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Congestion pricing for Latin America: Prospects and constraints
Charles R. Rivasplata a,b,*
a San Francisco Municipal Transportation Agency, One South Van Ness Avenue, San Francisco, CA 94103, United States
b San Jose State University, Urban Planning Department, One Washington Square, San Jose, CA 95192, United States
a r t i c l e i n f o
Article history:
Available online 23 June 2012
Keywords:
Congestion pricing
Traffic restraint
Travel demand management (TDM)
a b s t r a c t
In an effort to reduce the adverse impacts of the car and promote sustainable transport in Latin America,
some governments have either implemented travel demand management policies or have considered
ways of directly reducing the number of vehicles in congested areas. While demand management
measures have been promoted in a small number of countries, including vehicular restrictions as well as
the promotion of public transport modes, there are currently no congestion pricing programmes in
operation in Latin America. This paper begins with an overview of travel demand management, including
its principal aims as well as its primary objectives within the Latin American context. It discusses past
efforts to promote traffic restraint and perspectives for developing congestion pricing schemes in both
São Paulo and Santiago. Finally, it examines the potential role of congestion pricing as a demand
management tool. While it is one of the most effective demand management measures in the indus-
trialised world, a number of barriers currently prevent it from being widely adopted in Latin America.
� 2012 Elsevier Ltd. All rights reserved.
1. Introduction
In recent decades, transport planners have become increasingly
aware of the need to promote Travel Demand Management (TDM)
strategies, particularly in light of the decentralisation of activities
away from urban centres. The negative impacts of increasing
private vehicle use (e.g., rising levels of traffic congestion and
fatalities, deteriorating air quality conditions, lack of physical
activity) on cities and suburban areas arewell documented, causing
a great deal of concern among local residents (WHO, 2011). As
a result, many local governments have sought to curb private
vehicle use, employing practical, low-cost solutions.
Governments have found that while it is necessary to build
urban infrastructure for the movement of goods and services, it is
also important to make efficient use of existing facilities when
designing mobility programmes and promoting alternative modes
to the private vehicle. This is especially true in low density
communities where public transport is limited. In order to be
effective, vehicle restriction and/or congestion pricing should form
part of a comprehensive transport plan.
This paper proposes to explore the past development of TDM
strategies in Latin America, particularly traffic restraint measures
and proposals to implement congestion pricing schemes in cities in
the region. It will seek to define TDM programme policies that have
been successfully implemented, and where appropriate, will
discuss their potential applications. In many cities throughout the
Americas, there have been serious efforts to introduce TDM plans
aimed at providing accessible alternatives to the private vehicle. In
Latin America, these programmes have often consisted of vehicle
restriction schemes in major cities, which have been coupled with
public transport enhancements.
Prompted by an increasing level of awareness of the negative
effects of motorised transport on local environments, a number of
countries have identified the need to reduce private vehicle use.
Many local authorities in the industrialised world have adopted
TDM schemes that make better use of available resources and
educate the populace on the benefits of using alternative modes to
the car. Similarly, in the developing countries, a small number of
governments have recently begun to embrace demand-side solu-
tions on a trial basis. However, planners have come to understand
that even TDM strategies are not always transferrable and what
works in Europe may very well not work in Latin America. Thus,
these planners have had to adapt these strategies to their own local
conditions.
This paper begins with an overview of travel demand manage-
ment and its evolution both in the developed world as well as Latin
America. Next, it explores the role of congestion pricing, one
component of a larger set of available TDM tools. This innovative
form of vehicle use rationalisation has been implemented in
* San Francisco Municipal Transportation Agency, One South Van Ness Avenue,
San Francisco, CA 94103, United States. Tel.: þ1 415 701 5383.
E-mail address: Charles.Rivasplata@sfmta.com.
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Research in Transportation Economics 40 (2013) 56e65
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a number of European and Asian cities, and studied in a small
number of cities in Latin America.
In particular, the paper reviews past attempts to mitigate
growing traffic congestion in two Latin American cities: São Paulo,
Brazil and Santiago, Chile. It also explores the prospects of intro-
ducing congestion pricing in these cities, to better manage traffic
congestion and generate new revenues for public transport and
non-motorised transport infrastructure.
In both cities, there has been a focus on developing sustainable
transport strategies that can effectively achieve the broader
objective of greater access for all. The following section provides
background on public transport integration, its principal goals and
objectives and its significance in regionwide transport planning.
2. Travel demand management
In its efforts to promote sustainable transport options, TDM and
its supporting programmes are designed to provide the traveller
with a wide array of alternatives to the private vehicle. Collectively,
these alternatives offer the traveller multiple transport options,
reducing dependence on the private vehicle.
2.1. Overview of TDM
Essentially, TDM comprises a diverse set of transport strategies
that collectively promote the effective, efficient and equitable use of
existing and renewable resources (adapted from VTPI (2010) and
TRB (2012)). Increasingly, local authorities and planners have
embraced TDM as a viable link through which to strengthen and
coordinate regional transport, for the purposes of managing traffic
congestion and reducing both vehicle emissions and traffic fatali-
ties/injuries.
Rather than accept the traditional predict and practice of
increasing the supply of road space to meet private vehicle
demand, TDM strategies advocate increased use of alternative
options, such as public transport, bicycling or walking (Goodwin,
1999). This demand-side focus responds to evidence showing
that increases in road capacity often do not provide long-term
solutions to traffic congestion, but rather, promote vehicle use,
leading to increases in traffic levels and congestion(Noland &
Lem, 2000). Demand-side options normally require far less
space and are more energy-efficient than vehicle-oriented,
supply-side options. In addition, they are far cheaper to use,
i.e., when gas, maintenance, insurance and other costs are taken
into consideration.
In general, TDM programmes and strategies have focused on
producing changes in travel behaviour, improving access to public
transport and non-motorised modes, making it more difficult to
travel alone by private vehicle. These strategies are charged with
decreasing vehicle occupancy, often placing restrictions and/or fees
on private vehicle use. The principal types of TDM measures are
education, promotion and outreach, and travel incentives and
disincentives, which are complemented by sustainable travel
options and supportive land use practices (Transport Canada,
2012). Under this framework, vehicle restrictions and congestion
pricing are the principle TDM measures, complemented by
enhanced urban public transport.
In practice, TDM strategies have been developed to address all
kinds of trips, such as those based on geographic location, trip
purpose, route, mode and time of day. The development and
implementation of these strategies normally entail a good deal of
planning and negotiation with authorities and businesses. Often,
they are closely linked to wider government policies and actions
advocating low-cost solutions to many of the urban mobility issues
encountered by both large and medium-size cities.
While TDM has seen widespread application in Europe and
North America since the 1970s, it has only recently been introduced
in Latin America. In retrospect, many of the concepts central toTDM
evolved from programmes implemented during World War II,
when U.S. residents were required to reduce their consumption of
energy in support of the war effort. Later, TDM strategies were
adjusted to respond to the oil and congestion crises of the 1970s
and became commonplace by the 1980s and 1990s. Today, they
include not only employer-based programmes, but also demand-
side applications for schools, special events, recreational centres,
emergency situations (FHWA, 2004).
In the past decade, Latin America has become increasingly
aware of the need to seek low-cost solutions to curb explosive
growth in motorisation. The following section reviews efforts made
to apply demand management in the region.
2.2. TDM in Latin America
In Latin America, as in many other regions of the Developing
World, TDM provides an opportunity to develop sustainable
transport options, tailoring strategies to local conditions. Many
countries in the region are economically constrained and cannot
finance high capital investments in transport without assuming
a significant level of debt, effectively preventing investments in
other critical sectors (Diaz Olvera, Plat, & Pochet, 1997). In
contrast, TDM offers localities a general framework through
which to make efficient use of resources and low-cost invest-
ments, providing residents and other travellers with a set of
mobility options through which to perform activities
(Vasconcellos, 2001).
Recently, many transport policies in Latin America have been
linked to investments in road infrastructure, highway manage-
ment and technology, commonly regarded as supply-side
measures. However, in some cases, these have been com-
plemented by demand-side measures that are linked to
improvements in transport organisation, traveller information
and awareness campaigns. In addition, demand-side measures
have included successful marketing efforts, such as the promotion
of public transport, bicycling and walking (Bovy, 2000). These
alternative modes have been found to stimulate urban develop-
ment and sustainable transport, i.e., in response to problems
related to social exclusion and economic hardship (Vasconcellos,
2001).
2.2.1. Brazil
In Latin America, Brazil has taken the initiative to create TDM-
related legislation, providing a political response to perceived
mobility issues. In 2004, the National Policy on Sustainable
Mobility entered into practice. This policy is considered innovative
for Latin America, and its introduction is considered to be a first
step towards implementing TDM measures there (Rodrigues da
Silva, da Silva Costa, & Macedo, 2009). It embodies a new focus
on people and not vehicles, developing individual policy compo-
nents for transport, accessibility, circulation and urban space;
stimulating the use of non-motorisedmodes of transport; to reduce
spatial exclusion; and improving the quality of urban environ-
ments. Subsequently, the government launched the following
programmes (Xavier & Boareto, 2009):
� Accessible Brazil, which allows states and townships to develop
actions for ensuring the accessibility of the disabled and elderly
to public transport
� Bicycle Brazil, which aims at stimulating the use and circulation
of bicycles in a way that is integrated with collective transport
systems.
C.R. Rivasplata / Research in Transportation Economics 40 (2013) 56e65 57
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This policy could contribute to resolving many of the conflicts
facing Brazilian cities, as it appears to transcend the existing
barriers that have limited policymaking and transport planning in
Brazil. National transport policies there have traditionally been car-
oriented, targeted at residents that can afford the costs of owning
a private vehicle (Vasconcellos, 1997), to the detriment of the
majority of residents that cannot. It is interesting to note that in the
case of Brazil, 45 percent of the urban population makes less than
three minimum wage salaries, limiting this sector’s access to
transport (Ministerio das Cidades, 2003).
2.2.2. Colombia
Another country that has advanced in the development of
infrastructure investment programmes is Colombia (CAF, 2010).
Based on the need to initiate a structural change in transport to
improve liveability and make Bogotá more efficient and competi-
tive, the municipal government designed and implemented
a comprehensive strategy to improve urban mobility (Hidalgo,
2004).
Government plans, such as Por la Bogota que Queremos and
Bogota Para Vivir Todos del Mismo Lado, adopted under Mayors
Peñalosa (1998e2001) and Mockus (2001e2004), respectively,
called for prioritising non-motorised and public transport and
reducing car use (Alcaldía Mayor de Bogotá, 1998, 2001). Cen-
trepieces of this strategy included an extensive bicycle path
network (“ciclorutas”) and the Transmilenio project, a landmark
Bus Rapid Transit (BRT) system.
Collectively, these efforts have played an important role in the
advancement of TDM in Colombia. A general referendum was
placed before the voters to gauge the level of support for TDM
measures, such as Car Free Day campaigns in Bogotá. This refer-
endum, the first of its kind in Latin America to be passed by
amajority of the voters, reflects a significant change in the attitudes
of users, operators and the community in general.
2.2.3. Chile
While Chile has yet to identify a set of TDM policies at the
national level, the Transantiago Plan and reorganisation of transport
in Santiago, have supported demand management principles. For
example, this plan promotes the use of public transport and non-
motorised modes through improved facilities. One of the prin-
cipal objectives of the Transantiago Plan has been to make public
transport a better choice for travellers through the establishment of
higher standards of planning and investment, i.e., contributing to
the development of an environmentally sustainable system
(Rivasplata, 2006).
2.2.4. Venezuela
In the past decade, Venezuela has made advances in the
development and dissemination of TDM strategies, with plans for
involving the general public in future campaigns. However, while
the National Assembly approved legislation in support of the Kyoto
Protocols, there is not yet a clear policydirection stemming from
this action, nor is there widespread understanding of the potential
benefits of TDM.
In recent years, a small number of cities and states in Venezuela
have begun to appreciate and even embrace some of the key
principles of TDM, in a few cases, adjusting traditional programmes
and campaigns to better suit the needs of local users. Nevertheless,
efforts in such cities as Caracas and Merida (e.g., “Dia sin Carro”)
have yielded only limited success. In the latter case, despite
a concerted effort to involve the public in ongoing TDM campaigns,
a change in local government eventually ended these efforts.
Having reviewed some recent attempts to develop TDM in Latin
America, we now turn our attention to congestion pricing, a tool
that has proven to effectively reduce traffic flows during key
periods of congestion.
3. Congestion pricing as a TDM tool
Different types of disincentives to vehicle use, including
congestion pricing, have proven to be an effective form of travel
demand management. By pricing roadways according to the rela-
tive level of traffic congestion at specific times, it provides greater
choice to the traveller.
3.1. Overview of congestion pricing
In essence, congestion pricing encompasses a set of strategies
and techniques aimed at developing charges that will effectively
discouragemotorists from entering a congested area during certain
periods of high traffic congestion (Hau, 1992; Vickrey, 1969). In
conjunction with other TDM measures, congestion pricing is an
effective way of discouraging private vehicle use, especially where
other alternatives exist.
The concept behind congestion pricing is derived from the
economic theory of efficiency and externalities, which states that
people make socially efficient decisions if they fully consider the
social costs and benefits. The optimal congestion tax is themarginal
external cost at the point where the marginal social cost is equal to
the marginal social benefit (Button, 1993). In practice, an analysis of
pricing schemes ensures that congestion taxes are appropriately
set.
Multiple forms of congestion pricing have been implemented,
including schemes covering the inner city (as in London), a signifi-
cant part of the metropolitan area (as in Singapore), or a wider,
perimeter area (as in Oslo). Other proposals have looked at charging
on the basis of such factors as time of day or type of vehicle.
According to GTZ (2002), the principal objectives of road and
congestion pricing are the following:
� Produce a shift in routes;
� Bring a change in the time of travel;
� Generate revenue;
� Mitigate negative environmental impacts; and
� Improve quality of life.
In this section, this paper explores the potential for imple-
menting congestion pricing schemes in large cities of Latin Amer-
ica. Thus far, most city-based congestion pricing schemes have
either employed cordon charges, where fixed or variable amounts
are charged within a congested area; or areawide charges, where
distance-based amounts are charged on all roads in an area (Larson
& Sasanuma, 2010; Mahendra, 2008). In addition, over the past few
decades, a number of other forms of congestion pricing have
evolved, including:
� Variable Roadway Tolls, charging tolls on an entire road or
highway;
� Variably-Priced Lanes, such as high-occupancy or express toll
lanes; and
� Variably-Priced Highway Ramps, charging traffic to enter/leave
a freeway.
These strategies have been shown to reduce traffic congestion,
decrease vehicle emissions, increase public transport patronage,
improve service reliability, and importantly, reduce the number of
vehicle accidents on areawide roadways. In addition, the proceeds
from congestion pricing can serve as a key source of revenue for
other transport programmes (Litman, 2006). For example, in more
C.R. Rivasplata / Research in Transportation Economics 40 (2013) 56e6558
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than one case, these revenues have helped fund public transport,
which in turn, provides residents with an alternative option to the
car (Rivasplata, 2006).
Congestion pricing has had a significant impact on traffic
volumes in some areas. In London, it resulted in a 26 percent
reduction in congestion delays. A recent study in the U.S. estimated
that congestion pricing can bring reductions of up to 5.7 percent in
vehicle kilometres travelled (VKT) and as much as 4.2 percent of
vehicle trips in a region (TRAC, 2007).
Standard tolls differ from congestion pricing in that the former
comprise fixed amounts charged on a single road or highway
facility. In the past few decades, advances in technology have
facilitated the design and operation of electronic toll and conges-
tion pricing facilities, eliminating the need for toll booths. As
a result, many of the current toll facilities in the U.S. are automated,
reducing vehicle processing time and administrative costs. Simi-
larly, some congestion pricing systems have already successfully
applied these electronic toll technologies.
Thus far, congestion pricing has been implemented in a limited
number of cities, including Singapore, London and Stockholm,
while serious proposals have been rejected in Manchester (U.K.),
Birmingham, and Edinburgh. In New York, a pricing scheme was
rejected not by a metropolitan body, but by the state legislature
(Larson & Sasanuma, 2010). Nevertheless, areawide congestion
pricing proposals are currently being considered in a number of
cities, including Beijing and San Francisco (SFCTA, 2010).
London introduced a system of congestion charging in its central
area in 2003. This areawide scheme requires that most motorists
leaving or entering the city’s congestion zone (on weekdays)
between 7:00 a.m. and 6:30 p.m. pay a congestion fee at vending
machines, the Internet, or by phone. The system employs a vast
network of cameras that record licence plates both entering and
leaving the congestion zone (Litman, 2006), allowing for motorists
to be charged accordingly e the initial fee of £5 ($8) was increased
to £8 ($13) in 2007.
In Stockholm, a congestion tax in the city centre was introduced
on a trial basis in 2006, and was subsequently adopted by refer-
endumwhen studies showed that traffic levels had decreased by 20
percent in less than a year. Fees to enter the city centre vary by time
of day, from a low of about $3 to a high of about $9, and can be
automatically deducted fromabankaccountor bepaid for (with cash
or a credit card) at convenience stores (Larson & Sasanuma, 2010).
The Singapore scheme also provides a model for areawide
congestion pricing. In 1975, the city introduced the Singapore Area
Licensing Scheme, the world’s first pricing system, which was
converted in the late 1990s into an electronic road pricing scheme
(GTZ, 2002). Recent advances in technology have permitted real-
time variable pricing to be introduced as well.
While congestion pricing features a clear set of benefits, critics
have argued that it also generates equity issues. On the one hand, it
assigns costs to those middle and high-income travellers that
contribute most to congestion; however, it can also be financially
burdensome to low-income residents that are dependent on a car,
particularly if they have few viable alternatives (Ecola & Light,
2009). In some areas, efforts have focused on ensuring that
congestion pricing programmes include discounts or free passes for
low-income households (Frick, Heminger, & Dittmar, 1996).
Despite equity concerns, there is evidence that in some cases,
the public is ready to accept congestion pricing. In the U.S., a study
commissioned by the Transportation Research Board (TRB) found
that in the aggregate, there is significant support for tolls and road
pricing. Based on quantitative analysis, this study determined that
some important factors influencing public opinion include the type
of pricing, the use of tolling revenues, and the clarityof information
provided to the public (Zmud & Arce, 2008).
In addition, other research indicates that equity issues may
not be as much of a concern in practical applications. According
to a Federal Highway Administration (FHWA) study on the
income-based equity impacts of congestion pricing in value
pricing projects, the perception of unfairness may have been
exaggerated in projects funded under the early phases of the
programme. For example, equity impacts relating to income were
not evaluated in the case of “full facility” pricing projects (e.g., on
tollways). The study concludes that the perception that conges-
tion pricing is an inequitable way of responding to the problem of
traffic congestion does not appear to be borne out by experience
(FHWA, 2009).
3.2. Congestion pricing in Latin America
While no congestion pricing schemes have yet been imple-
mented in Latin America, a number of cities have discussed
managing congestion. Some cities in the region, including Bogotá,
Medellin, Mexico City, La Paz, Quito, Santiago and São Paulo, have
attempted to alleviate congestion by strategically imposing
restrictions on vehicles. In other cases, governments have imposed
fuel taxes.
In most cases, these cities have prohibited vehicle use on a given
day of the week, based on the last digit of a vehicle’s licence plate
(Mahendra, 2011). These schemes, locally known as “pico y placa”
in Bogotá, “restricción vehicular” in Santiago, and “Rodizio” in São
Paulo, limit the number of vehicles on the road, but are heavily
dependent upon ongoing enforcement.
Vehicle restriction schemes are still very much in practice in the
aforementioned Latin American cities. Despite some opposition,
often from elements directly linked to the automotive industry, it is
believed that these existing schemes still provide limited relief
from increasing congestion. While congestion has progressively
worsened in cities such as São Paulo, Santiago or Mexico City,
without some form of vehicle restriction, conditions would prob-
ably be far worse than they are. What is often not discussed is the
idea of switching to a more effective alternative for restricting
traffic during congested periods.
While vehicle restriction has had some success, in time motor-
ists have found ways to circumvent the system. In all of these cities,
many of the residents living in high-income communities (where
car ownership is typically higher) have simply bought a second car,
effectively doubling their level of access to the city. In Mexico City
and Bogota this pattern has been particularly evident and is a key
reason why some experts in these cities have turned to other
schemes for reducing traffic congestion (Mahendra, 2011).
In the past few years, there have been ongoing debates on
congestion pricing both in Santiago, Bogota and São Paulo. In
Santiago, a study directed by FranciscoMartinez of the University of
Chile and a team from the Economic Commission for Latin America
and the Caribbean (ECLAC) found that with 900 new cars per day,
Santiago can expect drastic consequences by 2030. To avoid this
pending disaster, the authors of the study recommended that
congestion pricing be introduced along with improvements to the
Transantiago scheme. The Interministerial Office of Transport
Planning (Sectra) is said to be developing a strategic transport plan
for Greater Santiago that will include pricing (Valencia, 2011).
Similarly, in Bogota newly-elected Mayor Petro has stated that
he intends to introduce a congestion pricing scheme that would
involve charging a fee for the use of specific corridors. While this
proposal is still under discussion, it is envisioned that fee revenues
would go towards improvements to the public transport system.
One idea is to establish route concessions with private companies
that would collect tolls for a specific route and transfer revenues to
the city (Juaber, 2011).
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Clearly, in the cities with vehicle restriction, these measures
alone cannot reduce or even stabilise congestion levels. Experts
argue that congestion pricing is one of the most effective ways of
restricting access to heavily congested urban areas. It can effectively
introduce a price mechanism to limit vehicle entry to congested
areas, and generate revenue to cover administrative costs and
investments in alternative transport. The fact that congestion
charges can be increased or decreased to control traffic volumes is
especially attractive.
That is not to say that there aren’t serious barriers to adopting
a congestion pricing scheme, particularly in Latin America, where
incomes are lower and resources are scarcer than in Europe.
Depending on the size of the congestion zone and the tolling
technology used, these pricing systems can run millions of dollars
to design, set up and operate. In the case of London, the initial costs
were sizeable (Litman, 2006) e start-up costs totalled over £160
million ($250 million) in 2007 currency (BBC, 2007).
In addition, the provision of additional public transport service
provides an alternative to the car. In London, a significant increase
in public transport was provided in support of the congestion
pricing scheme (Rivasplata, 2006). There are also grounds to
believe that BRT can play an important role, as it is highly
competitive with the private vehicle.
Similarly, in Latin America congestion pricing schemes will need
to secure design and start-up funding as well as initial operating
funds. They will require the installation of sophisticated tracking
systems, including electronic facilities and equipment, as well as
the placement of cameras (CEPAL, 1999). The introduction of
congestion pricing will also require not only coordination between
municipalities or districts in a city or urban region, but also a great
deal of political commitment, public acceptance, institutional
capacity and education. Government must inform important
sectors of the population, including motorists, other transport
users, community groups, employers, and of course, society as
a whole.
In addition, a number of economic and institutional issues will
need to be overcome. For example, a multi-million dollar conges-
tion pricing programme will likely deprive other projects, sectors
and geographic regions of important investments, regardless of the
primary source of funding. This is a major concern, particularly in
middle-income countries like Mexico or Colombia. On the institu-
tional side, one key hurdle will be to ensure that the lead agency
and consultants implementing these schemes have the capacity to
successfully set up and operate such a programme. Equally
important will be the need for the implementing agency to receive
support from other cooperating agencies.
After carefully considering the pros and cons of introducing
congestion pricing, another issue that needs to be carefully
considered by transport authorities is the choice of pricing scheme.
Each city is unique in its geography, socioeconomic structure and
set of travel patterns, and distinct from cities where congestion
pricing has been implemented, such as Singapore or London (Hook
& Ferreira, 2004). It is important that planners study potential
congestion zones and based on a number of factors (e.g., future
traffic levels, size, density), target one or more areas for imple-
mentation. In addition, for maximum effect, thought should be
given to combining congestion pricing with other TDM measures.
Certainly the argument that congestion pricing generates
inequities between income classes carries less weight in Latin
America and other areas of the developing world. In these coun-
tries, car ownership is largely a privilege of the high-income resi-
dent and to some extent, the middle-income resident. In Latin
America, most low-income residents have very low levels ofpurchasing power and often, do not own a private vehicle (nor have
access to one). In most countries of the region, low-income
residents are public transport-dependent and/or heavily reliant on
non-motorised transport for most of their daily trips.
In order to gain a greater perspective concerning some of the
issues involved in deciding whether or not to introduce a conges-
tion pricing programme, the next section explores congestion-
related issues in two Latin American cities where such a pro-
gramme has been seriously discussed.
4. Case studies: São Paulo and Santiago
This section provides a profile of each case city, its urban
transport network, past attempts to restrict traffic in different parts
of the city and more recent proposals for introducing congestion
pricing in the city. In São Paulo, traffic restrictions have been
introduced, but toll facilities are not widely used. In the case of
Santiago, authorities have implemented electronic toll roads in the
past decade, providing a mechanism for recouping the costs of
infrastructure investments.
4.1. São Paulo
Over the past few decades, the issue of traffic congestion has
increasingly become a central issue in São Paulo (see Fig. 1).
International news sources have commented on this problem, with
Time magazine noting that the city has the world’s worst traffic
jams (Downie, 2008) and an IBM study placing it among the top six
cities for commuter pain (IBM, 2010). The following paragraphs
provide background on Greater São Paulo, its regional network and
past attempts to implement vehicle restriction.
Greater São Paulo, the capital of São Paulo State, is the principal
population and commercial centre of Brazil, concentrating a very
high proportion of the country’s industry and financial services.
With close to 19 million inhabitants (CAF, 2010), it is currently the
largest city in South America (see Table 1). The city is located on
a plateau within the Serra do Mar, about 70 kmwest of the Atlantic
Ocean and 360 km southwest of Rio de Janeiro.
The metropolis has an average density of just over 8300 persons
per square kilometre, comparable to the average densities of some
European cities, but certainly lower than a number of other cities in
the region, such as Bogotá or Caracas. Over the years, a relatively
high level of car ownership has led to urban sprawl away from the
city centre and longer average daily commutes. This pattern has
resulted in greater car dependence and less use of alternative
modes.
Despite its high levels of congestion, São Paulo does have
a comprehensive set of public transport modes. Currently, the
formal public transport network consists of standard buses,
trolley buses, minibuses, heavy rail metro, and commuter rail. In
addition, a number of vans, formerly part of the informal transport
sector, carry a significant share of all trips in the region. Collec-
tively, public transport carries about 12 million daily trips (over
one third of the region’s 35 million daily trips): 75 percent (9
million) by bus or van, and 25 percent (3 million) by rail (see
Table 2).
Greater São Paulo grew at a relatively rapid pace between the
1950s and 1980s, overtaking Rio de Janeiro as the nation’s largest
metropolis. During this period, new roadways were built and car-
oriented development was encouraged, much as it was in the U.S.
(Vasconcellos, 1997). In the past few decades, a general lack of
coordination between transport investments and land use planning
has characterised many world cities, including Sao Paulo. An
increase in car ownership (generated by rapid growth in incomes)
without adequate travel demandmanagement has often resulted in
severe air pollution and congestion during extended periods of the
day (Anas & Timilsina, 2009).
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Traffic congestion has become an increasingly pressing issue in
São Paulo, particularly in the past few decades, when vehicle
ownership has outpaced population growth in the region. The total
number of cars in São Paulo grew from approximately 2 million in
1985 to 3.4 million in 2002 and almost 4.4 million in 2007 (CAF,
2010; Mahendra, 2008). In 2007, there were approximately 230
cars per thousand inhabitants, a relatively high ratio when
compared with other cities in Latin America (CAF, 2010).
In response to rising congestion and poor air quality conditions,
the Secretary of the Environment of the State of São Paulo intro-
duced a set of programmes in the 1990s. One of these included
introduction of the “rodizio” programme, which sought to reduce
pollution levels by restricting the circulation of one-fifth of the
private vehicle fleet onweekdays (Hochstetler & Keck, 2004).While
the programme was initially developed by the State of São Paulo,
the City of São Paulo and its powerful transport agency initially
opposed it, based on its strong ties with auto-supportive companies
(Mahendra, 2008).
The rodizio programmewas initially considered to be successful
in improving air quality, as it informed residents of the adverse
environmental effects of increases in car ownership, and encour-
aged them to modify their behaviour. The level of compliance with
the rodizio programme was said to be high, as many residents
joined public authorities in a concerted effort to improve the
environment (Hochstetler & Keck, 2004; Mahendra, 2008). In the
mid-1990s, a however, a change in state government resulted in an
abrupt end to rodizio. In 1997, the City adopted a less-stringent,
rodizio programme for the purposes of reducing congestion in
Central São Paulo (Mahendra, 2008).
In the past ten years, increased motorisation has inhibited the
effectiveness of the rodizio programme, prompting many to
consider supplemental or alternative schemes for controlling
congestion, including a congestion pricing programme. Many
residents have chosen to circumvent the system through the
purchase of additional cars, a trend that has proven difficult to
thwart (Mahendra, 2011). As a result, São Paulo authorities estab-
lished a local task force of transport experts to evaluate a set of
pricing proposals (Hook & Ferreira, 2004).
One option discussed by this task force was the development of
a three-ring pricing scheme focused on Central São Paulo.
Motorists would not be charged for travelling in the economically-
depressed, inner ring, but would be charged for operating in one
or more of the two outer rings. Issues to resolve include method of
payment, vehicles to exempt, and enforcement (Hook & Ferreira,
2004).
4.2. Santiago
For decades, Greater Santiago has attempted to mitigate high
levels of pollution and congestion. In 1986, the city introduced
a vehicle restriction scheme, in response to environmental
concerns. Almost two decades later, Santiago implemented tolls on
a segment of its freeway network as part of a larger transport plan.
The following paragraphs provide background on Santiago (see
Fig. 2), its regional network and attempts to implement vehicle
restriction measures.
Santiago, capital and principal commercial centre of Chile, lies at
the northern end of the Central Valley, 120 km east of Valparaiso,
the country’s chief port. It is the sixth largest urban region in South
America, with close to six million inhabitants (see Table 1). In
recent decades, Greater Santiago has witnessed substantial urban
expansion, engulfing nearby communities (e.g., Maipú).
Fig. 1. São Paulo: intersection congestion.
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The average population density of Greater Santiago is more than
8800 persons per square kilometre, slightly higher than the rate for
São Paulo. Local mobility patterns have resulted in prolonged
periods of congestion in central areas and medium to high average
trip lengths. Despite the historic predominance of publictransport,
motorisation rates have increased in recent decades, particularly in
the middle to high-income residential areas. While the downtown
is still a major centre of commercial activity, transport infrastruc-
ture investment has further supported commercial and residential
decentralisation (Rivasplata, 2006).
Despite this decentralisation of activities and continued growth
in car ownership, nearly 75 percent of all trips in the region are by
public transport or one of the non-motorised transport modes. The
public transport network consists of bus services, shared taxi
services, a heavy rail metro system and urban segments of the
national rail network. The road-based systems are privately-
operated, whereas the rail-based modes are publicly-operated.
Collectively, public transport carries over five million daily
passengers: 80 percent by bus, 6 percent by shared taxi and 14
percent by rail (see Table 2).
Santiago has witnessed significant growth in private vehicle
ownership, from a rate of 60 cars per thousand inhabitants in 1977,
to more than 165 in 2010 (CAF, 2010; Mahendra, 2011). In fact,
between 1991 and 2001, the number of private vehicles in Santiago
grew at an annual rate of more than 10 percent (O’Ryan, Turrentine,
& Sperling, 2002). As in the case of São Paulo, explosive growth in
car use during the late 1980s and 1990s was driven by increases in
personal income and a gradual decline in the overall quality and
reliability of public transport in Santiago. As cars became increas-
ingly accessible in the late 1970s, many residents decided to
purchase a vehicle, further contributing to congestion and air
pollution.
Santiago was one of the first cities in Latin America to introduce
a vehicle restriction programme, largely in response to worsening
air quality and its adverse impacts. Patterned after similar schemes
piloted in Lima and elsewhere, this licence-based programme
prohibited cars, buses and taxis from circulating between 6:30 a.m.
and 8:30 p.m. at least one day a week (Fresard, 1998; Mahendra,
2008). It effectively removed one-fifth of the region’s vehicles on
days of severe pollution. Eventually, it was expanded to all week-
days between March and November.
In general, results were mixed, with some initial congestion
relief, but a gradual worsening of conditions as car use continued to
rise. As in other cities, numerousmiddle and high-income residents
purchased a second or third vehicle to avoid the restriction, further
contributing to increased congestion and air pollution in the city.
With the return of democracy in 1990, however, local authorities
began to seriously study new ways of mitigating congestion and
environmental degradation in Santiago. In 1994, the National
Commission for the Environment (CONAMA) was established to
develop air quality plans (Lee & Rivasplata, 2001).
Since 1990, Sectra has played a role in the design and planning
of transport in Santiago, including the establishment of the city’s
first competitive tendering scheme for public transport in the early
1990s. In 1995, Sectra released its 1995e2010 Development Plan,
which set system goals for limiting car use and maintaining the
existing mode split in Santiago (Sectra, 1995). The Development
Planwas uniquely multi-modal, coordinating enhancements to the
roadway system in Santiago with expansion of the largely frag-
mented public transport system (Rivasplata, 2010).
A principal element of the Development Plan has been the
construction, improvement and operation of a comprehensive
network of roadways. Through an elaborate set of PublicePrivate
Partnerships (PPPs), this set of thoroughfares and freeways has
provided improved connectivity throughout the area. In the past
decade, many of these freeways have been financed through elec-
tronic toll systems, providing some of the tools necessary to also
introduce congestion pricing.
Importantly, the Development Plan introduced market-oriented
mechanisms for electronically charging freeway users, requiring
that all vehicles, except buses and other essential fleets pay a user
charge of approximately US$4. Subsequent proposals called for
implementing a variable road use charge of up to $4 per kilometre,
based on time of day and level of congestion. Others suggested
introducing parking charges, based on trip purpose and duration of
stay (Mahendra, 2008; O’Ryan et al., 2002). Despite the fact that it
would be very simple to implement congestion pricing, thus far,
supporting legislation has been stalled in Congress.
5. Discussion
While São Paulo, Santiago and other Latin American cities have
implemented vehicle restrictions to offset growth in car use, no city
in the region has yet adopted and implemented a congestion
pricing programme. There appears to be growing interest in some
areas and past experience has shown that congestion pricing
schemes can achieve desired results. However, the political will
necessary to proceed is still lacking (Mahendra, 2011).
In both case cities, transport experts are fully aware of the costs
and benefits of implementing a congestion pricing scheme
(Mahendra, 2008). Prior to implementing a programme there are
clear issues that need to be resolved, including:
� the geographic area or areas to be targeted for congestion
pricing;
� the granting of exemptions to certain groups;
Table 1
Urban characteristics of the case cities.
Indicator Greater São Paulo Greater Santiago
Population (thousands) 18,784 6039
Density (per square kilometre) 8333 8814
Total employment (thousands) 10,369 3471
Tertiary sector employment (%) 79 71
Sources: CAF, 2010; Instituto de Seguridad y Educación Vial, 2009.
Table 2
Daily travel characteristics of the case cities.
Indicator Greater São Paulo Greater Santiago
Trips: all modes (thousands) 35,807 17,822
Trips per capita 1.91 2.95
Mode split (percent)a
Private transport, incl. taxi 32 27
Public transport 33 36
Non-motorised 35 37
Public transport trips (thousands) 11,838 6503
Public transport modes (percent)
Rail 25 35
Bus 75 58
Other (shared taxi) 0 7
Private vehicles
Cars (thousands) 4386 819
Motorcycles (thousands) 652 23
Private taxis (thousands) 39 27
a Mode split includes all trips. Sources: CAF, 2010; Malbran, Muñoz, Thomas, &
Scharz, 2003; Sectra, 2001.
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� the reliability of existing car registration information;
� the method of electronic pricing, i.e., a system that merely
charges for entering a zone, or one that charges for going
anywhere that is congested;
� the funding strategy for both establishing a programme and
providing for its ongoing operation and evaluation;
� the estimation of costs and revenues, based on pricing
scenarios; and
� the strategy for covering administrative costs and if applicable,
for applying programme revenues to other transport projects.
In general, these are issues that may prove challenging, but
that can be resolved, either in favour of implementing
a congestion pricing programme, or in support of not imple-
menting such a programme. After all, not all cities in the region
would necessarily benefit from such a scheme and a great deal of
caution should be taken before proceeding down this path. First,
we have seen that these systems are expensive to establish and
maintain and many countries are probably too poor to credibly
justify introducing one. Second, it may be problematic to
implement such a programme, particularly where there is little
information linking vehicles to their owners. Third, estimated
programme costs may be too high to recover through a variable
fee schedule, let alone fixed tolls. Finally, in light of reported
graft in some Latin American countries, there may not be a solid
commitment on the part of authorities to see that these charges
are enforced.
In the event that congestion pricing is determined to be
a viablealternative, what may be most challenging is securing
solid, long-term political support. Experience has shown that for
controversial programmes such as this, it is essential that one or
more influential political figures strongly support themwhile they
are in power, and that a long-term political commitment to the
programme is secured. Without this vital support, a congestion
pricing programme cannot be expected to survive, particularly
where there is a strong car lobby. The political champion must
take a strong and unwavering stand in favour of congestion
pricing, convincing the public of its benefits and costs. This
champion must also be willing to put his/her personal reputation
on the line for the project, as former-mayor Ken Livingstone did in
London.
In the past year, there have been clear indications that the mood
may be shifting in a few countries. There appears to be a growing
acceptance of the need to implement congestion pricing in a few of
the region’s most congested cities. Some decision makers, hesitant
in the past to make a commitment to support congestion pricing,
have either promised to seriously consider it, or have gone on
record in favour of it. In Colombia, the DeputyMinister of Transport,
Felipe Targa, and the Mayor of Bogota, Gustavo Petro, have stated
that they support congestion pricing in principle. In Chile, the
Minister of Transport, Pedro Pablo Errázuriz, commissioned an in-
depth study to determine the merits of a congestion pricing
scheme, and is said to be very seriously considering introducing
one (Pinochet & Sottorf, 2012).
Fig. 2. Santiago: major corridor traffic.
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6. Conclusion
Latin America, like other regions in the developing world, has
seen explosive growth in motorisation in recent decades, resulting
in increasing levels of congestion; ongoing traffic fatalities and
injuries; and environmental pollution in cities throughout the
region. Nowhere has this been more evident than in the primary
urban centres of the region, where daily travel has increasingly
become more difficult. In the recent past, planners and decision
makers have increasingly looked to TDM measures as a way of
efficiently controlling congestion through low-cost, demand-side
strategies.
While many TDM measures are incentive-based, vehicle
restrictions and congestion pricing represent measures that are
intended to discourage the use of the private vehicle. In particular,
pricing has been found to be a very effective tool for discouraging
the use of the private vehicle in many industrialised countries of
the world. In this sense, congestion pricing can effectively
discourage a resident from entering a specific area (or even from
using the car), especially where other, supporting measures are
employed. In the case of congestion pricing, it is essential that an
integrated set of public transport services provide the general
public with alternative means of transport. A comprehensive set of
information concerning pricing and alternative modes and facilities
can also facilitate a significant shift away from the car.
In their efforts to make transport more sustainable, São Paulo
and Santiago have attracted a great deal of interest in vehicle
restriction, capturing the attention of not only planners and envi-
ronmentalists, but also, metropolitan decision makers. Perhaps, the
fact that these cities are located in emerging, middle-income
countries strengthens the argument in favour of establishing
a congestion pricing programme. Each city already has a modern
network of regional roads and highways upon which to test and
implement congestion pricing, as well as a comprehensive set of
public transport systems to support the programme.
Based on an analysis of these cities, this paper concludes that
congestion pricing may offer an alternative to some of the cities
experiencing severe traffic congestion and/or environmental
degradation. However, each city is unique and should be carefully
assessed to see whether congestion pricing is an appropriate
alternative. If there are constraints that prevent key provisions from
being implemented, congestion pricing may end up falling short of
its expectations.
While vital, the mere adoption of a programme does not, in
itself, guarantee widespread success. First, it is essential that pro-
gramme planners seek input from city, state and federal agencies,
transport experts and the general public. This process will help
planners as they explore the various alternatives for implementing
a pricing programme within an established set of constraints.
Next, in each city it will be important to carefully analyse the
potential impacts of congestion pricing schemes on the transport
system and to compare future system scenarios with and without
congestion pricing. A major step in this analysis will be to accu-
rately estimate the general costs and benefits of specific congestion
schemes, for example, in reducing traffic congestion, improving air
quality and reducing the number of traffic injuries and deaths.
Clearly, this should be an area of further study, as a reliable esti-
mation of impacts may help decision makers adopt congestion
pricing more easily. Under no circumstances should a pricing
scheme lead to further poverty.
Past experience has shown that the success of a pricing pro-
gramme is often dependent upon the level of commitment on the
part of all parties involved. Where vehicular restrictions and/or
congestion pricing strategies are embedded in a larger transport
plan process, it may be easier to maintain that level of commitment,
as long as there is political and financial support. In contrast, stand-
alone congestion pricing schemes can provide a deterrent to
motorists. Without accompanying measures (e.g., an enhanced set
of public transport services), however, these schemes are bound to
fail.
Finally, implementation of a congestion pricing programme
should be carefully planned, and if appropriate, it should be
carried out in stages. While there are advantages to bringing
everything to fruition at the same time (e.g., equity, economies of
scale), staged programmes can reduce the risk of failure and allow
authorities to claim success at an early stage. A large part of the
initial London pricing zone was implemented at one time,
requiring a concerted effort on the part of planners, technicians
and authorities to ensure its success. However, not all cities in
Latin America have the capacity or the resources to pull off such an
effort.
Regardless of these limitations, all major urban regions should
pledge to improve the quality of life of residents and visitors
through the development and implementation of TDM measures
that include some form of congestion management.
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