ROAD CHARGING IN FRANCE ALAIN FAYARD Warsaw General directorate of roads June 2006 The views expressed in this presentation are those of the author and not necessarily those of the organizations which the author belongs to

OUTLINE THE BACKGROUND PRICING AND FUNDING : THE TRUTH, AND NOTHING BUT THE TRUTH TO MEET ISSUES AT STAKE STEP BY STEP AND TOMORROW ?

OVERVIEW ON FRANCE (in 2006) 60 million inhabitants 551,000 km2 surface (Source INSEE) 22 regions 100 counties 36,500 local districts GNP: 1792 billion € National Government Budget: 271 billion € (Source Minefi) Private cars: 30,1 million Commercial vehicles: 6,1 million (Source CCFA)

A SYSTEM WHICH ACTUALLY WORKS IN 2004 IN 2006 170 Km 1 500 Km 10 800 Km

FRENCH NATIONAL ROAD NETWORK Expenditures and road-linked resources Toll roads Free-toll roads Total (8,200 km) (11,800 km*) (20,000km) Maintenance 1.3 0.5 1.8 Investment 2.2 1.0 3.2 Total 3 2 5 In billion € *out of which 1,800 km toll-free motorways Gas excise: 26 billion€ (central gvt: 20 billion€) non earmarked Registration fee: 2 billion€ (for local auth.) non earmarked HGV possession fee: 0.23 billion€ non earmarked Tolls: 6.6 billion€ (HGV: 2.2 billion€, PC: 4.4 billion€) AFITF: 1 billion€ for roads (land planning tax, public domain fee….)

PRICING : CORE QUESTIONS Threefold price role : cost recovery demand orientation financing  are these roles compatible? e.g. : High demand = low price (cost recovery) high price (offer and demand) Marginal eco. (or social) cost? what about financial balance constraint? what about “external effects” charges? What pricing perimeter ? One infrastructure work A network A system Is it consistent with a market economy?

INFRASTRUCTURE USE PRICING ? Where does the money come from ? Tax payer / user The means toll “fiscal” / “concession-financing” toll? general taxes specific taxes The process the general budget the earmarked taxes specific organization (authority, concessionnaire) The electronic toll collection Techniques: DSRC / GNSS Architecture:where data are proceeded ? Enforcement: barriers are only linked to this issue.

MAY PRICING BE FREE? CONTROLLED PRICES / REGULATED MARKET PRICES Natural monopoly or dominant position Non contestable market (infra./services) Competitiveness of economy Spatial planning Social equity Tariff elasticity of traffic ---> risk of lower social utility HGV / private cars CONTROLLED PRICES / REGULATED MARKET PRICES WHAT LEGAL SAFETY?

EUROPEAN DIRECTIVES EUROVIGNETTE : Directive 1999/62/ as modified by directive 2006/38 Vehicle taxation (nationality) : minimum rates User charge (time related) : maximum rate Toll (distance related) : linked to costs of constructing, operating and developing the infrastructure network A bureaucratic management of road charging (….in favour of road) No external costs charging (but a proposal asked) Cost recovery (+ mark up  no actual financial means) IS IT CONSISTENT WITH A MARKET ECONOMY? ENERGY: Directive 2003/96/EC restructuring the Community framework for the taxation of energy minimum levels of taxation to motor fuels

TO MEET ISSUES AT STAKE (1/3) Acceptability 1955-1970: public companies 2000: Liber’T, interoperable EFC (cooperation) 1.5 million badges,  3/4 no-cash transactions Level of service, customer’s satisfaction (Les français et le réseau routier : usage, satisfaction et attentes, CREDOC 2004) Earmarking Concession companies Some attempts of dedicated road funds

EARMARKING Attempts of dedicated road fund ( e.g. FSGT) Concession companies Breakdown of financial resources for national road network

TO MEET ISSUES AT STAKE (2/3) Financial resources Main impetus through concession companies From 1/3 to 2/3 Mutualization Inside the companies between stretches (70’s) Between companies (80’s) at a nation-wide level Inside groups of companies (90’s) Breakdown of 10€ collected toll ASFA, data 2005

TO MEET ISSUES AT STAKE (3/3) Regulation At the beginning, toll fixed by the government Since mid’80’s, five-year planning contracts Toll tariff evolution Investments in infrastructure and services Road safety, social policy and environnemental protection A CHANGING BUT NOT A WEAKER ROLE FOR GOVERNMENT Demand management? Some modulations ( / routes; / time) Increasing coefficient between HGV and PC Few urban tolling To be implemented: Modulation / pollution Possible toll without concession (Law 2004-809, CVR L122-4) HGV charging on main highways A possible PPP without demand risk and actual resources (cf. German LKW MAUT + A betrieber Modell / Portuguese SCUT)

AND TOMORROW? Tolled motorway network A mature network  cash flows New accounting rules since 2001  profit + corporation tax AFITF (decree 2004-1317, 2/11/2004)  indirect «mutualisation » Total privatization in 2006 of c.ies (not of the assets) (Floatation in Euronext: ASF in 2002, APRR in 2004, SANEF in 2005) What business model? A tightened central Gvt road network from 38,000 km to 20,000 km (concessions included) Territorial (transit) and environment-oriented RUC A wider array of tools: concession, RUC without concession, « contrat de partenariat »

Thank you For any further information : Alain FAYARD, French Road General Directorate Francesco GAETA, French Road General Directorate Arche Sud F-92055 La Défense Cedex alain.fayard@equipement.gouv.fr francesco.gaeta@equipement.gouv.fr