, we can consider a simple value matrix to show the value/cost of each deci-

sion. Table 4 illustrates, using fictitious numbers, that a False Alarm (charging for a road that was not used) could be very costly if it invites motorist complaint and a potential for a class-action suit. We would use this kind of weighting to decide how to bias a TDP meter to reduce False Alarms. Unfortunately, when reducing False Alarms, we tend to increase the portion of Misses, which we also wish to reduce - especially since meter opera-tors will be involved in contracts that will guarantee rev-enue to the road operators or governments.

But even this is a simplification. We can expect that in some countries or continents there will be many paid road operators and many state, provincial, county or regional road operators. As TDP pricing replaces other taxes, each such player will want to be sure that it is receiving its entitlement of revenue and motorists using those roads will want to be sure they are not overpaying by accidentally paying the wrong (and higher-priced) road operator.

For example, the French government is planning a per-kilometre tax on all trucks over a certain size on all

“Driving only on well-surveyed roads

is an insuffi cient way of testing TDP

reliability”

Table 3: The behaviour of the perfect TDP meter

THE TRUTHWhere is the vehicle? Toll Road Not Toll Road Toll Road Hit (100%) False Alarm (0%) Not Toll Road Miss (0%) Correct Rejection (100%)

The meter decision

Table 4: The value of each decision a TDP meter can make

Hit ($1) False Alarm (-$100)Miss (-$1) Correct Rejection ($0.01)

its national highways. There are already about 8400 km of tolled French highways built and operated by ten road operators. To address this, a TDP meter must distin-guish among these ten operators’ facilities and the French national roadways. When the currently untolled roadways become taxed, the existing tolled roads will retain the same tolls as before. This means 11 or more parties will receive revenue as determined by a single TDP meter and there will be many places where one of the existing tolled roads is near, intersects or crosses over the newly taxed national roads.

Hence Table 4 is an obvious simplification and the requirement for a near-ideal TDP meter (Table 3) becomes clearer. To test such a device, we must simu-late multiple charging zones or multiple roadways that are operated by multiple road owners. This needs to be set up to test the ability of a TDP meter to maximize Hits and Correct Rejections and minimize False Alarms and Misses all among several road-owners, several charg-ing schemes, including roads and areas that are not charged.

If the scheme under consideration does not contem-plate charging for driving on private roadways (field, trails, parking lots, driveways) then those must be tested


for Correct Rejection and especially False Alarm. This is something that map-matching does very poorly.

The current positionAll things considered, driving only on well-surveyed roads, recognizing mapped road segments and calcu-lating distance is an insufficient way of testing a TDP meter’s reliability. We will need to address GPS (and Galileo) positioning errors in ways far more effective than those used for consumer navigation. This includes both additional processing and intelligent geographic information system functions to defeat the noisy nature of GPS multipath - all while testing and treating False Alarms and Misses with the same diligence as Hits and Correct Rejections.

A comment on the Measurement Canada website sums it up nicely: “Although it is impossible to attain perfect accuracy, it is possible to control the magnitudes of measurement errors to acceptable levels through a system of organized activities.” E

Michael Kosic is contactable via email at [email protected] and Bern Grush at

[email protected]

Metering

Just how accurate is accurate?

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Congestion Charging


The powerof 10...Attention, pop pickers! ANDY GRAHAM charts the congestion charging top 10...

“When we talk about road

charging we use terminology that is

completely inaccessible”

Congestion Charging


erroneous costs for charging and privacy problems. When we do talk about road charging, we use termi-

nology that is completely inaccessible - such as talk of “marginal social cost” and “internalising external costs.” When policy is discussed, we talk about EC 2004/52 and EETS. And when we talk technology, it really is all letters and numbers. Is it any wonder we cannot counter such negative publicity?

Where is the single authoritative source of clear and understandable messages about road charging, availa-ble to those best placed to exploit it? Well, Wikipedia is not a bad place to start and someone with good knowl-edge has been working there, but we should not rely on volunteers (for, as Homer Simpson pointed out, they don’t even get paid).

So here goes with my attempt, in time-honoured reverse order, at the congestion charging top 10...

At H3B Media’s recent European Congestion Management Think Tank, there was a healthy debate in two areas.

Firstly, does the public really understand congestion charging, or are they convinced it is just another stealth tax? Opinions differed, reflecting the diverse audience and the many countries represented. But the second area - have we tried our best to help the public under-stand - showed we have far to go. We should have a far more active role in overcoming some of the misconcep-tions, half-truths and downright lies out there. Even if we cannot actively “sell” our business for political reasons, we should present a clear statement of fact when others challenge us.

As an example, in the UK, a petition posted to the Prime Minister’s website in 2007 attracted 1.7m signatures from the British public, alerted by an email claiming

Congestion Charging


10. Tolling roads is not a new idea. Even those countries like the UK for which a tolled motorway is a relatively new idea resorted to tolls for funding new bridges and tunnels this way many years ago. But many current European roads were originally tolled. “Turnpikes” – originally a spiked barrier in or across a road but now used to refer to a road with a toll-gate - ran in England from 1706 until the 1870s. So the idea of potentially charging for road use “as you go” has not just been thought up, it has been defrosted.

9. There is actually quite a big difference between a toll road and a Congestion ChargeTolling a road pays for the construction and then opera-tion and maintenance of infrastructure. By virtue of good design and pricing, toll roads generally give a high quality service to drivers and hauliers (toll operators do not like queues, as customers will not see an advantage in paying tolls).

A congestion charge is instead a specific charge for use of roads that reflects the congestion that user con-tributes to the network. They are not the same as tolls, but to the road user they can seem the same (you pay money and the roads run better). We need to be careful not to mix up the two.

8. Congestion Charging is not a new idea, either - it is just that technology now helps us deliver it. The UK government published the Smeed Report in 1964) which laid down principles such as:

The road user should pay the costs that he (women obvi-ously didn’t drive then) imposes upon others, namely road costs, congestion and social costs. Costs should be related to the amount of use made of the roads and vary according to the location, time, and type of vehicle.

Cities should be zoned, with costs ris-ing to 10 shillings per hour of driving in the centre of London or Cambridge [that is 50p or 60cents, not allowing for infla-tion] and costs should be stable and known in advance. Payment in advance of travel should be possible.

This was in the days when the most technologically advanced equipment in the car was an AM radio. We have only recently had technology available to widely apply these ideas and, more importantly, the political will to tackle the problem.

.7. Congestion Charging is there for a reason… congestion. Even the most committed petrolhead agrees that con-gestion will ever get better on its own (although I under-stand an article that will appear in Thinking Highways’ first issue of 2009 will attempt to show that it will). And

even if you disagree with global warming, deep down you know building more roads is not the answer. You also know it costs you more to go on holiday in August, buy a plane ticket for morning peak travel and a whole host of other “pay for what you get” services. Yet we have not been strong enough in selling the positive changes that occur after congestion charges have been deployed. Traffic in London may have returned to the congestion levels of five years ago, but what would it have been like with five years of unrestrained growth?

We should focus on the long term congestion reduction from charging and give hard evidence - Singapore, Stockholm, Malta, Durham and Milan as well as London.

But with an economic downturn, levels of congestion may ease. Voters will be tempted to put congestion charging down the agenda compared to other issues of a recession, only for it to be needed rapidly once the economy picks up. Congestion charging cannot be allowed to die if short-term issues camouflage its longer-term need.

6. DSRC delivers. There are now many freeflow systems around the globe for motorway charging and proven technology for urban and national truck charging. Pilot schemes are still needed to overcome some local issues and concerns over privacy and interoperability. But there are enough OBUs, gantries and enforcement tickets issued every day across the globe using DSRC to say we have a stable product.

5. Anonymous charging is possible - but who wants it? Many authorities have gone to considerable efforts to allow users to have anonymous charging. Satellite posi-tioning can be deployed so all the computations are

undertaken in the OBU, so no other organisation knows where the user has been.

This has been demonstrated in Can-ada, in German and Swiss lorry schemes and in a trial in Oregon, USA. But few users have taken it up once they realise that it is easier and often cheaper to have a single account deb-ited at source and not have to top up with a credit card.

As schemes roll out, the objections about privacy seem to be overcome (has anyone actually been caught having an affair by road user charging?) CCTV is more intrusive than charging and your cell phone can be used to track you.

And as anyone taken the mobile telephone operators to court for knowing when they are “roving”? The prob-lem is not the capability of a charging device, but the intention and the objective of its deployment.

Let’s remember there is no such thing as “satellite tracking”. Satellite-based systems do not watch vehi-cles, they simply work out where the vehicle is using clever maths. There is no spy in the sky.

“Congestion charging cannot be

allowed to die if short-term issues

camouflage its longer-term need”

4. Yes, you can have a single bill as you travel across Europe. Although there are different on-board units in use, work such as eToll service provided by Egis Projects in Ireland and the Eurotoll service provided across Europe by Sanef show this can be overcome by providing a sin-gle integrated bill.

We as an industry don’t make enough of the ability to piggyback other serv-ices on this bill – fleet management and secure parking for example are added value services becoming available, but what about buying fuel too?

3. Charging can be simple! The decision to make London Conges-tion Charge a daily payment (so increasing the effort needed to make the charge) was a timely one, as it made it not so much a fiscal penalty to drive into London but also suggested an “If you can’t be bothered, take the bus instead” message.

But as technology and other services have deployed, ease of payment (perhaps on a monthly basis) now dominates the market and we should pass this message on. Microwave devices can be put in vehicles without any power supply - having a life of five years or more.

Congestion Charging

45ETCetcc Vol 3 No 4

2. Trucks are different from cars. Across Europe, many authorities are already charging for trucks to use their roads on a pay as you go principle. This has the political and fiscal advantage of obtaining revenue from foreign transit trucks that otherwise might travel “for free”.

Provided the deal is “fair”, truck operators support the distribution of cost. The key is to have a simple system that costs as little as possible to deploy, with easy to understand occasional user schemes, strong enforcement and inter-opera-bility.

1. Over to you...This magazine is all about thinking and debate so what would your number

one be? Send them through to [email protected] or [email protected]. There will be a prize for any that we use. E

Andy Graham is principal of White Willow Consulting, based in Surrey, UK

Many thanks to experts who helped with some ideas, especially Bruno Corthier of Sanef, Steve Morello of

Egis Projects and Duncan Matheson of PA Consulting.


“We should focus on the long term

congestion reduction from

charging and give hard evidence”

Traf c must ow.Our contribution: know-how.

Donau-City-Strasse 1, 1220 Vienna Tel. +43 1 26 33 444, Fax +43 1 26 33 444-10 of [email protected] | www.austriatech.org

AustriaTech – Federal Agency for Technological Measures Ltd.

AustriaTech is a policy instrument of the Austrian Federal Ministry for Transport, Innovation and Technology (bmvit) for developing the opti-mum co-operative bene ts from telematics applications in the eld of transport and traf c.

Dutch Road Pricing


Dutch courageMIGUEL ANGEL MARTINEZ OLAGUE reflects on the Dutch Road Pricing project (ABvM) from an industry perspective

Setting up what will be the world’s first ever nation-wide, all-vehicle road-pricing system without doubt calls for unflinching leadership and unflagging determination.

These qualities were all to the fore in the letter sent on 27 June by the Dutch Transport Minister to the President of the Lower House of the States of the Netherlands. Sel-dom does a Transport Minister provide parliament with such a clear-sighted technical description of the chal-lenges to be tackled and surmounted in bringing an ambitious project to a successful conclusion. From this point of view the letter is a valuable document pinpoint-ing all the main challenges to be addressed by the responsible public authority.

All too often in recent times the interaction between industry, consultants and public authorities has tended to spawn overly optimistic implementation plans, espe-cially in the case of groundbreaking projects that pose stiff technological challenges. Witness the difficulties experienced by the German HBV toll system in keeping up with the original deadline. An “Emperor’s New Clothes” syndrome comes into play here. Politicians wish to set up a trailblazing system in record time while the firms themselves show a certain corner-cutting lax-ity in their keenness to win a multi-million-euro project amidst fierce competition. This certainly does not look

likely to happen in the case of the Dutch project, judging from the minister’s declarations of the following tenor in his letter: “I do realise, however, that these statements provide no absolute guarantee for me or for the Lower House that a system will be operating on time in an open market, suited to serving millions of road users”

Along those lines I would like to make some observa-tions on the Dutch project as detailed in the aforemen-tioned letter.

Feasible and reasonable?Past experience in systems engineering and develop-ment down the ages has shown us that the first essential step, a sine qua non of further progress, is to clearly define system requisites. On occasions it will be neces-sary for the authority and suppliers to conduct studies and previous testing programs, repeated with sufficient frequency to ensure the technical feasibility of these requisites, but it will always be the authority itself that has the last word on the final applicable requisites.

Without this spadework it would be somewhat rash to speak of project feasibility or an implementation time-table, and it is therefore surprising to find that some companies have already ensured the feasibility of the Dutch project. How is it possible for a product to be deemed to meeting required performance specifica-

Dutch Road Pricing


tions if these have not yet been defined? There is a clear need for including a clear requisite-defining stage in the minister’s scheduled plan. It would above all be cru-cial for this requisite-defining stage to be completed before putting the various elements out to tender. Although the Minister’s letter reflects the importance of strictly defining certain requisites, it is not made clear how this would be done or in which stage of the plan.

As well as the timetabling implications of the requi-site-defining process, the requisites and their associ-ated legal aspects need to be studied from a technical perspective. It is indeed gladdening to find a political document so clearly specifying the importance of a closely related set of three elements, namely: the per-formance and reliability requisites, the certification process and the legal aspects bound up with any system failure and concomitant claims. Civil aviation has for-malized these processes, especially in the field of navi-gation, and it might well be worthwhile tapping into this pool of experience when setting up the Dutch system.

Accurate and reliable?As regards the performance requisites, the document mentions different concepts such as accuracy and reli-ability and also mentions the “correct settlement in the final totals”. The purpose of these requisites is to serve as specifications not only during the tendering and con-tract-awarding process but also during system valida-tion and certification and, as need be, SLA-based compliance measurement during operations. If these

requisites are going to serve this purpose successfully it is essential, as already pointed out, for them to be for-mulated as strictly as possible beforehand and to be assigned reference values giving them a unique and measurable definition in all the abovementioned proc-esses, thus ensuring uniformity of use by all involved parties.

It should be stressed here that the concept of accuracy alone is clearly insufficient for defining what is to be expected of a system with these characteristics. As clearly expressed in the letter, it needs to be rounded out with other parameters measuring reliability and ensuring correctness of the load calculation.

As far as the application of satellite navigation is con-cerned, and especially in the field of civil aviation, this additional parameter is clearly identified and denomi-nated as “Integrity”.

Integrity is defined as: “a measure of trust which can be placed in the correctness of information supplied by the total system.” In practice this means that the system has to be capable of identifying with a high degree of probability when this error is above a certain threshold. This probability and the threshold also need to be spec-ified. This concept has nothing to do with the “Data Integrity”, which refers to the assurance that the data are not modified throughout the various processes involved, especially during communications.

In the case of a distance-based charging system with different charging fees per zones this Integrity concept involves two different and essential requirements: on

“In recent times the interaction

between industry, consultants and

public authorities has tended to spawn overly

optimistic implementation

plans”

the one hand the capacity of identifying that the charg-ing calculation error is not above a certain value (e.g. 1 per cent of the real value) with a very high probability (close to 100 per cent) and on the other hand the capac-ity of guaranteeing that zone identification is correctly performed with an even higher probability (closer to 100 per cent).

The need of these requirements is two-fold: in the first place they concern system credibility and its social acceptance and secondly the data’s validity as irrefuta-ble judicial proof in the case of any claim or litigation. We understand that this is exactly what is being referred to when the letter says: “I conclude that 99 per cent accuracy can be demanded from the system, while the assumption of the proposed law is nearly 100 per cent.”

Perfect asymmetryAnother important factor to bear in mind here is the built-in asymmetry in the definition of these requisites, inasmuch as overcharging errors should have a much lower probability than undercharging errors. In other words the most strin-gent system-definition requisite is ensuring that the overcharging likeli-hood is very close to zero. Judging from experience in other electronic tolling systems, this overcharging should be lower than 1 in 10,000 so that the prob-ability referred to in the letter should be at least 99.99 per cent.

Regarding zone identification, the probability of a false identification (leading to the application of a higher fee) should be even higher with values near 99.9999 per cent (one false inside-zone identification in 1,000,000) because of its higher impact on user perception of system credibility. As a matter of fact this requisite is also recognized by the expert group for the European Electronic Fee Collec-tion standardization process where they identify that “False recognition of a geo-object [zone] should be less than 1 in 1,000,000”

It is easy to see how compliance with these requisites depends in turn on setting similarly strict requisites for GPS-based positioning calculations, since these under-pin the various charging calculation processes. In other words the receiver has to guarantee performance nor-mally defined by the community of satellite navigation experts as “position Integrity.” A recommendation here is to adhere to this definition, since it allows assurance of all the matters of concern to the minister in his letter and has been accepted for years by the expert satellite-nav-igation community (especially by Civil Aviation).

Public acceptabilityFinally there is another aspect that strikes us as impor-tant in the feasibility of a project such as the Dutch one, namely its social, and ipso facto political, acceptance. There is no doubt that public authorities see a signifi-cant political risk in launching a tolling system of this type. They are wary of the difficulties of getting the system across properly and defending it from the most

trigger-happy criticism: “Why should we pay for using a road network when we have already paid for its con-struction with our taxes? This is just another money-rais-ing exercise! The well-off can pollute as much as they like! Traffic congestion is insufferable without paying for it as well!”

Green thinkingAnother major concern clearly reflected in the letter is the transition process from the current situation to the fully-implemented, up-and-running road pricing system. Launching a preliminary voluntary scheme to act as a transition to the future obligatory scheme would be a solution. This would cut down the political risk and help to phase in the system gradually.

The scheme would work as follows. New-vehicle pur-chasers would be offered a refund of part of their already-paid conventional taxes upon trading in the vehicle in the future. This sum, or green check, would be calculated automatically from the data furnished by an

OBU fitted by permission of vehicle owners when opting into the scheme. The value of the green check would depend on the vehicle type and the mileage clocked up throughout its use-ful life in those areas or thoroughfares and timebands that have been defined and published as high congestion (rush hours-zones). If the vehicle use is lower than the average, the difference is refunded to the user as a discount on applicable taxes in the purchase of the

new vehicle. This scheme would be a real incentive for vehicle

owners not to use them in rush hours; as such it could chime in with what the Ministry defines as “Mobility Projects”. Furthermore, system implementation is vol-untary and gradual rather than a new government impo-sition, unlike a national toll system. This is an aspect weighing heavily in favor of this idea, avoiding what might otherwise be undesired side effects of the transi-tion from the current taxation system to a tolling system, such as a slump in vehicle sales as would-be buyers abide their time until the new scheme comes in.

Level bestIn conclusion, the success of a project as ambitious as the Dutch one depends heavily on the establishment of clearly defined performance requisites in a pre- tendering stage. These would include specification of minimum performance in standard terms of accuracy, integrity and availability. Implementation should also be phased in by means of a preliminary voluntary scheme whereby users are refunded part of their con-ventional taxes if rush-hour vehicle use is below a set level. E

Miguel Angel Martinez Olague is corporate development director at GMV, based in Madrid.

He can be contacted via email at [email protected]

Dutch Road Pricing


“The most stringent system-definition

requisite is ensuring that the

overcharging likelihood is very

close to zero”

www.skymetercorp.com

The future of tolling.


50

Who moved my customer?

Is it really time to say farewell to the toll booth? And is it also time to say sayonara to cash? BOB McQUEEN, rather fond of both entities, is preparing for a painful goodbye...

Vol 3 Issue 4 ETCetc www.thinkinghighways.com


www.thinkinghighways.com ETCetc Vol 3 Issue 4 51

There is an undeniable trend towards truly open road tolling in the US today.

While the dedicated short range communications (DSRC) technologies involved have always been capa-ble of supporting this, the associated enforcement sys-tems are now good enough and sufficiently trusted to cause the demise of the toll booth. Express lanes abound and some agencies have even committed to a com-pletely cashless future. In transit agencies around the world we are also seeing an unprecedented investment in electronic payment systems that make use of smart card technologies and near field communications for fare payment. Are we seeing the beginning of the end of that challenging mix of cash and transportation?

I’ve always viewed the use of cash as a necessary, yet undesirable, side effect of operating a pay-per-use transportation facility. The traffic disruption caused by toll plaza queues, the boarding delays caused on transit vehicles and the expense and difficulty of handing sub-stantial volumes of cash pose tough challenges to toll

road and transit operators alike. So you would think that I would have no compunction in waving our square friends goodbye. And yet a niggling wave of nostalgia sweeps over me as I think about the end of the toll booth.

Why? Good or bad, the toll booth was a customer interface. It was a point of contact between the operator and the customer. At the toll booth you could ask direc-tions, perhaps even receive a free map of the local toll road network, make change and exchange pleasantries with a cheerful, helpful member of staff. All the while, your fellow travelers in the queue behind you seemed to join in this idyll by waving at you and making hand ges-tures indicating that they thought that you were number one!

Seriously, the loss of a customer interface should be evaluated in any business to determine the likely impact on the ability to service the customer and support enhanced service levels. In the case of toll plazas and toll booths there were some extremely negative aspects

“I’ve always viewed the use of cash as a

necessary yet undesirable side

effect of operating a pay-per-use transportation

facility”


Vol 3 No 4 ETCetc52

of the particular interface. Having to select the appro-priate lane at the toll plaza, the need to slow down and stop, the chances of a crash caused by driver confusion or distraction, having to fumble for cash. These are all in the past as we drive towards truly open road tolling using a combination of DSRC transponders and video image processing for license plate recognition.

Money is out of the office...While many agencies have left a few cash lanes in place, others have committed to what I would call “zero cash”. It’s not that we don’t accept cash in payment for use of our toll roads, it’s just that we don’t want to deal with it at the roadside any more. This perhaps means that our toll plaza customer interface hasn’t vanished completely; it’s just gone to a better place, but who moved my customer?

This thought about a change in the customer interface caused me to take an analytical look at the points at which a toll agency interfaces with or touches its cus-tomers. I came up with a very simple graphical view as shown in the figure.

The boundary between the toll agency and the cus-tomer is represented by the curve and the dots indicate the points where a customer interface is possible. Rep-resenting it in this simple way enables a clear picture of the customer boundary in which the number and nature of the customer touch points can be examined. In this rather primitive example there are a number of possi-ble customer touch points.

There are several touch points that have the potential to be predominantly positive or negative depending on the nature of the transaction conducted across the chan-nel and the way in which the encounter is handled. It occurs to me that the quality of the overall interaction with the customer could be actively managed by taking this type of approach to understanding the nature and number of the interfaces, the resources applied to each and the training/instructions provided to agency staff that both support and manage the interface. Perhaps by color coding the dots according to the likely customer perception of the interface – green for positive, amber for neutral and red for negative?

One way to look at this is in terms of the “return on toll” delivered to the customer through these interfaces. This could be an actual monetary value of benefits and a cus-tomer perception of value. I would argue that both are equally important in communication customer value and service.

Accentuating the positiveAnother interesting and related aspect to the demise of the toll plaza is the new approach to customers that chose not to pay by transponder or cash. In the past these customers may well have been classified as viola-tors and subject to the negative customer touch point called violation enforcement. Today you could well argue that there is no such thing as a violation and those customers can now be treated as premium customers that have elected to pay an additional fee in return for a more convenient way to pay.


TollEnterprise

Roadside service patrol

survey

Universal traffic citation

Incident management

Dynamic message sign

Personal visit to customer

service center

Telephone call

Interactive voiceresponse system

newsletter Traffic and highway

operations

Transponderinstallation

Account re-loading and

balance check

Figure 1: When a toll agency ‘touches” its customers

It is also worth noting the positive revenue implica-tions of this shift since toll agencies typically don’t get to keep the fines for violations, but can certainly keep the premium fee for service.

So what’s the point of this insight into the loss or move-ment of a customer service interface? Simply that such interface opportunities are precious and should be cul-tured to be a positive experience as far as possible. Active interface management is another intriguing possibility, perhaps by applying some of the saved resources from toll plaza operations to renewed efforts to raise the quality of the other interfaces.

Perhaps a dimension of this quality lies also in the con-sistency of the service quality and organizational mes-sage that is supported and projected across such interfaces. Is the quality of our dynamic message sign messages consistent with the quality of our interactive voice response system and our roadside courtesy patrols?

We have the opportunity to apply advanced technolo-gies to turn our toll operations into anonymous faceless enterprises, or glorious examples of technology enabled human-centric service. I like the concept of a local toll agency that collects tolls and delivers a local, clearly understood return on toll by investing in better infrastructure and enhanced services through a custom-ized blend of asphalt, concrete, steel, technology and people.

Dream onThis brings me to my technology nightmare. We are see-ing the emergence of wide area charging approaches that take advantage of GNSS location technologies and wireless telecommunications. In the USA there is already serious discussion about the use of the WAVE 5.9GHz standard to support nationwide toll collection, conges-tion charging and managed lanes. In Europe the devel-opment of the Galileo satellite location system has spurred similar discussions.

While this would make toll collection much easier and take some of the burden of device distribution, manage-ment and perhaps even revenue collection from the toll agency, I have a concern. This emerging ability to charge anywhere at any time based on distance traveled, loca-tion and time could enable a “charge anything that moves” revenue generation strategy with the money going into some sort of central exchequer for redistribution to non-transportation and non-highway purposes such as education, healthcare and social wel-fare. The benign and familiar ‘transportation republic’ that collects revenue then re-applies it back to the local network would be redundant in this scenario.

My old friend the toll booth is gone; the age of the vio-lator has been replaced by the age of the premium cus-tomer, so is the decline and fall of the transportation republic on the horizon? That would indeed mean the loss of a very dear friend and cause me to utter those words: “Who moved my customer?” e

Bob McQueen is growth leader with the 0Cash Company. He can be contacted via email at

[email protected]



“Violators can now be treated as

premium customers that have elected to pay an additional fee in return for a more convenient

way to pay”

Technology


These goalposts are not for moving

DAVE MARPLES’ hypothetical wishlist for a technology-led road pricing future

Did you know, there’s no requirement for your car to have indicators? At least, not in the UK if it was built before 1936. Similarly there’s no requirement for seatbelts, parking brakes or even a windscreen depending on the year of manufacture and a few other minor factors.

The reasons for this are obvious: we shouldn’t go mov-ing the goalposts for equipment that’s already out in the field, so we simply update the requirements that new vehicles have to meet and wait for population erosion to do the rest . Pretty soon the greater part of the old vehi-cles are on the scrapheap and the population has inte-

grated the new functionality as normal behaviour. This approach mostly works well (when was the last

time you got into a car that didn’t have seatbelts?) but there’s always a long tail of laggards, the ‘vintage vehi-cles’, that never update, with the result that our road sys-tems have to deal with vehicles that may be many generations out of date.... I wonder how many tail-end shunts are as a result of the vehicle in front having ABS and the vehicle behind not having it?

Sometimes of course we mandate updates by means of retrofit (the London Low Emissions Zone being a good example) but that tends to only be done under very

Technology


Technology


restricted circumstances and one would certainly hope that a long time is spent deliberating before any deci-sion to impose mandatory costs on road users is taken.

In Information Technology terms this whole issue of how to deal with the existing population when integrat-ing new functionality is known as the Legacy Systems Problem.

In that world you can sometimes solve it by mandating updates within a certain period of time, or by ceasing support for old versions, but sometimes you just have to live with it and suffer the additional costs and perform-ance restrictions it burdens you with - a 1930s telephone will still let you make a phone call on most land tele-phone networks in the world, for example.

So, five paragraphs in, why on earth am I ranting on about technology migrations and the telephone net-work in an electronic toll collection and road pricing magazine? Well, we’re actually in an interesting situa-tion – to a first approximation pretty much any tolling system in the world that demands an in-vehicle compo-nent will need similar functionality in terms of location detection, processing capability, communications, memory and some form of display.

Not only that but the device will be mandatory for almost all of the vehicles in theatre and there will be mechanisms deployed to ensure it’s there and working properly and to get it repaired when it breaks... to all intents and purposes the device will be there, and will work.

Doesn’t it seem a shame to go to all of that effort, just for road charging?

The not-so secret migrationThe deployment of a tolling system means that, for one of only a very few times in our his-tory, we can achieve an almost pervasive technology migration over the course of a single generation of vehi-cles and, not only that, mandate the retrofit of the exist-ing population... in the space of a couple of years we can deploy a platform into every vehicle in theatre and have the mechanisms to make sure it stays there. The oppor-tunity for new applications to exploit that platform are immense.

A few years ago I was quite heavily involved in an ini-tiative to create an environment for these kinds of flexi-ble, long life, highly reliable applications known as the Open Services Gateway Initiative (OSGi). The European Union Global System for Telematics (GST) project extended and specialised it for in-vehicle use.

Both of those were Java-based (and I will confess to some concerns about the use of Java in this environ-ment) but the ideas and concepts are applicable no matter what languages you chose for implementation. I would highly recommend that anyone looking at devel-oping an in-vehicle tolling unit take a long hard look at that work to take advantage of some of the lessons we learned.

My argument is simple; the components that are in that hypothetical in-vehicle tolling unit; a GPS, comms, processor, a display and some storage are pretty much the same components you need for a whole wide range

of applications. If we can standardise it a little bit we’d end up with a mandated, secure, reliable and maintained platform in every single vehicle on the road.... I want the word ‘flexible’ on that list too. I’m not suggesting that one size will fit all, there will be a whole range of devices meeting the platform specification with different addi-tional capabilities - just like the PC on the desktop, but hopefully a little more reliable.

Cost versus benefitJust because we’re technically capable of doing some-thing doesn’t mean it will happen... although, as an engi-neer, I’d love it that it were so. The biggest problem with doing all of this is the business justification - the people that will get the benefits aren’t necessarily the ones who will incur the costs. The biggest single task is to build market mechanisms that ensure that deploying a perva-sive compute platform in vehicles, on the back of road charging, is actually of benefit for all of the participants, and that’s not trivial.

I suspect it’s a forlorn hope – we will do our usual thing of paring the platform down to the bone and selecting cost optimised designs which can just about meet the single application demands made of them with no option for any future expansion or re-purposing.

I can only hope that since our bankers and account-ants have completely discredited themselves with their overly simplistic financial models and overly complex derivations we might actually be able to do things for good engineering and societal reasons in the same way that our ancestors gave us sewers, bridges and underground train systems with-

out looking for a three-year Return on Investment.

Added valueFinally, I could argue that this versatile device might actually make the deployment of a road charging solu-tion easier, since instead of it just being a means for extracting money from the driver, we might actually be able to offer him some significant benefit - a platform that’s versatile enough might actually encourage adoption.

It’s my tolling device but it’s also a SatNav, a speed warning device, a fuel economy meter and a vehicle maintenance monitor - and I saw a couple of cool appli-cations on the ‘net the other night that I want to try out. E

Dr Dave Marples is Chief Scientist of Technolution B.V. of Gouda, NL (www.technolution.eu) where he is

involved in work on Road Charging, ITS applications and Weigh in Motion technology. He was the Chief Architect

of the EU GST programme (www.gstforum.org) and was the Executive Director and Architecture Chair of the

OSGi (www.osgi.org).

His background is in communication systems technol-ogy and he is Honorary Professor of Communications at

Stirling University in Scotland (www.cs.stir.ac.uk/~djm).

“Just because we’re technically capable of doing something doesn’t mean it will

happen”

CARE, COMPASSIONAND CONCERN ON THE FREEWAY

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01 Our patrol vehicle operators have state and national public safety certifications.02 We provide a complete turnkey program at not cost to motorists.03 Provide Internet based Fleet Management Systems.04 Provide public safety grade AVL/GPS incident recording/reporting systems.05 Personnel, vehicles, equipment, AVL/GPS, patrol dispatch centers, and public relation programs.06 The most experienced provider. Over 27 years providing service patrol programs throughout the U.S.

07 Provide the widest variety of quick clearance, motorist, and public safety assistance.08 Provide a variety of different custom service patrol vehicles with and without tow capabilities.09 Endorsed by Departments of Transportation and State Governments.10 Endorsed by State Police, Fire/Rescue, and other public safety agencies.11 National award winning programs.12 Consistent media recognition.13 Rural, remote area, and urban program applications.

14 All program service costs included in single patrol hourly billing rate.15 Operators adhere to detailed conduct policies16 Standard Operation Procedure Development17 Local office and project management18 Provide Complete Indemnification and hold harmless agreements.19 Provide audited financial resources.20 Operators have perfect no-fault safety records. Zero fatalities.21 Private Sector funding available to offset costs.

Samaritania Incorporated,10 Riverside Drive, Lakeville, MA 02347, USATel: +1-508-947-3700Fax: +1-508-947-5544www.freewayservicepatrol.cominfo@freewayservicepatrol.com


As many readers will probably be aware, in 2004 the European Union adopted a Directive on “The Inter-operability Of Electronic Road Toll Systems In The Community” (2004/52/EC). The purpose of this ena-bling Directive was to provide the path to the practi-cal delivery of interoperability in European electronic road tolling systems. This was to facili-tate the movement of goods across the Union with a single On-Board Unit per vehicle and a single road charging account provided by an ‘EETS Provider’.

The legislation made provision for a Regulatory Com-mittee of Member States, chaired by the Commission (the Comité Télépéage), to take a Decision on the defi-nition of the European Electronic Toll System (EETS) by 1 July 2006.

Most importantly the Directive stated that “Such deci-sions shall only be taken if all the conditions, evaluated on the basis of appropriate studies, are in place to ena-ble interoperability to work from all points of view, including technical, legal and commercial”.

Somewhere a clock is tickingThe implications of any Decision are that this would set an ‘implementation clock’ ticking, requiring the EETS to be delivered to HGV (over 3.5 tons) owners and interna-

Comment

EETS: shoots and leaves

To head towards a brave new interoperable future, the European Commission must demonstrate that there is a viable business case for the European Electronic Toll Service, says DUNCAN MATHESON

Comment


tional coach owners who wished to use such a service within three years, and to any vehicle owner within five years.

The Directive also enshrined the technologies that were to be used for electronic charging, limiting these to Dedicated Short Range Communications (DSRC) at 5.8GHz, Global Satellite Navigation Systems (GNSS), and Cellular Networks (CN) using GPRS. In part, this was due to the Commission’s frustration at the slow progress on standards development within European Standards bodies, but was also seen by many as an opportunity to promote the implementation of the Gali-leo satellite positioning system.

Since the Directive’s adoption, the Commission appointed a number of Expert Groups to look into, and report upon, a range of topics that were seen as being necessary to help with the definition of the system. To date, there have been some 12 or so such groups cover-ing such areas as:

• Group 1 - DSRC Technologies• Group 2 - Classification of vehicles• Group 3 - Enforcement of EETS• Group 4 - Certification of Equipment • Group 5 – GNSS/CN technologies for EFC

In addition, the Commission has funded work on the CESARE III and CESARE IV Projects led by ASECAP (the European Association of Toll Road Operators) with the support of Member States to look in more detail at the elements necessary to aid the definition of the EETS. CESARE IV is due to complete its work by the time this issue goes to press or in early 2009.

The Commission has also funded work on the Road Charging Interoperability (RCI) Project, led by ERTICO, which completed its final report in 2008.

However, all is not rosy in the EETS garden.

Stockholm syndromeAs should now be clear, the July 2006 “Decision dead-line” passed some time ago, mainly because of the com-plexity of defining the technical, commercial and legal framework necessary to make the EETS definition ‘com-plete’. The challenges that were posed were recognised by the Stockholm Group - a collection of Member States that in general had limited experience of, but nonethe-less an interest in, wide area tolling systems. This align-ment has sought to work both as part of the CESARE Projects and in its own right to support the Commission in the development of a Decision draft that could ulti-mately be supported in a Comité Télépéage vote.

Shortly after the adoption of the Directive, PA Consult-ing Group issued a paper that set out 16 topic areas that it considered needed to be addressed before such a Decision could be made. [The paper can be found at: https://www.paconsulting.com/publications/pb_open /pb_toll_service.htm]

These were grouped under three headings; examples of which are outlined below:

Develop a single contract• Align and gain the commitment of all

stakeholders • Establish a Memorandum of Understanding to

support business, data, process and payment-means interoperability between all schemes to be part of the EETS

• Demonstrate the cost benefit of the EETS and clarify who is paying for its provision and operation

Encourage scheme operators to develop interoperable systems and procedures

• Assess the extent to which Business Models can be reconciled or a new paradigm created

• Quantify the capital and operating costs, and the time necessary to migrate to a future operational environment, where interoperability between systems to support international billing (and potentially enforce-ment) can be delivered

• Determine the most effective form of data clear-ing between the separate schemes across and within national borders

Create the conditions for defining and developing the Universal On-Board Unit

• Incorporate Directive-specified technologies as a minimum

• Meet agreed Standards (some do not exist)• Support interoperability (roaming, charging,

payment acceptance, performance)However, the majority of these issues have not been

satisfactorily and definitively addressed in the mean-time, and there is now a serious international risk that pressure will be brought to bear to agree a Decision prematurely.

Work on international standards to support EETS is being undertaken through CEN but progress is slow and there is still some substantive effort required before such standards are approved which can then be refer-enced from within any Commission decision.

Consequently, with the Commission understood to be seeking a Decision in the next few months, the question is “What has to be done to ensure that this is not done prematurely?” There is a real and urgent need for the Commission to demonstrate that there is a viable busi-ness case for the EETS.

Knock-on effectThe reality is that without this, any Decision under the Directive could have huge consequences for Scheme Owners (Toll Chargers) and the potential market for Service Providers (EETS Providers) and pressure should be brought to bear by Member States to argue the case for this now. Indeed there is a requirement in the Direc-tive for the Commission to deliver a cost benefit analysis before the end of 2009 (Article 2 (3)).

Such a study needs to demonstrate at least the follow-ing four things:

1) That there is real, genuine and widespread demand from hauliers for an interoperable service

2) That there is an attractive profitable business for companies that are interested in becoming EETS Pro-viders

3) That costs of the changes to existing systems to accommodate EETS can be afforded and implemented

Comment

VVol 3 No 4 ETCetc62 www.thinkinghighways.com

in a cost effective and timely manner by Toll chargers4) That the money go round can be resolved in a

context where EETS Users are not required to pay any premium charges to Toll Chargers.

Let’s look briefly at each in turn.

Demonstrate that there is real, genuine, widespread demandNowhere to date has there been any systematic consid-eration of the extent to which the European road haul-age and coach industry operators want a fully interoperable service for road pricing. The absence of any cost benefit study, indicating who will be picking up the costs of the provision and installation of an interop-erable EETS On-Board Unit (OBU) and a clear indication of how the EETS service from EETS Providers will be paid for their provision and operation does not help this situation.

Demonstrate that there is attractive profit-able business for EETS ProvidersThe Directive makes no provisions for how EETS Provid-ers can be brought into being (apart from Toll Chargers who also issue OBUs and maintain accounts). The EETS Provider services are generally considered to be some form of market offering and hence cannot be created explicitly by Member States except perhaps as some form of State-run operation to which EETS users would have to subscribe, whether within the State or from another country.

As soon as EETS comes into force, there is an implica-tion that Toll Chargers that continue to offer OBUs to ‘local users’ will become responsible for undertaking EETS account management, including sourcing and supplying EETS OBUs for an uncertain demand. Alter-natively they could co-opt EETS Providers from whom such services could be sourced if any come into being.

Demonstration that the costs can be afforded and changes implemented in a timely mannerThere are legal obligations upon Member States to ensure that the technical provision of the EETS (what-ever these turn out to be - when specified) are imple-mented within the electronic charging schemes that operate within their boundaries. However, without a clear definition of the EETS in technical, commercial and legal terms, the costs of changes to existing systems to accommodate the additional capabilities necessary to support EETS operations cannot be understood or quantified. Consequently the time and resources required to implement the changes in a manner that does not hamper existing operations also cannot be assessed.

Although projects like RCI have made strides toward the consideration of an interoperable OBU, it is not clear that the OBU costs have been a key consideration or that the functionality required would encompass all the potential scheme designs that could be required by Member States under the principles of subsidiarity. At the very least there is a need for a European-wide agree-

ment of the superset of Scheme Rules that would pro-vide the basis upon which an EETS universal OBU could be formulated by ‘industry’.

Demonstration that the money go round can be resolvedPerhaps one of the biggest challenges underpinning the implementation of the Directive through the agree-ment of a Decision is that it is very unclear what com-mercial model will underpin its operation. There is an obligation on Toll Chargers not to discriminate against EETS Users by price - EETS Users must not be charged any more than other users. Recent discussions in Europe have also suggested that the Commission does not expect EETS Users to be charged for accessing the EETS Services although subscription charges may be permit-ted. This leaves any would-be EETS Provider in the situ-ation that it must administer its operations without any clear additional revenue stream to offset the sourcing and provision of EETS OBUs, even if the (unknown) costs for the device and installation are paid for by the sub-scribers to the service.

In addition, the Commission appears to be taking the position where EETS Providers receive their revenues from Toll Chargers in respect of issuing OBUs and col-lecting revenue on their behalf. However, this appears to raise further issues in terms of the contractual rela-tionships as CESARE recommendations suggest that EETS Providers should guarantee Users’ payments.

Consequently, it then becomes unclear who is the cus-tomer in the EETS Provider/Toll Charger relationship with corresponding uncertainty about the VAT implica-tions of this. One possible option around offsetting EETS Provider costs is that the EETS Provider might be able to provide additional, Value Added Services (VAS) to EETS Users as a means of separate revenue generation. How-ever, characteristically VAS in the transport domain has to date not been a big money spinner for providers. In addition, the Commission has also sought to enable competition in the supply of such VAS on OBUs as was the case with the Toll Collect OBU employed in the Ger-man Lorry Charging Scheme which would detract from this incentive to would be EETS Providers.

ConclusionsWe have seen that there is pressure being brought to bear by the Commission to move the EETS Directive for-ward to a Decision over the coming months - this appears to be a matter of process instead of true progress. How-ever, many of the issues that are needed to support the EETS unambiguous definition have yet to be definitively addressed (including many of the points listed in the Directive’s own Annex) potentially causing ambiguity in implementation within what are likely to be very demanding implementation timescales.

Consequently, Member States, and more importantly the road charging community in Europe, need to wake up to this situation and ensure that authorities are alerted to the potential for perverse outcomes if such a Decision is made prematurely. E

[email protected]

www.q-free.com


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Documents

ETC, etc December 2008