Congestion Charging Could Cost £100m

Dont know what to make of these findings that the Congestion Charging Extension Scheme could cost £100m and be less beneficial -in financial terms anyway.Here is the story:


Home » News » London: Western expansion could cost £100M London: Western expansion could cost £100M



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Mayor Ken Livingstone has announced he will go ahead and double London's charging zone, despite doubts about the controversial scheme's cost-effectiveness.
The costs of expanding the zone westward could outweigh the benefits by £100M over 10 years, according to Transport for London's own analysis.
A separate assessment of the impact on TfL's finances indicates that it could be 10 years before the scheme breaks even.
Extending the daily £8 charge to the rest of Westminster and parts of Kensington & Chelsea in February 2007 ? four years after the first cordon scheme's introduction ? will cost £113-118M to set up, and a further £25M for traffic management.
TfL expects to cut traffic by 10-14%, while raising £55-75M in charges and penalties, depending on driver 'sensitivity' to the new charging area.
But a series of concessions, following a hostile public consultation, will erode the benefits and income arising for public transport. The discount zone for residents will be bigger than first proposed, and two more additions ? in Kennington and north Battersea ? are set to follow.
The mayor has also decided to end charging a half-hour earlier at 6pm from September next year, and give drivers an extra 24 hours to pay up, at a higher cost of £10, to avoid penalties.
Income from the current central zone will fall by up to £9M a year, while 'pay next day' loses another £8-11M in the short term.
TfL stresses that the extension will still raise £25-40M annually in net revenue, but that does not include the upfront costs and £11-15M a year for extra buses.
The number of drivers willing to pay has to be at the upper end of TfL's expectations, if it is to even begin recouping its investment within five years. That, however, would mean a cost/benefit ratio of less than one, and poor value for taxpayers.
Livingstone's statement admitted this would be criticised at a public inquiry, which legal counsel advise is not essential.
He was persuaded to go ahead because of the scheme's 'strategic fit' with his transport goals of cutting congestion and promoting public transport.
Livingstone said he regretted the 2% increase in central zone traffic but levels would still be 15% below pre-charging levels.
Kensington & Chelsea leader Merrick Cockell welcomed the 90% discount for all its residents, but insisted that congestion levels did not justify an unpopular move that would harm business.
His opposition was echoed by the AA, freight industry and business group London First.
London Assembly Greens predicted that extending the zone would again defy predictions of doom, while Transport 2000 saw it as a first stop to capital-wide charging.