Wednesday, July 11, 2012

Congestion charge flames out

Rush hour on Erzsebet Bridge.
So congestion charging in Budapest is dead -- again. Last Friday, Parliament took up a proposal that would have given municipalities (such as Budapest) the right to implement such a charge. The bill went down in a crushing 305-14 vote. The measure, proposed by the super-majority Fidesz party, garnered support from just two of its own MPs; the other supporters were from the left-leaning green party LMP. Even one of the two Fidesz representatives who submitted the bill voted against it.

Well, what did we expect? This idea, mooted and buried multiple times by former Free Democrat Mayor Gábor Demszky, was suddenly revived in January as City Hall groped for ideas to save its public transport  company, BKV, from going bankrupt. At first, City Hall released a trial balloon concerning an annual tax on car ownership, and after the predictable media outcry, the idea was dropped.

V District Mayor Antal Rogán, of Fidesz, voiced support for the idea of congestion charging, and somehow City Hall got on board. Mayor István Tarlós, who ran on the Fidesz ticket during his campaign but who has strained relations with the party leadership, walked a fine line on the issue. He stressed first and foremost that the idea was not his own, but one that he was forced to consider because his predecessor (Demszky) had promised it as a condition for getting EU funding for the Fourth Metro line. The proposal gained traction as a kind-of emergency fiscal measure along with proposals to further milk public transport users, including increased fares, application of VAT on ticket sales (already implemented) and reductions in social discounts.

My initial skepticism was based on the apparent rush with which it would be implemented. Congestion charging is an extremely controversial way to deal with traffic problems and invariably takes a lot of time and care to put in place. In Europe, although several cities have studied the idea and have attempted to bring it into force, just two, London and Stockholm, have implemented a proper congestion charge. A congestion charge is now being piloted in Milan, but only after several years experience with a less expansive eco-charging scheme.

Authorities here seemed clueless about what they were getting into. The suggested timetable for implementation was simply not realistic: City Hall said it would be up and running in a year's time, by July 2013. Never mind feasibility studies, never mind public consultation, never mind a system design, never mind public tenders for the necessary hardware and software.

Last month, I heard a presentation by David Vitezy, director of the city's umbrella transport coordinating center, BKK. He spoke about various transport schemes in Budapest, including the congestion charge. I asked him how BKK was going to manage political opposition to the idea. His answer amazed me: There was no political opposition, he said. The City Assembly and the leadership of virtually all of Budapest's district governments agreed congestion charging needed to be implemented, he said, adding that because the previous government obliged the city to implement it, everyone had political cover.

Granted, that was before the media started to take the idea seriously. In the ensuing few weeks, the idea started to unravel as the press ran one story after another about the charge's potential pitfalls. Streets on the perimeter of the cordon would be filled with parked cars, home values would go down in neighbourhoods outside the zone, drivers would find loopholes to avoid the charge. One article made the dubious argument that the charge would largely be state money circulating back into state coffers. Why? Because state offices account for a "good portion" of downtown workplaces.

A couple weeks ago, Mayor Tarlos looked to be back-tracking when he suggested, rather than having a congestion fee, there would just be a toll on the city's bridges. This would be easier to implement and, I suppose, more populist because it would target mainly Rozsadomb yuppies.

Funnily enough, there was very little forewarning in the press about the Parliamentary vote. The proposal was submitted by its fickle proponents just three weeks earlier and, like most legislation going through the single-party dominated body, it came to a vote with no public debate, despite its decisive consequence. I reckon it took nearly everyone by surprise except the MPs themselves. It definitely did me -- even though I knew that, as in other countries, there would have to be law modifications at the national level to enable the congestion charge. But in Hungary's case, there just wasn't any noise about this critical stage of the process.

One of the ironies is that it was pressure from the Fidesz government that drove City Hall to moot the idea in the first place. Congestion charging was part of the long-term fiscal stability plan that City Hall bashed together this spring in the wake of BKV's debt crisis. The government compelled the city to draft the plan as a condition for paying off BKV's loans. Now that the government has shot down a central pillar of the same plan, how can it maintain its tough stance on BKV subsidies?

As to where this leaves Budapest in light of the previous quid pro quo with the European Union, I have no idea. It's clear from media reports that city leaders are happy to wash their hands of it. The current administration "never insisted" on the congestion charge, according to a statement on the BKK website. City Hall is also arguing that the measure was premature and that if it ever does go forward, it should be preceded by strategic investments in park and rides and other transport infrastructure. That's precisely what Mayor Demszky said when he successfully put off congestion charging until he was well out of office.

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