Preliminary Results On Current Practice
Maurits van der Hoofd
Urs Springer
Miguel Carmona
Stefan Suter
Eduardo Pires
Paavo Moilanen
Brussels, 9 June 2004
1
Maurits van der Hoofd
PT
Review of current practice and classification of
pricing and revenue allocation schemes
Objectives
• Dimensions and criteria for the description of pricing and revenue
allocation schemes
• Pricing and revenue allocation schemes digest
• To what extent are current practices conistent with theory?
Brussels, 9 June 2004
2
Maurits van der Hoofd
PT
Fact sheets: scope
• DoW: “This task will review and identify the ways in which
revenues are collected and assigned across Europe”
• “to make a general survey of current practices of revenue use in
the EU”
• Awaiting input from Work Package 2
Therefore: focus lies on pricing schemes for now
The results are preliminary as the investigation is still continuing.
Countries described are EU15 minus Luxembourg plus Switzerland.
Brussels, 9 June 2004
3
Maurits van der Hoofd
PT
Modes considered
Pricing schemes were investigated for the following modes:
•
•
•
•
•
•
Road – especially motorways
Rail – infrastructure charges
Urban PT – bus, tram and metro
Air – landing charges and other purely aeronautical charges
Inland waterways
Maritime – port dues
Brussels, 9 June 2004
4
Maurits van der Hoofd
PT
Aspects considered
• Pricing schemes
• Earmarking of funds
Revenue allocation schemes (to be developed):
• Design and allocation rules
• Forms of co-operation between the public and private sector
• Role of the institutions in the decision-making process
Brussels, 9 June 2004
5
Maurits van der Hoofd
PT
Design
Transport pricing
Pricing principle
General approach
Pricing instrument
Earmarking of
revenues for
transport sector
No earmarking
of revenues for
transport sector
Design, rule
Reasoning
Revenue allocation scheme
Uni-modal
Multi-modal
Design
Revenue allocation rules
Organisational solution
Institutional solution and
decision-making process
Maintenance
Service
TEN
Construction
TENMotorways
Main roads
Planning
TENMotorways
Local roads
Main roads
TEN Motorways
Local roads
Main roads
Motorways
Local roads
Main roads
Local roads
Brussels, 9 June 2004
6
Maintenance
Service
Road
Rail
Private trsp.Road
Rail
Construction
Public Trsp.
Private trsp.Road
Rail
Planning
Slow trsp.
Public Trsp.
Private trsp.
Rail
Road
Slow trsp.
Public Trsp.
Private trsp.
Slow trsp.
Public Trsp.
Slow trsp.
Maurits van der Hoofd
PT
Pricing principles
• Pure social marginal cost pricing:
Price = marginal resource cost + marginal external cost
• Marginal cost pricing
Price = marginal resource cost
• Second best solutions
such as multi-part tariffs, Ramsey pricing, SRMCP + mark-ups
• Target-oriented price schemes
No differentiation between user type, time of day etc. (eg ACP)
Brussels, 9 June 2004
7
Maurits van der Hoofd
PT
Pricing instruments
• Charge: A payment that is directly linked to a particular service
from a public or private provider.
• Infrastructure access charges
• Road tolls
• Bridge/tunnel charges
• Tax: A levy that must be paid to the government without any clearly
related service.
• Vehicle registration taxes
• Fuel taxes
• VAT
Brussels, 9 June 2004
8
Maurits van der Hoofd
PT
Road mode: pricing schemes
T
T+C:
?
T+C: 2nd best
?
?
T T+C: 2nd best
T+C: 2nd best
T+C: 2nd best
T+C: 2nd best
T+C: 2nd best
T+C: 2nd best
T+C: 2nd best
2nd
T+C: 2nd best
best
Brussels, 9 June 2004
9
Maurits van der Hoofd
PT
C: 2nd best
Rail mode: pricing schemes
?
C: 2nd best
?
?
C: 2nd best
C: 2nd best
C: 2nd best
nd best
C:
2
nd
C: 2 best
C: 2nd best
C: 2nd best
None*
C: 2nd best
Brussels, 9 June 2004
C: 2nd best
10
None
Maurits van der Hoofd
PT
C: 2nd best
Air mode: pricing schemes
?
C: 2nd best
?
?
T+ C: 2nd best
C: 2nd best
nd best
C:
2
C: 2nd best
nd best
T+C:
2
T+C: 2nd best
C: 2nd best
C: 2nd best
Brussels, 9 June 2004
C: 2nd best
11
?
Maurits van der Hoofd
PT
C: 2nd best
Inland waterways mode: pricing
schemes
?
?
?
?
None
? C: T- O
?
C: T- O
None
?
?
C: T- O
Brussels, 9 June 2004
C: T- O
12
Maurits van der Hoofd
PT
Maritime mode: pricing schemes
C: 2nd best
?
?
?
?
C: 2nd best
C: 2nd best
C: 2nd best
C: T- O
?
C: 2nd best
?
C: T- O
Brussels, 9 June 2004
13
Maurits van der Hoofd
PT
No
Earmarking of revenues?
Some air tax to
noise abatement
100% of HGV to
infra
?
Part of fuel tax to
regional infra
?
67% of HGV to rail
infra, 33% to
regional road infra
?
?
Some municipal tax
from urban companies
to urban PT
Some air tax to
noise abatement
No
58% of road to
tunnels
Electricity tax to
inland waterways
2.5% of electricity
tax to urban PT
No
?
?
No
Brussels, 9 June 2004
14
Maurits van der Hoofd
PT
Preliminary Observations
•
•
•
•
SMCP not observed, but internalisation occurs more than before
Roads and railways: where 2nd best solutions are more used
No specific pricing schemes for urban PT except France
Aviation charges (aeronautical) constrained by IATA, often multipart tariff or another second-best scheme
• Very few examples of the application of taxes and charges in
inland waterways
• Ports least regulated, often operate without govt. funding
Brussels, 9 June 2004
15
Maurits van der Hoofd
PT
Pricing and revenue allocation schemes digest
• To be done after completion of the fact sheets
• To cover following aspects:
– Pricing regimes (principles/instruments)
– Earmarking of revenues from transport pricing schemes
– Revenue allocation rules
– Objectives and design of the revenue allocation schemes:
• Subsidies and cross-subsidisation
• Legal framework and institutional settlement
• Transport funds
• PPP
• Institutional solutions
Brussels, 9 June 2004
16
Maurits van der Hoofd
PT
To what extent are current practices
consistent with the theory?
• Pricing doctrines
• Revenue allocation schemes
• Preliminary assessment to be carried out after the conclusion of
the fact sheets.
Brussels, 9 June 2004
17
Maurits van der Hoofd
PT