329 m

Toll Revenue

Czech Tolling
System at the
Age of Seven
78
Thousand Light
Trucks
575
Thousand Heavy
Trucks
33
Thousand Buses
44%
Toll from Foreign
Drivers
Czech Tolling
System at the
Age of Seven
2
I

Acknowledgement
Authors would like to thank the Road and Motorway Directorate of the Czech
Republic for granting of the permission for use of the data from the nationwide
truck tolling system. This analysis could not have been created without this
data.

I
3
Year EUR/CZK
2007 27.76
2008 24.95
2009 26.45
2010 25.29
2011 24.59
2012 25.14
2013 25.99
Methodological Notices
Monetary values such as system revenues and costs in international compar-
isons are converted to Euro using the average exchange rate published by the
Czech National Bank for each of the analysed years. Values for particular years
are therefore converted using the exchange rates noted in the table below.
4
I

246 m
EUR
Tolled network extension by
178 km of selected national
roads, mainly those that
replace yet to be built
highways
2008
tolled network 1,159 km v
avg. revenue 212 ths EUR/km x
avg. rate EUR 0.156 v
A global financial crisis affects
the Czech economy by drop
of toll revenues by 10%
associated with 9% decline
in traffic performance
2009
tolled network 1,263 km v
avg. revenue 166 ths EUR/km x
avg. rate EUR 0.146 x
Extension of the toll duty to
light trucks, introduction of
higher peak-time Friday’s
afernoon tarrif
2010
tolled network 1,346 km v
avg. revenue 193 ths EUR/km v
avg. rate EUR 0.139 x
Start of toll collection on
968 km of highways and
motorways for 12t+ trucks
and buses
2007
tolled network 968 km
avg. revenue 215 ths EUR/km
avg. rate EUR 0.150
200 m
EUR
209 m
EUR
260 m
EUR

I
5
Second tariff increase by
25%, introduction of toll
discounts (10–13% of yearly
payment) in November
2012
tolled network 1,381 km v
avg. revenue 250 ths EUR/km v
avg. rate EUR 0.174 v
Tolling system operates
without major changes,
cumulative collection
surpasses EUR 1.92 bn in
December 2013
2013
tolled network 1,421 km v
avg. revenue 231 ths EUR/km x
avg. rate EUR 0.161 x
Increase of toll rates by 25%
for all vehicle categories
except for Euro V, introduction
of special rates for buses
in September
2011
tolled network 1,358 km v
avg. revenue 243 ths EUR/km v
avg. rate EUR 0.164 v
330 m
EUR
345 m
EUR
329m
EUR
6
I

Content
Content
Content
I
7
Tolling System Implementation 8
and Evolution since 2007
Growing Importance of Tolling Revenues 18
for Infrastructure Financing
Regulatory Functions in the Tolling System 28
Electronic Tolling in the Central 36
European Region
Electronic Tolling in the European Union 44
Outlook for the Close Future of Toll Collection 50
The Tale of Three Scenarios: 56
Future of the Czech Toll Revenues
8
I

Tolling System
Implementation
and Evolution
since 2007
Tolling System Evolution
Tolling System Evolution
I
9
1. Every vehicle that is subject to the toll
duty must be equipped with an electronic on
board unit. The number of registered vehicles
grew from 62 thousand at the system launch
to 686 thousand in December 2013. Czech
tolled roads are every day used by 46 to 63
thousand tolled vehicles; lower number of 16
to 20 thousand unique vehicles is registered by
the system at weekends.
2. Costs between 2007 and 2013 amounted
on average 29.5% of revenues, or EUR 565.6 m.
The cost/income ratio is influenced not only by
costs, but also by revenues that have not been
consequently maximized in the Czech Republic.
3. The tolling system itself is owned by the
Czech state. When the current operations
contract with Kapsch consortium expires by
the end of 2016, the system will be handed
over to the Czech state and all improvement
investments made between 2007 and 2016 can
bear revenues well beyond the 2016 milestone.
12
I

The Czech DSRC system serves more than
680 thousand vehicles and is ready to receive
data from GNSS units
The system delivered by Kapsch is built upon the microwave DSRC technol-
ogy, using gantries for detection of vehicles. All vehicles that are subject to toll
duty must be equipped by an on board unit (OBU) that identifies the vehicle in
communication with the gantry. The OBU is provided for free, but a deposit of
EUR 60 (CZK 1,550) must be paid by the driver and will not be returned in case
the OBU was damaged. Each gantry represents an autonomous subsystem ca-
pable of transaction generation, i.e. billing based on the vehicle category (truck/
bus), emission class, day in a week, time and number of axles.
A new open telematic interface was implemented to the system in 2008. The
interface allows external users to draw data on traffic flow generated by the
tolling system.
While the Czech system was originally designed as a fully DSRC system, addi-
tional features allowing for use of satellite based OBU positioning were imple-
mented in 2008 and subsequently tested. The resulting “hybrid” central system
is now able to receive transaction data from microwave gantries as well as from
satellite GPS/GSM units that position the vehicle using satellite navigation and
use cellular data to communicate the positioning and transactional information
to the central system. The hybrid system is currently not used in commercial
operation and may be used for distance toll extension on a wider network of
national roads.
2012
25
595
638
538
75
527
470
2011
513
67
15
2010
57
2009
10
426
436
62
2013
686
33
2008
371
2007 2006
267
78
575
12t+
3.5t - 12t
Bus
Number of registered vehicles in the system (by the end of the year) between 2006 and 2013. Category
“bus” was reported in one group with truck until 2010. Exempt vehicles are not included
Source: ESVZ ČR
2012
25
595
638
538
75
527
470
2011
513
67
15
2010
57
2009
10
426
436
62
2013
686
33
2008
371
2007 2006
267
78
575
12t+
3.5t - 12t
Bus
DATA:
Tolling System Evolution
I
13
,
,
,
,
,
,

12t+ 3.5t–12t Bus
Ø 56,215
The Czech tolling system witnessed in its short history a significant growth that
surpassed expectations as well as assumptions made in the tender documenta-
tion. The forecasted number of 70 thousand on board units was almost reached
during the pre-sales phase by the end of 2006. The overall number of units has
been growing ever since.
Not every registered vehicle uses the Czech roads every day. Mainly foreign ve-
hicles visit the Czech Republic only several days a month or irregularly. An av-
erage of 56 thousand vehicles a day was operated on tolled roads in 2013. Week-
ends see a large drop to 18 thousand unique vehicles.
EUR 1.36 bn for the Czech highway
infrastructure
Total gross income (toll collection minus costs of the General supplier) of the
tolling system between 2007 and 2013 amounted for EUR 1.36 bn (CZK 34.7 bn).
Average yearly gross revenue was EUR 193.7 m with a low of EUR 114.0 m in 2009
(when the payments for delivery of Phases 1 to 4 peaked in the model of deferred
payments and the revenue was significantly impacted by the financial crisis).
Average number of unique vehicles that use tolled roads in the Czech Republic on weekdays from
2010 to 2013
Source: ESVZ ČR
data:
14
I

Tolling system is in state ownership and
operated under PPP scheme
The tolling system—as any fee collection system or tax collection process—
generates apart from its revenues also costs. Costs of the Czech system can be
split to (i) delivery of the system and (ii) provision of services necessary for the
system operation. The distinction of delivery and operations is reflected in the
procurement model as well—the system property rights were transferred to
the Czech state afer its completion and the General supplier provides oper-
ational services. Delivery and operations of the system are broken down into
four phases:
Phase 1 – delivery and operation of the system on highways and motorways
Phase 2 – delivery and operation of the system on selected national roads
Phase 3 – extension of the system to newly built sections of highways (for which
the building permit will be issued on December 31
st
, 2017 at the latest)
Phase 4 – extension of the system with additional 250,000 OBUs and introduc-
tion of the tolling for light trucks (3.5 t+)
Next two phases extended the system with technologies and services that do
not generate any tolling revenue, which sets them apart from Phases 1 to 4:
Phase 5a – implementation of an open interface for telematic applications
Phase 5b – implementation of the traffic management solution on the D1
highway
Phase 6 – implementation of the interface for satellite based OBUs (the
“hybrid” system)

Additional OBUs and related services (such as OBU refurbishment) were sup-
plied outside the scope of the phases.
The General supplier receives bonuses for system effectiveness exceeding 95%
and reimbursement of fees paid to the issuers of credit cards and fleet cards as
well. The effectiveness bonus equals to one half of the toll collection above the
95% threshold. Should the effectiveness decreases below 95%, the General sup-
plier is obliged to pay the whole loss to the Czech state.
Tolling System Evolution
I
15
System delivery and operational costs of the
general supplier amounted in the first seven
years of operation a total of EUR 565.6 m for
Phases 1–4
The delivery of the system was financed through a scheme of deferred pay-
ments. This PPP style of payment scheme conditioned by performance indi-
cators of the system did not require any state funds exceeding the toll revenue
at any time and allowed for use of toll revenue for system delivery payments.
Payback on the delivery of the system for highways and motorways (total cost
of EUR 101.88 m/CZK 2.67 bn) was just six months. Total costs of system delivery
and operation in Phases 1–4 payable to the General supplier until December 31
st
,
2013 reached EUR 565.6 m (CZK 14.5 bn) without VAT.*
Cost breakdown by Phases 1–4 and construction/operation between 2007 and 2013
(EUR millions without VAT)
Source: Kapsch Telematic Services s.r.o.
3.94
7.00
13.47
5.22
7.62
2012
79.59
5.20
59.37
3.85
25.66
3.99
39.97
32.35
6.26
35.99
2007 2008
100.35
7.29
35.05
7.24
5.08
7.25
35.84
76.98
6.81
5.19
2010
5.02
5.08
13.92
2011
14.23
74.69
7.40
79.07
33.91
2013 2009
95.54
33.89
7.20
3.96
5.52
6.88
32.86
5.27
5.91
13.84
36.25
Phase 1 – delivery
Phase 2 – delivery
Phase 3 – delivery
New OBUs
Phase 4 – delivery
Phase 1 – services
Phase 2 – services
Phase 3 – services
Phase 4 – services
OBU Recycling
Fees to card issuers
Effectiveness bonus 
3.94
7.00
13.47
5.22
7.62
2012
79.59
5.20
59.37
3.85
25.66
3.99
39.97
32.35
6.26
35.99
2007 2008
100.35
7.29
35.05
7.24
5.08
7.25
35.84
76.98
6.81
5.19
2010
5.02
5.08
13.92
2011
14.23
74.69
7.40
79.07
33.91
2013 2009
95.54
33.89
7.20
3.96
5.52
6.88
32.86
5.27
5.91
13.84
36.25
Phase 1 – delivery
Phase 2 – delivery
Phase 3 – delivery
New OBUs
Phase 4 – delivery
Phase 1 – services
Phase 2 – services
Phase 3 – services
Phase 4 – services
OBU Recycling
Fees to card issuers
Effectiveness bonus 
*) We are quoting costs without VAT (as the VAT rate changed three times in the Czech Republic between 2007 and 2013 &
toll revenue is not a subject to VAT) and assign costs to years based on due date of invoices. We believe that this approach
reflects the structure of the contractual relationship based on deferred payments.
DATA:
16
I

Cost/income ratio of system operations
decreased to 20.4% in 2013, international
comparison remains difficult
Average cost/income ratio of the system in the seven years of operation reached
29.5%. Average cost/income ratio of operations was 21.1%. Such percentage per-
formance indicators are however without any further context misleading as
the cost/income ratios are influenced by costs as well as revenues that largely
depend on the structure of the tolled network and tariffs.
Czech toll tariffs were significantly lower than in the neighbouring countries
for almost five years until 2012. As the majority of system costs is fixed, the cost/
income ratio is higher as the revenues have not been consequently maximized.
Prevailing regulatory role of the system since the introduction of the signifi-
cantly lower tariffs for Euro V+ vehicles in 2011 is also pushing the cost/income
ratio higher. If the Euro V tariffs had been increased (as for all other emission
classes) in 2011 and 2012, the cost/income ratio of operations in 2013 would de-
crease to 15.9% from the 20.4% achieved in reality.
Cost/income performance of the tolling system is increasing with extension of
tolling to roads with lower average revenue. In the Czech reality, we can demon-
strate this effect with extension to selected national roads. While the fixed costs
of operations are the same or slightly higher than in case of highways, the aver-
age revenue is five times lower on national roads than on an average kilometre
of highways.
Changing cost/income characteristics of the system, reflecting 2008–2009 peak in deferred payments
for system delivery
Source: costs–Kapsch Telematic Services s.r.o., toll revenues–ESVZ ČR
0.4%
2012
23.1%
2009
1.1%
22.0%
2011
23.3%
22.9%
2010
28.7%
3.0%
25.7%
45.6%
21.4%
2008
18.4%
2007
29.6%
22.4%
12.8%
24.2%
16.8%
40.8%
24.0%
22.0%
2013
2.0%
Operating Cost
Cost of Delivery
0.4%
2012
23.1%
2009
1.1%
22.0%
2011
23.3%
22.9%
2010
28.7%
3.0%
25.7%
45.6%
21.4%
2008
18.4%
2007
29.6%
22.4%
12.8%
24.2%
16.8%
40.8%
24.0%
22.0%
2013
2.0%
Operating Cost
Cost of Delivery
data:
Tolling System Evolution
I
17
We have intentionally chosen not to compare the effectiveness of the Czech sys-
tem with any other foreign countries. Different procurement models in various
countries and their reflection into the financial and asset ownership relation-
ships between the suppliers and operators make any international comparison
a very delicate task. A trustworthy comparison would have to adjust data by in-
fluence of road network length, price level of rates, traffic intensity as well as the
already mentioned procurement model and accounting principles.
Phases 5a, 5b and 6 implemented the open telematic interface, traffic manage-
ment solution on the highway D1 and interface for collection of satellite po-
sitioning data from GPS/GNSS units. Cost of implementation (delivery), pilot
testing and operation reached EUR 117.27 m (CZK 2.97 bn) without VAT between
2007 and 2013.
While the investment in Phases 1–4 were targeted at toll collection (i.e. direct
revenue generation), the main objective of the Phase 5 is management of the
traffic on the overloaded highway D1. According to the European Commission,
congestions cost Europeans about 1% of GDP. Aim of the traffic management
system on D1 is to reduce these socio-economic costs. Investments into hybrid
system may pay off in the future in case the hybrid (satellite) technology is used
for introduction of tolling on national roads.
Revenues (toll collection), costs of the General supplier (for delivery and operations) and gross income
of the toll system in its first seven years (EUR millions)
Source: costs Kapsch Telematic Services s.r.o., toll collection ESVZ ČR
Ø 193.7

265.7
2013
345.3
2011
250.1
-79.1
329.2
2012 2010
-79.6
253.5
-77.0
330.5
260.0
2009
-95.5
114.0
209.6
2008

-100.4
-74.7
141.1
-59.4
200.5
246.3
2007
Payments for delivery
and services
Revenue

145.9
185.3
Ø 193.7

265.7
2013
345.3
2011
250.1
-79.1
329.2
2012 2010
-79.6
253.5
-77.0
330.5
260.0
2009
-95.5
114.0
209.6
2008

-100.4
-74.7
141.1
-59.4
200.5
246.3
2007
Payments for delivery
and services
Revenue

145.9
185.3
data:
18
I

Growing
Importance of
Tolling Revenues
for Infrastructure
Financing
Infrastructure Financing
Infrastructure Financing
I
19
1. Despite of declining toll revenues to
EUR 329.2 m in 2013 due to the impact
of regulatory policies on tariff structure, the
total direct revenue of the Czech infrastructure
grew to EUR 495.1 m. Direct revenues accounted
already for one quarter of The State Fund for
Transport Infrastructure revenues.
2. One of the key fiscal characteristics of
the tolling system is the ability to collect the
same fees from local and foreign vehicles,
independently from their tax residency. This
atribute is crucial for the Czech Republic
because the share of foreign revenues grows
from 39% in 2007 to 44% in 2013.
3. The key financial issue of every tolling
system that is used primarily for infrastructure
financing is the declining average weighted
toll rate. Excessive discounts for the already
prevalent Euro V vehicles push down the
average weighted toll rate as well as the total
revenue. Tariff increases in 2011 and 2012 have
been effectively eliminated by the discount
policy – tariffs adjusted by inflation are currently
lower than in 2007.
20
I

The main goal of toll collection in the Czech Republic is to create one of the
main financial sources for infrastructure financing. Since introduction in 2007,
the system collected EUR 1.92 bn and the share of tolling revenues on the total
incomes of The State Fund for Transport Infrastructure has been steadily ris-
ing. Main reason for growing importance of toll revenues in the fund is however
not their growth, but decline in other sources of income, mainly privatization
revenues.
Direct revenues grow but still remain a minority
source of financing
Two items stand out from The State Fund for Transport Infrastructure revenue
overview—revenue from the electronic tolling and highway vignetes. These
two categories represent the only direct revenues tied to actual use of the Czech
infrastructure. All other revenue sources are either allocated tax revenues or
transfers from the state budget. Highway stickers were introduced in 1995 for
all vehicles to be replaced in 2007 by electronic tolling for large trucks and in
2010 for light trucks as well. Vignetes however remain an important revenue
source. As passenger car traffic increases and vignete prices have been raised
in the past years, the total revenue already surpassed historical levels achieved
Revenue sources of The State Fund for Transport Infrastructure in billions of Euros between 2006
and 2016 (real, budgeted and forecasted)
Source: SFDI annual reports, 2014 budget and mid-term outlook for 2015 and 2016 l 4
1.67
2016
Outlook
1.36
2.59
2013
0.18
0.21
0.97
0.28
0.21
0.14
0.34
0.15
2010
0.12
0.25
2011
0.28
0.46
0.30
0.30
2.30
2.58
0.79
0.39
0.18
0.20
0.25
2.00
0.24
0.12
0.27
3.19
3.13
0.67
0.19
0.19
0.16
2009
0.24
0.62
0.18
0.30
0.20
0.13
0.13
0.97
0.29
0.79
0.21
0.76
2007 2014
Budget
3.91
0.21
0.24
0.11
0.49
0.18
0.11
0.81
0.26
0.26
0.24
0.28
0.30
0.09
2008 2006
1.87
0.51
0.31
0.89
0.61
0.14
0.46
0.31
2.20
0.30
0.16
0.27
0.37
0.20
0.80
0.33
0.34
0.29
0.20
0.14
0.14
0.27
0.17
0.46
0.27
0.59
0.19
1.74
2015
Outlook
0.19
2012
0.19
0.27
Other Income

EIB Loans
EU Funds 
State Budget Funds
Privatization Revenues
 
Road Tax
 

Excise Tax on Fuel
Vignete
eToll 
data:
Infrastructure Financing
I
21
Comparison of revenues from sale of highway vignetes and electronic toll collection since
2001 (EUR millions)
Source: SFDI annual reports, ESVZ ČR
1
459
329
123
260
501
495
166

155
2013
345
2011
129
330
2012 2010
383
2009
110 111
2007 2006
288
210
116
200
2005
102
84
87
2003
319
357
2004 2008
246
65
2001
51
2002
62
Vigne e eToll
+148%
+72%

data:
when trucks paid vignetes as well. The total direct payments of the infrastruc-
ture users surpassed the milestone of CZK 10 bn (EUR 407 m) in 2011 and the 2013
collection reached EUR 495.1 m.
The loosening relationship between taxed vehicle ownership or fuel consump-
tion on one side and infrastructure use on the other side remains the weak
point of the traditional tax revenue systems. Collection of fuel excise tax has
goten very complicated in the reality of Europe without borders. The tolling
systems collect on the other hand fees from local as well as foreign vehicles, fol-
lowing a strict non-discriminatory principle.
Shares of Czech and foreign vehicles on registrations (lef) and toll revenues (right, EUR millions)
Source: ESVZ ČR
Czech Foreign
329
2012
43%
56%
2013 2010 2011
44%
57%
330
200
246
60%
40%
58%
260
59%
209
41%
58%
42%
345
61%
2009 2008
39%
2007
42%
2012 2013
686
2011
79%
21%
76%
638
77%
23%
595
78%
22%
2010
527
24%
2009
267
23%
2008
436
22%
78%
371
77%
2007
28%
72%
data:
22
I

Shares of foreign nationalities on the total toll collection from foreign vehicles according to the
country of registration between 2007 and 2013
Source: ESVZ ČR
100% of foreign users
100% of foreign users
2013
17%
11%
3%
12%
25%
27%
2012
13%
23%
16%
4%
29%
2011
16%
11%
3%
28%
14% 14%
2009 2010
16%
10%
3%
22%
16%
3%
9% 11%
22%
29%
6%
15%
16%
2008
29%
16%
35%
18%
2007
15%
16%
2%
39%
6%
15%
20%
2%
Hungary
Poland
Slovakia
Bulgaria
Others
Germany
Romania
100% of foreign users
100% of foreign users
2013
17%
11%
3%
12%
25%
27%
2012
13%
23%
16%
4%
29%
2011
16%
11%
3%
28%
14% 14%
2009 2010
16%
10%
3%
22%
16%
3%
9% 11%
22%
29%
6%
15%
16%
2008
29%
16%
35%
18%
2007
15%
16%
2%
39%
6%
15%
20%
2%
Hungary
Poland
Slovakia
Bulgaria
Others
Germany
Romania
100% of foreign users
100% of foreign users
2013
17%
11%
3%
12%
25%
27%
2012
13%
23%
16%
4%
29%
2011
16%
11%
3%
28%
14% 14%
2009 2010
16%
10%
3%
22%
16%
3%
9% 11%
22%
29%
6%
15%
16%
2008
29%
16%
35%
18%
2007
15%
16%
2%
39%
6%
15%
20%
2%
Hungary
Poland
Slovakia
Bulgaria
Others
Germany
Romania
data:
The Czech system collected between 2007 and 2013 a total of EUR 803.46 m (or
42%) from foreign vehicles. The share of Czech vehicles on the overall toll collec-
tion has been declining from the 2007 level of 61.3% and reached 55.7% in 2013.
Contrary to this development, the share of registered Czech vehicles in the sys-
tem remains stable between 21% and 23%.
The largest share of the foreign toll revenues traditionally pay the vehicles
registered in the neighbouring central European countries—Slovakia, Poland
and Hungary.
Infrastructure Financing
I
23
The toll collection reflects macroeconomic
situation of the Czech Republic as well as the
central European region
The Czech tolling system has already witnessed a rapid economic growth, the
financial crisis as well as the slow return to the modest growth afer crisis. Sit-
uation in the transportation sector is a traditional indicator of economic cycles
and data from the system allow for analysis of time series comprising of very
accurate data available almost in real time every day in the year.
While the sample of twenty-four quarters from 2008 till 2013 is already long
enough to illustrate the correlation of the GDP and traffic performance meas-
ured by the tolling system. The following chart shows this correlation by com-
paring quarterly year-on-year GDP changes and number of kilometres travelled
by trucks and buses on the tolled network.
Correlation between quarterly GDP growth and toll performance. GDP growth measured as change
to the same quarter in the previous year, seasonally not adjusted. Toll performance measured as
kilometres driven on the tolled road network
Source: toll data ESVZ ČR, macroeconomic data of the Czech statistical office as on March 11
th
, 2014
%
%
%
%
-%
-%
-%
4Q
5.2%
3Q
6.5%
2Q
2.7%
1Q/13
-1.7%
3Q 1Q/12 4Q
0.1%
4Q 2Q
-2.8%

7.8%
1Q/11
23.9%
2Q
-0.9%
31.6%
1Q/10 4Q
-7.2%
2Q 3Q 3Q
17.0%
37.4%
27.5%
4Q 3Q
-13.1%
2Q 4Q 2Q
24.0%
1Q/08 1Q/09
19.8%
3Q
GDP of the Czech Republic
Toll (paid kilometers)
Quarterly data
7.0%
-1.9%
-2.2%
-14.4%
22.9%
5.5% 0.6%
data:
24
I

Historical development of the average revenue per one tolled kilometre (EUR thousands) on
highways, motorways and national roads
Source: ESVZ ČR
Ø 164
310
2013
63
175
2012
75
2010
187
334
2011
68
185
323
109
2008
222
69
131
58
265
2009
53
136
0
120
265
2007
293
Highways National Roads Motorways
Ø 164
310
2013
63
175
2012
75
2010
187
334
2011
68
185
323
109
2008
222
69
131
58
265
2009
53
136
0
120
265
2007
293
Highways National Roads Motorways
data:
Average revenue per tolled kilometre is mainly
influenced by traffic density and tolled network
structure
Average revenue per kilometre in the Czech Republic was decreasing between
2007 and 2009. Very small growth started in 2010. The average revenue rose in
2011 and 2012 reaching the peak in 2012—EUR 250 ths—thanks to the toll tariff
raises in January 2011 and 2012. The decrease between 2007 and 2010 can be at-
tributed to the financial crisis in Europe and changing structure of the Czech
tolled road network. While the whole tolled network comprised only of high-
ways and motorways in 2007, the numbers for 2008 onward are influenced by
introduction of tolling on national roads.
Combination of lower rates on national roads and generally lower traffic inten-
sities contributes to the decrease of the average collection per kilometre on the
whole network. Average revenue in 2013 reached EUR 231 ths, the decrease was
this time caused by the negative impact of Euro V tariff benefits.
The following graph depicts the average revenues per kilometre in a context
of various road types. Revenue on average kilometre on highways is five times
higher than on the national roads. The main reasons for this striking difference
are the lower traffic density (average number of vehicles paying toll on one kilo-
metre of highways was 1.85 m 2013, while only 732 ths vehicles paid on national
roads) as well as lower average weighted toll rate (EUR 0.088 on a national road
vs. EUR 0.168 on a highway).
Infrastructure Financing
I
25
Average weighted toll rate is the strategic
indicator of revenue sustainability
The average weighted toll rate is the most precise expression of the average
price paid by the transport companies for use of one road kilometre, taking into
account composition of the fleets (emission classes, number of axles etc.) and
actual performance in the price categories of the complex tariff tables. To keep
the toll revenue sustainable, the average weighted toll rate should be stable or
slightly rising. Decline of the average weighted toll rate can be offset only by
a rather strong growth in the vehicle performance (driven kilometres) on the
tolled road network.
I46
I38
I55
I58
I47
R63
I11
35
R48
28
R10
R35
R46
39
R55
R56
51
18
R52
D11
I33
84
77
R4
60
R6
65 I35
D3
76
73
I52
72
I30
R7
68
I48
67
94
337
163
141
134
105
D8
R1
260
246
216
150
340
148
D5
290
329 D2
D1
506
Average revenue of one tolled kilometre in 2013
broken down by road sections (EUR thousands)
Source: ESVZ ČR
Revenue differences among individual tolling segments are even higher than
those of whole road sections. Yearly income of the least profitable segment of
the national road I/47 (close to city Hulín) accounts only for 1.66% of yearly in-
come generated by the most profitable segment in the Czech Republic, found
on the highway D1 in Brno. Among the TOP 10 yielding tolling sections are only
sections of the highway D1 and Prague ring road R1. On the other hand, the
10 lowest yielding sections are all on national roads I/47, I/55, and I/58.
26
I

Development of the Czech average weighted toll rate reflects impact of the
regulatory policy that awarded significant discounts to the Euro V vehicles.
According to the European trends, the rates introduced to the new system in
2007 were slightly differentiated by emission classes. The average weighted toll
rate had been declining until 2010 as rates remained the same and the structure
of fleets changed in favour of more ecological vehicles. The weighted average
grew in 2011 and 2012 with 25% tariff increase in both years. However, as the
tariffs for the Euro V vehicles remained unchanged, the weighted average grew
only by 14.8% in 2011 and 8.7% in 2012.
The average weighted toll rate therefore reflects a situation of tariff freeze for
category of vehicles that has overtaken majority of the performance on the
highway network in time. The fast growth of Euro V vehicles to a share of 60%
by the end of 2013 constitutes a significant revenue instability issue. The 2013
revenue declined in a situation of simultaneous traffic performance growth for
the first time in history of the system.
The following chapter is therefore devoted to the possibilities and impacts
of regulatory policies in the tolling systems that can motivate or demotivate
certain behaviour through parameters of their tariff policies.
0.162
0.150
2010
2007
2008 0.151
0.137
2013
Average Weighted Toll Rate
2012 0.171
2011
2009
0.157
0.163
+0.9%
-6.3%
-0.8%
-8.9%
+14.8%
+8.7%
-4.5%

0.137
0.139


0.149

0.123

0.147

0.137
0.162
-15.0%
-8.9%
-7.1%
-9.8%
+13.1%
+6.7%
-7.7%

Real Average Weighted Toll Rate
Development of the average weighted toll rate (in EUR) since 2007 in nominal (lef) and real
terms (right)
Source: ESVZ ČR, Czech statistical office
Infrastructure Financing
I
27
28
I

Regulatory
Functions
in the Tolling
System
Traffic Regulation
Traffic Regulation
I
29
1. Financial and regulatory functions of tolling
systems are conflicting. The system can
generate revenue and regulate, but the financial
function will be subordinated to the regulatory
policy and the system will not operate on its
revenue potential.
2. The regulatory optimization is used mainly in
the urban tolling systems in Europe as well as
in the rest of the world. Friday’s afernoon peak
time regulation as implemented in the Czech
highway tolling system is rather an exception.
Internalization of negative externalities based on
tariff differentiation according to the emission
classes remains the most widely used regulatory
policy across Europe.
3. Support of Euro V vehicles through lower
tariffs has had a negative impact of EUR 192.8 m
since 2011. This experience practically shows
that regulation through the tolling system
is costly and some regulatory goals can be
achieved also by other means. German subsidy
programme for fleet renewals accomplished
beter results in a much larger country with
similar costs.
30
I

Tolling system can be optimized either
for revenue, or for regulation
Tolling systems in the Czech Republic as well as in the neighbouring countries
have been built primarily in order to collect fees for infrastructure maintenance.
The practical impact of this decision is a system design that does not leave the
road users other economically efficient options than use of the tolled road. How-
ever, when this design is combined with regulatory measures introduced to the
system through tariff benefits for selected groups of road users, both roles—the
financial and regulatory ones get into conflict.
The regulatory optimization is a significantly more complex task than the rev-
enue maximization. A choice must be given the drivers—an option to change
their behaviour toward the behaviour desired by the policy designers. These
may include using a city bypass instead of shorter intra-city route and parking
and using public transport for further travel to the city centre. The nature of
the conflict between functions lies in the availability of single one optimization
tool—the toll tariffs. Practically the regulatory function can co-exist with the fi-
nancial function, but the financial function will not be able to use the tariffs for
revenue optimization as the tariff structure is already optimized for regulation
and the behavioural change.
Knowledge of transportation companies’
sensitivity to tariff alterations is the key
parameter of every regulatory policy
The tariff management task becomes a behavioural economics exercise in form
of tariffs that are exactly as high as needed to motivate the road users to change
their behaviour (i.e. to change economic motivations of individual or company).
Key parameter for this task is knowledge of the elasticity of demand for the
infrastructure capacity. The elasticity shows the responsiveness to changes in
prices. If the regulator strives to limit truck trips during peak times, the elastic-
ity shows the percentage change (decrease) in kilometres driven at that particu-
lar time afer price change by one per cent.
Approximation of the elasticity is a very complicated task, usually achieved
through large socio-economic research efforts. The non-linear nature of the
elasticity makes the task even more complex. Experience shows that the elas-
ticity can be studied only within a given context—for example drivers of pas-
senger cars react differently from trucks, as well as a transportation company
working in a just-in-time delivery context will act differently from a company
that can afford to delay the delivery for a few hours.
Traffic Regulation
I
31
The overall impact of the regulatory policies through tariffs does not limit it-
self only to transport companies. Their clients who define the requirements
as a part of their overall manufacturing and logistic chains largely determine
their behaviour. Therefore, any successful regulation has to target decisions of
the clients. This factor naturally does not make the regulatory task any easier.
Czech regulation through higher tariffs
on Fridays is an example of peak time traffic
influence
Variable rates are widespread in urban tolling systems and in the United States.
A unique example of traffic regulation on a highway through the toll rate
change is the Friday’s afernoon regulation in the Czech Republic. The clear
goal of the regulatory intervention was to limit truck traffic in the Friday’s
afernoon peak when people leave cities for the weekend.
The impact is depicted on the following chart, showing distribution of the dis-
tance (measured in kilometres) travelled on a Friday before and afer the regu-
latory intervention.*
*) This hi-level analysis is illustrative, full impact analysis would require comparison of more than two Fridays, i.e. work
with a longer time series.
32
I

The graph clearly shows that part of the Friday’s afernoon journeys was moved
from afernoon to morning hours. Drivers stop already before 3 pm when the
higher rate zone starts and is valid until 9 pm. The graph depicts the original
six hours higher tariff peak time, which was shortened by one hour starting on
February 7
th
, 2014, following a European regulation (which allows for peak time
tariff increases for maximum of five hours). The number of kilometres trav-
elled in the regulated time zone decreased by 15% in the comparison of the two
analysed days. 50% increase of rate and only 15% decrease in traffic show low
price elasticity of demand in the given context of time, day of the week and the
length of the increased peak time rate from 3 pm to 8 pm is this finding all but
surprising.
Use of highway tolling systems for such peak-time regulations remains rare.
Experiments with this kind of regulation are usually found in urban tolling sys-
tems. The main reason is the conflict between regulatory and financial func-
tions with the financial function being a priority in highway systems.
Internalization of negative externalities
is a common regulatory use of tolling systems
Ecological policies of European states have a strong tendency towards inter-
nalization of negative externalities, in practical terms puting an explicit price
(through tax or toll) on negative effects of the heavy road transportation. The
4%
6%
2%
1%
5%
3%
23 3 1 0 2 17 21 18 11 8 22 9 6 15 12 5 20 16 14 13 7 4 10 19
unregulated
regulated
Increased toll
rates between
3 p.m. and 9 p.m.
Impact of the higher rates on the distribution of the intensity within a day: comparison of Friday
May 18
th
, 2007 (without regulation) and May 14
th
, 2010 (regulated by higher tariffs)
Source: ESVZ ČR and own calculation
4%
6%
2%
1%
5%
3%
23 3 1 0 2 17 21 18 11 8 22 9 6 15 12 5 20 16 14 13 7 4 10 19
unregulated
regulated
Increased toll
rates between
3 p.m. and 9 p.m.
data:
Traffic Regulation
I
33
goal of the taxation is to increase the costs of the activity that produces the ex-
ternalities. The increased costs enter the decision making process of transporta-
tion companies as well as their clients. The companies are in theory motivated
to faster fleet replacement, the clients to a choice of transportation mode that
reflects its overall costs.
A practical internalization tool is the toll tariff differentiation by emission class
of the vehicle (currently Euro 0–Euro VI). This approach is the same all over Eu-
rope, but the degree of differentiation in European countries differs.
The Czech experience of (continuously) supporting emission class Euro V that
has already reached a share of 60% on the traffic performance shows a critical
need to plan and evaluate financial impact of toll tariff regulations not only
by the number of vehicles, but mainly by the share on distance performance.
Mainly Euro V vehicles are more active (i.e. one vehicles has a higher perfor-
mance in kilometres travelled on the tolled network), which further makes the
effect of discounted tariffs higher.


Euro II
0.128
Euro II
0.065
Euro II
0.288
Euro V Euro V
0.155
Euro V Euro V
0.389
Euro II
0.324
0.437
0.162
Euro V
0.181
Euro II
0.234
Czech Republic Austria Slovakia Germany Poland
+29%

+86%

+96%
+100%

+12%

Extent of the “ecological discount” for Euro V vehicles shown through comparison with Euro II rates
in Central European countries (rates in EUR valid as of January 1
st
, 2014 for trucks with 5 axles, 12 t+)
Source: MYTOCZ, Asfinag, Sky Toll, Toll Collect, viaToll
Jan
2010
Jan
2009
Jan
2012
Jan
2013
Jan
2011
Jan
2008
Jan
2007
Euro 5 Euro 4 Euro 3 Euro 2 Euro 1 Euro 0
Euro V
Euro IV
Euro III
Euro II
Euro I
Euro 0
100%
The detailed performance data gathered from the tolling systems illustrates
transfer of the performance from Euro III to Euro V vehicles. The Euro III vehi-
cles used in the past few years for the majority of international highway trans-
portation are gradually being replaced with new Euro V vehicles.
34
I

We can also observe that the employed regulatory policy did not manage to fa-
cilitate replacement of the most environmentally harmful vehicles in classes
Euro 0–II. As these vehicles run mostly outside the tolled network, the higher
tariffs of the tolled network cannot provide sufficient economic motivation for
their replacement.
Euro V
Euro IV
Share on Performance (Paid Kilometers)
11.52%
Euro III
0.36%
Euro II
Euro I
5.08%
Euro 0
26.41%
0.49%
56.13%
30.65%
1.49%
40.00%
11.14%
Share on New Registrations
3.81%
12.92%
Jan
2010
Jan
2009
Jan
2012
Jan
2013
Jan
2011
Jan
2008
Jan
2007
Euro 5 Euro 4 Euro 3 Euro 2 Euro 1 Euro 0
Euro V
Euro IV
Euro III
Euro II
Euro I
Euro 0
100%
Share of vehicles in individual emission classes on the overall traffic performance (performance
measured by kilometres driven on the tolled network)
Source: ESVZ ČR
Comparison of the registrations and performance in individual emission classes in 2013
Source: ESVZ ČR
data:
Traffic Regulation
I
35
Tolling is not the only regulatory tool, other
measures are ofen more efficient ways towards
regulatory goals
While the higher tariffs on Friday afernoon are an alternative to the total travel
ban for trucks in peak times, there are also alternative measures that can be
taken to support fleet renewals. Unfortunately, the Czech Republic did not make
use of a targeted national subsidy programme for fleet renewal with ecologic ve-
hicles. Such programme can according to the European rules support purchase
of vehicles compliant with higher emission class than the one which is currently
obligatory (i.e. Euro VI until December 31
st
, 2013 and hypothetical “Euro VII” ve-
hicles starting with January 1
st
, 2014). German subsidy programme supported
between September 1
st
, 2007 and August 31
st
, 2014 in total 86,500 purchases of
Euro V and VI vehicles. Costs of the Czech Euro V tariff support (currently al-
most EUR 193 m) are already very close to the costs of the German subsidies
(EUR 196 m until the end of August 2013). The important structural difference
between both approaches lies in the international context of freight transpor-
tation. The German state budget subsidized purchases of vehicles by German
companies. On the other hand, the foreign transport companies took benefits
from EUR 93 m (48%) of the Czech Euro V tariff benefits in form of lost Czech toll
revenue. Even the success rate of the German approach is higher as the traffic
performance of Euro V+ vehicles in the Toll Collect system accounted for 83%
of the overall driven distance, while the same indicator in the Czech system was
only 61%.
The German fleet renewal subsidy is an example of efficient regulatory policy.
The ecological differentiation of the tariffs on a basis of emission classes perma-
nently acts in favour of externalities internalization (as any other tax would).
The national subsidy programme on the other hand provided the one-time fleet
renewal impulse. The Czech policy of low Euro V toll tariffs has chosen a per-
manent support to motivate one-time fleet renewal—with very high costs and
arguable success.
36
I

Electronic Tolling
in the Central
European Region
Electronic Tolling in the Central Europe
Electronic Tolling in the Central Europe
I
37
1. The Czech Republic became the third central
European country launching a nationwide tolling
system in 2007. Electronic tolling systems have
been used in all neighbouring countries since
mid 2011.
2. Ever since the introduction of nationwide
tolling systems in the central Europe, the tariffs
in Austria have been the highest. The main
reason is the highway-financing model that
relies only on direct revenues from tolling (for
trucks and buses) and vignetes for passenger
cars.
3. Five central European tolling systems
represent not only two technologies, but
also a set of different infrastructure financing
strategies. Such strategies are reflected in
revenue and performance parameters of tolling
systems.
38
I

When launched in January 2007, the Czech tolling system became the third na-
tionwide truck tolling system in the central European region. Due to the launch
issues of the German system, the Austrian launch of the DSRC microwave sys-
tem in 2004 marked the first birth of electronic tolling systems in the central Eu-
rope. Tolling systems have been however spreading fast over the region and all
four Czech neighbours have been operating multi-lane free flow tolling systems
since the launch of the Polish system in mid 2011.
Austria
Austria became on January 1
st
, 2004 the first country in Europe launching a na-
tionwide electronic toll collection system for all vehicles exceeding gross weight
of 3.5 t. The operator of the system is the state owner infrastructure company
Asfinag. The microwave system is very similar to the solution implemented later
in the Czech Republic and requires a compulsory on board unit named Go-Box.
Toll rates are comparatively higher than in the Czech Republic. Special (higher)
rates are collected on five selected roads crossing the Alps due to their higher in-
vestment and maintenance costs. Special surcharge is collected on the Brenner
highway during the night-time as well.
The system generated estimated EUR 1.12 bn revenue in 2013, collecting toll on
2,178 km of highways. Apart from the crisis year 2009, the toll revenues have been
growing each year since introduction of the system as the tariffs are yearly being
adjusted by inflation.
Germany
The first nationwide satellite based tolling system was launched in the middle of
2005 in Germany and is operated by a private company Toll Collect under a PPP
scheme. The system combines GPS localisation of the vehicle with mobile data
communication in GSM network to transmit the location and billing data to the
central system. Use of the satellite OBU is not compulsory, the drivers can pay
toll for a pre-selected route manually on self-service kiosks. The structure of
the tariffs has been stable since 2009 while introduction of a new category for
Euro VI vehicles is being discussed.
Tolled network was extended in August 2012 to 1,135 km by selected national roads
(Bundesstrassen). Toll is now being collected on 13,999 km of roads and in 2013
the revenue reached stunning EUR 4.41 bn. The system collected over EUR 35 bn
since its launch. The revenues grew till 2010 with a record yearly revenue of
EUR 4.54 bn and started to slightly decline since 2010 due to the increasing share
of Euro V+ vehicles that pay lower tariffs.
The German public private partnership “A-Model” is closely linked to the nation-
wide toll collection. Typically the private entity takes over an existing section of
the road that is to be refurbished and in some cases extended to 3+3 lanes. The
private entity operates the section for 20–30 years and toll on the section is col-
lected by the Toll Collect system (i.e. no new systems are built on the PPP sec-
tions). The toll collection does not make the privately operated sections self-suf-
ficient. Consequently, the existing financing gap is closed using other (tax)
resources of the Government. As the A-Model projects usually transfer the de-
mand risk to the private sector, the decisive price element in the public procure-
ment process is the extent of the to the toll revenues. Typical A-Model projects
are A1 Buchholz Kreuz (A1/A261)—Bremer Kreuz (A1/A27), A4 Hörselberge bypass,
and A8 Bubesheim–Augsburg West. Other German PPP projects (A5 Baden-
Baden–Offenburg, A8 Ulm–Augsburg, A9 Hermsdorf–Schleiz) do not transfer
the demand risk to the private operating entity and are, therefore, procured and
financed in the availability model of guaranteed payments independent from
the actual toll collection.
Slovakia
Slovakia launched the satellite based tolling system in January 2010. Currently
the system collects toll from all 3.5 t+ vehicles on 2,681 km of highways, motor-
ways and national roads, while the national roads make up to 73% of the tolled
network. Vehicles must be equipped with an on board unit. The previously used
ticketing scheme was abolished in September 2013. Another large set of changes
was introduced to the system in January 2014. This expansion was initially com-
bined with extension on further 980 km of road sections within cities (which
were previously excluded from tolling even though the road as such was tolled
outside the city). Toll was charged to transiting vehicles, but this measure was
cancelled in March 2014 because of protests of transport companies.
Tariff table is now restructured to accommodate Euro V, Euro VI and EEV vehi-
cles as the Euro IV category was merged with Euro III. Following the example of
foreign systems, transport companies can now claim volume discounts.
Toll collection in 2013 amounted for EUR 159 m. Total revenue in the first four
years of operation reached EUR 610 m. System was delivered and is now being
operated in a 13-years operation agreement by a private company SkyToll.
Electronic Tolling in the Central Europe
I
39
40
I

Poland
Poland launched its tolling system in the middle of 2011 on 1,573 km of highways,
motorways and national roads. Further extension of the tolled network in 2012
and 2013 increased the length of the tolled network to 2,653 km. The goal of the
Polish government is to toll up to 7 thousand kilometres by 2018. The micro-
wave solution requires the vehicles to be equipped with an on board unit named
viaBOX. An exception on the Polish network is the A2 highway from Lodz where
toll is still collected manually, however, ETC lanes were established to allow for
seamless passage of trucks equipped with OBUs. Operator of the system, private
company viaToll, collected EUR 240 m (PLN 1 bn) in 2013.
Austrian tariffs remain the highest in the region
As the toll revenues are only a fraction of the infrastructure investments in
the central Europe, tariffs are usually set politically. The situation in the Czech
Republic is not different with tariffs being regulated on a basis of a govern-
ment decision. However, the global limits are set in the Directive 1999/62/EC as
amended by the Directive 2006/38/EC. Both directives stipulate the principle of
toll collection up to the real life-cycle costs of the infrastructure, maintenance,
service provision and toll collection.
Due to the complexity of tariff tables, simple average cannot be used for inter-
national tariff comparison. We have, therefore, chosen to compare actual tariffs
for the most used category of vehicles used in long haul international trans-
portation—truck with gross weight above 12 tons, with 5 axles complying with
the Euro V emission class. The presented simplified comparison however does
not reflect the international context of purchasing powers. Even with this sim-
plification, the comparison is relevant for international routing decisions (e.g.
whether to use Czech or Austrian highway on the Frankfurt—Budapest route).
The Czech tariffs remained unchanged since the launch of the system until
2010. Prices were at half the Austrian ones, while the German tariffs were 30%
higher. Afer minor tariff adjustments made in 2010, drivers of the above men-
tioned truck category paid in Austria 98% more than in the Czech Republic.
The first substantial tariff raise came in 2011 when all categories except for
Euro V vehicles saw a 25% increase of tariffs. The gap between Czech tariffs and
neighbouring countries got therefore smaller, prices in certain categories be-
came even higher than in Germany and Slovakia. Prices for the already signifi-
cantly increasing Euro V category however stayed on the 2010 levels.
The same measure was repeated in January 2012. Prices for all categories except
for Euro V were once again increased by 25%. Tariffs for Euro 0–IV categories
Electronic Tolling in the Central Europe
I
41
are now higher than in Germany and Slovakia, while the prevailing Euro V trucks
still pay more than twice the Czech price in Austria.
During the next year, 2013, only Austria adjusted the rates. All other central Eu-
ropean countries did not change their tariff tables (note: difference depicted in
the graph is a reflection of the currency fluctuations, mainly CZK/EUR). Aus-
tria and Slovakia raised their tariffs in January 2014. Combined with the depre-
ciation of the Czech Crown against Euro in the autumn 2013, this raise leads
to a record difference between Czech and Austrian tariffs. As of now, a 12 tons
Euro V truck with 5 axles pays 2.6 times more per one kilometre in Austria than
in the Czech Republic.
Profitability of tolling systems in the Central
Europe reflects various tolling strategies
Five central European tolling systems represent not only two technologies,
but also very different infrastructure financing strategies that, furthermore,
define the role of tolling systems as well as their revenue and performance
characteristics.
Austria is an example of thorough highway fee collection from all trucks and
buses (with gross weight above 3.5 tons). The tariffs are rather high as the toll
revenue is a key income source for the infrastructure management company
Asfinag that has no other significant revenue apart from tolls, vignetes (sold
to passenger cars) and special tolls collected from passenger cars for passage of
alpine mountain passes and tunnels.
Austrian tolling system is with no compromise optimized for revenue maxi-
mization. Toll is collected only on highways where the toll collection is very ef-
ficient thanks to the limited network with high traffic density. Tariffs reflect
real infrastructure lifecycle costs and are adjusted by inflation regularly every
January. Higher costs of alpine highways and tunnels are also reflected in more
expensive tolls paid on such sections. The result of this strategy is clear—the
highest average revenue per kilometre and steadily growing revenue.
Germany has chosen a strategy of tolling only vehicles with gross weight ex-
ceeding 12 tons, initially only on highways. Only since 2012, the tolling has been
extended to selected sections of national roads (“Bundesstrassen”). As the infra-
structure is partially financed from tax revenues, the tariffs are lower than in
Austria. Lower average revenue per kilometre also reflects lower tariffs and toll-
ing of non-highway roads that bear lower yields than highways.
42
I

The Czech Republic, Slovakia and Poland on the contrary introduced tolling also
on a significant part of non-highway roads as the core highway network of three
countries still awaits completion. Lower revenue from non-highway roads due
lower tariffs and traffic intensity results in comparatively low average revenues.
This effect is at best observed in Slovakia, where national roads represent 73%
of the tolled network length.
Strong preference of regulatory functions in the tolling system makes the Czech
tolling strategy stand out not only in the region, but also in Europe. Increased
tariffs on Friday afernoon and significant discounts for Euro V vehicles (in com-
parison with Euro V) are unique. While the Austrian strategy is purely focused
on revenues, we can describe the Czech strategy as one with a strong regulatory
reference, while the financial revenue function is secondary.
Comparison of highway toll tariffs for a Euro V compliant truck with gross weight above 12 tons,
with 5 axles
Source: MYTO CZ, Asfinag, Toll Collect, SkyToll, viaToll
2014
EUR 0.065
EUR 0.155
EUR 0.181
EUR 0.389
EUR 0.150
2013
EUR 0.065
EUR 0.155
EUR 0.189
EUR 0.065
EUR 0.155
EUR 0.189
EUR 0.164
2011
EUR 0.347
EUR 0.357
EUR 0.162
2012
EUR 0.163
EUR 0.323
EUR 0.189
EUR 0.189
EUR 0.328
EUR 0.155
EUR 0.155
EUR 0.168
2010
Germany
Poland
Slovakia
Austria
Czech Republic*
2014
EUR 0.065
EUR 0.155
EUR 0.181
EUR 0.389
EUR 0.150
2013
EUR 0.065
EUR 0.155
EUR 0.189
EUR 0.065
EUR 0.155
EUR 0.189
EUR 0.164
2011
EUR 0.347
EUR 0.357
EUR 0.162
2012
EUR 0.163
EUR 0.323
EUR 0.189
EUR 0.189
EUR 0.328
EUR 0.155
EUR 0.155
EUR 0.168
2010
Germany
Poland
Slovakia
Austria
Czech Republic*
*) The toll rate for
the Czech Republic is
considered for common
week (the Friday’s
afernoon tarrifs are not
included).
data:
Electronic Tolling in the Central Europe
I
43
The only neighbouring country to employ regulatory measures in the tolling
system is Austria with a very limited extent on the Brenner highway (higher
tariffs in the night try to limit noise).
National tolling strategies reflect the local situation, priorities and toll revenue
significance in the overall infrastructure-financing model. The short introduc-
tion to the local context also shows pitfalls of international comparison without
thorough reflection of national specifics.
PL
90.5
CZ DE
315.0
SK
65.0
AT
514.2
231.6
Average revenue of one tolled road kilometre in the Czech Republic, Slovakia, Austria, Germany and
Poland as of 2013 (in EUR thousands)
Source: ESVZ ČR, Asfinag, Toll Collect, SkyToll, viaToll, own calculations
44
I

Electronic Tolling
in the European
Union
Electronic Tolling in the European Union
Electronic Tolling in the European Union
I
45
1. Electronic toll collection has been regulated
in the European Union since 1999 by a number
of directives that focus mainly on tariff policy,
interoperability and internalization of negative
road transportation externalities.
2. The currently last Directive 2011/76/EU
introduces the environmental surcharges and
defines their maximum allowed amounts for
noise and pollution. This directive has not been
transposed to the Czech national law yet.
3. The European commission sees the need
to conclude a toll payment contract in each
country as a barrier on the internal market.
Introduction of the interoperable European
Electronic Tolling Service (EETS) is, therefore,
a priority in the European tolling policy.
46
I

Common European policy
In course of the past twenty years, the set of European tolling directives laid out
financial, technical and regulatory requirements for nationwide tolling systems.
The directives create a definition of framework in which all the tolling systems
of member states have to operate, while many decisions are lef to individual
consideration of the member states and toll chargers.
The directives require collection of fees on highways, but there are no European
rules for tolling on non-highway infrastructure. The directives define a meth-
odology and financial limits for calculation of toll tariffs. The tariffs themselves
are not harmonized and each country can individually decide the pricing, fol-
lowing the harmonized methodology. In addition to the infrastructure lifecy-
cle cost driven tariff calculation, member states can levy ecological surcharges
as a measure for negative externality internalization. Last but not least, the
technology choice between DSRC and GSM/GNSS is lef to the member states
as well.
Internalization of negative externalities is one
of the main concerns
The latest addition to the family of European tolling directives—the Directive
2011/76/EU*—takes another step towards internalization of negative external
costs of road transportation. Toll rates may, therefore, be in the future increased
by environmental surcharges.
The directive stipulates the methodology for calculation of negative external-
ities caused by noise and air pollution. Increased toll fees will in the future in-
ternalize both the sources of externalities. The maximum fee for air pollution is
set to 12 Euro Cents on interurban roads and 16 Euro Cents on suburban roads.
Noise surcharge will not exceed 2 Euro Cents while distinguishing day and
night.
Internalization of external costs into the costs explicitly born by transport com-
panies increases motivation for modernization of vehicles and usage of interur-
ban roads (where possible).
*) Directive 2011/76/EU is afer the Directive 2006/38/ES another change to the origi-
nal Directive 1999/62/ES on the charging of heavy goods vehicles for the use of certain
infrastructures.
European interoperability is a key long term goal
Introduction of the technical and contractual interoperability of individual na-
tional tolling systems in Europe has been a clear priority of the European Com-
mission for several years. The current model of having one on board unit for
each country is seen as a barrier on the internal market and a source of ineffi-
ciencies. One universal unit for toll payments all over Europe would simplify
operation of the national systems and save costs in transport companies that
have to maintain multiple contracts and equipment for European operation.
The interoperability design does not hamper competition of OBU manufactur-
ers and suppliers of the local collection systems. If the manufacturers stick to
the standard, all units will be able to communicate with tolling systems using
standardized open interfaces.
Interoperability of tolling systems is stipulated by the Directive 2004/52/ES and
the related Commission Decision 2009/750/ES. Their main goal is to prevent de-
ployment of incompatible tolling systems in Europe. The directive defines pa-
rameters of the European Electronic Tolling Service (EETS), allowing payment of
toll using one device (unit), one contract and one single payment. The technical
execution foresees communication between the local toll collection operators
and OBU providers using the standard ISO 12 855 that specifies details of tech-
nical protocols for data transaction accounting and other necessary adminis-
trative data exchanges.
The European Electronic Tolling Service defines contractual rules for the ecosys-
tem of EETS providers (OBU issuers), toll chargers (national system operators,
i.e. payees) and payers (drivers, transport companies). The basic working princi-
ple of EETS is similar to a mobile phone roaming—use of mobile phone abroad
while having a contract only with the “home” operator and paying a single bill.
All EU countries should prepare their infrastructures for EETS launch not later
than on October 13
th
, 2014.
REETS—on a way towards EETS
The “Regional European Electronic Tolling Service” project (REETS) is the most
significant step towards achieving the EETS vision so far. The project analyses
the contractual, procedural and technical issues in order to recommend an ac-
tual solutions for EETS introduction. A total of seven EU member states (Aus-
tria, Belgium, Germany, Denmark, Spain, France, Italy and Poland) and Switzer-
land have been working on the project together with the association of future
EETS Service providers AETIS since 2013. The project efforts are co-financed by
the European Union through the TEN-T agency.
Electronic Tolling in the European Union
I
47
48
I

While the true European interoperability remains
a challenge, the EasyGo+ interoperable model
is extending from Scandinavia to the Central
Europe
Several smaller interoperability efforts have been developed alongside EETS
for the past ten years. Majority of them is focused on technical interopera-
bility, while the contractual (procedural) interoperability remains still in the
background. Technical interoperability allows for use of one on board unit in
multiple states. The contractual interoperability, on the other hand, simplifies
contractual relationships.
Bilateral interoperability (as for example between Austria and Germany) con-
nects two countries, but the current focus is on multilateral interoperability
projects. EasyGo+ is the so far largest multilateral project born originally in
2007 in Scandinavia (Denmark, Sweden and Norway). It is also the only mul-
tilateral project supporting contractual interoperability among multiple coun-
tries. One service provider facilitates access to all participating tolling systems
and other services (such as ferries or bridges) and issues one invoice to the trans-
port companies.
EasyGo+ expanded from Scandinavia to Germany and Austria in November
2013. The AutoPASS and BroBizz on board units can now pay for tolls in Norway
and Austria, bridges in Sweden, Norway and Denmark as well as ferries mainly
between Denmark and neighbouring countries including Germany.
Ambitious French satellite based project
EcoTaxe is suspended and launch date is
currently not known
French plan to introduce a special ecological tax “EcoTaxe” has run into prob-
lems. The system presented for the first time in 2011 should have been launched
in 2013. However, no firm launch date was set until March 2014. EcoTaxe is the
first satellite based nationwide tolling project in one of the largest EU countries
since deployment of the German system. EcoTaxe even surpasses size of the
Toll Collect system in both key parameters—the network should encompass
15,000 km of national as well as local roads and all vehicles with a gross weight
above 3.5 tons will be liable to EcoTaxe payments.
Electronic Tolling in the European Union
I
49
Use of electronic technologies for tolling systems in Europe
Source: own analysis
GPS / GSM
LSVA
DSRC
data:
Public transport will be exempt from EcoTaxe. The actual tax rate will be
based on number of axles, emission class and weight of the vehicle. Trucks will
pay between 0.119 EUR/km for emission class Euro VI up to 0.196 EUR/km for
emission class Euro I.
50
I

Outlook for the
Close Future of Toll
Collection
Outlook for the Close Future
Outlook for the Close Future
I
51
1. The operations contract for the Czech
system expires by the end of 2016. Continuity
of the system operations has therefore become
a current topic in the Czech Republic. The
selection of the future system operator is
connected also to the intention to extend tolling
to national roads that has been discussed for
several years.
2. While the most atention is paid to the future
of the system beyond 2016, the burning issue
of 2014 is the decreasing revenue. Stabilization
of the revenue through tariff management
measures can be implemented immediately.
3. New infrastructure financing models based
on direct revenues from truck and passenger car
tolls are becoming common in Europe. Various
models of toll collection from passenger cars are
becoming a European topic as the discussion in
Germany intensifies.
52
I

Future of the Czech tolling system beyond 2016
is today’s most current national topic
When the current operations contract with the Kapsch consortium expires by
the end of 2016, the current microwave DSRC system covering highways, motor-
ways and selected sections of national roads will remain owned by the Czech
state. Following the December 2013 government decision, the existing system
will be upgraded to support EETS before 2016 in order to fulfil requirements of
the valid European Directives.
The current main topic surrounding the future of electronic tolling in the Czech
Republic is therefore very clear: the continuity of the toll collection in the Czech
Republic in the context of re-use of the existing valuable assets and current dis-
cussions on system extension to broader network of national roads.
European directives currently require tolling of non-highway roads in case the
highway network of the country has not been completed yet and national roads
replace the highways. The Czech Republic, as well as neighbouring Slovakia and
Poland used this possibility. The Czech Republic tolled almost 200 km of national
roads that replace (yet to be built) highways connecting important border cross-
ings and the existing highway network (e.g. I/33 from Hradec Králové to Poland,
I/52 to Austria). The second reason for national road tolling was prevention of
tolled road bypassing (e.g. I/48 that could almost perfectly replace highway D1
for drivers looking for an alternative to the tolled road).
The decisive parameter for economics of any toll extension to national roads
is the average income from one kilometre of such a road. Average revenues
in the Czech Republic are significantly lower on national roads than on high-
ways. Average revenue per kilometre of national road in 2013 amounted only for
EUR 65 ths, while the average kilometre of highway and motorway generated
EUR 259 ths revenue. Plans for extension the distance-based tolling model to
non-highway roads will, therefore, calculate with real traffic intensities on the
roads, not extrapolating current revenues. Rise of toll rates and increasingly
cheaper technology would be, on the other hand, the motivating factor for dis-
tance-based tolling.
Decision whether to maximize revenue, or use
the tolling system for traffic regulation is crucial
and can not be deferred further
As we have clearly shown in previous chapters, the tolling system can be op-
timized either for revenue maximization, or used to carry out regulatory poli-
cies. Despite of being strategically designed as revenue bearing, the regulatory
functions prevailed in the Czech system over the past few years. This fact is
well reflected by the decreasing revenues due to the low Euro V tariff and other
discounts.
The newly formed tolling strategy, that is to take shape in the next months, has
to come finally to a clear decision—what is the primary goal of the tolling sys-
tem in the Czech Republic? This key strategic decision paves way to answering
tactical questions such as extent of the tolled network or tariff structure based
on key financial, or regulatory performance indicators.
Should the revenue optimization prevails
in the Czech system, the revenue has to be
structurally stabilized
In case the main goal of the tolling system is not changed from financial to reg-
ulatory by a formal government decision (which would replace the original 2005
decision which is still valid), it is necessary to stabilize the tolling revenues as
soon as possible and fully restore the main financial task of the tolling system.
The stabilization is possible only by restructuring of the tariff table, reflecting
the growing share of Euro V vehicles. This measure has to stop the decline of the
average weighted toll rate we have been observing since 2013.
Tariff management should focus on prevention of similar situation as the one
we are experiencing now. Higher transparency and lower risk of unforeseea-
ble impact of ecological policies can be achieved through toll rate split into two
parts:
1. Fee covering the cost of the infrastructure limited by the Directive 1999/62/ES
amended by the Directive 2006/38/ES: the same fee for all vehicles, differentia-
tion only by the extent of the wear (weight, number of axles)
2. Internalization of external costs pursuant to the Directive 2011/76/ES: by the
level of air pollution (rate based on the Euro classification) and noise, taking into
account time of the day and location (interurban/suburban)
Outlook for the Close Future
I
53
54
I

The future tariff strategy should be able to quickly adapt on the changing en-
vironment (such as inflation, changes in infrastructure costs) as well as traffic
paterns and fleet composition.
If the traffic regulation by the system becomes
the main concern, new performance metrics
has to be defined
Should the decision be made to officially shif the system objective from financ-
ing to regulations, the current performance and cost indicators will not be ap-
plicable anymore. The cost/income ratio of operations (that reached 20.41% in
2013) can serve as an example—if the Euro V tariffs had been raised in the same
manner as tariffs for other emission classes, this ratio would fall to only 15.95%.
If the system revenues remain to be burdened by the impact of regulatory pol-
icies, the newly introduced performance indicators have to focus on success of
the regulations rather than on traditional revenue and cost metrics.
Passenger cars tolling is growing to a European
topic thanks to the intentions of new German
government
The second possible extension direction of the distance-based fee collection
model is passenger car tolling. Introduction of such a concept was discussed
in the Czech Republic as one of the options how to leverage the existing micro-
wave DSRC infrastructure on highways. Discussion of a similar electronic fee
collection concept has emerged even in Germany, country with a strong tradi-
tion of free highways. Fee collection for use of highways by foreign drivers be-
came even one of the hotest topics of the 2013 general election campaign.
Electronic systems can collect time based (creating an “electronic vignete”) as
well as distance-based fees. Both options bring beter control of payments and
less fraud. The distance-based model is also fair payment dependent on actual
use of road by individual drivers.
Outlook for the Close Future
I
55
56
I

The Tale of
Three Scenarios:
Future of the Czech
Toll Revenues
Revenue Scenarios
Revenue Scenarios
I
57
1. Future revenues and profits of the Czech
truck tolling system until the end of the current
operations contract by the end of 2016 largely
depend on tariff decisions for 2015 and 2016
that have to be taken in 2014. The basic scenario
built upon assumptions of moderate economic
growth and no changes in tariffs predicts the
total revenue for 10 years of system operation on
a level of almost EUR 3 bn.
2. Introduction of automatic tariff adjustments
by inflation would prevent decline of revenues
in real terms. However, a significant revenue
increase can be achieved only by tariff table
restructuring. The financially most important
measure is abolition of the excessive
Euro V discounts as this category of vehicles
has already overtaken the majority of traffic
performance and its share is still increasing.
3. The total revenue potential of the Czech
tolling system between 2007 and 2013 with
the current tariff policy, without the excessive
Euro V discounts, was EUR 2.11 bn. Due to the
discounts, the potential was filled only to 91%
with revenues of EUR 1.92 bn.
58
I

The future of the Czech tolling system is generally tied to the end of 2016, a mile-
stone that marks the end of the current operations contract with the Kapsch
consortium. The remaining two years (2015 and 2016) however remain available
for revenue optimization of the system that is suffering from decreasing reve-
nues. The following three scenarios demonstrate impact of several decisions on
the tolling revenues. All scenarios are built upon assumptions of a modest eco-
nomic growth (of 2–3% real GDP), inflation growth (2.6% in 2014 and 2.4% in 2015)
and growing share of the Euro V vehicles to 80% in December 2016.
Scenario number one: business as usual,
no changes
The first scenario is built upon preservation of the current tariff policy until
the end of 2016. Neither tariff changes, nor changes within the tariff table struc-
ture are taken. As the share of Euro V vehicles enjoying the heavily discounted
tariffs is rising, the revenues are almost flat. However, as the Euro V saturation
progresses, the indicators of revenue growth and distance travelled on the tolled
network start to converge. The 2013 situation of growing performance and de-
creasing revenues should not therefore repeat.
Despite the optimistic macroeconomic forecasts, the revenues in the basic
scenario do not exceed the threshold of CZK 10 bn (EUR 367 m) until 2016.
4,000
0
3,500
3,000
2,500
2,000
1,500
1,000
500
2016 2015 2014 2011 2010 2013 2009 2008 2007 2012
Lost Scenario
Scenario 3
Scenario 2
Scenario 1
+585
4,000
0
3,500
3,000
2,500
2,000
1,500
1,000
500
2016 2015 2014 2011 2010 2013 2009 2008 2007 2012
Lost Scenario
Scenario 3
Scenario 2
Scenario 1
+585
Cumulative toll revenue (in EUR millions) in scenarios since 2007 (real data are depicted til 2013,
forecasted ones from 2014)
Source: ESVZ ČR, own calculation
data:
Scenario number two: introduction of Inflation
adjustment of tariffs
The second scenario introduces inflation adjustment of tariffs starting on Jan-
uary 1
st
, 2015 (for all categories in the tariff table, adjustment by inflation rate
of the previous year). The inflation adjustment itself could generate EUR 27.7 m
additional revenue in 2015 and 2016 only.
Automatic inflation adjustment of tariffs (e.g. stipulated by law) would be
a very important factor in achieving stability of tariffs in real terms. Inspiration
can be drawn among others from Austria.
Scenario number three: return to the pre-2011
extent of ecological tariff differentiation
The third scenario assumes a significant tariff policy change on January 1
st
, 2015.
Apart from inflation adjustment introduction (same as in the second scenario),
the Euro V rates would be raised in the same extent as all other categories in 2011
and 2012—“twice by 25%”. The 2015 revenue therefore jumps by EUR 143.5 m to
EUR 497.3 m (instead of EUR 353.8 m).
The cumulative revenue of the third scenario in 2015 and 2016 is EUR 320.4 m
higher than in the basic scenario.
Revenue Scenarios
I
59
500
550
400
350
300
450
250
0
Evolution of toll revenue (in EUR millions) in scenarios since 2007 (real data
are depicted til 2013, forecasted ones from 2014)
Source: ESVZ ČR, own calculation
4,000
0
3,500
3,000
2,500
2,000
1,500
1,000
500
2016 2015 2014 2011 2010 2013 2009 2008 2007 2012
Lost Scenario
Scenario 3
Scenario 2
Scenario 1
+585
data:
60
I

The lost scenario
The last scenario is entirely hypothetical and models a situation without
Euro V discounts already since 2011. All tariffs (including the Euro V) would be
raised twice by 25% in 2011 and 2012. This state is then kept unchanged until the
end of 2016 (this scenario therefore does not work with inflation adjustments as
the scenarios #2 and #3 did). Revenues of this scenario grow faster since 2011 and
the yearly collection exceeds the threshold of CZK 10 bn (EUR 367 m) already in
2012. The 2014 collection in this scenario surpasses EUR 454 m (CZK 12 bn).
The cumulative ten-year revenue exceeds the basic scenario by EUR 585 m.
While the future economic development and toll revenues can only be predicted
with a high degree of uncertainty, one remains clear: the only significant source
of revenue growth is tariff structure adjustment.
Revenue Scenarios
I
61
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