Congestion Tax in Stockholm Mats Karlsson Swedish Road Administration

Background

18 control points Vehicles are taxed when entering/ exiting the Stockholm city centre Stockholm - a City on water

June 2003 The Stockholm City Council passes a decision to conduct a trial implementation of environmental charges in the Stockholm inner city zone An inquiry into congestion charging, commissioned by the Government, finds that congestion charges has to be collected as a state tax

Procurement IBM Svenska AB was contracted by the SRA to develop, construct and operate the technical system. The procurement of the technical system was subjected to legal investigation. The case was tried by the Stockholm County Administrative Court, the Administrative Court of Appeal and the Supreme Administrative Court during the summer and autumn of 2004 and continued into early 2005.

Three components Expanded public transport More park and ride-facilities Congestion tax

reduce traffic to and from the city by 10–15 percent during rush hour better level of service in Stockholm city traffic reduction in the emissions of carbon dioxide, nitric oxide and particulate matter city residents will experience a better city environment The full-scale trial – core objectives

How the system worked

City of StockholmStockholm Transport (SL) SRA Tax Authority IBM Ministry of Finance Enforcement Service Courts Bravida Connecta Elan IT Resource eWork Manpower Nordea Posten Reitan Servicehandel Sverige AB Riz IT SAP Stokab Sweco VBB AB VÄGBELYSNING I SVERIGE AB FORTUM DISTRIBUTION AB NOFA VÄGVERKET PRODUKTION Focus Neon Ministry of Industry Q-Free

18 control points located at Stockholm city entrances and exits. No congestion tax levied on vehicles driving on the E4/E20 (Essingeleden) past Stockholm. No congestion tax for vehicles driving from Lidingö past the bridge control point if they subsequently pass another control point to exit the inner city zone within 30 minutes.

Congestion tax levied between 6.30 a.m. and 6.29 p.m Owners of vehicles registered in Sweden were required to pay the congestion tax if their vehicle passed a control point on the way in or out of the Stockholm inner city area The maximum amount per vehicle and day was SEK 60 The congestion tax law applied only to vehicles registered in Sweden

Vägverket Projekt Trängselskatt Two ways to identify vehicles: - through photographing the number plates - via the onboard unit No opportunity to pay at the control points - Payment could only be made retroactively - traffic flow was not affected as drivers were not required to stop when driving past a control point. Vehicles registered automatically

Vägverket Projekt Trängselskatt High resolution camera with an infrared flash Takes photographs of front and rear number plates Number plates are identified directly in the cameras using Optical Character Recognition (OCR) software

Vägverket Projekt Trängselskatt Laser detectors Senses when a vehicle drives past a control point The lasers activate the cameras, at which point the number plates are photographed, first from the front and then from the rear

Vägverket Projekt Trängselskatt Transceiver aerials The aerials transmit a signal to activate the onboard unit in the vehicle  The onboard unit transmits a unique ID number to the receiver aerials in order to identify the vehicle

Vägverket Projekt Trängselskatt The photo is cropped in the camera

Vägverket Projekt Trängselskatt ABC 123 At least two photo images Data from the passage is packaged in a file Vehicle profile Camera Laser Aerials Onboard unit ID number Time Date Control point

Vägverket Projekt Trängselskatt Passage information generates a tax decision Only one tax decision per vehicle and 24-hour period – the tax decision can include several passages Tax decision available by 7 am the day after passage No tax decision generated for exempted vehicles

Vägverket Projekt Trängselskatt Manual identification if needed Number plate photos that could not be read automatically were forwarded to Customer Services for manual examination

Vägverket Projekt Trängselskatt Tax decisions on the Internet Published no later than by 7 a.m. the day after passage. Information about the amount payable could also be obtained through Customer Services or when paying at a Pressbyrå kiosk or 7-Eleven shop.

22 Vägverket Projekt Trängselskatt Control Points Two photos Onboard unit readings Time and place Number plates System Architecture Web Portal ”My tax decisions” Onboard unit orders form (to contact Customer Services) Tool for Customer Services, SRA and National Tax Board Pre-processor Offline OCR MCR to Customer Services Onboard units  Number plates Reads photos Eliminates exempted vehicles Generates tax decisions per day Stores detailed passage information SAP System Accounting Payments Reminders CRM Reports Postal Services Scans Print-outs Distribution Website for companies National Tax Board Reviewals Receives appeals Exemption, respite and reimbursement decisions Traffic Registry Updates the system with vehicle and ownership data Enforcement Service Handles unpaid tax decisions Pressbyrån / 7-Eleven Payments Onboard unit orders Onboard unit returns Internet payments Payment Services Nordea SRA account Bank Giro Centre Direct debit Other banks Payments

23 Vägverket Projekt Trängselskatt 24 Hour Operational Cycle

Payment - Payment to be registered in the SRA congestion tax account no later than 14 (five) days after the passage of a control point. - No invoice was sent out. - Responsibility of the vehicle owner to ensure that the tax was paid in time.

Automatic payment through an onboard unit and direct debit Payment at Pressbyrå kiosks and 7-Elevens Methods of payment Payment via Plusgiro and Bankgiro Payment by credit card via the Internet

Communication

Vägverket Projekt Trängselskatt Overall communication goal Everyone entering Stockholm after January 3, 2006 in a vehicle registered in Sweden should be aware of the congestion tax and of the fact that the car owner must pay without having been prompted to do so. Strategy: Intensive communication, keeping a low profile Traffic, the system, and Customer Services will run smoothly from Day One. High penetration level that the target group assimilates the information is a key success factor.

Vägverket Projekt Trängselskatt Two direct channels to the general public General information Individual tax decisions Payment by credit/charge card Order onboard units Customer services tel: open Monday – Friday 7 am to 9 pm

Vägverket Projekt Trängselskatt Simple, consistent announcements Strategy: Intensive communication while keeping a low profile Focus on ”HOW” messages Factual – neutral – no value judgements Informative – not opinionated High penetration level – actually getting across the message was crucial.

Vägverket Projekt Trängselskatt Extensive media coverage 3 Jan 2006: ”Every fourth car disappeared”

31 Vägverket Projekt Trängselskatt Number of calls to Customer Services 3 Jan- 31 July

32 Vägverket Projekt Trängselskatt Number of days when the tax was levied139 Total number of passages at control points Number of passages liable for the tax Passage statistics 3 January - 31 July

33 Vägverket Projekt Trängselskatt 28% of the passages were not liable for the tax: 9% ”Lidingö rule” exemptions 8% Taxis 3% ”Green” cars 2% Buses 2% Vehicles with disabled person parking sticker 4% Other Passage statistics

34 Vägverket Projekt Trängselskatt Total of 14.5 million tax decisions Tax decisions and charges amounting to SEK 399 million 96% of the tax decisions were paid on time Number of reminders with a service charge (SEK 70) Number of reminders with a surcharge (SEK 500)

35 Vägverket Projekt Trängselskatt Payment channels - direct debit account 63% - via Pressbyrå kiosks / 7-Eleven shops 24% - via banks 13%

36 Vägverket Projekt Trängselskatt Total number of lane hours Lost operational time, number of lane hours57 Non-identified vehicles 1% > 99.9% Operational reliability (0.05%) (0.20%) (0.02%) (<0.01%) (0.01%) (<0.01%) The 18 control points cover 78 traffic lanes. Every control point is operational 13 hours (780 minutes) per day, which amounts to lane minutes per day. % of total number of lane minutes/month Lane Minutes

37 Traffic reduction – on average

38 The effects stabilised quickly – and disappeared quickly -28%-24%-23% -22% -24% -3%-5% End of charge period ”Remnant” effect probably due to road works Vehicle passages across the charge cordon, weekdays between 6 am and 7 pm (estimated)

% less time in traffic queues Inner city approach (inbound) Inner city approach (outbound) Inner city streets Inner city through- routes (northbound) Inner city through- routes (southbound) Queuing times, morning rush-hour a.m.

The goals were achieved ”Reduce traffic at rush hours by 10-15% to/from the city” Reduction, 20-25% ”Better accessibility – higher traffic service level” Queuing time reduction, 30-50% in the city Essingeleden (city by-pass) + 4-5% ”Reduce emissions of carbon dioxide, nitric oxide and particulate matter” - 14% reduction in city; 2.5% in Stockholm County ”A better environment for city residents” Imprecise – difficult to define and measure “More resources for public transport” Net income estimated at some SEK 500 million/year during permanent operation

What´s next? On April 12 the Government submitted a Bill to the Swedish Parliament proposing the reintroduction of a congestion tax effective from 1 August 2007 The Bill contains a proposal on how the Congestion Tax Act should be formalised in connection with a reintroduction Parliament is expected to handle the Bill in June The Swedish Road Administration has a Government mandate to prepare a reintroduction of the congestion tax pending the decision of Parliament