Ring Road (M80) – an opportunity for road pricing?

The current upgrade of Melbourne’s Ring Road (the M80) provides an unprecedented opportunity to implement a form of peak period congestion charging in Melbourne.

Designation of one lane as a toll lane during congested periods would offer a higher speed for vehicles paying a fee. They would not necessarily enjoy the maximum permitted speed – a time saving of around 15% seems sufficient.

A toll lane would offer clear economic benefits. In particular, it would enable high value trips, which currently suffer the same delays as comparatively low value trips, to be made faster. In the US these sorts of lanes are called High Occupancy Toll (HOT) lanes but I prefer something like High Value Trip (HVT) lanes to emphasise the underlying efficiency rationale. The ‘price’ or toll varies with how many vehicles use the toll lane to ensure it provides an advantage while optimising the level of use. Read the rest of this entry »