Congestion Pricing Part Deux:

This is part two of a three-part essay based on my master’s thesis. It discusses why congestion pricing is the most effective way to address traffic congestion in large cities. Part one can be found here.

Photo by Wambui on Unsplash

The three proposed alternatives to Congestion pricing

1. Building more roads

The lack of adequate road infrastructure, particularly roads that allow vehicles transiting through Nairobi to bypass the city center, has created a significant traffic bottleneck. In addition to increasing the number of cars in the city, large vehicles in transit contribute significantly to the wear and tear on city roads. Making progress on several ‘bypass routes’ that make it easy for some transit traffic to avoid the city center is, therefore, a government priority.

The current Nairobi Bypass project, which involves three roads around the city and 98 km of paved road, has an estimated implementation cost of $460 million. This yields a price per kilometer of approximately $4.6 million. This is equivalent to about twice the estimated annual loss that the city of Nairobi incurs due to traffic congestion (assuming the $500,000 daily loss earlier mentioned), making it an easy investment to justify.

These roads also contribute to the region’s overall transportation infrastructure, a factor critical to maintaining strong trading relationships with land-locked neighboring countries such as Uganda, Rwanda, and Burundi. These relationships have been under strain of late, with countries like Burundi opting to ship produce through the port of Tanzania despite being 500 km further than the port of Mombasa and having a lower dwell time (cargo clearing speed) of 3.7 days.

According to the Kenya National Bureau of Statistics, the number of passenger cars imported into the country grew at a Compound Annual Growth Rate (CAGR) of approximately 50% from 2010 to 2013. This rate of growth accelerated each year. Between 2012 and 2014, the number of cars on Nairobi’s streets doubled to 700,000. Given this high growth rate, it is unlikely that Nairobi will be able to construct enough road infrastructure to keep up with the pace of car acquisition. Worse still, recent research has shown that far from curing traffic congestion, highway and road expansion often increases traffic by increasing demand (Duranton and Turner, 2011). This research suggests that exclusively pursuing a strategy of building more roads exposes Nairobi to the risk of building expensive but necessary additional infrastructure without addressing traffic congestion.

2. Light Rail Transit

Light rail transit (LRT) is an attractive alternative to the more expensive, construction-intensive subway system. Its surface and elevated tracks make handling issues such as track and tram repair significantly cheaper while allowing for high-capacity transit that minimally disrupts existing city infrastructure. Despite these advantages, LRT still has significant drawbacks with regard to scalability and running costs.

Light rail systems have the second highest capacity of the popular forms of Mass Transit. At 19,000 passengers per hour per direction (G. Gardner, J. C. Rutter and F. Kuhn ,1994), Light rail can handle the current traffic density on Jogoo Road, Nairobi’s most heavily trafficked road. However, traffic on Jogoo Road is projected to increase exponentially over the coming decade, rising from approximately 90,000 vehicles per day to over 400,000 per day in 2030. If this projection holds, the city risks outgrowing its LRT almost as soon as it is constructed.

A major risk with building LRT infrastructure is that consumers appear to be highly price inelastic, preferring to take Matatus over trains even when the Matatu ride is often four times as long as the train ride (30 minutes vs. 2 hours). Part of this inflexibility appears to stem from commuter’s perceptions of the convenience of the train system. Users indicate an aversion to multi-modal transit and want to be dropped off as close to their destination as possible, even if this implies a significantly longer ride. Aligning LRT infrastructure with current transit routes is critical for the public’s acceptance of the system.

3. Bus Rapid Transit

Since it was first introduced in Curitiba, Brazil, nearly 40 years ago, Bus Rapid Transit has steadily increased in popularity as a low-cost alternative to more expensive MRT options such as Subways and LRT. Furthermore, with enhancements such as dedicated lanes, off-board fare collection, and platform-level boarding, BRT’s capacity has steadily risen to rival that of LRT systems. BRT systems are also flexible, allowing cities to repurpose dedicated BRT roadways for passenger cars in case of low demand. Despite these advantages, the systems are still expensive and logistically complex to manage effectively.

A 2000 study by the United States Government Accountability Office (GAO) puts the cost per Km of building a BRT in the US at $8.4 million vs 21.8 million for LRT. Closer to Nairobi, in Dar es Salaam, a 21 km Bus Rapid Transit line built jointly by Beijing International Engineering Group (BCEG) (feeder station construction) and by German contractor Strabag International GmbH (mainline construction) is in operation. The system was constructed at a total cost of €134 ($145 million), which works out to $6.9 million per km. While this is about half the cost per kilometer of the Addis Ababa Light rail system, it is still 50% higher than the current cost of building more roads, benchmarking off the cost of construction of the southern bypass mentioned above.

Though capacity varies quite widely, BRT can handle passenger numbers that rival those of LRT. The world’s most efficient bus transit lines, such as Bogota’s TransMilenio, carry 2.1 million a day over 106 Km of road. This translates to a peak hour carrying capacity of between 35,000 and 45,000 passengers, sufficient for Nairobi’s needs (Informe de gestion 2013 Transmilenio S.A.). The Dar es Salaam BRT, for its part, has a projected carrying capacity of 300,000 passengers using 148 buses along its 21 km length.

Why new transport infrastructure is necessary but not sufficient to solve traffic congestion

A large and growing body of evidence shows that the infrastructure-based solutions discussed above will not work for Nairobi if the problem we want to address is traffic congestion. Though traffic congestion is related to sub-standard public transit alternatives and the poor state of Kenyan roads, it is distinct from these two problems. It is, therefore, risky to assume that solving one or both of these related problems will resolve traffic congestion in the city. Evidence suggests that solving one of these associated problems could have the counterintuitive result of worsening traffic congestion. In light of this, it is essential to implement solutions that directly address the primary driver of traffic congestion: the number of cars on the road. One such approach that has proved effective is Congestion Pricing.

Though traffic congestion is related to sub-standard public transit alternatives and the poor state of Kenyan roads, it is distinct from these two problems.

Congestion pricing refers to charging drivers for access to (certain parts of) a city. Proponents point to the concept of the ‘Fundamental law of road congestion’ (Duranton and Turner, 2011), which investigates the effect of lane kilometers of roads (the length of available roadway multiplied by the number of lanes in each segment) on vehicle- kilometers traveled (VKT) (a measure used as a proxy for congestion). The study finds that VKT increases proportionally to roadway lane kilometers for US interstate highways, indicating that an increase in roads does not reduce congestion and may, in some cases, increase it by increasing demand. The study also finds no evidence that the provision of public transit affects VKT. Though these studies were conducted in US cities with far more adequate infrastructure than Nairobi, they provide some of the most rigorous evidence on the general efficacy of traffic congestion interventions. They suggest similar results would be achieved if the studies were conducted in the developing world.

The study finds that VKT increases proportionally to roadway lane kilometers for US interstate highways, indicating that an increase in roads does not reduce congestion and may, in some cases, increase it by increasing demand.

The fundamental law of road congestion builds on earlier work found in ‘The law of peak-hour expressway congestion” (Downs, 1962, 1992) and applies it both to highways and other types of roads. Duranton and Turner find that the proportional increase in VKT comes from four main sources, with the first two being the most critical:

1. Changes in commercial driving
2. Changes in individual behavior (driving more)
3. Migration to cities with more roads and public transit and
4. Traffic diversion

Studies such as these cast doubt on the effectiveness of the alternatives previously discussed and strengthen the case for congestion pricing as the appropriate solution to Nairobi’s traffic problem.

Comparatively, little new infrastructure is required to implement the congestion pricing system. Toll collection can be done with different cost and time efficiency levels, depending mainly on whether the system is to be put in place using toll booths with human personnel or through an automated process. Nairobi’s current road infrastructure lends itself to effective toll collection due to the limited number of major entry points into the city center. As mentioned, a study by the Africa Development Bank identified nine corridors that carry the bulk of traffic in and out of Nairobi’s central business district. The NIUPLAN recommends assessing appropriate MRTS solutions to place on each of these corridors. However, placing major toll collection points on these corridors would be a far better and cheaper way to capture and control most traffic in and out of the city. Smaller toll stations could supplement these main booths on the more minor routes into the city, which are not many, and account for a much smaller proportion of the traffic flowing into the city. Moving the Major toll stations further out would increase the coverage of the congestion reduction system but would necessitate an increase in the number of booths since routes branch out the further you get from the city.

Running costs would depend on the means of implementation chosen. Singapore was the first to implement congestion pricing in the 1970s when automated technologies such as video capture of number plates and in-vehicle units automatically charging motorists whenever they pass through a computerized booth had not yet been invented. Therefore, the city used a paper-based model to simplify compliance and enforcement. Despite its simplicity and lower cost, a paper system is limited because one cannot adjust tolls to address congestion during peak travel times. If Nairobi implements congestion pricing, it would likely need to be electronically administered, given the significant role that peak-hour traffic plays in slowing average travel times for an entire traffic network (Gómez-Ibáñez, 2005). This would increase initial construction costs but reduce running costs associated with personnel.

A look at London’s implementation of congestion pricing provides a valuable benchmark for ‘appropriate pricing’ of tolls to minimize cost to Nairobi residents while achieving traffic reduction goals. The London example shows that congestion pricing can have impacts on par with high-capacity MRT systems such as LRT and BRT. Levying a £5 charge on vehicles coming into the city center between 7 am and 6:30 pm, Monday through Friday, reduced car entry during charging hours by 33% and 11% for trucks and vans. These changes contributed to a 30 percent reduction in congestion delays in Central London. These numbers translate to 65,000 to 70,000 motorists no longer on the road, with 50 and 60 percent shifting to public transit (primarily buses, which were now faster due to reduced congestion) (Gómez-Ibáñez, 2005).

Levying a £5 charge on vehicles coming into the city center between 7 am and 6:30 pm, Monday through Friday, reduced car entry during charging hours by 33% and 11% for trucks and vans. These changes contributed to a 30 percent reduction in congestion delays in Central London.

Since congestion pricing directly affects what motorists pay to utilize city road infrastructure, it provides a relatively easy lever to adjust when traffic begins to raise congestion to undesirable levels. An increase in the congestion level signals that the current price is no longer high enough to deter use, and congestion pricing provides a direct way of adjusting the cost to move to a more desirable equilibrium.

Despite the advantages, adopting congestion pricing in Nairobi will likely require careful messaging and political mobilization. This is because it is likely to be perceived as an additional tax on city residents with little faith in the administration’s ability to effectively collect and use revenue for the public good. Given Nairobi’s complex political dynamics as described earlier, with the overlapping interests of local and national level politicians, Matatu and bus owners, the emerging middle class, and the urban poor, it would take delicate political organizing to implement any congestion pricing scheme successfully. That being said, congestion in the city center is well recognized by most of these constituencies as a significant problem for the city, and a workable solution would be a welcome relief for all.

Granting exemptions or reduced tolls to the modes of transport used by low-income residents (e.g., matatus, minivans, and motorcycles) would not only promote an equitable distribution of the costs of solving the city traffic problem but also increase the political supportability of the initiative. The availability of a clean, modern, and reliable public transit alternative to driving into the city center would also help lower the barriers to switching away from driving oneself into the city as it will otherwise be difficult to convince city commuters to leave the comfort and security of their cars and enter the often chaotic Matatu and Bus system.

Next week’s post will be the last in this series. It will discuss the specifics of implementing congestion pricing in Nairobi.

First published on Substack.