Economic evaluation of intelligent transportation systems strategies: the case of the Oslo toll cordon

Intelligent transportation systems (ITS) projects often offer an effective solution for many transportation problems as compared to traditional solutions such as increasing road capacity to solve congestion problems. However, ITS projects are often not evaluated in economic terms either because methodologies are not available, or when they are, data become a limitation. Since economic assessment is the order of the day in the transportation sector, many potential ITS projects are losing terrain relative to alternative solutions. This study develops and demonstrates that economic evaluation of ITS projects in the road sector is possible. The authors use the Oslo toll cordon as a case example, where semi-automatic toll collection was replaced by a full-fledged ITS-based toll collection. The results show that ITS-based toll collection is highly profitable from an economic point of view. The reasons are that the ITS-based toll collection relieves congestion at toll points thereby leading to (i) time savings for road users, (ii) reduced noise and pollution associated with slow movement of vehicles at toll points, (iii) improvement of the city´s landscape because toll booths and signposts are removed and (iv) reduced costs associated with operating tolls. The study urges ITS proponents to start using economic evaluation when assessing the merits of their projects.