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E-toll revenues exceed estimates

Despite success, expansion to primary roads is in doubt

By Victor Velek
Staff Writer, The Prague Post
January 9th, 2008 issue

After years of disputes and delays, the premiere year of the electronic toll system pulled in revenue exceeding the wildest estimates of experts and state officials.
In 2007, trucks weighing more than 12 metric tons traveling on the country’s 1,000 kilometers of motorways paid about 5.7 billion Kč ($320.6 million) through the system. Projections for the year had ranged between 2.4 billion and 3 billion Kč.
Despite the unexpected boom in revenue, the planned expansion of the toll system, built and operated by the Austrian company Kapsch, has been put in limbo by the Transportation Ministry.
Initial proposals for the toll system would have had fees collected from heavy trucks driving on the country’s 1,200 kilometer-long network of primary roads by mid-2007. Instead, only select sections of the network, some 180 kilometers in total, were added into the e-toll system this month.
Collecting money from the primary roads using the microwave-based toll gates provided by Kapsch proved to be technically and economically unviable, said Deputy Transportation Minister Jiří Hodač.
“Microwave technology is not suitable for the extensive network of minor roads,” added Transportation Ministry spokesman Karel Hanzelka. “The only feasible way of introducing the e-toll system to minor roads is to use satellite navigation or a combination of microwave and satellite systems.”
The ministry is currently carrying out a feasibility study on future extension of the system beyond motorways.
“The system must be profitable and at the same time must not paralyze the truck transport businesses and the economy as a whole,” Hanzelka said.
The final decision on whether to build tolls on lower-category roads will be made by the end of the winter, according to Hanzelka.
Even though its expansion has slowed down, the ministry estimates that yields from the toll will grow: “This year, we expect the tolls collected will rise to 7.5 billion Kč,” Hanzelka said.
In following years, the state should pull in even more from the system, which will include all vehicles heavier than 3.5 metric tons as of Jan. 1, 2009. Currently, these vehicles must buy toll stickers priced between 750 and 8,000 Kč to travel on the motorways.
The other winner from the toll is Kapsch, which receives payments from the toll for its construction and operation. Last year, the state paid Kapsch 900 million Kč as the first installment for building the system and another 900 million Kč for its operation, according to Kapsch spokesman David Šimoník.
Whether or not the state expands e-tolls to the primary roads, Kapsch is set to benefit further. Last year the government reworked its contract with the company, guaranteeing that Kapsch will expand the system to all motorways constructed until 2017, rather than to the primary roads.
As the motorway network should grow by 1,000 kilometers within 10 years — about the length of the primary roads originally slated for the e-toll system — the contracted price for the construction and 10-year operation of the system, 22.2 billion Kč, remained the same.
This sweeping annex to the contract was signed Dec. 27.
Congested growth
The success of the e-toll is a reflection of the growing economy. “The booming economy pushed the demand for road freight,” said Martin Felix, spokesman for the Association of Road Transport Operators, ČESMAD Bohemia.
“Truck transportation has been boosted also by mushrooming hypermarkets and industrial zones,” Šimoník said. Supplying a single hypermarket requires a fleet of trucks. Rail transport is not an option as new shopping malls and plants are not connected to railways, he added.
Moreover, the Czech Republic is used by many international freight carriers as a transit country, Felix and Šimoník said.
According to ČESMAD Bohemia, the e-toll is proof that truck tolls cannot reduce heavy road transportation or shift it to railways.
“In fact, the truck toll is just another form of taxation that affects all consumers, not just transport operators, as tolls increase the prices of many products,” Felix said.
However, ČESMAD Bohemia accepts that the e-toll system and its future expansion are inevitable. The only issue freight businesses are complaining about is being required to pay tolls on vehicles weighing less than 12 tons but that feature towing devices which can push them over the weight limit.
It’s unfair to force truck drivers with towing devices to pay the extra fees even though they are not towing a trailer, Felix said.

Victor Velek can be reached at vvelek@praguepost.com


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