Case Study llI'.I Dealing with Trafc Jams in [ondun As London entered the 21st century, it eononted a major issue that plagues many cities throughout the worldexcessive automobile trafc. Many Londonersparticularly the business communityrated trac congestion as the city's most serious problem. At peak periods, the average speed was less than 19 miles per hour= a slower speed than the horsedrawn carriages of previous centuries. Drivers spent about halftheir time waiting in traic- This congestion nightmare was not only a major source of driver frustration but also a contributor to both environmental and economic problems. By one estimate, trafcrelated problems cost London businesses roughly 2 millionmore than $3 millionevery week Clearly, the city needed an aggressive policy to address this issue- The solution, proposed by the government study Road lll'hargiurg Options for London (RDCDL) authorized by the 1999 Greater London Authority Act and endorsed by incoming mayor Ken Livingstone, was congestion charging. As the name suggests, the city would assess a fee, or charge, on every automobile that entered hightrafc sections of London during pealr hours. Rather than attempt a broad citywide implementation, the government focused specically on the highly congested section of central Londm 1uhere roughly one million people entered every day, about 159,999 of them by private automobile- Beginning in February 2993, drivers who entered this area between T AM. and 6:39 P_M- had to pay a fee of 5 {roughly $3] by midnight. The fee steadily increased over the years, and by 2914 it had increased to 11.59 (roughly 513). [i] Certain types of vehicles, such as ambulances, buses= and taxis, are exempt Drivers have the option to pay the charge by mail (prepay), text: messaging, telephone, or in person at various pay points. Failure to pay the fee resu'tts in a ne of 139 {roughly 5299)- [ii] Signicantly, this solution makes extensive use of current technologies. From the start, the city installed almost 7'99 cameras at more than 299 sites in the designated hightrac area to photograph the license plates of every vehicle that entered the area. The city transmitted these photos to a data center that translated the photographic images into license plate numbers utilizing automatic number plate recognition technology. To create and implement the congestion charge plan= the government had a number of project risks: Tight schedule: The projectneeded to be completed under tight deadlines in orderto meet multiple statutory requirements and minimize disruptions to commuters- Technolog: The cameras had to be strategically plaoed in order to accurately photograph tens of thousands of license plates every day- Lack of preexisting models: There were no preexisting models in the world to follow. Limited experience and expertise: Livingstone had been recently elected mayor, and the supervising governmental agencyTransport for Londonhad only recently been created. Thus, neither was experienced in building such a system. Political fallout: rThe political risk of a system failure to Livingstone was so huge that it would be extremely damaging to his career. Transport for London adopted a series ofmanagement strategies to navigate these waters and limit the risks resulting om its limited experience- IT ability, and management time- Perhaps the most signicant decision was to outsource the basic management activities to rms that specialized in these areas- For example, PricewaterhouseCoop-ers rst and then Deloitte 4% Touche were contracted to manage the competitive bidding process. Early in the project, project managers identied the critical technical elements and divided the project into ve :packages\" that could: if required- be bought and managed separately. These included {1} the camera component= (2) the socalled image store (storage) component that collected images, converted them into license numbers, and condensed the images [duplicates would occur when one vehicle was photographed by several cameras}, (3) the telecommunications hnks between the cameras and the image store component, (4} the customer services infrastructure, including the ability to pay by phone, web, and mi and (5) an extensive network of retail outlet kiosks and gas stations where people could pay the toll- The retail (driver's) side ofthe system was seen as sucha bigriskthat itwas bought and managed separately. To further reduce the risksE it was decided to select the best available technologies for each of the ve packages- Another riskaversive move \"as to utilize only established technologies for the actual process of identi-ring the vehicles in the designated zone- For example, Transport for London rejected proposals to employ electronic tags because this technology had not been proved e'ective in scenarios such as this one. Finally, the city added roughly E buses to its eet to accommodate increased ridership. Transport for London requested bids on the project early in 20111. The estimated $ll62 million project was large enough to require listing in the European Union's public sector register. Companies throughout Europe were allowed to bid on it. Separate bids could be tendered for the camera and communications packages whereas the remaining three packages could receive bids on a combined basis or individually. Deloitte d: Touche reviewed more than 40 bids before deciding on a single contractor to manage the entire program- Its choice tt-as The Capita Group, England's largest business process outsourcing rm. Sigicantly, before accepting Capita's bid, Deloitte 3: Touche required both that rm and the other nal candidate to submit technical design studies- In addition, Capita's contract included penalties if the company riled to meet the established deadlines- After awarding the contract to Capita, Deloitte dc Touche closely monitored every step of the process, and it kept additions to the original plan to a minimum- As a result, scope creepthe process whereby a project increases in both size and costs as new features are addedwas never a serious issue. ne of the few changes added to the requirements was an option for motorists to pay fees through the popular SEES textmessaging format. Throughout the implementation of the new system, the city continually sought feedback from key stakeholders. In addition, it regularly updated the public concerning the project's status. Consequently, few drivers were caught mattare when the new policy went into e'ect on February 17, 2003. The mayor also wisely decided to begin operations during a school holiday period when traffic volumes would be significantly lower. Thus, by the time traffic returned to normal, drivers generally had adapted to the new procedures. What were the results of these concerted efforts? Unlike so many systems projects, London's congestion charging plan was completed on time and within budget. Significantly, however, the demanding schedule did not compromise the quality of the work. Instead, five months after it was begun, the new program appeared to have achieved its basic goals when a follow-up studyiii indicated that traffic in central London had diminished by as much as 20%, and average driving speeds had improved. A 10-year study found sustained reductions in central London, averaging 23% over the longer period. [iv] The fines and fees resulted in a project payback period of about one and one-half years. It was estimated that total revenues would amount to $2.2 billion over a 10-year period. Moreover, vehicular emissions of toxic substances such as nitrogen dioxide were also reduced. However, a study found it difficult to determine the precise causes of London's decreased emissions between 2003 and 2011. [v] The system appears to be thriving and growing. Transport of London has pay-as-you-go Oysters card with a free mobile app to manage it. [vi] One potential problem that did not emerge was "rat runs" in which traffic jams would appear in areas outside the zone as drivers altered their routes to avoid the charges. After reviewing the outcomes of the London program, many observers predicted that congestion charging would become a standard practice in cities throughout the world