1. 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

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

3. 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)

4. A SYSTEM WHICH ACTUALLY WORKS
IN 2004
IN 2006
170 Km Km Km

5. FRENCH NATIONAL ROAD NETWORK Expenditures and road-linked resources
Toll roads Free-toll roads Total
(8,200 km) (11,800 km*) (20,000km)
Maintenance
Investment
Total
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: billion€ (HGV: 2.2 billion€, PC: 4.4 billion€)
AFITF: 1 billion€ for roads (land planning tax, public domain fee….)

6. 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?

7. 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.

8. 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?

9. 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

10. TO MEET ISSUES AT STAKE (1/3)
Acceptability
: 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

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

12. 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

13. 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 , 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)

14. AND TOMORROW? Tolled motorway network
A mature network  cash flows
New accounting rules since 2001
 profit + corporation tax
AFITF (decree , 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 »

15. Thank you For any further information :
Alain FAYARD, French Road General Directorate Francesco GAETA, French Road General Directorate
Arche Sud
F La Défense Cedex