1. Preparations for the Mileage Charging Electronic Toll Collection in Hungary Árpád G. Siposs, Toll Strategy Manager, KKK Coordination Centre for Transport Development Workshop on Road User Charging Systems, Warsaw, June 12, 2007

2. Tolling History in Hungary / 1 First master plan for speedways:1942 Motorway constructions started:1961 „500 km of Toll Motorways” programme:1970-1976 Attempt to introduce the vignette system:1989 Toll collection by Concessionaires:1996-2004 Continuous expansion of vignette system:2000-2004 Electronic registration and control of vignettes:from 2002 Preparations for mileage based ETC:from 2003 Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

3. Tolling History in Hungary / 2 The Former Manual Tolling Facilities M1/M15 BOT 1996 1999 M5 BOT 1997 2004 M3 State 1999 1999 M5 PPP from 2004 Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

4. Current Vignette System / 1

5. Current Vignette System / 2 Structure of the Vignette System in 2007 Four user charge categories: D1  3.5 t  D2  7.5 t  D3  12 t  D4 (7.5 t  buses: 1 category  ) D1  3.5 t  D2  7.5 t  D3  12 t  D4 (7.5 t  buses: 1 category  ) Four network extensions widening by categories: for D1, D2, D3, D4 exempted m’way & e’way sections: 44 km, for D1, D2, D3, D4 exempted m’way & e’way sections: 44 km, for D1 only on m’ways (with exemptedby-passing sections): 668 km, for D1 only on m’ways (with exempted by-passing sections): 668 km, for D2, D3, D4 on m’way by-passes as well + e’ways: 221 km, for D2, D3, D4 on m’way by-passes as well + e’ways: 221 km, for D4 on 42 trunk road sections around the country as well: 470 km, for D4 on 42 trunk road sections around the country as well: 470 km, (above the 933 km speedway network) totally charged:1359 km. (above the 933 km speedway network) totally charged:1359 km. Five validity periods: valid for 1 calendar day (for D2, D3, D4), valid for 1 calendar day (for D2, D3, D4), valid for 4 consecutive days (for D1 with a summer season price), valid for 4 consecutive days (for D1 with a summer season price), valid for 10 consecutive days, valid for 10 consecutive days, valid for 31 consecutive days, valid for 31 consecutive days, yearly vignette (from January 1 to the next January 31). yearly vignette (from January 1 to the next January 31). Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

6. Current Vignette System / 3

7. Traffic & Revenue Forecasts / 1 The Main Weakness of the Vignette System Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6) The virtual toll level will further decrease with 40% by 2013!

8. Traffic & Revenue Forecasts / 2 Reasons to Shift to Mileage Charging 31% of traffic outputs caused by foreign vehicles but only 27% of income is generated by foreign vehicles; 31% of traffic outputs caused by foreign vehicles but only 27% of income is generated by foreign vehicles; 63% of 1 day truck vignettes bought by foreign vehicles, they pay less / km in a transit trip than a domestic personal car pays / km in a year; 63% of 1 day truck vignettes bought by foreign vehicles, they pay less / km in a transit trip than a domestic personal car pays / km in a year; 150 countries & more than 3 m registered licence plates: personal cars:55% domestic users; goods vehicles:75% foreign users; 150 countries & more than 3 m registered licence plates: personal cars:55% domestic users; goods vehicles:75% foreign users; average off motorway trip length: 38 km (no vignette) average on motorway trip length:173 km (vignette). average off motorway trip length: 38 km (no vignette) average on motorway trip length:173 km (vignette). Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

9. Traffic & Revenue Forecasts / 3 (in 2006) Source: Transman Kft. (km) Average distribution functions for the mileage charging and the vignette system Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

10. Traffic & Revenue Forecasts / 4 (in 2006) Cost Allocation Study Calculation of cost generation share by vehicle categories for cost components & road categories. Calculation of cost generation share by vehicle categories for cost components & road categories. Toll level depending category multipliers were recommended (4 categories / basic toll levels in 2005 terms) : Toll level depending category multipliers were recommended (4 categories / basic toll levels in 2005 terms) : cost recovery: 1,0-1,3-2,0-5,3 4,7 HUF/km, cost recovery: 1,0-1,3-2,0-5,3 4,7 HUF/km, virtual from vignettes: 1,0-1,3-2,0-5,3 5,6 HUF/km, virtual from vignettes: 1,0-1,3-2,0-5,3 5,6 HUF/km, low: 1,0-1,4-2,2-5,5 7,5 HUF/km, low: 1,0-1,4-2,2-5,5 7,5 HUF/km, acceptable: 1,0-2,0-3,0-4,212,0 HUF/km, acceptable: 1,0-2,0-3,0-4,212,0 HUF/km, European average: 1,0-2,0-3,0-4,217,0 HUF/km, European average: 1,0-2,0-3,0-4,217,0 HUF/km, optimum for disposable income: 1,0-1,4-2,0-2,522,0 HUF/km, optimum for disposable income: 1,0-1,4-2,0-2,522,0 HUF/km, maximum income: 1,0-1,4-2,0-3,130,0 HUF/km. maximum income: 1,0-1,4-2,0-3,130,0 HUF/km. Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

11. Traffic & Revenue Forecasts / 5 (in 2006) Forecasts for 4 road network schemes: Forecasts for 4 road network schemes: only motorways with free sections, only motorways with free sections, only motorways, no free sections, only motorways, no free sections, motorways & expressways, no free sections, motorways & expressways, no free sections, motorways &expressways + parallel roads for goods vehicles. motorways & expressways + parallel roads for goods vehicles. Calculation of sensitivity analysis for 7 mileage depending toll levels + the vignette system. Calculation of sensitivity analysis for 7 mileage depending toll levels + the vignette system. Lower than „European average” toll levels had a 10 years catch up period  higher revenue growth. Lower than „European average” toll levels had a 10 years catch up period  higher revenue growth. Forecasts for: 2008, 2010, 2015, 2020. Forecasts for: 2008, 2010, 2015, 2020. The Forecast Scenarios Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

12. Traffic & Revenue Forecasts / 6 (in 2006) Sensitivity Results / 1 Source: Bauconsult Kft. Toll levels for sensitivity: Network Schemes Toll Incomes (billion HUF) Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

13. Traffic & Revenue Forecasts / 7 (in 2006 & 2007) Toll Level Proportional Comparison / any Category Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

14. Traffic & Revenue Forecasts / 8 (in 2007) Feasibility Study Inputs With a restriction of the cases evaluated in 2006 to a more reasonable set of varieties new calculations: With a restriction of the cases evaluated in 2006 to a more reasonable set of varieties new calculations: motorways & expressways + transit („E”) roads + all trunk roads; motorways & expressways + transit („E”) roads + all trunk roads; „do nothing” case: the pure vignette system; „do nothing” case: the pure vignette system; mixed tariff model (Vignette  3,5 t < ETC), alternative tariff model (choice: Vignette or ETC  3,5 t < ETC), only ETC tariff model (ETC for all vehicle categories), mixed tariff model (Vignette  3,5 t < ETC), alternative tariff model (choice: Vignette or ETC  3,5 t < ETC), only ETC tariff model (ETC for all vehicle categories), 3 networks × 3 tariff choices × 3 toll levels = 27 cases. 3 networks × 3 tariff choices × 3 toll levels = 27 cases. For a 5 years operational project term (2009-2013). For a 5 years operational project term (2009-2013). A feasibility study calculated the costs for the different cases, to predict the results of the new ETC system. A feasibility study calculated the costs for the different cases, to predict the results of the new ETC system. Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

15. Traffic & Revenue Forecasts / 9 (in 2007) Sensitivity Results / 2 Toll Incomes (billion HUF) Toll levels for sensitivity: Tariff Choices & Network Schemes Source: Bauconsult Kft. Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6) Sensitivity Results / 2

16. Frame of a New Toll Policy / 1 Proportionality & Equity in All Dimensions Under the user & polluter pays principles: Under the user & polluter pays principles: user charges & tolls should cover infrastructure costs of mainly the (extra) service levels (basically as service fees on m’ways & e’ways); user charges & tolls should cover infrastructure costs of mainly the (extra) service levels (basically as service fees on m’ways & e’ways); charging for geographical & time dependent mitigation measures (from beginning to avoid diverting heavy vehicle traffic, but later for demand management for all categories); charging for geographical & time dependent mitigation measures (from beginning to avoid diverting heavy vehicle traffic, but later for demand management for all categories); charges & tolls should gradually include charges & tolls should gradually include externalities as well. Proportional burden should be implemented between: Proportional burden should be implemented between: frequent & infrequent users (mileage charging); frequent & infrequent users (mileage charging); vehicle categories according to their cost generation share; vehicle categories according to their cost generation share; service levels of roads if it does not cause measurable diversion to lover level roads. service levels of roads if it does not cause measurable diversion to lover level roads. Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

17. Frame of a New Toll Policy / 2 Gradual Implementation in Different Dimensions Proportionality differences should be alleviated from bigger to smaller ones: Proportionality differences should be alleviated from bigger to smaller ones: those should pay more (or real usage dependent) first whose participation in the cost allocation is much deviated from (lower than) the justifiable level; those should pay more (or real usage dependent) first whose participation in the cost allocation is much deviated from (lower than) the justifiable level; incentives should be given for more environmentally friendly vehicles (from beginning preferably); incentives should be given for more environmentally friendly vehicles (from beginning preferably); introduced measures should be operable & enforceable at an economically feasible level introduced measures should be operable & enforceable at an economically feasible level. Setting of user charge and toll levels should take into account social & economical affordability at any time. Setting of user charge and toll levels should take into account social & economical affordability at any time. Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

18. Frame of a New Toll Policy / 3 The Most Important Changes with ETC Solution To stop devaluation of flat rate vignette incomes user charges & tolls together should cover at least yearly operation, maintenance and reconstruction costs of the charged network. To stop devaluation of flat rate vignette incomes user charges & tolls together should cover at least yearly operation, maintenance and reconstruction costs of the charged network. To meet this target first the more heavy vehicles will be shifted to mileage dependent toll aiming at to avoid international traffic diversion because of neighbouring foreign charging systems as well. To meet this target first the more heavy vehicles will be shifted to mileage dependent toll aiming at to avoid international traffic diversion because of neighbouring foreign charging systems as well. The network extension will cover gradually the road network from higher to lower level with a possibility for a total coverage for the heaviest one in the future. The network extension will cover gradually the road network from higher to lower level with a possibility for a total coverage for the heaviest one in the future. Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

19. Frame of a New Toll Policy / 4 The Usage of Incomes Generated by Tolling The incomes form road user charges & tolls should be earmarked for the charged road network to keep and improve the service level & mitigate environmental effects of the given sections or on the physically or functionally competing roads. The incomes form road user charges & tolls should be earmarked for the charged road network to keep and improve the service level & mitigate environmental effects of the given sections or on the physically or functionally competing roads. The incomes from demand management like charging parts should be allocated for environmental purposes, other transport modes or for the public transport. The incomes from demand management like charging parts should be allocated for environmental purposes, other transport modes or for the public transport. The amount and usage of incomes should be published regularly. The amount and usage of incomes should be published regularly. Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

20. Scope of the ETC System / 1 Forecasted J3+J4 Category Traffic in 2009

21. Scope of the ETC System / 2 Optimisation of the Network Extension Sorting of trunk road sections by revenue generation Sorting of trunk road sections by revenue generation Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

22. Scope of the ETC System / 3 Optimisation of the Network Extension Where is the Optimum Extension? Where is the Optimum Extension? Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

23. Scope of the ETC System / 4 ETC Solution Should Cover New vehicle categories (above 3.5 t + starting tolls in 2007 terms) : New vehicle categories (above 3.5 t + starting tolls in 2007 terms) : J2: all buses & goods vehicles with 2 axles:26,50 HUF/km J2: all buses & goods vehicles with 2 axles:26,50 HUF/km J3: goods vehicles with 3 axles:33,00 HUF/km J3: goods vehicles with 3 axles:33,00 HUF/km J4: goods vehicles with 4 or more axles:40,00 HUF/km J4: goods vehicles with 4 or more axles:40,00 HUF/km Network length: in 2008: 3,500 kmin 2013: 4,100 km speedways:1.000 km1,500 km parallel roads:1,000 km1,400 km other trunk roads:1,500 km1,200 km Network length: in 2008: 3,500 kmin 2013: 4,100 km speedways:1.000 km1,500 km parallel roads:1,000 km1,400 km other trunk roads:1,500 km1,200 km Traffic in AADT: in 2008: 0,000 v/din 2013: 0,000 v/d speedways:3,410 v/d3,060 v/d parallel roads:950 v/d910 v/d other trunk roads:1,560 v/d1,740 v/d Traffic in AADT: in 2008: 0,000 v/din 2013: 0,000 v/d speedways:3,410 v/d3,060 v/d parallel roads:950 v/d910 v/d other trunk roads:1,560 v/d1,740 v/d Incomes: in 2008: 26 mHUF/kmin 2013: 34 mHUF/km speedways:61 mHUF/km64 mHUF/km parallel roads:6 mHUF/km12 mHUF/km other trunk roads:12 mHUF/km23 mHUF/km Incomes: in 2008: 26 mHUF/kmin 2013: 34 mHUF/km speedways:61 mHUF/km64 mHUF/km parallel roads:6 mHUF/km12 mHUF/km other trunk roads:12 mHUF/km23 mHUF/km Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

24. Scope of the ETC System / 5 Enforcement is Key Element of Free Flow Tolling Where is the economic optimum of enforcement levels  cost & total system income (fraudulent user rate)? Where is the economic optimum of enforcement levels  cost & total system income (fraudulent user rate)? Performance level of the enforcement is calculated in origin & destination models (  charged traffic output). Performance level of the enforcement is calculated in origin & destination models (  charged traffic output). Optimising the number of fixed enforcement sections +mobile enforcement vehicles & their shifts. Optimising the number of fixed enforcement sections + mobile enforcement vehicles & their shifts. Precise mapping of fixed enforcement sections. Precise mapping of fixed enforcement sections. The enforcement part of the ETC system should be implemented & operated by ÁAK Zrt. (State Motorway Managing Co. Ltd.) The enforcement part of the ETC system should be implemented & operated by ÁAK Zrt. (State Motorway Managing Co. Ltd.) Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

25. Scope of the ETC System / 6 Scope of ETC Services to be Tendered Tendering & contracting by Coordination Centre for Transport Development (former UKIG, now: KKK). Tendering & contracting by Coordination Centre for Transport Development (former UKIG, now: KKK). Mileage based multilane free flow system which can distinguish: Mileage based multilane free flow system which can distinguish: the section, time, distance of usage, the section, time, distance of usage, the exempted vehicles, the exempted vehicles, the vehicle categories, the vehicle categories, the environmental sub-categories. the environmental sub-categories. Design, finance, 5 years of operation, with a call option or transfer at the end of the project life time. Design, finance, 5 years of operation, with a call option or transfer at the end of the project life time. Tolling History in Hungary (1-2) Current Vignette System (1-3) Traffic & Revenue Forecasts (1-9) Frame of a New Toll Policy (1-4) Scope of the ETC System (1-6)

26. Thank You for the Attention! Workshop on Road User Charging Systems, Warsaw, June 12, 2007