1. 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

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

3. The Netherlands Population: 16.2 million 8+ million vehicles
2400 km motorways
> 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

4. 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

5. 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

6. 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
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

7. 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
± 1 billion

8. 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)

9. 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

10. 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

11. Will he make the difference ?

12. 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)

13. 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

14. Tentative schedule KMP
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

15. 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

16. 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

17. 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

18. 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

19. 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

20. Thanks for your attention
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