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Road Pricing in the Netherlands

Workshop on Road User Charging SystemsWarsaw, June 11 and 12, 2007

Ronald Keus and Jan VisMinisterie van Verkeer en Waterstaat

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Contents

• History of Pricing Policy in the Netherlands• Current pricing policy in the Netherlands• Scope of the Kilometre Charge (KMP)• Cabinet’s decision

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• Population: 16.2 million

• 8+ million vehicles

• 2400 km motorways

• >134.000 km roads in total

• >100 billion km made on yearly basis

• Daily congestion problems, in particular related to the economic centre (Amsterdam, Utrecht, The Hague and Rotterdam)

• Total 6.8 billions of vehicle taxes (BPM and MRB taxes) on a yearly base (including provincial taxes)

• 350 border crossings

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The Netherlands

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Previous Dutch RUC attempts

• 1988: Rekening Rijden I • 1992: Spitsvignet • 1994: Rekening rijden II • 1999: Spitstarief + investments package • 2001: Kilometer Charge

Untill 2005 without success.Failed because of insufficient political support

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Lessons learned

• From our own history:– Political and public acceptance is the biggest problem, and

not the technique– Show the (tax)payer where the revenues are spent on– Show the (tax)payer that the system is fair:

• To pay for use of the road• To pay for pollution

• From experiences abroad:– ‘Keep it simple’– ‘start at a small scale, but start at least’– Pricing policy requires politicians with courage

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Recent historyThe Platform and their advice (2005)

• A breakthrough was needed• Introduction of an advisory Platform• The main social and business society where involved

– E.g. motorists association, environmental groups, representatives of employers and employees, regional governments, etc.

• Chairman was mr Nouwen (1999 former opponent)• The Platform came with their advice in May 2005:

– Several concepts of charging discussed– Selected option: price per kilometre (KMP) for all vehicles

on all roads. Based on time, location and environmental aspects. Feasible by 2012-2014.

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Recent historyAdvice of the Platform

Effects of KMP, differentiated on the basis of time, place and environmental characteristics

Calculations based on average rate of 3,4 eurocent per kilometre, and a congestion rate of 11 eurocent per kilometre

Reduction of travelling

time during congestion

Improvementenvironmentroad safety

Investmentcosts

Introduction Prosperity

KMP, Differentiated on the basis of time, place and environmental aspects

± 60% upto 10% ± 3 billion 2012-2016 ± 1 billion

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Road pricing in the Mobility Plan (September 2005)

• Advice of Platform leading principle in the Mobility Plan– It‘s effective, fair and transparent– And contributes to accessibility and environment quality

• Strategic considerations: – To preserve the public support: stay close to the opinion

of the Platform– It presents a step-by-step approach – A quick start with famous traffic black spots or bottlenecks– And step by step towards full-scale road pricing (kilometre

price)

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Current pricing policy

• Current Coalition Agreement• Objectives and scope of the KMP• Tentative schedule KMP• Main additional requirements• Market consultation• Joint Fact Finding• How further?• Cabinet’s decision

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Coalition Agreement, 7 February 2007

“To improve the accessibility by road in general, and in particular in the Randstad, the system of a kilometre charge (differentiated on the basis of time, place and environmental characteristics) will be introduced in the coming cabinet period, if necessary in stages. This under the conditions that the current taxes (BPM, MRB, Eurovignet) will be converted into a kilometre charge, and that the system costs and costs of billing and payment collection are not higher than 5% of the revenues.”

Randstad = (urban agglomeration of Western Holland), BPM = tax on purchase of passenger cars and motorcyclesMRB = vehicle tax

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Will he make the difference ?

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Objectives and scope of the KMP

• Objectives– Primary: pay for usage (‘fairness’)– Secondary: congestion/economy and environment

• Scope of the KMP– All motor vehicles, passenger + freight– All roads in NL– Differentiate by time of day and location– Differentiate by (environmental) characteristics of

vehicle – Conversion of current tax system (for purchase and

ownership of a vehicle) into a new system (use of the vehicle)

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Main additional requirements

• Free-flow operation• European interoperability directive …• Easy to use and understand the scheme• Accuracy sufficient for credibility

– 99% of invoices less than 1% deviation (?)• Respect user privacy• Costs visible in the vehicle (?)• System should be able to support toll/point charges• System scalable and to allow stepwise implementation• Adequate prevention / detection of fraud• Flexibility for changes in road network, tariff structure

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Tentative schedule KMP

Price per kilometre draft

bill

Requirement Specifications

Realisation of private component

Realisation of public component

NOTA

MOBILITEIT

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Social implementation en communication

Preparing for policy choices

2005 2006 2007 2008 2009

Km-price

= go/no go

Tender

Research

agenda

Implementation strategy

Including tax transition issues

CostMonitor

Costmonito

r

Costmonitor

2012

Joint Fact Finding

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Main questions Market Consultation(2006)

• Can the KMP be achieved?– Which requirements are difficult to realise ?

• Can the KMP be achieved at acceptable costs ?– Investment << € 3 billion– Operational cost < 5% of revenues

Involved: industry, toll operators, consultants• Phase 1: 42 interviews (industry, operators, consultants)• Phase 2: 12 assignments

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Main message market consultation

• Yes, the KMP can be achieved• 2012 is feasible, provided that ....• Estimates initial investment: 30% lower• Estimates operational costs: scattered image, but

tendency towards 5% objective can be observed

• Limitations of results of market consultation:– Requirements not sufficiently clear yet– Organisation & business model / public – private

undecided (including allocation of risks)– No operational examples to compare– Commercial bias

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Joint Fact Finding (2006 and beginning 2007)

• Together with local governments, social and business society, other Ministries

• Preparation of policy choices:– Rate structure, congestion mark-up, differentiation on the

basis of environmental characteristics– Conversion of current vehicles taxes– Organisational issues:

• public/private• division of task and responsibilities• enforcement

• Communication with citizens and companies

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How further?

• Second half of 2007:– Cabinet’s decision– Implementation strategy and policy choices

• Planning legislation– December 2007: Draft to Lower House and EU for

notification – Beginning 2008: start discussion with Lower House

• Preparations for tendering procedure:– End of 2007;– New cost monitor

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Cabinet’s decision (second half of 2007)

Scope of Cabinet’s decision

• Conversion of current (fixed) vehicle taxes into the kilometre charge (KMP)

– Amount of reduction of the current vehicle taxes;– How to introduce the kilometre charge and to reduce the vehicle

taxes?;• Rate structure

– Differentiation according to environmental characteristics and according to time en place

• Organisational and legislative issues– Who decides about the rates?, – Is the kilometre price in legal terms a tax or a levy?– Exemptions

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Thanks for your attention

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