Final Wac Case Report

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DEBASHIS PATRA ROLL NO-802010 PGP 2008-10, IWSB WAC REPORT: THE PRICING OF TOLL CHARGES 1. Problem Insufficient utilization of Second Link Bridge 2. Problem Establishment Second Link, as the name suggests was a bridge constructed to link Singapore and Malaysia. It was 1.9 km long and had six lanes. It had a capacity to handle 200,000 vehicles every day. It was jointly built by Singapore and Malaysia, with the former building 0.21 km of the link costing S $ 620 million, and the latter building 1.7 km of the same and spending RM 450 million. Second Link was supposed the ease the vehicular traffic snarls that were daily affairs plaguing the Causeway Bridge. For this reason, the immigration checkpoints at both the ends of Second Link Bridge were built wider than Causeway. Second Link was also intended to provide better immigration and customs facilities than the Causeway. Besides this, it was supposed to facilitate ease of movement of heavy vehicles plying it daily. All in all, it was supposed to be better than Causeway Bridge. A significant departure that marked Second Link from Causeway was that motorists using this bridge had to pay toll charges unlike the Causeway Bridge. The toll charges concerning other vehicles using Second Link were also significantly higher than Causeway Bridge. However, a year later it was seen that motorists preferred using the Causeway. Against a projected target of 200,000 vehicles per day, the actual figures were fewer than 11,500. This was only 5.7% of the capacity of Second Link. This in turn led to annual toll tax collections of RM 7.8 million by Malaysia against the projected collection of RM 11.31 million. 3. Objective To increase the number of vehicles using Second Link, thereby leading to its effective utilization. 4. Alternatives


Decrease Toll Charges(All/Some/Days) Use one way Vehicular Movement Apply Toll Charges One way only

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5. Criteria
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Revenue Generation( Amount of Money collected annually through toll charges) Decrease in Traffic Congestion at Causeway Time taken to recover money invested in building Second Link

6. Evaluating Alternatives


Decrease in toll charges in absolute terms will cause reduction in whatever revenue is being presently generated. If toll charges are significantly reduced for big Lorries and heavy vehicles, it will lead to this category of vehicles preferring Second Link over Causeway. If toll charges are reduced preferentially, i.e. on some days for some vehicles, it will encourage those vehicles using the Causeway to start using Second Link. This will then lead to easing of vehicular traffic on Causeway. However, the time taken to recover money invested in building Second Link by respective governments of Singapore as well Malaysia will increase. Using one way vehicular movement by utilizing either of the two bridges for coming or going and distributing money collected from toll charges according to the prescribed rate charts of the respective bridges is feasible if we consider Revenue generation as well as Decrease in congestion of vehicular traffic at Causeway. However the time taken to recover the money invested in building the bridge will be more than in the above case, if preferential toll charges are applied. Keeping the toll charges unchanged and applying toll charges one way only won’t cause decrease in annual revenue presently generated. Some heavy vehicles might consider using Second Link if one way toll charges are applied to reduce commuting time. Time taken to recover the money invested in building Second Link will be more than the above case.





7. Prioritizing Alternatives After judging all three alternatives we would suggest applying preferential toll charges, i.e. the first alternative, followed by the second alternative, followed by the third.

8. Action Plan
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Levy toll charges on Second Link preferentially, i.e. on some days apply less charge for some type of vehicles. Give more preference to drivers of Lorries and other heavy vehicles using Second Link by giving them discounts if they start using it on a monthly or annual basis. A system of “preference passes” or annual tickets can be implemented also. Once new lorry drivers start using Second Link, they‘ll attract others also by word of mouth publicity.

9. Contingency Plan If the above alternative is not implemented due to some reason, then we’ll consider the second alternative. i.e. Any of the two bridges Causeway and Second Link will be used for coming/going. The revenue collected by way of toll charges will then be distributed according to the rate charts or toll charges concerning the two bridges given in the case.

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