Saturday 8 November 2014

France's nationwide truck toll on hold indefinitely

Back in July, I noted that the long awaited Ecotax, heavy vehicle road charging system for France, was on hold, because of politics.

A new plan was developed to only toll 4000km of roads, not the 15000km originally envisaged, with the emphasis being on only charging motorways and major highways with parallel tolled motorways, and also on handing a political gift to Brittany, where opposition to the toll was greatest.

The problem in Brittany was that the French Government's efforts to convince people, or more specifically, truck owners and operators, that paying by distance is fair, didn't wash with those in far off parts of France.  They figured the toll was "unfair" because they "had" to use longer stretches of road.  Quite why others should pay for them to have roads they use because of where they choose to locate themselves wasn't clear, but then France has multiple layers of accretive subsidies, and anyone who dares challenge this simply meets protest.

In July, it was envisaged that the toll system would start operation on 1 February 2015, but not any more.  

According to The Local,  the toll has been shelved, indefinitely.  It appears that the deep unpopularity of the Socialist Francois Hollande government has put pressure on this project, which ironically had been approved under the Sarkozy government. 

Ecology Minister (and former leader of the Socialist Party) Ségoléne Royal announced the government would not be introducing the tax.  The rightwing opposition said it showed that there was "no government" because of constant "zigzagging".  The EELV (green) party said the decision was "disastrous" showed "lack of courage", claiming it would cost the government 450 million in lost net revenues per year (it is closer to 550 million).  

Reasons given for the suspension were:

- Difficulties of implementation (which is simple nonsense, as it was never an issue technically, rather politically);
- Concerns about costing jobs in the haulage industry.

The government instead decided to tax more heavily the multiple companies that own France's privatised toll motorway system, although it is not clear how this also wont cost jobs in the haulage industry, or it simply will mean more traffic on the untolled government owned roads as tolls increase.

The consortium contracted to implement the system will now seek many millions of Euros in compensation for the termination of contract.

What could have been done?

I'm tempted to think that rather than scrap the scheme, efforts could have been made to reduce other taxes on the haulage sector in exchange for the Ecotax.  Reducing taxes on licensing/registration of liable vehicles would have helped, and be more efficient transferring such costs from the ownership of a vehicle to usage.  However, a more complex option would have been to offer a refund mechanism that included refunding part of the diesel tax.  This would have had to be done to generate some revenue to make it worthwhile, but at least by cutting other taxes there would be a chance to gain some consent for the project.

Unfortunately, it looked like a chance to just increase taxes on one sector, without little publicity about the roads that would get fixed by the project.  Quite simply, there needed to a proposition to road users to support it (bear in mind it was only for trucks), making it just a new charge with little in return is not going to be popular.

It's a shame, because France does have a problem of heavy use of untolled motorways, but the right solution needs to be about striking a deal with those paying, that the money generated goes into the networks being tolled and that another tax is cut in return.

Unfortunately, that isn't going to happen.