A Draft Report of my Final Thesis


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This is a draft of my final master's thesis. I would like to share this with you.

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A Draft Report of my Final Thesis

  1. 1. CHAPTER ONE 1.1 INTRODUCTION Transport as stated in the words of Hoyle and Smith (1992) is “an epitome of the complex relationships that exist between the physical environment, patterns of social and political activity and levels of economic development.” This statement goes further to buttress the position of scholars like Mabogunje (1989); Todaro (1989); and Barke and O’Hare (1984) that, ‘transport systems provide a key to the understanding and operation of many other systems at many different scales. At one extreme, intercontinental transport provides essential communication between the advanced and developing world. At the other extreme, local transport to rural markets in many parts of the third world is a vital component in changing dynamic socio- economic structures.’ In fact, the debate over the relationship between transport and development is a long- standing one, which continues to this day. In the midst of this long-standing debate, a United Nation’s study by Voigt in 1967 claimed that transport is “…the formative power of economic growth and the differentiating process.” Regardless, Hoyle (1973) states that such statements are gross over-simplifications and according to him, the transport and development relationship is essentially a two-way interaction process, and the result of the interaction depends upon the type of economy involved and upon the level of development at which the transport improvements are effected. At a given stage of development, an area requires a certain level of transport provision in order to maximize its potentials. The fact of the matter is, most developing countries lack safe, organized, and 1
  2. 2. effective transport structures. Some of these countries, however, have acquired an appreciable level of transport development which, when effectively managed, could help achieve a significant level of development. Most urban transportation problems that confront both developed and developing countries alike are traffic movement and congestion, crowding on public transport, difficulties for pedestrians, environmental pollution, accidents, and parking difficulties to mention only a few. Interesting enough, the economically advanced nations have made giant strides and indeed have achieved significant success in managing most of these problems. Of course, some developing countries have also made significant efforts in solving some of these problems, but much work remains to be done. One developing country that has made giant efforts towards managing traffic congestion with remarkable success is Singapore. Their effort date as far back as 1975 and since then their success story has become a model for many developing and developed nations alike. Urban transport problems have serious consequences on socio-economic lifestyles of the general public. Luggard (1922) stated as follows, ‘the material development of Africa may be summed up in the one word, transport.’ This could hardly be stated more appropriately. It is therefore disheartening to mention that the envisioned socio-economic development of Africa, especially that of Ghana, is threatened by these urban transport problems. It is against this backdrop that this work proposes to look into the concept of road pricing as an important transportation management strategy used in removing and/or reducing traffic congestion in the metropolis of Accra. The prospects and problems of applying this strategy in the Accra metropolis would form the major focus of this research. Traffic movement and congestion continue to be a serious 2
  3. 3. problem and as a result, it creates loss of precious man-hours and reduces productivity of both the state and organizations. In Latin America, for instance, road transport accounts for more than eighty percent of domestic passenger movements, and more than sixty percent of freight movements (Estache et al, 2000:pp.235). Road transport is also known to account for more than eighty-five percent of freight and passenger movement in some countries such as Argentina and Brazil. In Sub-Saharan Africa (SSA), including Ghana, it is estimated that roads carry 80 to 90 percent of the region’s passenger and freight traffic (Heggie, 1994). Not only is the sector large, but it is growing rapidly. In Asia, for instance, from 1984-1994 the road networks of Indonesia, Korea, Malaysia, and Pakistan grew in length for more than five percent per annum. In Eastern Europe, countries historically dominated by rail are now witnessing an increased demand for road transport. All these increases have in no doubt contributed to the traffic congestion problem throughout the world (Estache et al, 2000:pp.235). Estache et al (2000:pp.235) stated that, because most road projects require investment with slow amortization, many of these (road construction) projects will not generate sufficient demand to make them self-financed through some type of user fee or toll. The road sector, they acknowledged, will continue to be in the hands of the public sector, to a much larger extent than the other transport activities. In addition, therefore, pricing decisions in this sector tend to be influenced in many countries by strong trucking lobbies that aim at keeping cost recovery as low as possible. However, fiscal crisis and competing demands from other sectors like health and education are bringing changes in the extent of public- private partnership in the expansion and 3
  4. 4. operation of road networks. Governments throughout the world, including many poor African and South Asian countries are commercializing their operations to cut costs, improve user orientation, and increase sector specific revenue (Estache et al, 2000). To this point, Ghana cannot be left out of the picture. The phenomenon of traffic congestion itself is the result of many complex factors, among which is the proliferation of lower capacity vehicles such as private cars, taxis, and to a very large extent mini buses known in Ghana as ‘tro-tro’ (converted small cargo vehicles into passenger buses). Throughout the world, the concept of road pricing has been known to have two main merits. First, it is known for the generation of revenue for the metropolitan authorities to fund other road projects in the metropolis and/ or the country. And second, the concept of road pricing is used for congestion management. This forms the basis of this work. This work examined some of the problems of traffic congestion critically, and the vital role of road pricing in solving the problem. This review is done, having in mind the objectives enshrined in the urban transport policy reform document of Ghana, designed in the 1990s as well as the white-paper of the proposed Ghana transport policy document currently underway. We have also taken into account the Road Traffic Offences Regulations of 1974 that came out of the Road Traffic Ordinance of 1952. All these documents were meant to control and/ or check the human elements that are likely to lead to the problem under investigation. Some specific objectives enshrined in the documents mentioned above were meant to improve accessibility of the urban community to places of residence, employment, education, leisure, shopping and to other important amenities. Again, reference was made to the enhancement of 4
  5. 5. the urban travel opportunities at affordable cost for the less mobile, including the urban poor; non-vehicle owners; children; the elderly and the handicapped; and a host of others like the opening of doors when cars are in motion; stopping of vehicles thirty feet near a junction; and parking of vehicles on a road abreast of another motor vehicle. The researcher employed various approaches to collect the relevant data for the study. Discussion and interpretations of the findings took into account the conditions of the social milieu of the country, the global occurrences, plus documents available in the transport sector (basically those on road transportation). 1.2 Definition of Some Concepts in this Study Road pricing: This is a type of arrangement where motorists pay directly for driving on a particular roadway or in a particular area. There is the Manual Road Pricing Scheme, which includes the following: Area Licensing Scheme (ALS) and the Road Pricing Scheme (RPS). The difference between these two is that the former is paid upon entering a specific area-called restricted zone (RZ) whilst the latter is paid upon traveling on an expressway. It should be noted that the area-licensing scheme is where low occupancy vehicles are charged for entering congested areas during rush hours or periods. This is usually aimed at reducing the number of private cars during rush periods by encouraging the use of public transportation. For this system to work effectively and successfully there should be adequate public transportation for handling the extra demand that would be generated. There is also what is currently known as the Electronic Road Pricing (ERP) system. The ERP was basically introduced so as to make the system run faster and also to correct some of the 5
  6. 6. shortcomings of the manual system. ERP therefore has three major groups of components. The first comprises the In-vehicle Unit (IU) and the stored-value smart card. The second group consists of the on-site ERP gantries, which include the antennae, vehicle detectors, and an enforcement camera system that take pictures of the vehicles’ license plates as they drive through the gantries. This group of components is linked to a controller on-site, and data collected are transmitted to the control centre. The third group of components in an ERP system is the Control Centre. This includes various servers, monitoring systems and a master clock to ensure timing at all the ERP gantries are synchronized. All financial transactions are also processed here, before they are sent to the bank for settlement by individuals. Again, violation images of offenders are processed at this point, and letters are sent out to them. Therefore, the major difference between manual and electronic road pricing lies in the fact that the former is human centered, whilst the latter is technology based. The following are some of the various types of road pricing: Congestion Pricing or Value Pricing; this refers to variable road pricing; a higher price under congested conditions and lower prices at less congested times and locations. And, value pricing is actually a marketing term that emphasizes that road pricing, can directly benefit motorists through reduced congestion or improved roadways. Cordon (area) Tolls; these are fees paid by motorists to drive in a particular area, usually a city centre. Some cordon tolls only apply during peak periods, such as weekdays. This can be done by simply requiring vehicles driven within the area to display a pass, or by tolling at each entrance to the area or what is known simply as control points. 6
  7. 7. Vehicle Use Fees; these are distance-based charges such as mileage fees that can be used to fund roadways or to reduce traffic impact including congestion, pollution, and accident risks. Other alternatives are what Lo et al (1996) and Armstrong-Wright (1986) referred to as area licensing, parking restraints, user taxes, and vehicle licensing restraints. They were, however, quick to add that, these do not directly affect the root cause of congestion. Control Points; these are entry points into the described area. At these points, there would be enforcement personnel who check the screens of the vehicles to see if they have displayed the road pricing licenses authorizing them to enter the area during the rush hours as stated in earlier paragraphs. Optimal Use of Roadways; it is often times difficult to determine this concept. But for the purpose of this work, the concept would be used to mean speeds on all CBD roads between 20km/hr and 30km/hr. For expressways, the speeds may be between 45km/hr and 65km/hr. When speeds go above the upper limits, too few vehicles are deemed to be using the roads, and hence the road space available is not being optimally used. On the other hand, when speeds fall far below the lower thresholds one can say there is a problem of congestion because many vehicles would be using the road, hence the need for action to be taken to maintain sanity, just as in the case of the area selected for the study. Optimal Average Speed; since in the Ghanaian case, there is not really a definition of the concept, we refer here to the Singaporean definition, which means that on the expressways speed has to be within the following range: 45-65km/hr. and, those of other streets should be within 7
  8. 8. ranges: 20-30km/hr. This implies that if speed is lower than 45-65km/hr on the expressways, there is congestion. But if speed exceeds 65km/hr, there is under utilization of the roadway. This explanation also holds in the case of streets. Throughput; this refers to the number of vehicles that can actually travel from one point to another point during or within a given time period. Table 1.1 summarizes these different categories of road pricing and their objectives. Some provide revenues, some reduce peak-period congestion, some reduce total traffic impacts (congestion, pollution, accident risks, road and parking facility costs, etc.), and some help achieve a combination of objectives. Table 1.1 Road Pricing Categories Name Description Objectives Congestion A fee that is higher under congested conditions To raise revenues pricing (value than uncongested conditions, intended to shift and reduce traffic pricing) some vehicle traffic to other routes, times and congestion. modes. Cordon (area) Fees charged for driving in a particular area. To reduce fees congestion in major urban centres. Road space Revenue-neutral credits used to ration peak- To reduce rationing period roadway capacity. congestion on major roadways or urban centres. Source: VTPI, 2006 1.3 Some Assumptions Underlying this Study 8
  9. 9. The assumptions governing this study are as follows: • It is assumed that there cannot be any more physical extension in the roads/streets defining the enclosed area for the research. And, even if there were any such extension in any of such roads in the future, they could not accommodate the growing travel demand of the people. • It is also assumed that with the coming into force of the road-pricing scheme, the efficiency in the operations of the public transport sector (e.g. metro mass transport) would be enhanced, as there would be more space available for them to provide reliable service to the public. • The coming into force of the road pricing scheme is expected to discourage people from using low capacity vehicles (e.g. private cars etc), and use the pubic transport thereby cutting down on non-essential trips to the area in question. 1.4 Statement of the Problem The problem that this thesis seeks to address is how road pricing can help reduce traffic congestion within the Central Business District of Accra. The following questions can then be asked: how should traffic congestion be effectively managed to bring about such transformations needed in the human society? What are the challenges or the problems that are likely to be faced when embarking on road price implementation? Again, what are the likely prospects of implementing it? Pacione (2005, pp. 267) states as follows, “…the primary function of urban transport is to provide mobility for people and goods within the city, but the efficiency with which this is 9
  10. 10. achieved is reduced by congestion”. Traffic congestion may simply be defined as a situation that arises when road and rail networks are no longer capable of accommodating the movements that occur on them (Turton et al, 1992). Yildirim (2001, pp. 3) also states that congestion is becoming an inevitable part of everyday life in most metropolitan areas all over the world. He continued by saying that, increasing population and wealth result in more automobiles than current transportation networks can handle. Due to limited expansion possibilities of the transportation network, congestion has increased drastically over the last decade. The major cause of urban traffic congestion as identified by Pacione (2005, pp.267-268), “…is the increasing number and use of vehicles on the roads. More specifically, it stems from the concentration of travel flows at certain times during the day, with the principal reason for the typical double-peak distribution of daily trips being the journey to and from work”. The proliferation of low capacity vehicles such as taxis and ‘tro-tro’ or mini buses in the Accra Metropolis have also contributed immensely to the problem. It must also be stated here that other factors such as lack of proper road markings; narrowness of roads; and lack of necessary intersections among others also contribute to the problem of traffic congestion in the Accra Metropolis. Apart from the causes identified by Pacione above, other causes are the human elements; for example lack of adequate pedestrian crossing points, drivers stopping anywhere and anyhow in the network (at least in the Ghanaian case), selling/hawking in the streets, and vehicles sharing the roads with pedestrians and, in some cases with animals. According to the Ministry of Transportation’s brochure on the Urban Transport Project; Concept Design of the Accra Pilot Bus Rapid Transit System (BRT), the population of the Greater Accra 10
  11. 11. Metropolitan Area (GAMA) will double in the next 15-20 years. And this will be associated with a continuing trend of reducing population density, expanding built up area, improvement in per capita income, and an estimated five fold increase in car ownership. It was stated that, currently more than 70% of major roads in Accra are congested and the picture is likely to get worse should current trends continue. The document also acknowledges that the available road space in the Metropolis is used in an inefficient manner. For example surveys conducted in 2004 showed that more than 70% of the motorized trips in Accra depended on some form of bus transport (trotro and large buses), but this together utilizes just over 30% of the road space. Cars and taxis on the other hand carry less than 30% of the person trips, but utilize almost 60% of the available road space in the metropolis. It is therefore sufficient to state that traffic congestion in the Accra Metropolis has become a serious nuisance if not an obstacle that hinders peoples’ socio-economic development as well as the productivity of the entire country. Statistics show there have been increases in the number of registered vehicles throughout Ghana, and more specifically in the Accra Metropolis. The total urban road network in the country as of 2005 stood at 5,504km. This comprises both paved and unpaved roads. In the Accra Metropolis alone, a total of 775 kilometers of the urban road network was paved; representing 54% of the total kilometers of road network in the Metropolis. A total of 658 kilometers was not, however, paved during the same time frame- 2005. This figure (658km) represents approximately 46% of the total road network in the Metropolis of Accra 11
  12. 12. (Department of Urban Roads, 2006). This could also, although to a minimal degree, have effect on the flow of traffic or movement. Available data from the Driver and Vehicle Licensing Authority (DVLA) show that a total of 52,881 vehicles were registered in Ghana in 2000. Out of this figure, 23,021 were registered in the Greater Accra Region (comprising the Accra Metropolitan Area, Ga District, Dangme West and Dangme East) excluding the Tema Municipality. The Tema Municipal Area alone registered a total of 13,400 vehicles in 2000. In 2001, there was a drop in the AMA figure to 18,092 representing a difference of 4,929. These numbers continued to rise and fall from 2002 to 2004 with an ending figure of 24,884 in 2005. These statistics clearly illustrate the unstable and fluctuating number of registered vehicles. In the year 2000, 27,552 private motor vehicles (PTE MV) with 2000 cubic capacity (CC) were registered throughout the country. This figure was far more than the total number of registered commercial motor vehicles (COMM MV) up to 2000 CC, which were only 5,104. In that same year, however, the total number of registered buses and coaches stood at 5,469. In 2005, the total number of PTE MV with 2000 CC stood at 22,949. Although this represents a drop in the year 2000 figure, it nevertheless exceeded that of commercial motor vehicles, buses and coaches, which stood at 6,686 and, 5,585 respectively. The table below shows these trends. It must be noted here that, even though there were no figures available to the researcher concerning the number of registered PTE MV; COMM MV; and Buses and Coaches solely for the Accra Metropolitan Area for the period 2000 to 2005, the researcher estimates after a careful study of 12
  13. 13. the figures that, the numbers for the AMA would be far greater than all other districts in Ghana given the level of concentration of socio-economic activities in the area. Table 1.2 Vehicles Registered in Accra District, and Registered Categories in Ghana. Year PTE MV COMM MV Buses & No. Of Registered Vehicles Up to 2000cc Up to 2000cc Coaches in Accra (Ghana) (Ghana) (Ghana) District 2000 27,552 5,104 5,469 23,021 2001 17,953 5,568 2,676 18,092 2002 18,512 6,015 2,601 20,884 2003 20,564 5,110 2,916 19,136 2004 20,333 7,642 4,882 21,458 2005 22,949 6,686 5,585 24,884 Totals 127,863 36,125 24,129 127,475 Source: Extracted from the DVLA compilations, 2005. NB: PTE MV ≡ Private Motor Vehicle. COMM MV ≡ Commercial Motor Vehicle. CC ≡ Cubic Capacity. Clearly the increases in PTE MV contribute to the traffic congestion in the country; moreover the Accra Metropolis nevertheless receives the greatest number of registered vehicles. This phenomenon is partly attributed to the general increases in incomes and a lack of efficient public transport system operations in the country’s capital city. Again, the availability of facilities such as auto loans have led to the increase in private car ownership in the city of Accra. Regardless, the fact still remains that the roads in the Metropolis still fall short of the travel demand of the city dwellers, hence the problem of traffic congestion that has bedeviled the city for many years now. This situation has led to loss of precious man-hours and general productivity over the years. In spite of these developments, road pricing for travels within urban areas has not been adopted in this country, and in most urban areas in the world, especially in third world countries. In the 13
  14. 14. Accra Metropolis, there are hardly any toll roads. It is difficult to generate funds locally (or domestically) for the road sector. In the face of these, traffic continues to increase on most of the roads during peak-periods (as described in coming paragraphs). Road pricing, has basically two merits; first, it helps generate revenue for the construction and maintenance of the roads. Secondly, it helps to manage efficiently the problem of traffic congestion on the roads, and in selected areas of a city. As a management strategy, road pricing has an advantage of reducing peak-period vehicular traffic as well as shift travels to other modes (if available) and times considered desirable. In terms of revenue generation, road pricing has an advantage in producing funds and helps to maximize revenue or recover specific costs. A typical example here is the Singaporean model where road pricing was recorded to have reduced traffic volume by about 10 to 15 per cent (Victoria Transport Policy Institute, 2006). It must be stated here that it is a painstaking strategy. Although the Ghana Road Fund Act of 1997 recognizes the potentials of road tolls as part of the strategy to support the Fund, it should be stated that such a mechanism is not widespread to generate the needed funds required for the road sector even though demand for travel and car ownership has greatly increased over the years. 1.5 Goals/Objectives of the Study The general aim of this study is to work towards unearthing the prospects and problems of implementing road pricing in the Accra Metropolis as a measure to help reduce road traffic congestion first in the Accra Metropolis, and possibly in other urban centres in Ghana. On a 14
  15. 15. more specific note, however, the study would work towards the attainment of the following objectives: • to establish the connection between socio-economic variables (e.g. income levels) and private car ownership; • to examine the relationship that may emerge between road pricing and the patronage of ‘tro-tro’/ mini bus and taxi; • to ascertain what the effects of road pricing would be on metro/public transport patronage; and • to make recommendations to guide policy formulation and policy implementation 1.6 Propositions Underlying this Study:-the following propositions have been carefully formulated to aid in the discussion of field data: • That a relationship may exist between road pricing and reduction in traffic congestion. • That reduction in the number of low capacity vehicles entering the study area may be a function of road pricing. 1.7 Conceptual Framework Figure 1.0 shows the structure of the problem and its various components. It also shows the effects of road pricing on the various elements. The framework holds that rising incomes would generally lead to an increase in car ownership and thus more car travel, and together with other factors such as population increases and urbanization, it is most likely that a further increase in traffic congestion will occur, a situation that could only be described as chaotic. 15
  16. 16. The various consequences of the problem have also been shown in the diagram below (Fig. 1.0). This would therefore result in less public bus travel hence higher bus fares and reduced services. This situation, in the long run, is anticipated to lead to more car ownership; increases in car travels; and more congestion. However, with the implementation of road pricing which is anticipated to produce an efficient public transport system, there is the likelihood of achieving a significant reduction in car ownership, and car travels, hence a concomitant reduction in congestion, partly achieved through higher patronage of public transport. Below is the diagrammatic representation of the framework. Fig. 1.0 Showing the Relationship amongst the Various Components of the Problem Rising Income More Reduced Car-Ownership Road Pricing 16
  17. 17. Reduced More Car travel Reduced Congestion Difficulties Environmental Bus Delays Locational for Impact and Change pedestrians unreliability and cyclists Reduced Faster & Reliable Less bus More Travel Travel Road Pricing Lower Bus Fares & Higher Bus Increased Fares and Services Reduced Services SOURCE: Adopted and modified version of Pacione’s work (2005), pp. 271. 1.8 Justification/Rationale of the Study During the last decade or so transport geography had shared with other aspects of the discipline in a general swing towards ‘geography of relevance’ (Williams 1981, pp 22), quoted by Farrington (1985). Farrington also states that, “…for the transport geographer this has included for example the imperatives of defining and applying the concepts of accessibility, assessing the role of transport in economic development and recognizing the environmental impact of 17
  18. 18. transportation. “First as geographers seeking a much more active role in the promotion of human welfare” (Smith 1997, pp 1) and then as researchers offering explanations of such activities, it is important that we take up the issue of road pricing and traffic congestion more seriously as it ultimately borders on socio-economic development, and even on the politico- cultural well-being of the citizens. In this spirit, this research tried to delve into the problem as stated in previous paragraphs. Most of the literature available on transportation reveal a wide spread belief in the importance of transport, and its efficiency in accelerating the developmental process of a nation. Accordingly, the rationale of this work has been to bring to light the prospects and problems one is likely to encounter in trying to implement road pricing in the Accra Metropolis as a strategy to help reduce or curb traffic congestion in the metropolis. The concept ‘Development’ still remains difficult to define in absolute terms. In this direction, the perspectives of scholars such as Mabogunje, Addo and others should be taken seriously. Mabogunje (1980) conceptualized development in modern times to mean socio-economic transformation of society. Addo (1995) states as follows, “…it is pertinent to draw attention to the view presently held by many scholars that development means something more than economic growth (GNP) or economic development.” In this direction, for development to be fully realized the researcher is of the view that people must have quick (or easy) access to their places of work, residence, etc or in simple terms accessibility must be greatly improved to propel us to develop more quickly. The question therefore is how should traffic congestion be effectively managed to bring about such transformations in the human society? What are the challenges or the problems that are likely to be faced when embarking on such a journey of road 18
  19. 19. price implementation? Again, what are the likely prospects of implementing it? These questions form the basis or rationale behind this work. 1.9 The Methodology adopted for the Study This comprised sources of data collection, the sampling design or technique, the target population, and methods of field data collection and analysis. 1.9.1 Sources of Data Relevant data for this research were collected from both primary and secondary sources. The former source called for the use of structured questionnaires as well as interviews. Focus group discussion (FGD) technique was also used. Cassette recorder was mostly used in capturing what was discussed. The information on the cassette was then transcribed and used in the analysis. Participant observation technique was also employed in collecting some relevant information about the target population. With regard to the secondary sources, a great deal of lesson was drawn from textbooks, geographical and economic journals on transport, working papers and reports. The Internet and other sources such as policy documents on transport were all used. The outcome of the field investigations (i.e. questionnaire administration and interviews) has been thoroughly discussed in chapters four and five. Questions relating to places where people reside and where they work were also posed to the people and these have been carefully mapped out to give a general idea of the routes along which people travel into and from the CBD. Other questions asked were; how education influences or affects peoples’ driving culture. To what extent does this go to make people change their behaviour towards driving properly? Does 19
  20. 20. education matter at all when it comes to the issue of ability to own a car? And does this have anything to do with the management and/ or control of traffic congestion on the roads in question? Data on the incomes of some respondents and the numbers of cars they have were also collected. This information made it possible to draw a correlation between income levels and private car ownership. Most of the interviews were done alongside the administration of the questionnaires except in some few cases where we had to conduct interviews separately due to the absence of key leaders or opinion leaders. The whole data collection exercise of this work lasted six months, starting from November 2006 to April 2007. However, the real field data collection started from January 2007 to April 2007 (refer to Appendix D). 1.9.2 Sampling Design Owing to the heterogeneous nature of the population, a stratified sampling technique was used to sub-group the population as follows: commercial vehicle operators (i.e. taxi and tro-tro); private car owners; public transport operators (metro transport etc.); policy formulators (i.e. Ministry of Road Transport, Department of Urban Roads, Accra Metropolitan Assembly); and the general public or commuters. The respective percentages have been shown in the table. A simple random sampling technique was employed to each of the above-mentioned sub-groups to arrive at the target population, which amount to 210. For instance in selecting the 48 general commuters out of the 210, the table of random numbers was used. Three-digit numbers were then read in the column of numbers. Hence the first 48 numbers in the column that had a value of 210 were written down. Each of these represents an individual in the 210 target population. 20
  21. 21. Table 1.3 below shows the distribution. The justification underlying this selection was to observe the various responses from these different groups since road pricing scheme is bound to affect them differently. This was also done to highlight the particular contributions of the different groups and analyze them in a more scientific way. For instance it was necessary to give enough sample size to the group of private car owners since road pricing is bound to affect them more directly than other groups. Table 1.3 Share of Target Population SUB-GROUP SHARE PERCENTAGE Commercial Vehicle 30 14.29 Operators Private Car Owners/drivers 110 52.38 Public Transport Operators 20 9.52 Policy Formulators 2 0.95 General Public 48 22.86 TOTAL 210 100 Source: fieldwork 2006 1.9.3 Methods of Data Analysis Data generated from the field for this study was analyzed using both descriptive and inferential statistics. By descriptive methods of summarizing information, the researcher employed techniques such as: percentage bar graphs, pie charts, frequency tables, and others such as standard deviation, to summarize the raw information gathered from the field. To establish the relationship between a rise in income and car ownership, a simple correlation equation such as the following; Yi = a +bXi, was used where ‘Y’ is the dependent variable (car ownership), and ‘X’ is the independent variable (income), ‘b’ is the gradient or slope of the line of best fit, and 21
  22. 22. ‘a’ is known as the ‘Y’ intercept if ‘X’ is zero, meaning the point at which the line of best fit cuts the Y-axis. Using the Least Square Regression Line where the value of ‘b’ and ‘a’ can be mathematically computed as has been shown in Appendix B, one can suitably run a regression for the afore- stated variables (income and number of cars), and from this one can proceed to make a prediction of the variables in question. In running a multiple regression the Queuing Analysis could also have been used, but since all the factors that cause congestion do not have numerical values- for instance human behaviour cannot be mathematically quantified- there was the need to use only the quantifiable variables thus the income and number of cars in the case of this work. Using the simple equation above (all things being equal) one could predict car ownership should income levels be known in advance. Assuming that government had increased salaries of workers in a particular year, we could then predict the number of people who are likely to own cars, or people who are likely to acquire additional cars. In their simplest form, therefore, correlation studies are used to investigate the possibility of relationships between only two variables (like the one stated above), although investigations of more than two variables are common. A correlation study then describes the degree to which two or more quantitative variables are related, and this is done by using the correlation coefficient (denoted by r), which could also be expressed in percentage termed the coefficient of determination (denoted by r2 ). The computations of these have been shown in appendix B. 22
  23. 23. The calculation of ‘r’ is in many ways similar to the Pearson’s product-moment coefficient of correlation. The correlation research technique used here was to fulfill basic purposes such as; to explain positive or negative relationships between variables. The outcome of ‘r’ as we shall soon see, aided by the computation of the significance level would help in explaining if the relationship between the two variables -income and vehicle ownership- was strong enough to make a well-built case with. It is important to note that, in the simple predictive model or equation above, the Yi is known as the predicted variable on Y (also known as the criterion variable) for individual i’s, Xi is known as the individual i’s variable on X (or the predictor variable), and ‘a’ and ‘b’ are then values calculated mathematically from the original variables or scores as have been demonstrated in Appendix B. Again, for any given set of data, ‘a’ and ‘b’ are constants. CHAPTER TWO LITERATURE REVIEW AND RELATED ISSUES 2.1 Chapter Overview This chapter attempts a critical review of some available literature on the subject under investigation-road pricing. The researcher critically reviewed the experiences of Singapore, Oslo, Trondheim, Bergen, London, California, and those of other places. One cannot complete a review of a study on road pricing without considering the economic perspective of the subject. 23
  24. 24. For this and other reasons, the study also ventured into a review of the economic discourse on the implementation of road pricing and its’ potential to reduce road traffic congestion. The study also looked into some of the barriers to the implementation of road pricing in the selected metropolitan cities as well as other issues that border on the applicability and/or implementability of the scheme. Some related issues on the subject (for instance the World Bank’s study report on road pricing, 2000) have also been discussed in this chapter. Furthermore, the benefits and costs issues of road price implementation have also been discussed here. 2.2 Literature Review Chin (2002) remarks as follows, ‘road pricing is an important component of Singapore’s overall transportation strategy’. This is perhaps why they have been able to reasonably manage the situation very well up to this day. According to him while road capacity continues to be increased judiciously in Singapore to meet rising travel demand, the strategy also calls for greater reliance on public transport usage and demand management. This is a demonstration that, we need to support road pricing scheme with the other means of traffic congestion management such as the Bus Rapid Transit (BRT) project being proposed by the government of Ghana. As part of a demand management strategy, Chin (2002) proposed the restraining of vehicle ownership either through the imposition of high up-front ownership costs or restrictions on the actual growth of the car population. The former type includes the custom duties and vehicle registration fees, which amounted to almost one-and-a-half times that of the cars open market value. This has somewhat been a policy in Ghana for some time now, but so far it has yielded hardly any significant success in managing traffic congestion on our roads. The latter is managed through a vehicle quota system. The other aspect of demand management that he also proposed 24
  25. 25. is to restrain vehicle usage through the levy, or a charge on motorists based on the quantity, place, or time of the use of their cars. Generally, the more one uses his/her car, the more one has to pay. Chin (2002) then declares that the road pricing schemes, petrol tax, diesel duty and parking charges are measures in this category. Pacione (2005) also asserted that in many countries road travelers pay to use intercity roads. However, tolls for travel within urban areas have not been adopted widely enough. This is nevertheless, the case in Ghana where even intercity tolls are very poorly organized, leading to poor revenue mobilization as well as poor traffic control management systems. Chin (2002) further concluded by saying that road pricing in Singapore has been effective in managing congestion on roads in the central business district (CBD) since its inception in 1975 and in recent years on expressways and other major roads outside the CBD. Technology, he noted, has helped to make the expansion of the original road-pricing scheme possible and the authorities are still keeping tab on new developments in road pricing technology to further enhance the present system. In a similar report produced by the Swedish National Road Administration (SNRA, 2002, pp. 3), it was reported that the Swedish Parliament’s decision on the continued development in the transportation system, emphasized adapting road pricing as a measure to providing a sustainable transport system. The planning was based on sub-goals of that parliament’s transportation policy and parliament’s vision of what they desired to achieve. The planning has to satisfy both the needs of transportation and the ambition to accomplish sustainable solutions. New effective combinations of established as well as new and untried policy measures and inputs must be 25
  26. 26. considered and used in order to attain stipulated goals in that country. In this respect, the SNRA then made use of a method involving a four-step principle with a focus on gradual testing of measures starting with “Soft” measures that affect the need of transportation, choice of mode, and efficiency to evaluate the problem. It was not until such measures have been found insufficient for solving the problem that other measures such as new road constructions or improvements were taken into consideration. This Swedish experience of stimulating the need of transportation, choice of mode and efficiency as well as the construction of new transportation facilities and improvements in the quality of the already existing ones (roads) have been the approach closest to the Ghanaian scenario for some time now. For instance, in the latest drafted National Transport Policy document (called the Green Paper), all the kilometers of roads that have been constructed from 2000 to 2005 was stated. This was perhaps done to emphasize the fact that the nation believes in the construction of new road infrastructure as well as in improving existing ones as a mechanism in reducing traffic congestion that have bedeviled our cities for a very long time, which we can say, is in many ways similar to the Swedish case although the purpose might also be to maintain the road network or infrastructure for future generations. In Ghana the most dominant carrier of freight and passengers is the land transport system. The Ghana National Transport Policy paper stated that in 2000 Ghana had an extensive road network of 42,000 kilometers. In 2001 the figure stood at 50,000 kilometers, and by the end of 2005 it stood at 60,000 kilometers. In 2004, 36 percent of roads were rated good, 27 percent were rated fair, and 37 percent poor. These were improvements over previous years. In 1997 for example, it 26
  27. 27. was envisioned that roads could be improved to 70 percent good, 20 percent fair, and more than 10 percent poor by 2002, but these targets were not achieved. As mentioned in the same draft document, improvement works on the roads have increased gradually. The sad aspect is that the Ghanaian government would have to rely on borrowed funds to support the construction as well as the improvement of the road network. The other aspect of the problem is due largely to unplanned expansion and lack of local construction capacity and skills. Therefore, in many cases, the cost of construction is too high and the roads are left to deteriorate until such time that funds become available for the construction works to begin. Congestion as indicated in the National Transport Policy document is a growing problem creating costs to our economy, pollution, and higher risk for traffic accidents. There are institutions in place to address the various needs and issues of our transport system, but our transport agencies have prepared separate, mode-focused policies, which have not been beneficial in a lot of ways. On the other hand, they served their purposes in the traditional planning processes in the country. The Ghana Poverty Reduction Strategy II (GPRS II), which is to cover the period 2006 to 2009, is to accelerate the growth of the economy so that the country can achieve middle income status within a measurable time period. And, in line with the transport objectives for fulfilling the New Partnership for Africa’s Development (NEPAD) visions which are: - to reduce delays in cross-border movement of people, goods and services; to reduce waiting time in ports; to promote economic activity and cross border trade through improved land transport linkages and; to increase air passenger and freight linkages across Africa’s sub-regions, the Government of Ghana, which is the provider of transport infrastructure 27
  28. 28. and to an extent provider of transport services and a regulator and controller in the field has launched the Urban Transport Project aimed at saving the sector from further collapse. The Ghana Urban Transport Project meant to improve transportation in the country, and help develop a framework for Metropolitan, Municipal and District Assemblies (MMDAs) to plan, regulate and manage urban transportation is a welcome news. The key objectives of the project as stated are: Improve mobility in areas of participating MMDAs through, a combination of traffic engineering measures, management improvement, regulation of the public transport industry, and implementation of the Bus Rapid Transport (BRT) system. Promote a shift to more environmentally sustainable urban transport modes and encourage lower transport-related GHG emissions along the pilot BRT corridor in Accra. The expected outcome of the investments on the pilot BRT corridor are; to reduce average travel time for bus passengers, increase average travel speed for all traffic, increase productivity of bus services (passenger share of large buses) and ultimately to reduce carbon dioxide (C02) emissions along the pilot BRT corridor in Accra. But as has always been the case, we face a number of challenges (policy-wise) towards planning and developing our road network. Funding for this very project is coming from both Ghana’s development partners and the government, but the bulk of the funds are coming from the former. This has always been the case. However, as stated in the “Green Paper” now the “White Paper”, we must address a system of user charges that will help raise revenues to cover maintenance, improvement works, and expansion costs. The Traffic Engineering, Management and Safety component of the BRT under the Urban Transport Project 28
  29. 29. also spells out the need to deal with congestion; and road pricing, if adopted, could help fulfill these aspirations. According to the SNRA (2002) report, road pricing in urban areas is an interesting measure for solving and/or managing the problem of traffic congestion in most urban areas. It would be observed that the Swedish Parliament had also, by their action, opened an opportunity for the implementation of road pricing in interested municipalities and regions. The government, as stated by the report, had asserted at the time that, this issue would be dealt with if there was a proposal to implement road pricing as part of the strategy to help solve road traffic congestion and related environmental, social and economic problems. This is a demonstration of the commitment needed from policy formulators to get the scheme going. If Ghana is to use such a scheme in solving the problem of congestion in Accra, one needs to see these actions crystallizing in order to pave the way for successful implementation of such a programme. In this direction, the SNRA (2002) report as well as other works may form the basis upon which we should build the discourse in the Ghanaian context. The Ghanaian case is in many ways similar to those of many other areas where road pricing has been adopted and/or tried or even considered for many years now. The Ghanaian urban population is growing at quite an alarming rate. The Greater Accra Region for instance, has remained the most densely populated region in the country since the 1960s (Ghana Statistical Service report, 2002). The Population density has increased from 167 persons in 1960 to 441 persons in 1984 and to 895.5 persons per square kilometer as at 2000. 29
  30. 30. The Region’s intercensal growth rate of 4.4 per cent between 1984 and 2000 is much in excess of the national average of 2.7 per cent per annum and this implies a doubling time of 16 years (Ghana Statistical Service report, 2002). The total numbers of registered vehicles (both commercial and private) as illustrated under the problem statement of this work are on the increase. There is also pollution of our urban environment on daily basis as a result of an increase in vehicle ownership due to increase in incomes and the consequent long queues that occur on the roads. As mentioned earlier, most of the roads in the urban areas are also narrow. Extensions can rarely be made possible as a result of the nature of the land use (i.e. location of departmental stores, food stalls, residences, etc along the roads), and due to the difficulties in raising adequate funds towards such projects. The SNRA (2002) report stated that road pricing is still an untried measure in Sweden although there are several theoretical calculations concerning its viability. The same can also be said about other countries as well. The effects of road pricing on traffic; environment; business; housing; and location together with the charges’ distributive effects and socio-economic consequences cannot be contested. Many authorities in this field including transport geographers for several years have conducted researches into the effects of road pricing on, for example, residential location patterns. It is worth mentioning that this has been the situation in many places (both developed and developing nations alike). However, the SNRA (2002) report states that when the issue of road pricing was debated, there were many questions on its sustainability. Therefore, countries seeking and/or wanting to adopt road pricing should consider the issue of sustainability. 30
  31. 31. What one should therefore note is that, the Swedish and other case studies throughout the globe are also reports of principal reasoning, calculations of concrete proposals and practical experiences by experts. As published by the SNRA’s report (2002), in some cases in particular when it comes to distributive effects, scientists do not quite agree on many of the issues. And, as acknowledged by the same report, there are quite a number of studies concerning the calculated effects of proposed road pricing systems; some of which have never been realized. It is therefore appropriate for all to study these cases well enough, before making any attempt at implementation. Yildirim (2001, pp.3) states that increasing population and wealth results in more automobiles than current transportation networks can handle. This observation by Yildirim is very much in tune with issues raised in the study’s conceptual framework. He further states that due to limited expansion possibilities of the transportation network, congestion has increased drastically over the last decade. Vehicle ownership in Ghana has increased, and would continue to increase in coming years and this calls for better planning of facilities. Arnott and Small (1994) estimate that one third of the vehicular movement occurs in congested areas in 39 metropolitan areas of the United States with a population of one million or more. They state that even without taking into account the additional factors such as lost work and leisure time, health problems, stress, discomfort, cost of extra fuel, accidents, and air pollution, the annual cost of driving in congested areas is around 48 billion dollars or 640 dollars per driver in the USA. These figures make the problem of traffic congestion serious and very threatening when nothing is done about it. 31
  32. 32. Interestingly enough, there has not been any quantitative appraisal of losses caused by congestion in the Ghanaian situation as at the time of conducting this research. However, there are significant annual loses in terms of the nations’ Gross Domestic Product (GDP) as well as in social terms which most players in the field acknowledge. In most areas where the concept of road pricing has been adopted, Yildirim explains that traffic planners often charge users in order to restrain the number of travelers on the transportation network. By charging the users, transportation planners try to achieve several objectives (Yildirim, 2001). Some of these objectives enumerated by Lo et al (1996) and May (1986) as quoted in Yildirim’s thesis are: cost recovery for planning, construction, operation, and maintenance of the network. This type of objective is widely used by many transportation agencies to recover costs of building new highways, tunnels, and bridges. In the context of congestion pricing, users can be charged by the operation agencies to the extent of the congestion that they are causing on the transportation network. An example the authors cited was the case of a privately owned toll road along side SR-91 in Orange County, California. Whilst agreeing that the Orange County case study is feasible, this might not necessarily hold in the Ghanaian context. The Ghanaian situation calls for a completely different approach, while drawing from the experiences of other parts of the world. As acknowledged earlier, we do not have that huge traffic volume as compared to other places (like the developed nations) but what makes the Ghanaian case alarming and urgent, is the inability to embark on physical extension on the roads due to lack of adequate road space and funding vis-à-vis increase in vehicle ownership which results in the complexity of other factors like loss in productive time etc. 32
  33. 33. The other objective why transport planners find it necessary and pertinent to charge road users is the retrieval of negative externalities. The users of the roads are expected to pay not only the direct cost including fuel and travel time but also the cost that they impose on others such as additional congestion and travel delay that drivers create, air pollution and accidents amongst others. All such additional costs are found to be negative externalities as the economists and other players in the field (e.g. the transport geographers) term them. The last reason why planners would like to charge users of roads is for demand management. According to Arnott and Small (1994), when the use of the transportation resources is not efficient (that is to say when some parts of the network are over congested compared to other points), those segments can be tolled or priced in order to shift the demand from the over utilized areas to other less congested roads. This they acknowledged might increase the overall efficiency of the system. It is in this direction that this work is investigating the traffic congestion problems in the Central Business District of Accra in order to observe the prospects as well as the problems of using a road pricing scheme. It is hoped that if this traffic management strategy coupled with others are adopted and tailored towards the need of the Ghanaian scenario, the problem of daily traffic congestion that have bedeviled our roads would be resolved to a large extent. As Yildirim (2001) acknowledged, the significant contributions that road pricing could make towards the reduction of traffic congestion cannot be over emphasized. The focus of his thesis was on road pricing, which he states, is a traffic management tool that can be employed to charge 33
  34. 34. individuals based on the time, distance, and congestion level of the links they are using. He, for example, mentioned the Marginal Social Cost Pricing (MSCP) tolls, which can be used to charge the users of the roads for the negative externalities they impose on others. According to him, the Marginal Social Cost Pricing (MSCP) toll is the most common form of road pricing and this is what most economists term the First Best Pricing. Yildirim further states that there have been several attempts to implement road-pricing projects. Some of these attempts were successful while others failed because of strong public opposition. He therefore acknowledged that the most important thing in the implementation phase has to do with the public acceptance of the subject and it is only appropriate for a study of this nature to be conducted to make the issues come into the public domain as well as to inform government decision-making. In this direction, Yildirim’s suggestion becomes very relevant. He states that users of the road should be informed and be persuaded that tolling the road will make life much easier in terms of congestion and public transportation. 2.3 The Economists’ Perspective on Road Pricing Economics, in the words of Hibbs (2003), is all about human behaviour in circumstances of scarcity. In other words, how we humans behave and/or are likely to behave when confronted with the realities of scarcity. “Anything not scarce has no price” (Hibbs, 2003). Therefore, by bargaining with prices this represents relative scarcity. 34
  35. 35. Hibbs (2003) stated that bargaining takes place in a market which may be physical but which for most purposes is the set of cash relationships that exist in a community that may be larger or smaller and is increasingly worldwide. He further explains that the function of the market and the aim of economic policy is to achieve two essential objectives; ‘the efficient allocation of scare resources of all kinds combined with the satisfaction of effective consumer behaviour’. Yildirim (2001) also acknowledges that economic theory argues that to achieve economic efficiency in the market, the price of the good or service should be at its full cost to society. It is important to indicate here that the type of efficiency being discussed by these two authors is quite different from the understanding of other experts. They are here referring to economic efficiency. In this direction, economic efficiency is not used in the same way as an engineer or as a doctor may understand the term. What is efficient in economic terms is best described as what is optimal (Hibbs 2003). Economic efficiency is balancing all the expressions of demand that are shown by our decisions in the market. Effective demand on the other hand, implies a demand backed up with purchasing power and willingness to pay. Drawing from the above discussions it is important for one to know that transport is a user of land – one of the factors of production alongside labour and capital. And, the relative scarcity of land is reflected in its price. While there may appear to be plenty of land, price always reflects the strength of demand. In other words, land is a scarce resource based on price and demand. As acknowledged by Hibbs (2003) in the following quotation: “The interaction of demand and supply means that the scarcity of land is at its greatest in cities and towns and its lowest in rural areas.” As urban and transportation geographers and above all, as planners, this should be of major concern to us. 35
  36. 36. Hibbs (2003) again stated that this scarce commodity, called, land is desired by a wide range of users including transport. For example, land is desired for housing; industrial and commercial uses; construction of hospitals; and other medical facilities; religious buildings; entertainment and educational facilities; and open spaces (i.e. car parks, playing fields, cemeteries, etc) among others. Hibbs (2003) further explains that not all of the uses mentioned above lend themselves to the pricing of land, and that is, of-course the way in which the market turns to allocative efficiency. Public parks in London would never be used if there had to be an entry price. Public libraries and many museums are also free at the point of use, and as with parks and open spaces, this reflects a general agreement that some things should be available for use in this way, for the general benefit of the community. The obvious question, one is likely to pose, is why then should the transport industry fall under the pricing system? As Hibbs (2003) states, the fact that land for transport is essential for the functioning of the city does not give it the right to any special priority within the general pricing system, but leaves it in competition with all other users of the land as a scarce commodity, the degree of scarcity varying with the concentration of demand and other factors. He further stated that the market for land, though, is highly imperfect, and roads, as users of land, have no value in the market since no one owns them. This is as a result the problem of opportunity cost of public open space being one example, and one of the most serious weaknesses that arises in the equation. 36
  37. 37. The situation therefore leads to what experts termed externalities or simply the external costs. External costs in simple terms are all costs, which appear hidden and do not appear in a company’s balance sheet and/or profit and loss account at the end of each year (Hibbs, 2003). For example, a car, by burning petrol or diesel for energy emits pollutants that make the surrounding fresh air ‘expensive’ in terms of the health hazards it poses to the public. Other forms of environmental pollutions associated with the transport industry may be the following: noise, visual intrusion, local air pollution, and the disposal of condemned/obsolete vehicles, each of which imposes disutility upon people who suffer from their impacts. Accordingly, therefore, all these costs are imposed on individuals but they are very difficult to be quantified or measured. Another type of these external costs may be the consequences of accidents, the direct impact of emissions on the environment (global warming, the depletion of the ozone, the direct incidence of acid rain), and the emission of toxins which leads to poor health and actual sicknesses, all of whose costs are left to go unpaid. Hibbs’ (2003) statements and explanations are very much similar to that of Yildirim (2001). The latter author for instance states that the social cost of travel includes both private and external costs. The private costs, he said are direct such as gasoline costs, travel time, and automobile users. The external costs too, he stated are those that travelers impose on other people such as congestion, travel delays, air pollution, and accidents. Yildirim (2001) further explains that for as long as these externalities remain under priced or even not paid for as also identified by Hibbs (2003), the road network is then not used efficiently. Hibbs (2003) also confirmed that these external costs are contributive factors to congestion on the network and it should be borne in 37
  38. 38. mind that this problem of traffic congestion is not peculiar to only advanced nations, but developing nations as well, hence the need to take pragmatic steps to solve the problem. Yildirim (2001) quoted the following authors; Pigou (1920), Armstrong-Wright (1986), Luk and Chung (1997), and Arnott and Small (1994), all of whom recommended Marginal Social Cost Pricing (MSCP) tolls as the best form of road pricing that is equal to the negative externalities imposed on other users in order to have an efficient utilization of the transportation network, since economic theory argues that to achieve economic efficiency in the market the price of a good, or a commodity, or a service should be at its full cost to society. The case made by these authors is justified to a large extent. The question still remains whether transportation facilities should continue to be provided free of charge to society? Should traffic congestion also be allowed to continue to be an impediment to movement and to development? For this and other reasons, one must do a critical analysis of the situation and come out with the best practice to solve the problem. To put the concerns expressed by economists more diagrammatically, let us take a look at the relationship between demand for travel and price as demonstrated in the figure below. This was adopted from Yildirim’s work. Fig. 2.0: Supply-Demand Equilibrium in Traffic Networks. Marginal Cost Cost per Trip Generalized Average Cost Trip M CB 38
  39. 39. B CC C CA A Demand tS tU Number of Trips Source: Yildirim (2001) The demand curve illustrates how much road users are willing to pay for road use. The area below the demand curve is the total user benefits gained for the road travel. Yildirim (2001) explained that an individual user entering the road would face only the cost he or she bears which is usually a combination of vehicle operation costs and the cost of travel time. The cost, he said, rises with the number of trips, while congestion increases the travel time and decreases vehicle operating efficiency and travel speeds. However, the marginal costs represent the effects of adding one extra vehicle or trip to the traffic flow. Marginal costs include all private costs plus external ones such as delays, pollution, and accidents. He went on and explained that the extra user affects all other users and the marginal cost is always higher than the average cost. When the road demand approaches the capacity of the road, there is a substantial increase in both travel time and delays to other vehicles. In figure 2.0 above, according to Yildirim (2001), users have an incentive to take the next trip until the total demand‘t’ reaches ‘tU’. For‘t’ < ‘tU’ the benefit gained is less than the cost 39
  40. 40. incurred. In his estimation, when there is no incentive for the next user to take the trip i.e. demand is at ‘tu’, the system reaches user equilibrium. However, at this demand level, economic efficiency in the market is not yet achieved, and when the level of road use is equal to ‘tS’, the marginal social cost of road travel is equal to the marginal user benefit given by the demand curve. At point ‘ts’ the economic efficiency is now achieved and this is known as the system optimal point. In order to have the user equilibrium at ‘ts’, economists argue that the users should be charged a toll in the amount CB - CA, which is called the MSCP toll. Yildirim (2001) further explains that the MSCP tolls are optimal in the sense of changing user behaviour to system optimal behaviour. This makes MSCP tolls one of the most popular tools for road pricing application. It is no wonder that MSCP tolls achieve the optimal utilization of the transportation system. And, it should be noted that optimization refers to the economic efficient use of the network. The issue of pricing the road could not have been stated more accurately than in these words of John Hibbs (2003, pp.66): “Despite the beneficial tendency of the market to bring about economic efficiency and the satisfaction of effective demand, the transport industry, like any other, is subject to a range of weaknesses that interfere in the process. These are largely the results of circumstances of which the normal costing and pricing decisions cannot or do not take account. So the costs and benefits involved are not brought to book. It is desirable that these externalities be internalized as far as possible in the interest of efficiency and effectiveness, and one major step in this direction would be to introduce a charge or price for the use of the roads. Other externalities such as pollution, accident costs, and 40
  41. 41. consequences for the environment more generally may prove more difficult to deal with and this gives rise to pressure for intervention and statutory control…” (Hibbs, 2003. pp.66) In spite of the widely accepted economic position on this subject, there is however some disagreement among some economists and other experts. The economist Crew (1969) disagreed strongly with Tipping on his view about road pricing and its potential effect on reducing congestion. The position of Tipping as quoted by Crew is as follows: “It seems reasonable to suppose that sooner or later (depending on the elasticity of demand and the valuation of time etc.) roads will become just as congested as they were before the pricing system was introduced. Road users would then be demonstrating their willingness to consume a service at the “cost” of providing it. Market forces in other words would be operating to secure an optimal resource allocation, but what about the rest of the population? There is no market in which they can purchase what they may need; namely, protection from the undesirable features of motor traffic” (Crew, 1969). Crew (1969), explains that Tipping’s conclusion as stated in the above quote on the scope of road pricing is very much in opposition to the view held by most economists. He stated that first, the analysis provided by Tipping is incorrect, and secondly that Pareto optimal solution for roads depends on pricing and the state of the law. Crew further explains that Tipping’s idea that “the roads will become just as congested as they were before the pricing scheme was introduced” is based on the view that the system cannot be expanded and the misconception that once a price is derived it will never be changed. On this, 41
  42. 42. Crew explained that if demand for road space increases the marginal social cost of congestion (e.g. pollution, accidents, etc.) will increase and the price will be raised in equality with this. Crew also observed that Tipping’s concern on the need to protect the population from “…the undesirable features of the motor traffic…” is undoubtedly an important point. However, in pointing out the problem, he goes too far in casting doubt on the applicability of road pricing in this case. It is now proposed to show that road pricing will play an integral part in the solution to this problem. The solution depends on optimal pricing within the framework of the law. Crew, therefore proposed that, two polar liability rules should be adopted in the case of automotive travel-that the automobile users shall be liable in damages for all or none of the effects of its operations. It is then left to the government to choose or decide on a set of liability rules between these two extremes. A different Pareto optimum, he said, corresponds to each and every liability rule. Hence, the choice is now left to the government on which liability rule to adopt and then use pricing to attain the Pareto optimum. This position Crew observed was quite different from what Tipping was saying. Tipping says: “…pricing can then be used to achieve this chosen level of traffic”. Crew, however, stated that the government cannot just decide upon some level of traffic and price to get this if they wish to attain a Pareto optimum without deciding upon a liability rule, and once this is decided upon, pricing can be used to attain the Pareto optimum, not some arbitrary level of traffic. To sum up, the economic discussions on the subject at stake demonstrates the potentiality of road pricing in reducing traffic congestion in the transportation network. Nevertheless, there remain 42
  43. 43. some questions to be answered since there are disagreements and/or disenchantments among certain economists. But one cannot doubt the potentialities of road pricing in checking traffic congestion as well as helping governments finance new transportation networks and creating public transportation amongst others. Christainsen (2006) also observed that elementary economics teaches us that an excess demand of a good or service can be eliminated if its price is raised sufficiently high. According to him the demand for roadway use is no different. He observed that chronic traffic congestion indicates that there is an excess demand for roadway use, but in most cases, there is no explicit price charged for driving on streets and highways. Christainsen (2006) remarked that, gasoline (or fuel) taxes may just mildly discourage driving (like in our case in Ghana, fuel taxes do not deter people from acquiring vehicles and driving), but these fuel taxes, as acknowledged by the author, do not charge vehicles according to time and place. Roadways, the author observed, may be mostly free of vehicles at some times and places, but they may be extremely congested at other times and locations. Christainsen (2006) observed further that traffic patterns might change over the years. Road pricing offers the possibility of targeting specific thoroughfares at specific times for more intensive traffic congestion. If the prices charged bear a reasonable relationship to the supply and demand for roadways, there are also payoffs with respect to information about driver preferences and road construction. He acknowledged for instance that if prices are so high, some users might decide to car-pool, change time of their travel, or use an alternative form of transportation. In short, a higher price is an indication to travelers to consider changing their behaviours, but the 43
  44. 44. people involved make their decisions based on their own information about circumstances of time and place. Christainsen (2006) further observed that some travelers may have close neighbours who commute to the same general place or area at about the same time and may prefer to carpool. Others may not know their neighbours very well, or their neighbours may commute to other locations. In the presence of a higher price, some may prefer another form of transportation, and some people may still not, but continue to drive in their own cars, but can take another route. He intimated that, others cannot, and in the long run, some people may even change their residence. Others, however, would still prefer to stay put. By contrast, a decision by public authority to set aside a highway lane for carpool during rush hours presupposes that a certain amount of carpooling is an appropriate response to the existence of traffic congestion (Christainsen, 2006). The car-pool lane, he argued, may be underutilized, and the congestion problems of the other highway lane may actually worsen because most drivers are now denied access to one of the lanes. The central issue, is whether it is better to rely on the information available to a relatively handful of public officials, who then make decisions for everyone else, or to just establish a market price to which thousands of people can respond on their own information. The fact here is that, the potentials of road user pricing in curbing the congestion menace on our roads remain incontestable. 2.4 The Geography of Road Pricing Around the Globe 44
  45. 45. There have been several attempts to implement road pricing in many metropolitan cities around the globe. The oldest of such attempts is the Singaporean example in June 1975. The Singaporean experience has become associated with road pricing by most researchers, planners, as well as players in transportation. Since 1975, many changes have been made to this scheme. Initially the scheme started with a manual (paper license) scheme where paper permits were issued out to motorists, but over the past thirty-one years it has evolved into an electronic system that operates almost throughout the day charging motorists for as many times that they drove pass a gantry. Singapore with a population of 3,665,920 (a little bit more than that of the city of Accra) and with a total vehicle number in the city of approximately 707,000 and the city’s size covering a total of 647.5 square kilometers lost one-third of its potential city products due to travel delays amongst other things (Victoria Transport Policy Institute, 2006). When the government in 1975 under the leadership of the then Prime Minister- Lee Kuan Yew realized the situation, they began to enforce an area-licensing scheme for restraining traffic volumes. The road pricing scheme combined with other vehicle fees (such as custom duties, taxes on petrol, etc.), and the limitation placed on the number of vehicles in Singapore significantly reduced traffic and reduced air pollution. Owing to the success that the first scheme achieved, the plan to implement the scheme on all of Singapore’s major highways was brought to the table. For similar implementation, however, Yildirim (2001) stated that certain prerequisites such as public acceptability, appropriate technical features, and complementary transport strategies have to be met. The Swedish National Road Administration (SNRA, 2002) which the national authority assigned the overall sectorial responsibility for the entire road transport system also stated that Singapore was 45
  46. 46. the first country to implement a type of area-based system which is considered by many as the first road pricing model in the world. The SNRA (2002) report remarked that by the fall of 1998 it was made a completely automatic system called the Electronic Road Pricing (ERP) system. SNRA (2002) further stated that the background for implementing road pricing in Singapore was the high exploitation of land and rather high standard of living, and these factors made traffic restrictions necessary. The purpose of implementing such a system as stated by the reports was to regulate traffic in order to improve accessibility of the general public. The basis for the charge was to achieve a target speed that gave improved accessibility. If the average speed drops, the fees that one paid for using the roads as identified by the report increases and vice versa. The fees are quarterly reviewed, and specified on electronic billboards at every gate. The environmental components of the fee did not, however, commence with the introduction of the system until the year 2001. Again, on the Singaporean experience, electric and hybrid vehicles pay lower fees. The charges vary between different locations, types of vehicles and hours. The revenue generated from the system went into national accounts and is not distinguished from other state revenues. The state, region, and the municipality being one and the same facilitated the political process for the smooth implementation of road pricing and use of the revenues. Singapore’s road pricing represents a model for many cities across the world, but one needs to device a system that suits their own conditions and also acceptable by it’s citizens. 46
  47. 47. Norway introduced road pricing in three of its urban centres. These are Oslo, the city of Trondheim and Bergen. In 1986 Bergen became the first city in Norway to charge on existing roads to finance new infrastructure. Eighty percent of the revenue realized from this toll system was used to extend the road network, and the remaining twenty percent was used to improve the city’s public bus or transport system. This is so different from the Oslo case, as the purpose of the Oslo toll system was solely to finance new investments in the road network that otherwise would have taken too long to complete. In Bergen’s experience the toll only applies on weekends (daytime), which is not surprising, because the most affected areas where traffic begins to build up is during the day. As was the case in the Singaporean model, the Bergen city toll system also started operating as a manual scheme, but was latter changed to the electronic system. SNRA (2002) reported that the agreement by the city authorities of Bergen was originally planned to last until the turn of the year 2002, but it has been prolonged for another ten years with the possibility of an additional ten year extension. Oslo’s Electronic Road Pricing (ERP) system was launched in 1990. The reason for introducing this policy was simply due to the increasing road congestion during the 1980’s. The purpose of the Oslo road toll system was to finance new investments that otherwise would take too long to complete. Accordingly, the Norwegian Parliament took a resolution to contribute with half their financing. The remaining fifty percent of the required funds, as stated by the SNRA (2002) report was to be covered by the road toll revenues for the period 1990 to 1997. As stated by this report, the emphasis of the Oslo example was on new road construction, and the purpose of the 47
  48. 48. new roads and passages was a transfer of traffic and thus alleviation of the situation in the central part of the city. Following this development a ring of 19 toll stations were set on all roads leading into central Oslo. The payment was either an electronic or manual or through coin drops, but as at today, most of the vehicles in Oslo pay electronically. There is a 24-hour charge for vehicles (except emergency vehicles, scheduled buses, and motor cycles). It is interesting to note that as at 2002, the fee was 15 NOK, and the cost for a monthly pass was around 400 NOK. Heavy trucks pay a double fee. The tolls were to be revoked in 2007, but now a second period is being discussed and will include more investments in public transport. What this, therefore, means is that the tolls might remain for a longer time than it was originally planned. In the Oslo case, one reason to extend or prolong the period of the toll system is that there is not enough time to finish the investments stated in the first package and that new investments are now being discussed (SNRA, 2002). It should be stated here that in both cities’ experiences (i.e. Oslo and Bergen), there seems to have been room for physical extension in the network, and there was a room to provide new road investments, but in the case of Accra central, where the attention of this study is directed, there can hardly be any physical extension in the network owing to the current land use. Under these and other constraints, however, the most feasible solution or appropriate measure is to use part of the revenues that would be generated from such a scheme to provide new investments in the road network. Again, investments should also be made in public transport systems to cater for the urban and rural poor (i.e. to provide Metro Mass Transport which is currently in operation across 48
  49. 49. the country). By so doing, there would be alternative means (or modes) for both motorists and the general public as a whole. The city of Trondheim in Norway is also known to have adopted the road-pricing scheme since the year 1988. The city of Trondheim has a population of 140,000 (VTPI, 2006). The interesting thing to note is that the figure is much less than the population of Accra. Trondheim’s road pricing charging area is approximately 4km by 6km. It is worth mentioning that Trondheim had the world’s first electronic road pricing scheme for entering a city, and a total of seven toll zones. Subsequently, this later came to be known as the Trondheim toll ring. As was the case in Oslo and in Bergen, the purpose of the Trondheim scheme was to finance new road infrastructure. However, part of the revenue was also used to finance public transportation, environmental measures, and passages for pedestrians and bicycles were to be provided free of charge to city dwellers. In the city of Trondheim, over 80% of those using the system have transponders on their windshield (SNRA, 2002). At the same time, there were also payment machines and a few manned stations. As far back as 2002, the charge was 15NOK per gate passage. A monthly subscription was discounted by 20 to 50%. There was no extra charge for additional passengers within the same hour (SNRA, 2002). According to this same report fees applied between the hours of 6am and 6pm in the city of Trondheim and the charge is lower during off peak hours. Again, it was stated in the report that there were ongoing trials as at the same time with ten differentiated fees to control traffic levels, although this is limited by the existing legislation during that time. The ultimate aim of the Trondheim system is to achieve a transition to a road-pricing scheme that controls traffic when the present agreement expires. 49
  50. 50. Trondheim therefore implemented what became known as ‘toll ring’ that surrounds the city’s downtown area. The ‘toll ring’ has 12 toll stations and uses a total of 35 lanes. Each tollbooth according to the Victoria Transport Policy Institute (VTPI) operates with an electronic card system used by 80% of drivers entering the city and the other 20% use the coin machines or magnetic strip cards, which are available at all twelve booths. Rates range from 0.62 U.S. dollars to 1.56 U.S. dollars with a peak charge between 6am and 10am. It is also recorded that as a result of these pricing schemes, inbound traffic has declined by 10% during toll periods while non-toll period traffic has increased by 9%. Again, it is reported that weekday bus travel has increased by 7%. As indicated in previous and/or earlier discussions, revenues are used for road infrastructure, public transit, and pedestrian and bicycle facilities. Some of the benefits of the Trondheim road pricing scheme as stated by the Victoria Transport Policy Institute (VTPI) were the following: immediate dip in peak rush hour traffic by 10%; revenues from the tolls have also been used to improve roads and build by-passes to cut traffic congestion. The income is also used to give commuters other options by upgrading public transits, building bicycle paths and even providing two hundred free bicycles for use in downtown Trondheim. According to the VTPI, initial public opinion of about 72% opposed the implementation of road pricing. This figure dropped to 48% two months after the launch of the scheme, and reduced further to 36% in 1996. Still in Europe, Italian cities have since 1992 had the opportunity to introduce entrance checks and, levy a fee to protect the cultural and historical values and monuments of their cities (SNRA, 50
  51. 51. 2002). This was not to reduce traffic congestion per se as was the case in other places mentioned. However, the Italian case had an implicit purpose of reducing traffic congestion in the cities. In Rome for example, the so-called ‘blue zone’ has existed since 1989 as a means to protect half of the city core. Between 6:30am and 6pm Monday through Friday, and between 2pm and 6pm on Saturdays, a part of the city center was closed to all vehicles not having a special permit (SNRA, 2002). So then, in Rome everyone living and working within this zone and certainly other persons (except visiting clients, medical doctors, etc) can get permission to drive into the zone. The report also further states that since 1988, however, everyone but the residents have to pay for permission that costs a bit over 300 Euro per year, which corresponds to the cost of an annual public transport pass. The check is completely done manually. In the city of London, it was noted that since February 17, 2003 authorities have charged a 5pounds daily fee for driving private vehicles in an eight square mile central area during weekdays as a way to reduce traffic congestion and raise revenues for transport improvements. However, road pricing has been discussed for many years until now. The background to the London plan was that the mayor, Ken Livingstone, considered the traffic situation to be the most important issue in the elections. An automated system checks vehicles entering the charging zone against a database of motorists who have paid the fee. According to the report, despite considerable controversy, the programme was implemented without major problems, and has substantially reduced traffic congestion. It has also improved bus and taxi service, and is generating revenues. 51
  52. 52. A previous government, as noted by the report, established the legal possibility for road pricing. Londoners, as it was noted, considered congestion to be the most urgent traffic issue since motorists in central London spend about 50% of their travel time in queues. So, the purpose of the London plan was primarily to reduce congestion in the road network but at the same time, to obtain revenue. The revenue will then be used to subsidize traffic investments in both road network and public transport at least for the first ten years (SNRA, 2002). The charge levied on trips in central London (an area of about the same size as the inner city of Stockholm) between 7am and 6:30pm on weekdays was 5 pounds per day for cars and 15 pounds for trucks. The fee is per day and remains the same no matter how much you drive during the day. Residents of central London reserve the right to buy a discounted weekly pass. Buses, taxis, motorcycles, and emergency vehicles were exempted under the scheme. There were other exemptions for a low annual or one time fee for the disabled and for the environmentally adopted cars. In central London the technique adopted was not toll stations. Instead, it involves taking a photo of all vehicles traveling in the zone. The number on the registration plates of the vehicle was compared with a register of vehicles having paid in advance. Cameras were placed at the boundary as well as within the zone. It should, however, be stated that the proposed scheme of Accra, need not necessarily start or begin with all of these advanced technologies. It may simply begin with a manual system as was the case in Singapore and later be fully automated. In any case, the proposed Accra scheme should follow the basic principle of tax collection; where the expenditure incurred in collecting the tax (road pricing in this case) should not exceed the 52
  53. 53. revenue to be collected. In this way, we can be assured that there would be excess revenue to be used in financing the transport sector. SNRA (2002) report acknowledges that at the time of compiling their report, there were already advanced plans to implement road pricing in many places all over the world. In Britain, apart from the city of London, an additional number of British cities (the city of Bristol, Leeds and Edinburgh) were close to finalizing plans on the subject. Most definitely, London’s experience would be of great importance to those cities as well as to other cities around the globe seeking to implement the scheme. It is noted that other cities such as Dublin in Ireland, Auckland in New Zealand, and Tokyo in Japan are also seriously discussing road price implementation (SNRA, 2002). We have so far been discussing the geographic spread of road user pricing, more specifically, talking about where there were attempts to implement the scheme, and where there has been some appreciable amount of success in the effort to implement the scheme. It is now time to take a look at some of the proposals that were abandoned after plans were far advanced in implementing the scheme. The abandonment of such projects was due to several reasons, some of which have already been mentioned in earlier paragraphs. Yildirim (2001) for instance associated some of these to strong public opposition. This reason, however, seems to be the single most common grounds for abandoning such projects as we shall soon see. On this point, Yildirim recommended that the most important thing in the implementation phase of road pricing is the public acceptance of the road-pricing project. In this direction he said; 53