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User Financing – Much More than Toll Professor Torsten R. Böger, VIFG mbH
VerkehrsInfrastrukturFinanzierungsGesellschaft mbH
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Content
Content
• User Financing on German Federal Trunk
Roads
• From Truck Tolls to Comprehensive User
Financing
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User Financing on German Federal Trunk Roads
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User Financing on German Federal Trunk Roads
German Federal Trunk Roads – Facts and Data
• 12,900 km of highway* fully subject to toll
• 38,900 km of trunk roads* ca. 2,300 km of which subject to toll
• Gross investment for 2014 (acc. Report on Infrastructure Costs ** ):
• Federal trunk roads: ca. 173 bn. €
• Federal highways subject to toll: ca. 13 bn. €
• Other federal highways: ca. 177 bn. €
• Infrastructure costs for 2014 (acc. Report on Infrastructure Costs):
• Total infrastructure costs: ca. 14 bn. €*
• Infrastructure costs included the following :
− Operating costs (maintenance, operation of services, policing costs, toll
system)
− amortization of assets
− interest on fixed capital
** Report on Infrastructure Costs 2013-2017; Prognosis for 2014 *Source: The Federal Statistical Office (Statistisches Bundesamt); as of January 1, 2015
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User Financing on German Federal Trunk Roads
Federal Trunk Roads – Facts and Data • Total income* from truck tolls
• Costs of the truck tolling system and expenditures for harmonization measures ca.
1 bn. € in 2014 – net toll in 2014: 3.4 bn. €*
• Funds already earmarked for federal trunk roads in the Federal Budget (in bn.€):
2009 2010 2011 2012 2013 2014 2015 (target)
4.325 bn. € 4.510 bn. € 4.477 bn. € 4,362 bn. € 4, 391 bn. € 4,464 bn. € 4,340 bn. €
*including funds allocated within the fiscal year
2008 2009 2010 2011 2012 2013 2014 2015 (target)
Federal Budget 6.50 7.20 5.56 6.40 6.46 6.66 6.61 6.19
Portion for Investments 5.20 6.20 5.48 5.25 5.36 5.45 5.49 5.06
- Funds for 2009-2011 were increased by the Second Economic Stimulus Package (KP II) and the Jobs Program for Building and Transport
- Funds for 2012 include 400 mil. € from the Program to Expedite Infrastructure (IBP I) - Funds for 2013 include 670 mil. € from the IBP I (200 mil. €) and the IBP II (470 mil. €) - Funds for 2014 include 117 mil. € from the IBP II - Funds for 2014: 500 mil. from the additional funds in the amount of. 5 bn. € for the period 2014–2017 - Amounts indicated include operating costs - System costs and funds for harmonization not included Source: Federal Ministry of Transport and Digital Infrastructure (BMVI)
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User Financing on German Federal Trunk Roads
Truck Toll on Federal Trunk Roads
• General truck toll (> 12 tons) on federal trunk roads – Law on Toll on Federal Trunk Roads / Bundesfernstraßenmautgesetz (BFStrMG)
• Since July 1, 2015: Extension of roads subject to toll to include an additional ca. 1,100 km of four-lane highways
• Since October 1, 2015: Vehicles weighing over 7.5 t subject to toll
• Toll amount depends on − mileage
− number of axels and emission class
• Allocation of toll revenue for − construction of federal highways
− system operation
− improvement of transport infrastructure
• The federal government is entitled to toll revenue; toll revenue and expenses are itemized in the Federal Budget and are managed by the VIFG
• Planned as of mid 2018: the extension of truck tolls to all federal roads (with the potential exception of roads crossing through cities)
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User Financing on German Federal Trunk Roads
Satellite System (GNSS/GSM)
User
Installation of vehicle device
Entry of vehicle data
GPS-supported identification of road segment
Vehicle device identifies road segments subject to toll
Monitoring (stationary and mobile)
Vehicle device calculates toll
DESTINATION
Toll Collect invoices user for toll
Amount sent by mobile phone to Toll Collect data processing center
Examples of the Truck Toll System in Germany (Source: Toll Collect)
Satellite sends location data (Global Positioning System, GPS)
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User Financing on German Federal Trunk Roads
Stakeholders in User Financing in Germany
Authority financially responsible for constructing and planning federal trunk roads
Decides about operation of the tolling system (“make or buy”)
Refinancing of the toll collection system (operator fees, etc.)
Construction and operation of federal trunk roads
Establishment of toll collection system
Operation of toll collection system Financing of toll collection system (through partners)
Revenue collection
Monitoring (enforcement)
Monitoring operators
Earmarking of revenue from truck tolls
Processing toll-based
transactions for federal trunk roads
Transparency in the use
of funds
States and DEGES (Auftragsverwaltung)
Source: VIFG diagram
Legislation for user financing Monitoring of government work
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User Financing on German Federal Trunk Roads
System of Providing Federal Trunk Roads to Users Federal Executive Administration – Distribution of Financial and Administrative Responsibilities
Federal Government States
Competencies Technical Competence (planning, decision-making, financing)
Executory Competence
Administrative responsibilities (§90 para. 2 GG in conjunction with §85 GG)
Planning for the entire network Planning specific measures, building, maintenance, operation
Financing responsibilities (§5 para. 1 p. 1 FStrG)
Administrative costs on the federal level, state planning costs (earmarked lump sum), new construction, expansion, maintenance, operation
Administrative costs on the state level (planning)
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VIFG Overview
Tasks and Functions of the VIFG
• Management and allocation of toll revenue
• Processing toll-based transactions • Reporting and ensuring transparency
in the use of toll revenue and investments
• Controlling and reporting for federal trunk roads
• Provision of adequate and proper IT services and infrastructure to fulfill the mentioned functions
• Competence center for PPP in transport and economic procurement
• Responsibilities in all phases of project development and implementation
• F- and A-model projects • Development of new private operator
programs
PPP Competence Center for Transport
Financing / Allocation Functions
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User Financing, a Core Issue for the VIFG
VIFG Overview
• The VIFG supports the conversion process from tax financing to user
financing
• The VIFG ensures that toll revenue is completely used for investments in
the transport infrastructure
• The VIFG provides transparency in terms of the use of toll revenue and thus
exemplifies a closed system of collecting and using toll revenue
• The VIFG utilizes user fees to efficiently provide transport infrastructure
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From Truck Tolls to Comprehensive User Financing
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Objectives for Transport Infrastructure
An Efficient Transport Infrastructure
• What is the scope of the required transport infrastructure?
• What level of quality do I want to achieve over the medium-term?
• What kind of availability does the transport infrastructure need to offer?
What kind of financing system makes it possible to achieve these objectives?
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From Truck Tolls to Comprehensive User Financing
A Fundamental Problem of Road Infrastructure Financing
Federal Budget
Services
x-Taxes
Financing Level
Service Level
≠ Taxes
Toll Revenue
User Level
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From Truck Tolls to Comprehensive User Financing
From Toll to Complete User Financing
Toll • Generating additional revenue
• Closing financing gaps
• Principles of non-assignment and annuality
User Financing
• Introduction of a lifecycle perspective
• Linking revenue and expenditures
• Principle of compensation
• Economical management structures to achieve organizational, investment, and cost efficiency
• Specific allocation of revenue
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From Truck Tolls to Comprehensive User Financing
The 5 “Transport Rules” of User Financing
User Financing
Effective Planning
Optimal Pricing
Efficient Management
Efficient Financing
Customer Orientation
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From Truck Tolls to Comprehensive User Financing
User Financing
• Effective Planning • Need-based, i.e. demand-oriented provision of road infrastructure
• According to the user principle, investments are made in measures that make economic sense
• The government should support measures that secure livelihoods and provide a public service
• Efficient Management • Deciding on a target system
• Towards this end follow:
− Strategic planning for the entire network
− Carrying out measures on an operative level
• A closed system of collecting and using toll enables a monitoring of all activities within the providing system
• This reduces informational asymmetries between decision-makers
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From Truck Tolls to Comprehensive User Financing
User Financing
• Optimal Pricing • Cost and performance accounting indicates the costs of investments and maintenance
• A detailed examination of cost structures serves as the basis for toll fees
• Linking of revenue and expenditures
• Toll fees enable the efficient use of limited resources
• Price differences make allowances for varying external costs and congestion on different road segments
• Efficient Financing • Setting up a management unit for steering and controlling
• Implementing investments cost-effectively
− Implementing maintenance strategies
− Optimizing construction processes • Guaranteeing a regular liquidity flow
• Lifecycle-oriented planning
• Use of incentive and monitoring mechanisms (for example through involving the private sector in production processes)
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From Truck Tolls to Comprehensive User Financing
User Financing
• Customer Orientation • Enhancing the role of the user = The user becomes the customer
• Equivalence principle
− Investment in federal trunk roads must offer recognizable advantages for users that justify the fees charged
• Transparency
− Regular assessment of the quality and scope of transport infrastructure
• Transparency leads to acceptance
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Contact
Verkehrsinfrastrukturfinanzierungsgesellschaft VIFG VerkehrsInfrastruktur- FinanzierungsGesellschaft mbH Georgenstraße 25
10117 Berlin
Phone: +49 (30) 5 20 02-62 10
Telefax: +49 (30) 5 20 02-62 12
Email: [email protected]
URL: http://www.vifg.de
Managing Director Prof. Torsten R. Böger
Phone: +49 (30) – 5 20 02-62 10
Managing Director Martin Friewald
Phone: +49(30) – 5 20 02-62 10