Ort, DatumAutor

Introduction to the REVENUE Interurban Case Studies

Heike Link (DIW)

Final Conference Revenue Use from Transport Pricing Brussels, 29-30 November 2005

Objectives

– Testing options of using revenues from different pricing schemes in a set of 7 interurban case studies

– Comparison of theoretical recommendations on optimal use of revenues with existing/planned schemes

– Recommendations on use of revenues that is:• efficient• equitable• legally and institutionally feasible• acceptable

Key questions on use of revenues

– Welfare effects of different pricing regimes in combination with options of using revenues?

– Earmarking to transport sector?

– Cross-subsidisation between modes?

– Cross-subsidisation between new (tolled roads) and existing (non-tolled) roads?

– Maintenance versus new construction?

– Public versus private procurement?

– Acceptability of specific options for using revenues?

1. Motorway Case Study Finland

0 50 km

3 4 6

7

501 E18

E18E12 E75

25Suomenlahti

Loviisa

Porvoo

Hyvinkää

KotkaHam ina

Salo

Helsinki

TurkuNaantali

Lohja

M uurlaLohjanharju

3

R autatie

Tienum ero

Valta tie

Lentoasem a

Satam a >1 M t

Satam a >5 M t

M oottoritie

Raja-asem aM oottori-liikennetie

M oottoritiesuunnitte illa / rakente illa

New 60km long motorway section of E18

- Financing investment for a new 60 km section of the motorway E18 (part of the „Nordic Triangle“) by different combinations of pricing schemes and use of revenues

- Public versus private procurement

2. HGV Charging German Motorways

- Earmarking - motorways vs. secondary

roads - intermodal revenue use - maintenance vs. new

investment- Public vs. Private

procurement

3. Swiss Rail Investment Fund

GotthardLötschberg

-

2/31/3

Cantons („States“)

Heavy vehicle fee:

Revenues: 600 mill. € / year

Reimbursements: 75 mill. € / year

Costs: 45 mill. € / year

Net revenues: 480 mill. € / year

New railway tunnels:

Lötschberg 2.700 mill. €

Gotthard 6.240 mill. €

Other 1.330 mill. €

Total cost 10.270 mill. €

23% foreign vehicles

77% domestic vehicles

-Optimal degree of earmarking HFV revenues-Cross-subsidisation road rail versus investments in both

modes

4. Motorway + Road/Rail Case Study France

– Financing new motorway projects from motorway dividends and land fees of existing motorways (AFITF)

– Financing the Lyon-Turin rail link from charging revenues of alpine motorway

Origin : Transport MinistryLegend :

Centre Europe Atlantique Road A 75 motorway

A 20 motorwayNational Road RN 7Estuaires Motorway

5. Zürich Airport Case Study

Use of revenues from:

a) noise/emission depending landing charges (noise funds)

b) SMCP

c) Ramsey pricingRunway extension at Zurich airport under the “optimisation Scenario”

Left: extension of runway 10/28 in the west. Right: extension of runway 14/32 in the north. Source: ARV 2004.

6. Rotterdam Port Case Study

– Existing + planned options of pricing, use of revenues and investment at the competing ports of Rotterdam and Antwerp

7. Acceptability of HGV Charges

a) Key informant survey - Transit traffic through CH and Db) Internet-based company survey - HGV charging

scheme D

Approach of the CS: What is a regulation scheme?

Scope Pricing InvestmentRevenue use &

financing

RulesWhat sectors / sub-sectors are

covered?

Which pricing rule?

What use of revenues, what

financing?

Which investment rule?

What actors are involved, with

what functions?

Who sets prices? Who decides on revenues use and financing?

Who makes investment decisions?

Regulatoryframework

Private or public provision?

Payment?Enforcement?

Exeptions?

Revenues collection &

management?

Tenders?Contracts?

Procurement & Imple-mentation

Approach of the Case Studies

Finland motor-way

D

HGV tolls

CH

rail/ road

CH

urban fund

France road/

rail

Zurich airport

Rotter-dam port

Accept-ability

Efficiency

MOLINO Other model Qualitative / Quanti-tative analysis

Equity

MOLINO Qualitative / Quanti-tative analysis

Technical and org. feasibility

Acceptability

The MOLINO model

– Partial equilibrium model with:

a) Transport market module (demand/supply by considering pricing and contracting of operations)

b) Investment module (investments as a function of transport benefits, expected profits, costs of capital)

c) Financing reporting module (incomes and expenditures, assets and liabilities, tpye of investment financing)

d) Infrastructure fund (income from/subsidies to different modes, accumulation over time)

– 2 competing transport options can be analysed (road/road, road/rail etc.)

Main findings

1. Welfare effects of SMCP– SMCP welfare superior but fails to recover costs.– French CS suggests combination of SMCP with

subsidies from the interurban fund AFITF.– In general: Transport pricing, investment, and

revenue use must be considered together for sound conclusions on efficiency.

– Overall positive effect may have winners and losers: Sound analysis of distributional effects necessary.

Main findings (cont.)2. Earmarking and intermodal cross-subsidisation

German HGV charging study: Revenues to general budget = welfare superior, but if

earmarking required: – Revenues should be earmarked to road, no cross-

subsidies to rail.– Supported by acceptability study: Hauliers ...

.... prefer use within road sector,

.... would even accept higher charge if revenues used for road.

Swiss and French case studies: Welfare increases by cross-subsidisation from road to rail

Main findings (cont.)

3. Cross-subsidisation between roads– French CS: Cross-subsidisation between existing

tolled motorways (dividends, Land fees) and new motorways increases welfare

– German CS: Use revenues from HGV charging at motorways for the motorways, not for other roads