Vendors such as LogicaCMG, Atos Origin, IBM, and Capita Group have been aiming to win business to project manage or handle the technology integration components of regional or nationwide traffic management schemes. The potential rewards are attractive. Capita recently secured a 90m-pound ($178m) contract extension to oversee the London congestion charge scheme for another 21-and-a-half months.
However, a planned road-charging project for trucks was axed by the UK government last year, and problems have dogged a similar one in Germany called Toll Collect, managed by DaimlerChrysler and Deutsche Telekom. Meanwhile, the London congestion charge scheme, which has been run by Capita since 2003 has failed to trigger similar engagements, despite initial interest from many local authorities in the UK and the continent. The mayor of New York has also dropped plans for a congestion charge due to the perceived negative impact on businesses based within the charging zone.
Capita previously stated that the potential market for managing congestion charge schemes in the UK could be worth as much as 65bn pounds ($125bn), but to date, only the city of Durham has followed suit with a scheme of its own in the UK. In the first British referendum on the issue, residents of Edinburgh rejected plans for a congestion charge scheme in their city by three-to-one in 2005.
But a new wave of optimism is running through the transport divisions of IT services companies on the back of fresh proposals for national road pricing schemes in the UK and Netherlands, the perceived success of congestion charge projects in London and Stockholm, and the availability of the new Galileo satellite positioning system.
David Hytch, director for consulting at LogicaCMG’s transport division, said: There have been a couple of stumbles in the traffic-management space, but schemes such as Toll Collect are now working and there is new momentum being generated by government initiatives. He pointed to the much-publicized Stern Review on the economic impact of climate change and the Eddington Transport Study on traffic congestion, which recommended a nationwide road-pricing system.
Hytch acknowledged that such a scheme would be hugely complex, but said he believes that local transport authorities may be given some autonomy to implement schemes under a national framework of recommendations. He said: It is not going to be a simple monolithic scheme. You can’t convert 35 million vehicles overnight to be able to use the same technology.
The UK government has also mentioned the possibility of nationwide traffic management projects piggy-backing on the recent growth in pay-as-you-drive, PAYD, insurance schemes. Insurance group Norwich Union has pioneered a service whereby it monitors its customers driving using a secure black-box device in the vehicle, linked to a national network of satellites and data recorders, and bases its charging on a per-mileage basis.
Content from our partners
Hytch said: It is an interesting scheme that is producing relevant information if the government wants to start charging for road use. But does Norwich Union want to become a tax collector for the government? There is an opportunity for companies like ourselves to handle the back office work, as we do with telecoms operators in areas such as billing.
Tony Lacy, head of transport strategy at Atos Origin, said that the way that congestion charge schemes are sold to the public is crucial to their success. He said: Why not give users access to real-time information feeds via the in-car technology that the government uses to calculate mileage? Schemes will be much more attractive to people if they are not merely punitive. There has got be some incentive.
Hytch agreed. Ken Livingston [London Mayor and architect of its congestion charge scheme] has spent a lot of money raised by the scheme on buses and tube trains, which has given people a valid alternative if they are being discouraged from using their cars, he said. There has to be a commitment of this nature if the public is going to accept them. Some 82% of the 110m pounds ($218m) raised by the London scheme last year was reinvested in the bus infrastructure.
Residents in Stockholm recently had a referendum as to whether a six month trial congestion charge scheme should be made permanent, with 53% voting in favor. The underpinning technology was much the same as in London, although cars could also be fitted with transponders which automatically debited a driver’s bank account when they pass one of 18 control points at the edge of a boundary zone. As in London, the idea is that funds generated by the scheme will be reinvested back into public transport.
The scheme was managed by the Swedish Road Administration, Vagverket, but IBM played a prominent role in developing and running the underpinning technology infrastructure, including data processing, call-center operations, and coordinating the large number of technology and services involved on the project.
There are two other major congestion charge schemes in operation around the world. In the Norwegian capital Oslo, residents have been paying to enter the city center since 1990, by paying around $2 at one of 19 toll booths at the edge of the charging zone. In Singapore, electronic road pricing (ERP) has been in operation since the 1970s, and the current version uses a dedicated short-range radio communication system to deduct charges from smartcards which are inserted in in-vehicle units, IUs, before each journey. Each time vehicles pass through a gantry when the system is in operation, the ERP charges are automatically deducted.
Although all of the these schemes received an initially hostile response from the public, there is a lot of evidence to suggest that they have succeeded in reducing traffic levels, which Hytch said will play well with governments under growing pressure to reduce carbon emissions. IBM claims that the Stockholm scheme reduced traffic volumes in the city center by between 20% to 25%, while Transport for London claims that its scheme has cut the amount of traffic entering the charging zone by 18%, with car volume down 37%.
The number of services and technology companies that stand to gain from growth in traffic management is huge, ranging from business services companies (such as Civica, Amey, and Serco), to IT services firms with road transport experience (ACS, Indra, and Steria), and project management consultancies (Deloitte, Kellog Brown & Root, and PA Consulting).
One company targeting future business from congestion-charge projects is business contractor Mouchel Parkman, which last month spent 26.3m pounds ($52m) on acquiring traffic-management specialist Traffic Support Ltd. The company said it was aiming to take over the London scheme from Capita next time it comes up for renewal.
