Putting A Price On Roads For A More Liveable City


Electronic Road Pricing replaced manual tolling and has been in use in Singapore since 1998

Electronic Road Pricing (ERP), sometimes known as Congestion Charging or Congestion Pricing, has been on the Hong Kong government’s agenda for close to 40 years. Hong Kong was perhaps even the first in the world to consider it. Since those early years, while the scheme did not materialize in Hong Kong, world leading cities like London, Singapore, Milan, Stockholm and New York have gone ahead and implemented, or as in the case of New York, are just about to implement ERP.


So, what is ERP?

Electronic Road Pricing is a simple yet powerful way of managing runaway congestion and inequity in bustling urban centres.


There is an unofficial law of traffic that says that any road, if left unmanaged, will eventually be reduced to a congested mess of vehicles “travelling” at 4-7 km/h, roughly equal to the speed of a brisk walk. This is due to the almost infinite potential of growth in vehicle ownership, while the space available for roads in a city is finite. The effects are also intensified by cities tendencies to concentrate attractive places of work in central business districts, as well as prohibitive costs of living, pushing people further and further out. With increased distances and lower density sprawl, public transport options can get less and less attractive and even though car ownership is expensive and inconvenient – a record number of people are adopting car lifestyles. This is exactly what has happened in Hong Kong in the past 15 years. Now, Hong Kong is still by far one of the best cities in the world when it comes to both public transport usage and public transport quality. But considering the density of Hong Kong, its already crowded road system is now bursting at its seams.


Since 2003, the car fleet in Hong Kong has grown from 524 300 to 766 200 in 2017. That’s a staggering increase of 46%, while road space on Hong Kong island and in Kowloon has barely increased at all. A notable figure is the average speed on Queens Road Central, where the average has sunk to just above 5 km/h, seemingly confirming the abovementioned unofficial law of road speeds. Congestion in rush hour is severe also in New Territories.



– Each day over 500 000 vehicles pass through Hong Kong’s CBD and over 70 percent of those vehicles are private cars and taxis (45% and 30% respectively).

Meanwhile public transport usage still makes up over 90% of all vehicular trips in Hong Kong. And this adds yet another aspect to the tragedy that is the runaway congestion in Hong Kong. One full double-decker bus can carry as many passengers as 126 single occupancy cars. Yet it only takes up the road space of two or three. This means that since the cost of using a road is the same – literally zero direct cost - whether you are on a bus or in a car. But as a bus passenger you use a fraction of the space. This is a serious problem of social inequity.


The solution that London, Singapore and the others have found to alleviate this issue is ERP. By using technological means to record vehicles that enter the most congested areas, they are able to assign prices to the usage of roads and charge the users directly for that privilege and based on their individual impact. These prices can fluctuate based on your vehicle type, being cheaper for an efficient vehicle – one that moves many people or a lot of goods using little space - and more expensive for a less efficient one. It can also fluctuate based on time of day, real-time or historical data based on actual congestion, and even give exemptions to residents of the area or people with disabilities.


ERP has yielded congestion reductions in these pioneering cities of around 15%. And citizens that initially were opposed to the system have now swung over and created majorities that are in favour. The sentiment has swung after the quality of life improvements that a well-priced road system brings have become visible. Quicker commutes, cleaner air, less noise, and better walkability have all been the effects of ERP.

Why then is the system not becoming a reality in Hong Kong? A few answers can be found in this article in the South China Morning Post by Evan Auyang, the chairman of Civic Exchange. And more input can be found here in the Position Paper that we also have put together.


A draft proposal for a Central ERP Pilot Scheme is currently being made by the Hong Kong Government’s Transport and Housing Bureau. The draft needs to be approved by the District Councillors in the relevant districts and then further ratified in the Legislative Council. But despite its almost universal benefits to a majority of Hong Kongers it somehow seems to lack favour with politicians.


Meanwhile congestion in Hong Kong keeps getting worse and worse, and the worst affected are the vast majority of our fellow citizens – public transport users and pedestrians.


“Continuous growth of traffic in a city with finite road space is a strategy doomed to fail. It can either fail when the situation gets so bad that citizens’ patience runs out, or fades away as a bad memory through smart and proactive transportation policy.”

Alexander Mastrovito, May 2019



Alexander Mastrovito is a mobility ambassador at Metta. He is also Head of Sustainable Transport Solutions for the Volkswagen Group commercial vehicle brand Scania, and an Associate Researcher at Hong Kong think tank Civic Exchange. He is also the chairman of The Swedish Chamber of Commerce’s Sustainability Committee and has now been in China and Hong Kong for close to 13 years – most of which has been spent working in the automotive sector.


***All statements or views expressed herein are of the author and not those of the Scania or Volkswagen Group.

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