final wac case report

8/8/2019 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. SecondLink 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

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 wont 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, theyll attract others also by word of mouth publicity.

9. Contingency Plan

If the above alternative is not implemented due to some reason, then well 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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