Preliminary Results On Current Practice

Brussels, 9 June 2004Brussels, 9 June 2004 PTMaurits van der HoofdMaurits van der Hoofd11

Preliminary Results On Current PracticePreliminary Results On Current Practice

Maurits van der Hoofd Urs Springer

Miguel Carmona Stefan Suter

Eduardo Pires Paavo Moilanen


Review of current practice and classification of Review of current practice and classification of pricing and revenue allocation schemespricing and revenue allocation schemes

Objectives

• Dimensions and criteria for the description of pricing and revenue allocation schemes

• Pricing and revenue allocation schemes digest

• To what extent are current practices conistent with theory?


Fact sheets: scopeFact sheets: scope

• DoW: “This task will review and identify the ways in which revenues are collected and assigned across Europe”

• “to make a general survey of current practices of revenue use in the EU”

• Awaiting input from Work Package 2

Therefore: focus lies on pricing schemes for now

The results are preliminary as the investigation is still continuing.

Countries described are EU15 minus Luxembourg plus Switzerland.


Modes consideredModes considered

Pricing schemes were investigated for the following modes:

• Road – especially motorways

• Rail – infrastructure charges

• Urban PT – bus, tram and metro

• Air – landing charges and other purely aeronautical charges

• Inland waterways

• Maritime – port dues


Aspects consideredAspects considered

• Pricing schemes

• Earmarking of funds

Revenue allocation schemes (to be developed):

• Design and allocation rules

• Forms of co-operation between the public and private sector

• Role of the institutions in the decision-making process


General approachGeneral approachTransport pricing

Design

Pricing principle

Pricing instrument

Earmarking of revenues for transport sector

No earmarkingof revenues for transport sector

Design, rule

Reasoning

Uni-modal Multi-modal

Maintenance

TEN

MotorwaysMain roadsLocal roads

Service

TEN


Construction

TEN


Planning

TEN


Maintenance

TEN


Service

TEN


Construction

TEN


Planning

TEN


Maintenance

Private trsp.Public Trsp.Slow trsp.

Road RailService


Road RailConstruction


Road RailPlanning


Road Rail

Maintenance


Road RailService


Road RailConstruction


Road RailPlanning


Road Rail

Revenue allocation rules

Organisational solution

Institutional solution and decision-making process

Design

Revenue allocation scheme


Pricing principlesPricing principles

• Pure social marginal cost pricing:

Price = marginal resource cost + marginal external cost

• Marginal cost pricing

Price = marginal resource cost

• Second best solutions

such as multi-part tariffs, Ramsey pricing, SRMCP + mark-ups

• Target-oriented price schemes

No differentiation between user type, time of day etc. (eg ACP)


Pricing instrumentsPricing instruments

• Charge: A payment that is directly linked to a particular service from a public or private provider.

• Infrastructure access charges

• Road tolls

• Bridge/tunnel charges

• Tax: A levy that must be paid to the government without any clearly related service.

• Vehicle registration taxes

• Fuel taxes

• VAT


Ro

ad m

od

e: pricin

g sch

emes

Ro

ad m

od

e: pricin

g sch

emes

??

??

??

TT

T+C: 2T+C: 2ndnd best best








T+C: 2T+C: 2ndnd best bestTT



Rail m

od

e: pricin

g sch

emes

Rail m

od

e: pricin

g sch

emes

NoneNone

??

??

??

C: 2C: 2ndnd best best

None*None*












Air m

od

e: pricin

g sch

emes

Air m

od

e: pricin

g sch

emes

??

??

??




T+ C: 2T+ C: 2ndnd best best





T+C: 2T+C: 2ndnd best bestC: 2C: 2ndnd best best

??



Inlan

d w

aterways m

od

e: pricin

g

Inlan

d w

aterways m

od

e: pricin

g

schem

essch

emes

??

??

??

??

C: T- OC: T- O??

??

??NoneNone

C: T- OC: T- O

NoneNoneC: T- OC: T- O

C: T- OC: T- O


??


Maritim

e mo

de: p

ricing

M

aritime m

od

e: pricin

g

schem

essch

emes

??

??

??

??

??

C: T- OC: T- O





C: T- OC: T- O

??



Earm

arking

of reven

ues?

Earm

arking

of reven

ues?

??

58% of road to 58% of road to tunnelstunnels

2.5% of electricity 2.5% of electricity tax to urban PTtax to urban PT

??

??

??

NoNo

NoNo

100% of HGV to 100% of HGV to infrainfra

Part of fuel tax to Part of fuel tax to regional infraregional infra

67% of HGV to rail 67% of HGV to rail infra, 33% to infra, 33% to regional road infraregional road infra

Some air tax to Some air tax to noise abatementnoise abatement

Some air tax to Some air tax to noise abatementnoise abatement

??

Some municipal tax Some municipal tax from urban companies from urban companies to urban PTto urban PT

Electricity tax to Electricity tax to inland waterwaysinland waterways

NoNo

NoNo

??


Preliminary ObservationsPreliminary Observations

• SMCP not observed, but internalisation occurs more than before

• Roads and railways: where 2nd best solutions are more used

• No specific pricing schemes for urban PT except France

• Aviation charges (aeronautical) constrained by IATA, often multi-part tariff or another second-best scheme

• Very few examples of the application of taxes and charges in inland waterways

• Ports least regulated, often operate without govt. funding


Pricing and revenue allocation schemes digest Pricing and revenue allocation schemes digest

• To be done after completion of the fact sheets

• To cover following aspects:

– Pricing regimes (principles/instruments)

– Earmarking of revenues from transport pricing schemes

– Revenue allocation rules

– Objectives and design of the revenue allocation schemes:

• Subsidies and cross-subsidisation

• Legal framework and institutional settlement

• Transport funds

• PPP

• Institutional solutions


To what extent are current practicesTo what extent are current practices consistent with the theory? consistent with the theory?

• Pricing doctrines

• Revenue allocation schemes

• Preliminary assessment to be carried out after the conclusion of the fact sheets.

Documents

Preliminary Results On Current Practice