Transportation Pricing
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Transcript of Transportation Pricing
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Critically Analysis of “ Malaysian Transport
Strategies, Measures andPolicies “ Report By Jeffery
D. Ensor
The Report Analysis
Among the available modes of transport in many large cities
around the world, the private car has been interested more.
There are undoubted advantages in using the private car rather
than the other modes of transportation. Freedom, Privacy and
comfort are some of the reasons for owning a private car by
people. Furthermore, availability of a private car, i.e.
whenever you require to wherever you desire to go, has made
the private car more popular than the public transport. From
the psychological perspective, it is undeniable that a car can
symbolize the user’s power, success and wealth. That is why
the demand for private cars has been growing recently.
Kuala Lumpur Metropolitan Area as the capital of Malaysia has
not been exception of private car ownership increase trend.
According to Road Transport Department of Malaysia[1,2], the
total registration of motor car has been elevated dramatically
during the years 2006 - 2011 (Figure 1 and 2).
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Figure 1: Cumulative Total Car Registration in Malaysia from 2005 to 2011
Figure 2: New Registered Motor Vehicles By Type And State, Malaysia, Fourth Quarter, 2011
Malaysia’s rapid economic growth plan has affected on KLMA in
various dimensions which causes more people being attracted to
this urban area, resulting in its population growth. In
addition to population growth in KLMA, there are other factors
mentioned in the Report such as GDP growth, rising average
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income, increased working age group and urbanization which has
promoted the travel demand and spread traffic over a wide
area.
Although private vehicles have improved the mobility needs of
many people in KLMA, it seems reasonable to worry about the
single occupancy vehicle growth. A critical challenge faced by
high rate of motorization effort in KLMA, such as other
cities, is traffic congestion. In many developed and
developing countries traffic congestion has been a serious
urban problem. Air pollution and environmental risks are also
other concerns in related to this booming motor vehicles
population.
The early solution most people think for mitigating the
congestion problem, is adding a new lane to the current
overloaded highways. Construction costs of new lanes are very
high and typically come from the fuel taxes. Since the
Malaysia Government policy is to keep fuel prices low, the
construction needs a large amount of funding. On the other
hand, the more spaces, the more drivers using the expanded
highways.
Traffic condition predictions and congestions might be partly
reduced by up-to-date information on the roads which allows
the drivers to plan for their less congested trip. Integrated
Transport Information Systems (ITIS) was launched by the City
Hall of Kuala Lumpur in March 2003 to provide public and real
time traffic information covering 243km2 of Kuala Lumpur and
surrounding areas[3]. ITIS provides the information such as
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area of traffic congestions, alternative routes and estimated
travelling time. However, this system has not been completely
successful in achieving its goals because of some limitations
including only online access to the information, a few
variable traffic condition signs and less public on-road
informing.
According to the Report, the need for Travel Demand Management
has implied Malaysia to bring the controlling on-road vehicles
number to its consideration. Many efforts have been
accomplished since early 1990s. Carpooling program, Parking
restriction and different charges, one-way roads, bus lanes
and so forth implemented which none of them has have a
positive long-term impact.
Transport pricing term which has been invented by economists
is now believed to be an effective way to reduce road
congestions. This term says that the price of using a road
should meet the cost of the road. This policy plays an
important role in many countries such as Germany, Italy,
Sweden, China, Singapore and so on. For KLMA, the road pricing
study has also commenced from year 1976 (Figure 3)[4]. The
major advantage of road pricing is elimination of wasteful and
excessive usage of current transit capacity.
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Figure 3: Road Pricing study recommendations
As described in the Report, prices typically are based on the
rule of marginal costs which implies that the marginal benefit
of a road usage is equal to marginal cost of the same road
usage. In the circumstances of congestion, the extra cost,
called externalities, in addition to internal costs will be
incurred due to environmental effects and total delays imposed
to other existing users.
However in the real world determining the exact transport
marginal costs as well as implementing an adjusted charging
system is very complicated, costly and maybe impossible. For
example valuation of noise, safety and CO2 emissions has not
yet been certainly identified. Therefore some urban cities try
to approximate the marginal costs.
Although Malaysian Government follows supporting of reduction
of charges to the customer, it would better to be considered
that the consequences of not implementing an effective policy
to reduce the congestion and its effects will definitely be
against the people.
The Report divides the marginal cost into fixed and variable
cost to examine the tools and measurement for road pricing.
Using the fixed cost (incurred by user independent of the
amount of travel) such as vehicle quota, vehicle ownership
taxes and insurance as a tool for road pricing is ineffective
in practice. It has approximately no effect on travel demand
because the cost is paid whether the driver uses the car or
not.
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On the contrary, variable costs (incurred depend on the amount
and the nature of travel) can be managed effectively so that
be converted to a travel managing tool. Some automobile
operating costs have been investigated in the Report.
Fuel Prices seem initially the best managing tool for lowering
energy demand, reducing hazardous emissions and enforcing
automobile manufacturer to bring the car more fuel-efficient.
However, it has also some disadvantages such as suffering poor
innocent people as well as less relation to congestion
factors. In addition, raising fuel price will absolutely
affect every aspect of everyone’s life, rising price from the
transportation to raw material and commodities. That is the
consequence of the fact that nearly every thing in the society
needs distribution and shipping which affected from the rising
fuel price.
Another variable cost measure is Parking Restraints. Providing
and managing parking spaces has a significant role in mobility
and efficient space usage. In unrestrained parking area, park
space do not creates demands for travel; however for
restrained parking areas, additional space facilitates
additional travel by private vehicle. There are many
instruments which can be utilized for these two dimensions of
control: Price and Supply. According to Price, Parking Price
increasing, Parking Rate Structure and Parking Tax are
examples of such instruments. Similarly, for controlling
Supply the instruments such as Removing Parking Space and
limiting Parking Growth may be useful. Parking Restraints
policy has some side effects. First, if it can not be
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supported by sufficient transports of other modes, it might be
reduce the accessibility. Second, if parking restraints is
implemented inconsistently, it can cause diversity in trips
rather than reducing them. Third, as the Report says, it will
increase the for-hire drivers which mask the reduction of
private cars. Despite these drawbacks, Parking restraints
measurement and strategy is very fascinating supplement travel
management tool in many developed and developing cities, but
needs to be affected consistently in a large area of on-street
and off-street parking spaces.
Among the current approaches to tackle traffic congestion in
KLMA, congestion pricing represents a sustainable and
practical policy which discourages drivers to overuse their
private cars during the peak hours, while motivating them to
utilize other modes of transport. Congestion pricing reduces
the delays and make possible the prediction of travelling
time. It also benefit to the government by improving QOS,
achieving additional revenue without increase in taxes or
capital expenditures and by decreasing the required time for
accident response. In related to public transportations,
congestion pricing improves its speed and reliability which
results in public transport demands while lessening the
maintenance and operation costs. A portion of the revenues
collected from the tolls in this system, can be consumed as
operation and management costs and the rest (as net revenue)
can be used for development and expansion of roads, highways,
traffic facilities and public transportations, for reducing
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other taxes and so on. Figure 4 demonstrates the benefits of
congestion pricing through a virtuous cycle[5].
Figure 4: Congestion Pricing Benefits
It is undeniable that the effectiveness level of congestion
pricing on alleviating the rush hour traffic jams and on
public transportation completely depends on the type of
pricing strategy is chosen.
Since the Network Pricing strategy requires high sophisticated
technological systems for tracking the cars within the
congested areas as well as people reaction challenges, it is
not suitable for KLMA congestion pricing scheme. However it
seems that Area-wide or cordon pricing can have a significant
role in congestion reduction. However, this kind of strategy
would not be successful without development of public
transportation infrastructure. Public transportation
enhancement is a fundamental factor for implementing area-wide
or cordon pricing system and must be deployed beforehand.
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HOV and HOT lanes are another strategy of congestion pricing.
HOV has more advantages over HOT lanes according to the
Report. But that is feasible where the road has enough space
in order to separate a special lane for special vehicles. Some
roads within the KLMA central division area have not
sufficient capacity or width for implementing these carpool
lanes; however for some expressways, if it enhances people-
moving capacity, the unseparated or separated HOV lanes can be
constructed.
KLMA Today:
Motorized road transportation is still the first preference of
movement in KLMA. Even now slower speeds and rising traffic
congestion bother people in the city. According to the
Transport Statistics Malaysia 2010 [2], the number of
passengers carried by LRT services in Kuala Lumpur has
remained approximately the same during the years 2006 and 2010
(Figure 5) in comparison to the increasing rate of registered
motor vehicle during these years (Figure 1) .
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Figure 5: Number of Passengers for LRT services (2006-2010)
Constructing more roads and highways can not catch up to the
rate of motorization in KLMA. Congestion leads to productivity
(man-hours) loss and pollutes the environment. If the
government are not able to manage this trend effectively, soon
KLMA will be converted to a huge parking space. Therefore, it
is suggested that a policy of Carrot-and-Stick must be
followed by the Malaysian Government, i.e although economic
growth entices travel demand as ‘carrot’ or motivator, there
is also a need for ‘stick’ or restraints to balance the
situation.
Area Congestion Pricing Scheme introduced in the Malaysia Land
Public Transport Act 2010 (Act 715) [6] for the first time. In
this law the Minister has prescribed to charge the drivers who
use the roads within the designated areas. To fulfil this
order, there are also some prerequisites mentioned in this law
such as specifying the roads in which the payment must be
collected, the persons who are authorized for collecting and
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retaining charges and the persons and classes of vehicles that
are exception from this law. But it is obvious that this
scheme will not be implemented effectively without enhancement
of public transportation.
Public transportation expansion has always been in the
consideration of Malaysian Government. According to the Star
news website [7], in 2011, 470 RapidKl buses were added to the
fleet which raised the total passengers by 4.04 million in
comparison to the previous year. Three more Bus Expressway
Transit (BET) inserted to help reduce travel time by utilizing
the alternatives routes with lighter traffic. Also 35 trains
initiate to LRT lines to raise the passenger transporting
capacity.
Unfortunately under the current circumstances, KLMA is seems
not to be very close to its goal in expansion of public
transport supply and demand, although Tenth Malaysia Plan
(2011-2015)[8] has considered the growth of public
transportation in order to reduce the private travel demand
and traffic congestion. Achieving target will require major
demand and supply efforts from KTM Komuter, LRT and buses.
Maybe the other kind of pubic mode should be come to the
attention such as BRT (Bus Rapid Transit).
A Similar Experience
The same issue has arisen in Tehran capital of IRAN, as the
most significant metropolitan city in Middle East area.
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Population growth, exceeded usage of private cars, low
capacity roadways, low price fuel and city sprawl are the main
causes of traffic congestion in Tehran. Congestion pricing
(cordon) has been established since 1979 to ease travel in
central area. This restricted zone is now controlled by ITS
systems. BRT line has been implemented in Tehran since 2004
which has about 104Km length and reaches to 300km in future.
Odd-even Licence plate restricted zone is another scheme which
introduced and implemented within a larger area in Tehran.
According to this plan, only licence plate cars with even
numbers are allowed to enter or transit across this specific
zone on even days of a week. The others are allowed on odd
days but this area is unrestricted on weekends. Expansion of
Subways, Cycle stations and lanes, Parking lots and multi-
floor parking, ITS systems development and so on are the major
programmes which have all been successfully employed to lessen
the side effects of traffic demand growth in this metropolis.
The above example is what I have experienced during my living
in Tehran, so when I compare these two cities I make believe
that solving the KLMA congestion challenge in the near future
will be not beyond access. It only requires well-trained
experts for financial, strategic and risk management planning
and so on to provide proper Traffic Management Scheme in a
timely and effective manner.
References:
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1. Road Transport Department Official Portal, http://portal.jpj.gov.my
2. “Transport Statistics Malaysia 2010”, Ministry of Transport Malaysia
3. Michael Yong, “Integrated Transport Information System (ITIS) for Kuala Lumpur: The
Clear Way To Go”, JURUTERA, October 2005
4. J. Mohamad, A. T. Kiggundu, “The rise of the Private car in Kuala Lumpur, Malaysia”,
IATSS Research Vol.31 No.1, 2007
5. “Transit and Congestion Pricing”, U.S. Department of Transportation, Federal
Highway Administration, April 2009
6. “Laws of Malaysia, Act 715, Land Public Transport Act 2010”
7. “The Star online”, http://thestar.com.my/news/story.asp?file=/2012/4/16/nation/1108915
6&sec=nation
8. “Tenth Malaysia Plan, 2011-2015”