Top officials in Israel's Ministry of Finance are putting together plans to combat the increasing congestion on Israel's roads including a congestion charge for vehicles entering the country's main cities during morning and evening rush hours. The plan will be submitted to Minister of Finance Avigdor Liberman, and if approved would become part of the Economic Arrangements Law, linked to the budget, sources close to the matter have told "Globes."
The plan is particularly needed for the Tel Aviv Metropolitan region due to the huge increase in the number of cars on the road since the end of the Covid lockdown and delays in building the various mass public transport systems for the region. The situation is expected to worsen in the coming few years with the advent of lower-cost electric vehicles aggravating congestion.
Tel Aviv is likely to be the first city where a congestion charge is introduced between 7 am and10 am and 4 pm and 6pm. The fee, which is likely to be about NIS 10 per day would be collected electronically through various advanced technological methods such as roadside cameras or smart chips in cars. Due to the technological component it is likely to take up to two years to implement the plan once it is approved.
In recent years such a plan has been enthusiastically promoted by the Ministry of Transport, Ministry of Finance and Tel Aviv Municipality but was resolutely opposed by former Minister of Finance Israel Katz. It is unclear whether Avigdor Liberman will support the plan.
The plan would add an estimated NIS 1.5 billion to the state coffers of which two thirds would be used to increase the budget for public transport and one third to lower the cost of the annual vehicle license for all drivers.
An OECD report on Israel last December recommended that Israel should impose a congestion tax, starting with the Tel Aviv Metropolitan region. The report said that the experience of such cities as London and Stockholm, which had imposed congestion charges, have been very positive, with waiting time in traffic jams reduced by up to 30%.
The Ministry of Finance Spokesperson declined to comment on the report and a source close to Minister of Finance Avigdor Liberman said, "The new minister has only just begun his job and will need to form a policy on the issue, which is not the most burning topic on the agenda."
Published by Globes, Israel business news - en.globes.co.il - on June 18, 2021
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