2.3.2. Imposing road pricing
In addition to purchase-based constraints, road pricing is a usage-based tax system mainly to reduce congestion by discouraging travel on expressways and major arterials towards CBD during peak hours. Congestion prices are collected by an electronic road pricing (ERP) system that functions with overhead gantries across roads and smart cards installed into in-vehicle units. ERP is capable to collect charges at operating speed. Through regular reviews and rate adjustments, ERP system has brought a more even flow of traffic by varying road charges according to time and place, depending on the level of congestion (e.g., Tuan Seik, 2000). ERP has been effective in maintaining an optimal speed range of 45–65 km/h on expressways and 20–30 km/h along arterial roads. The technology for road pricing will soon be updated (“ERP II”) with the incorporation of Global Positioning System (GPS) or Global Navigational Satellite System (GNSS) technology that enables distance-based congestion charging instead of point charging with physical gantries. Therefore, congestion charges will be imposed based on the actual length of congested roads traversed by the motorists (LTA, 2008a). It will be a more flexible and reasonable method of managing and charging congestion, and thus is likely to be more effective and sustainable.