Ort, Datum Autor Introduction to the REVENUE Interurban Case Studies Heike Link (DIW) Final Conference Revenue Use from Transport Pricing Brussels, 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 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 Gotthard Lötschberg - 2/3 1/3 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 mill. € Gotthard mill. € Other mill. € Total cost 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 Ministry Legend : Centre Europe Atlantique Road A 75 motorway A 20 motorway National Road RN 7 Estuaires Motorway

5. Zürich Airport Case Study Use of revenues from: a)noise/emission depending landing charges (noise funds) b)SMCP c)Ramsey pricing Runway 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 - T ransit traffic through CH and D b)Internet-based company survey - HGV charging scheme D

Approach of the CS: What is a regulation scheme? ScopePricing Investment Revenue use & financing Rules What 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? Regulatory framework 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