Road Pricing in the Netherlands Workshop on Road User Charging Systems Warsaw, June 11 and 12, 2007 Ronald Keus and Jan Vis Ministerie van Verkeer en Waterstaat

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

The Netherlands 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 The Netherlands

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

Lessons learned From our own history: From experiences abroad: 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

Recent history The 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. Chairman Nouwen was former chairman of the motorists association. He was responsible for the campaign against Rekeningrijden at the time of Minister Netelenbos Market principles: prices instead of taxes, paying for possession I.s. paying for use, revenues used for infrastructure, one national organization for collecting the revenues, private involvement in infrastructure development, independent Road Authorities

Recent history Advice 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 Improvement environment road safety Investment costs Introduction Prosperity KMP, Differentiated on the basis of time, place and environmental aspects ± 60% upto 10% ± 3 billion 2012-2016 ± 1 billion

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)

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

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 motorcycles MRB = vehicle tax

Will he make the difference ?

Objectives and scope of the KMP 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)

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

Tentative schedule KMP 2005 2006 2007 2008 2009 2012 Km-price Research agenda = go/no go N Price per kilometre draft bill O T Joint Fact Finding A Preparing for policy choices M Implementation strategy Including tax transition issues O B I Realisation of public component L I Cost monitor Cost monitor T Cost Monitor E I Requirement Specifications T Tender Realisation of private component 3 Social implementation en communication

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

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

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

How further? Second half of 2007: Planning legislation 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

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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