Update on Germany's heavy (and light) vehicle charging systems

On 1 January 2005, Germany introduced the world's first full GNSS based road user charging system, applying only to trucks with a Gross Vehicle Weight (GVW) of 12 tonnes and above. Unlike the Swiss system (LSVA), which used GNSS technology to supplement the tachograph (primarily for verification and compliance purposes) as a means of measuring distance, the LKW-Maut (as the German system is called) uses an On Board Unit (OBU) with GNSS technology to map match to measure distance for chargeable purposes. A consortium known as Toll Collect won the PPP contract to finance, design, build and operate the system. 

From motorways to all highways

The system has expanded from the original network of around 12,500km of motorways by around 2,300km in recent years (mainly by adding segments of Federal highways that were used by trucks diverting from motorways to avoid charges), but will be expanded again on 1 July 2018 to ALL Federal highways. The charged network will then consist of over 40,000km of roads (see below)

Map of all Germany Federal Highways and Motorways

There are further discussions about expanding the scope of the system to include buses and coaches, and all vehicles with a GVW of at least 3.5 tonnes (which is the widely used definition of "heavy vehicles" in the European Union).   I expect that once the system has expanded to Federal Highways, there will be a need to further expand the chargeable network to include regional and local roads.

As part of the expansion to the whole Federal highway network, the process of charging trucks is to change.  At present, OBUs measure distance and calculate the charge applicable for the vehicle, then transmitting the charging data to the back office to bill the operator.  Charging rate table data is transmitted to each OBU as it is updated, so that all trip data is retained in the OBU.  All that is transmitted is data that a truck with a specific identity travelled X number of kilometres on charged highways over a set period of dates.   This is to change.  All trip data is to be transmitted to the back office, with the calculation of charges undertaken centrally, rather than on each OBU.

It is explained as follows by Toll Collect:

This is necessary because the very large route network will give rise to changes much more frequently in the future, especially on the federal trunk road – e.g. construction sites or traffic blockades. Therefore, route information that determines the toll calculations must be adjusted much quicker than before.

In other words, with some routes likely to be closed at some times (and trucks diverted onto alternative, longer routes), it will be easier to apply exceptions to the current system by calculating charges centrally, than by applying such temporary changes through updates to over 1.1 million vehicle OBUs. 

In the early days of discussions about GNSS OBU technology, options were discussed as to whether OBUs would be a "thick" client or a "thin" client.

A thick client would have all processing undertaken in the OBU, which would then only transmit the calculated charge data to the back office for billing purposes.  There are advantages in reducing communications costs, higher protection of privacy (due to a lack of trip data being transmitted) and reducing the risk of the system not being functional due to breakdown of the centralised system (as OBUs could record trips and store charging data until the back office is ready to receive it).  However, the main disadvantage is the need for updates of charging table and maps needing to be transmitted to all OBUs, which risks updates not being made in a timely manner or not being able to be made swiftly in the event of the need for changes due to roadworks or accidents.

A thin client simply measures the chargeable events and transmits that data to the back office, which collects the data and uses the trip information against maps with charge rates to calculate the charges for each OBU.  The advantages are that the OBU can be less complex and cheaper, with it being much easier to amend change maps and rates for charging, including discounts and exemptions by location and time of day.  Unsurprisingly, the key disadvantage is the need for regular communication of charging data and that transmission of such data may be seen as tracking movements of vehicles.

Alongside this change, new enforcement infrastructure is to be installed on Federal highways.  600 poles will be installed with enforcement equipment (four metres high) to classify vehicles, read number plates and check that vehicles subject to the charge have operating OBUs (or prepaid trip passes).

Use of revenues

The net revenues from the system were originally used to fund maintenance on the motorway network and also contribute towards railway and inland waterway infrastructure improvements, but this was changed in 2011 to be fully hypothecated for Federal motorways and highways. €4.63b in gross revenue was raised from the system in 2016, with an estimate €4.66b in 2017.  About €1.45b is spent on managing and operating the system, and "harmonisation measures", and another €150m is diverted to the Federal Ministry of Finance to makeup for a "shortfall in vehicle tax revenue".  That leaves €3.2b net revenue for expenditure on the Federal motorways and highways per annum.  All net revenues are spent by a dedicated agency, VIFG (Verkehrsinfrastrukturfinanzierungsgesellschaft).  VIFG - the transport infrastructure finance company - is a Federal Government owned company which was set up to implement the heavy vehicle charge and to use the funds collected, as well as manage public-private partnerships.  It now has the function of managing the payment transactions for all expenditure on the construction, maintenance and operation of all Federal highways (and motorways) since 2016.  A total of €7.7b was spent on Germany Federal highways in 2017, so the LKW-Maut contributed to just over 40% of that spending.

€5b in revenue is estimated to be collected in 2018, but expected to reach just under €8b by 2022, due to the expansion of the charged network and growth in freight traffic.

The current tariff rates are shown here.

Change of operator and temporary nationalisation

The Federal Government is also to nationalise the encumbent operator (Toll Collect) of the country's heavy vehicle charging system (LKW-Maut) in order to resolve a 12 year old dispute as the single supplier PPP contract ends in August 2018. The Federal Government has been seeking compensation for lost revenues (worth €7 billion) due to delays in the system commencing, and has been in arbitration since 2006. Furthermore, there are concerns that as Toll Collect is the sole provider of accounts in Germany (with 1.1 million vehicles with registered accounts), that any transfer to a replacement operator could be complex if Toll Collect is not selected for the next contract.  The plan is that on 1 September (the day after the contract expires), the Toll Collect LKW-Maut business will be nationalised, and will then be transferred to the new contractor in due course.

Tenders were called for a new operator from that date with four consortia shortlisted:

• Autostrade, which had won the bid for the cancelled French Ecotaxe system (which would have charged trucks on the national state highway network which competes with France's extensive network of private/commercial toll motorways)

• Skytoll. Operator of Slovakia’s GNSS heavy vehicle charging system.

• Toll Collect (T-Systems, Daimler), the encumbent operator (as a new operator).

• IBM/Continental/Abertis, a new consortium.

Whatever operator is selected should expect to share the market in Germany with new European Electronic Toll Service (EETS) operators.

Further expansion and charges for light vehicles

The German Federal Government is also examining expanding the scope of the charge to include buses and coaches, and all vehicles down to 3.5 tonne GVW. 

In parallel, Germany is developing the PKW-Maut, a time based charge for car use of ALL public roads. It has yet to be implemented due to legal challenges (including concerns from neighbouring countries about discrimination), but when implemented will apply a prepaid charge for access to those roads. Vehicle owners will be required to purchase one year, two months or 10 days of access. Prices will be dependent on a vehicle's emissions rating, ranging from €2.50 for 10 days to €130 for one year.  In parallel with its implementation, the Federal Government plans to reduce annual registration fees by approximately the same proportion.   I wrote extensively about the proposal two years ago.    It now appears this system is to be delayed until 2020 according to Berliner Morganpost (German) having previously been promised for 2019.  The light vehicle charge (known as the "car toll") is expected to raise €481m in revenue in 2020 (almost entirely from foreign users, given German car owners are expected to receive offsetting reductions in ownership based taxes).

Germany's proposed introduction of road user charging for cars

Germany has had a distance-based road pricing scheme for heavy goods vehicles 12 tonne and over since 2005, initially for the autobahns, which has been expanded in scope to include vehicles down to 7.5 tonnes since 1 October 2015 and increasingly Federal highways (not just motorways).  Indeed, from 2018 all Federal Highways will be subject to the charge (known as LKW-Maut).  I've written more about the expansion here.  In time I'd expect the charge to cover all heavy vehicles down to 3.5 tonnes, as the logical next step.  Indeed, Federal Finance Minister,  Wolfgang Schäuble, has said that over time there will be road pricing on all public roads for all vehicles.  

Map of Federal Highways to be subject to heavy vehicle charge

A more controversial development has been the plan to expand charging to include light vehicles (up to 3.5 tonnes).   It was originally to come into force on 1 January 2016, but has been deferred because the European Commission (EC) believes it is illegal and there is some political controversy about it in Germany.  It is unclear when the car vignette (known as PKW-Maut) will be introduced.

German car vignette

The proposal is to introduce a time based charge, known throughout Europe as a vignette which is based on pre-purchasing access to the road network for a set number of days.  As it stands now, the proposal is as follows:

- All German licensed cars will be required to purchase a one-year vignette to use any public roads.  The rate be determined on environmental factors described as "will be calculated based on their engine capacity and environmental performance. For every 100 ccm increment of cylinder capacity up to a defined cap of 130 euros"

- All foreign licensed cars will choose from either a one-year, two-month or ten-day vignette only required to use the motorways.  Depending on the environmental category of the vehicle it ranges from €16 to €30 for a two-month vignette, or €5 to €15 for a ten-day vignette.

The days for a vignette are consecutive.  A one-day trip on the motorways requires a ten-day vignette, and it is valid for ten consecutive days, not ten separate one-day trips on different months.  

Vignettes will be fully electronic, meaning they are enforced by automatic number plate recognition. They will be able to be purchased online, or in registered retail outlets (filling stations).  

Gross annual revenue is estimated at €3.9 billion (in today's values presumably), comprising €3.2 billion from German drivers and €700 million from foreign ones.  Operating costs are estimated at €200 million per annum.  However, the countervailing reduction in the domestic vehicle tax will reduce revenue by over €2 billion per annum.   The estimated first year net revenue is €500 million, but this is expected to increase rapidly 

All revenue raised from the vignette will be hypothecated into the same transport fund as the heavy vehicle LKW Maut goes into, which is unlike existing motoring taxes.    The table below depicts the range of vignette prices. 

Level	Price of annual vignette		Price 10 days	Price 2 months
	From	To
1	-	39	€5	€16
2	40	69	€10	€22
3	70	130	€15	€30

EC objections

The EC launched an infringement case against Germany (it said it would launch a similar one on the UK for its HGV Levy, but the Brexit vote has effectively stalled this).  The two reasons it regards Germany as infringing the EU Treaty are:

- German drivers effectively will not pay as they receive a commensurate discount in vehicle tax;

- The vignette prices for short term visitors are seen as being disproportionately high.

The German Government is convinced its proposal is legal and personally I do not agree with the first point.  Vehicle tax is a national matter and it is up to Member States as to the level they set it at.  If they want to shift taxation from owning a vehicle to operating it, then it is up to them.  The mandatory one-year vignette for German vehicles using all roads, may be seen as making the vignette different, but this is discriminatory in favour of foreign motorists.  Foreign motorists don't pay when using roads other than motorways, but Germans do.  It would be much more equitable to apply the vignette for Germans to motorways only, but I suspect this would result in significant traffic diversion.  Otherwise, the vignette for foreigners could be applied to all roads, although the EU may still regard this as "disproportionate".  No Member State applies vignettes to all roads, but that is not in itself a reason why they should not be so applied (particularly as, for light vehicles, the marginal costs of their use of motorways is lower than that for local roads, and negligible in any case).  

In short, as long as the same price applies to foreign as to German vehicles, for the vignette, then what is done with other taxes appears to me to be a national matter.  

On the relative prices,  the issue is more subtle.  A vignette, as a daily charge to use the network, seeks to recover costs that should be something akin to usage.  That doesn't mean that a rate for a year should be 36.5x the price for 10 days (or vice-versa), bearing in mind that a short-term user is likely, on average, use the roads much more in terms of time and distance than a long-term user.  Short term users may transit the entire country, or visit it to many places, long-term users may spend days without using their cars.  

I will just point to this report of which I was one of the authors.  The methodology we used to compare the prices of short and long term vignettes was to establish the average daily price and the ratio in daily price between the shortest and longest period products.  

This extract from the report outlines the findings (for prices in 2011):

EU vignette price ratios between longest and shortest term products

As you can see, at the time Slovenia charged by far the highest price for a short term product compared to a long term one, probably because it knew it could charge high prices for what is a two hour drive between Croatia and Italy or Austria.  Austria, by contrast, had the lowest ratio.  What about Germany?  

Applying the same methodology, to the middle environmental category, the ratio per day is:

€0.15 per day for an annual vignette in the mid-range of "Level 2".

€1 per day for a ten day vignette in Level 2.  So the ratio between the long and short term product is 6.7, putting it much closer to the high charge countries than the lower charge ones.

Bear in mind since that report, following representations from the European Commission, Slovenia has altered its vignette rates by increasing its annual charge, so it now charges:

€0.30 per day for an annual vignette for cars;

€2.14 per day for a one-week vignette for cars, with a ratio now of 7.1

It seems difficult for Germany to justify charging cars over 6x as much for a short term vignette than a long-term vignette, as this presumes the average distance or time spent on the network is 6x greater for a 10-day vignette user than an annual user.   There may be statistics to justify this from the BMVI (Federal Ministry of Transport and Digital Infrastructure), but I have not seen them.  I would suggest the Austrian and Hungarian ratios of 3-4x are more realistic.

Where to from here?

I suspect that whatever the findings of the infringement action against Germany, it will continue with the charge, if only because it is unlikely that any fines will significantly offset the €500 million net revenue it will receive.

However, for Germany the vignette should be an interim measure.  It makes some revenue from foreign cars, which is what it is designed to do, but it isn't much of a reform in terms of changing behaviour or in encouraging the more efficient management of roads.

As it expands the LKW Maut in 2018 to Federal Highways, the case for expanding the scope for all vehicles down to 3.5 tonnes must be high, given that neighbours Belgium, Switzerland, Austria, the Czech Republic and Poland all have heavy vehicle road user charging systems that apply to such vehicles.

For light vehicles, it could do with observing the pilots underway in Oregon and California, and looking at move from vignettes to distance charging, even if it is as simple as odometer reporting. Furthermore, it should do so not simply to rebalance charges from taxes on owning vehicles (which are regressive) but also from fuel taxes which are inevitably eroding in yield and fairness, due to the appearance of more fuel efficient and electric vehicles.  Such a shift would apply primarily to Germans, but could mean Germany charging much lower fuel prices than its neighbours (down closer to the EU legal minimum fuel tax rate), and for all road use to be charged by distance and vehicle size, emissions rating.   Foreign vehicles could simply be required to have distance charging accounts and have distance measured whilst in Germany (and have it apply to all roads at the same rate, unless users want to pay according to road type - with higher charges for local roads, lower for Federal Highways and the least for motorways).  

Those that do not pay by distance, would not be able to receive fuel tax refunds.

Of course there are a number of complications and issues around doing this, but the platform already exists to do this.  Moving the LKW-Maut down to 3.5 tonne vehicles has to be the first step, but the case for distance charging of cars exists now and Germany would be well placed to look at how it could progress this, to replace the vignette it is about to introduce.

Germany expands road pricing: Part 2 light vehicle vignettes

As I reported around a week ago, Germany is taking two significant steps forward in expanding charging of road vehicles, on both motorways and major federal highways.   I wrote previously about the changes to the truck toll system, this article is not as long as much less detail is available, but this time it focuses on the introduction of a new time-based charge for light vehicles, otherwise known as a vignette that will

 predominantly apply to cars.   The term for that in German is PKW-Maut (effectively "passenger car toll").  However, it is not a toll, either in conventional parlance nor under European law (which counts it as a "road user charge" although it applies regardless of how frequently you use the charged road during the period of te vignette).

What vehicles?

Germany expands road pricing: Part 1 distance based truck tolling

As I reported around a week ago, Germany is taking two significant steps forward in expanding charging of road vehicles, on both motorways and major federal highways.  

1.  Expansion of scope of the LKW Maut truck toll to cover trucks from 7.5-12 tonnes, and to toll over 1,000km more of previously untolled Federal Highways.

2. Introduction of a vignette (pre-paid time based charge) for light vehicles across the autobahn network

It follows from nearly 10 years of operation of the ground-breaking, and initially fraught ridden LKW Maut truck toll system.  This is the first of a two part post about the major changes happening to road charging in Germany, and covers the expansion of the scope of the existing truck toll system.

Terminology in this sector is often troublesome, so let me very clear about the dimensions of the LKW Maut.

Significant steps forward in New York, Finland, Germany and Australia

I've been busy, and meanwhile lots has been going on in the world of road pricing.  All of which I will giving more attention in the coming week or so.

They are:
- New push for tolling reform in New York that if implemented, would effectively be a congestion pricing scheme for the city that benefits residents of outer suburbs;
- A Ministry of Transport and Communications Working Group in Finland has recommended that the country move away from ownership based taxes to a "kilometre based" tax system;
- Germany is expanding the scope of its distance based truck toll and will introduce a private car vignette from 2016;
- Infrastructure Partnerships Australia, a lobby group advocating reform of infrastructure policy, has published a discussion paper, notably with several major Australian motoring associations, advocating fundamental reform of road transport taxation and charging, with a strong push to shift away from ownership and fuel taxes, to direct road pricing.

Germany's car vignette: the problem is making it tax neutral for Germans

Nearly a year ago I wrote that Germany is considering introducing a vignette system for private cars using its motorways, primarily as a way of raising money from foreign motorists.

Now EurActiv reports that the newly agreed "grand" coalition government in Germany, between the centre-right CDU/CSU of Angela Merkel and the centre-left SPD, includes agreement to proceed with such a system.

For those unfamiliar with the vignette systems of Europe, the concept is relatively simple.  It involves prepaying for access to a highway network (typically all or most of the motorways of the country), and the pre-purchase can cover set periods that can range from 1 day to 1 year, with most systems offering three products (something between 4 and 10 days, another for 1 or 2 months and another for a year).   Traditionally, vignette systems have required vehicles to display a sticker on the windscreen proving payment has been made, but more recently systems in Hungary and Romania are electronic.  All that is needed is for the relevant authority to have a record of payment associated with a number plate, so that those without vignettes can be targeted and stopped by Police.

The decision to introduce vignettes for cars is driven by politics, as German motorists know only too well that if they drive into three of the countries that border Germany they face vignettes (Switzerland, Austria and the Czech Republic, with a fourth coming with Belgium), whilst in France they will pay tolls on the extensive tolled motorway network.  Beyond that, other countries in eastern Europe have vignettes, whilst those in southern Europe have extensive toll roads.   Whilst motorists from many countries drive through Germany, with the perception that they don't pay.

German autobahn network

Doesn't Germany already charge foreign vehicles?

Now it is well known that for trucks 12 tonnes and over, there is the LKW-Maut distance based truck tolling system, which recovers infrastructure costs from those vehicles.  For cars there is nothing (beyond a handful of toll roads), except of course, fuel taxation.  Whilst it is possible to drive across Germany without buying fuel, it is far less likely than driving across Slovenia.  However, it is commonplace in Europe to treat the taxation of motor fuels as not being in any way a tax on road transport, even though it is, in effect, so. The preference is to treat this as just another tax (even though it is levied exclusively on one source of energy, used primarily for one purpose).  

In Germany, petrol is taxed (as of July 2013) at up to €0.6698 per litre (less for lower sulphur content) and diesel at  €0.4857 per litre, none of which is hypothecated for transport spending.   Of course, the amount of fuel tax paid when using German roads will be dependent not only on the amount of driving on German roads, but how much a motorists fill their fuel tanks before and after a trip, making fuel tax a poor proxy for payment for road use (although it certainly is a tax collected because of road use).

Avoiding discrimination

The EU Treaty makes it clear that EU Member States should not discriminate against citizens from other EU Member States.  That means that any vignette in Germany must apply to cars registered in Germany as well as other countries.  Of course, on the face of it, that means an increase in taxation for Germans, which is not exactly what politicians are seeking.   So proposals so far have included the concept of a "discount" for German motorists.

Now the issue becomes rather subtle here, as EurActiv reports Siim Kallas, "the EU commissioner for transportation, has rejected new plans for tax rebates in Germany" in that German motorists cannot be exempt from the vignette nor can they get a rebate for it.

Yet other forms of taxation would appear to be able to be reduced.  Motor Vehicle Tax (a tax on ownership) could be reduced proportionately, so that most Germans do not pay more in tax.  Yet with one politician saying that he wants to raise something like  €800 million rather than  €100 million a year from the vignette, it seems unlikely that this could be possible, alongside reducing other taxes.   The Green Party seems to support introducing a vignette, but without any cut in other taxes (matching its antipathy towards private motoring).

What should Germany do?

If a vignette was introduced, similar to Austria, the key issue remains as to how to deal with other taxes.

Austrian car vignette

News briefs - Australia, Germany, UK

Australia - Transurban CEO calls for network road pricing and hangs onto Pocahontas 895

AAP reports that Transurban CEO, Lindsay Maxsted, told the company AGM last year that 

"The time is quickly coming where we must face concepts such as distance-based tolls, peak-hour pricing or demand pricing... We must utilise our existing networks better."

The Sydney Morning Herald reported him saying:

the states could not ''build our way out of congestion forever'' and needed to look at different pricing models for roadways.

He said that there could also be off peak discounts, but existing concessions meant Transurban could only charge one price all day long.  He insisted Transurban was not motivated to renegotiate these, but that future concessions should include the flexibility for peak and off peak pricing.

This is a welcome step, and besides being obvious, it demonstrates that private road owners are incentivised by the market to increase yields at peak times, and utilisation off peak, which would benefit them and off peak users (and peak users if congestion is avoided).  

However, New South Wales Minister for Roads, Duncan Gay, responded saying there wouldn't be a "congestion tax" or "time of day tolling", which frankly is a missed opportunity.  Curiously an online poll on the Sydney Morning Herald website suggested 42% would support higher peak time tolls.  A figure which astonishes me, as I wouldn't expect people to support this without expecting more reliable trips or reductions in off peak tolls.

On the beleagured Pocahontas 895 toll road he said Transurban will hang onto the asset, but seek to renegotiate with its lenders:

"That's the most likely outcome: a full reconstruction with those lenders, and we may well be the ongoing owners of that asset," he said  "The fact is that because of the poor performance of the asset, there's not a lot of people out there that run the asset, and in terms of our expertise, we're still probably the logical owner of it but not at the price paid those many years ago."

Germany - attitudes to urban congestion charging

I already reported on how some German states have been considering urban congestion charging as a revenue raising proposition.  An article in The Local points out some more details of what was being considered and responses to it:

- It talks of a single charge of EURO 6.10 per day (US$7.85);
- Green Party says it is "badly needed" to pay to maintain and modernise transport infrastructure;
- Federal commissioner for tourism Ernst Hinsken, of the conservative Christian Social Union (part of the ruling Federal coalition), warned against "defrauding commuters and tourists" arguing it would unfairly punish commuters facing increasing fuel prices;
- HDE, a retail business association, claimed it would make downtown city centres less attractive, by penalising those who visit them for shopping.

Still a fair way to go in Germany before this goes further.

UK - Local transport chief calls for nationalisation of private toll road

According to the Birmingham Mail, Centro (the public body responsible for planning and contracting public transport services in the West Midlands) Chief Executive Geoff Inskip has called for the UK Government to nationalise the M6 toll road.  He said it was "madness" that the parallel untolled publicly owned M6 is "choc a bloc" with congestion, but that high prices on the toll road meant it was underutilised.  Midland Expressway (the company that owns the road) responded by saying it had a "long term view" of the investment.

Germany considering congestion charges and vignettes, to raise money

Background

In the road pricing world, Germany is best known for one system - the LKW-Maut truck toll which charges all trucks 12 tonnes and above according to distance travelled on all motorways and some secondary highways.  It was the first such system ever to use GPS technology as the primary measurement of distance as the chargeable event (distance charging existed elsewhere, but used other technologies).   That toll is now being extended to a far wider network of highways as follows:

• for which the Federal Government is responsible in terms of construction and maintenance,
• that do not pass through built-up areas,
• having two or more lanes in each direction,
• whose carriageways for the two directions of traffic are separated on their entire length by central reservations or any other structures,
• that are at least 4 kilometres long and
• that are directly linked to a federal motorway.

Beyond that, there are a small handful of toll roads, but for private vehicles, the charge almost all face is simply fuel tax and motor tax (an annual ownership tax).

No German city has congestion charging.

Congestion charging?

According to the German international broadcaster Deutsche Welle, 16 state transport Ministers who met in October 2012 have decided to "investigate the options for municipalities to introduce congestion charges."

However, the report quotes one Minister as saying that cities need to find new sources of revenue, indicating that what they really want is a tax, that delivers other positive outcomes.  

The German automotive lobby is known to be adamantly opposed to tolling, to the point that there are very few toll roads in Germany for cars (the LKW-Maut truck toll system is a different matter).   Ulrich Klaus Becker, vice-president of the German automobile club ADAC was opposed on the grounds that it just added costs to motorists.

The report then makes a very blunt claim that such charges could have a negative economic impact:

Economy experts also warn of how a congestion charge could negatively affect commerce, pointing out that German drivers already pay a total of more than 53 million euros in motor vehicle taxes, petroleum taxes and other dues. Herbert Schulte, of the German Association for Small and Medium-sized Businesses, blames the lack of money for road construction on a poor distribution of funds.

There can always be a sound argument about the existing uses of taxation, although the "million" in that report is actually a "billion".  None of the fuel taxation in Germany is hypothecated for transport spending, but there is a better argument that can be made, about whether it would be better to replace some existing taxes with forms of road pricing.

The report continues to say that the mayor of Tübingen, in the southern state of Baden-Württemberg, Boris Palmer, wants a one euro charge to enter the inner city, although it quotes "traffic expert Michael Schreckenberg" who believes it wouldn't generate that much money.

Renowned expert, Andreas Kossak, who runs his own business AK Research and Consultancy, was an advisor to the commission and says that the work that has been done has been primarily about congestion charging for traffic management and environmental protection purposes, with revenue being secondary, and that German news reports seem to have distorted this.  

Germany already has low emission zones

German cities have introduced limited access zones in some cities, basically being low emission zones that restrict vehicle movement for environmental reasons.  They are endorsed at the Federal level and so effectively provide some traffic control, but only raise some revenue from fines, which essentially means they are self funding.   48 cities/city-regions have implemented such zones (a list in German is here).  As an example, the one in Berlin is described on this site  (English here). A leaflet for foreign tourists in English also explains what users need to know.  It applies to both German and foreign registered vehicles.

Berlin Low Emission Zone

Only vehicles with a Euro 4 (or retrofitted Euro 3) rating are permitted to be driven in the low emission zone.  It is enforced by requiring all vehicles to have a sticker that depicts the emissions rating of the vehicle.  The sticker is applicable across Germany, but issued locally and available online.  Foreign registered vehicles in the category below that are also allowed (Euro 3 or retrofitted Euro 2) until the end of 2014.  A fine of 40 Euros is issued to any vehicle found to have entered the zone without the correct sticker.  It applies to both cars and commercial vehicles, including all trucks.  Coaches are also included, although there is an exemption for Euro 3 vehicles that get a certificate that they cannot be retrofitted technically.

There are exemptions for cars with passes for the severely disabled, specified vintage vehicles, mobile equipment and machinery, motorcycles and three-wheeled vehicles, emergency vehicles, military vehicles and refuse collection vehicles (and a handful of other minor categories).   The zones apply 24/7, that means there is no period at all during which higher emission vehicles are permitted to operate

It covers an area of 88 square kms, bounded by the orbital suburban rail line in the city.  Reports of its success indicate particulates have dropped by more than 50% and nitrogen oxide emissions by 20%. 

With so many of these in place, it wouldn't be technically too difficult to convert many into congestion charging zones, although sticker based enforcement (in the case of Berlin) is not exactly what is needed.  However, any such charges should be based on targeting congestion where it is at its worst, rather than adopting a simple scheme option because it is easy to implement.

Baden-Württemberg's transport minister Winfried Hermann (Greens) is in favour of it, according to one report.

Vignettes

While debate continues at the state and city level, the Federal German Transport Minister Peter Ramsauer (CSU), is advocating a vignette for cars to use the motorways and major highways.  This would correspond to the LKW Maut truck toll that charges by distance on such roads for vehicles over 12 tonnes.  Austria has a similar pairing of charging for its motorways, with distance charging for vehicles over 3.5 tonnes, and a vignette for those below that.  Belgium is looking to introduce a vignette for light vehicles, and Hungary, the Czech Republic, Slovakia, Bulgaria, Romania and Slovenia all have a vignette.

The vignette is essentially a pre-paid access charge to use a network of roads.  A motorist can typically buy three products. An annual charge, a monthly charge or one for a period ranging from 4 days to 2 weeks, depending on the country.  For German residents, they would need to decide if they use the motorways sufficiently to buy an annual charge or not.  Foreigners would also have to purchase such a vignette.  Given that Germany has considerable numbers (although proportionately not high relative to domestic traffic) of foreign registered cars using its roads, in theory it could recover tens of millions of Euros of revenue from foreign vehicles - it could correspondingly reduce vehicle ownership taxes, so that German citizens did not have to pay more.  The argument being that German citizens face vignettes in many other European countries (or tolls), but those residents don't face such charges in Germany.

Given that Germany faces Federal elections this year, it appears that the CSU is continuing to advocate a vignette, with offsetting tax cuts, the CDU is willing to consider it, but the FDP is opposed.  I suspect any decisions regarding vignettes will not be made until after the election.

Conclusion

It is clear that the big undercurrent in Germany regarding charges is about revenue.  Congestion charges could deliver that, but be unpopular particularly if motorists see them being driven about money, not managing congestion.  Vignettes could deliver some as well, but are unlikely to be accepted by many unless they get a corresponding cut in other taxes.  It would also have to be designed in a way that ensured that motorists who chose not to buy the vignette did not congest roads that were not subject to it.  Germany is adept at doing this with the LKW-Maut now (having added non-motorway, highways to the charged network purely for this purpose).

Standing back from this, there needs to be a consideration at Federal and State levels as to what they want their highway networks to deliver.  This means being strategic about future investment (including taking cold economic decisions about what improvements are worth proceeding with), about adopting best practice asset management systems to optimise expenditure on maintenance, and then what revenue is needed to pay for it, and from what road users.  The LKW-Maut is an excellent starting point, as are the low emission zones, which appear to have delivered on what they have promised.  However, the discussion is now moving towards wider reforms.  In that field, replacing part of vehicle ownership taxes with a vignette may be a useful step forward, but a bigger step would be intelligent discussion about the future of fuel taxes.  

At the political level, I'd encourage cities and states to pursue their own solutions, but Federally the new Federal Government should be bold in terms of setting a strategy for better charging of roads.   That should have economic, revenue and environmental dimensions to it, and not be afraid to talk about the options that get instant opposition - by talking about tax reform, not new charges.

Macquarie Atlas Roads revenue up in June 2012 quarter

The Herald Sun of Melbourne reports that toll road concessionaire Macquarie Atlas Roads has stated that toll revenue across its investments increased 1% in the latest quarter, despite a weighted average toll volume reduction by 1.7%.  The headline results are reported by MAR as follows:

• In 6 months to 30 June 2012, weighted average toll revenue is up 0.9% compared to the same period the previous year.
• Autoroutes Paris-Rhin-Rhone (France) has seen a 0.5% reduction in revenue in the past 6 months compared to the previous, reflecting a 5.2% reduction in heavy vehicle traffic and 2% reduction in light traffic.  This was put down to the weak economy, reduction in workdays (negative for trucks, but the positive effect on cars was offset by poor weather) and high fuel prices.
• Dulles Greenway (DC) has seen a 8.3% increase in revenue in the past 6 months compared to the previous, with a 0.3% increase in total trips.  Revenue increased due to an average 8% increase in pricing on 1 January 2012 approved by the Virginia State Corporation Commission, indicating very low demand elasticity relative to pricing.
• M6 Toll (UK) has seen a 3.1% increase in revenue in the past 6 months compared to the previous, with a 0.6% increase in trips (although this involves a 1.8% increase in workday trips, but 3% reduction on weekends and public holidays).  The proportion of cash transactions (indicating more occasional users) increased by 1.7% of all transactions.  Revenue increased due to changes in pricing on 1 March 2012 and increased demand.
• Chicago Skyway (IL) has seen a 4.9% increase in revenue in the past 6 months compared to the previous, with a 1.1% increase in trips (comprising a 2.6% increase on workdays but a 1.6% decrease on weekends/public holidays).   Revenue and trip increases were driven by a 18.9% increase in heavy vehicle volumes, offsetting the 0.9% decrease in light traffic.
• Indiana Toll Road has seen a 7.7% increase in revenue in the past 6 months compared to the previous.  Traffic was up 2.6%.  Most notable is an 18.7% increase in heavy vehicle traffic paying using manual collection rather than account based transactions, this compares with only a 2.2% increase in traffic for all light vehicles, and heavy vehicles with accounts.  Toll rates were revised in 1 July 2011 which also contributed to higher revenues.
• Warnow Tunnel (Germany) saw a 7.1% decrease in revenue in the past 6 months compared to the previous.  This followed a 12.2% decrease in total trips.  The primary reason is that roadworks on the “competing” untolled route ceased in October 2011, resulting in a diversion back to the no longer disrupted untolled option.  Toll rate increases on 1 November 2011 and 1 May 2012 partly offset this reduction in demand, although it would not be surprising if the November 2011 increase induced a greater shift in demand as the tolled route was seen as even less competitive on price and travel time.