Collecting tolls at a regional level is complicated enough, says Dionelis. But does attempting to do so at a pan-European level make good business sense or just add another unnecessary level of complication?
When dealing with market structures we should know that there is always one side that makes the first move. But which side should be the one to 'shoot first'? Is it the consumer or the producer - the party which makes the demand or the party which satisfies that demand? In the case of tolling interoperability, this issue is rather easier than deciding whether it was the chicken or the egg which came first.
Addressing the market
Addressing the consumption side first is a mistake that in the long term will only lead to dead ends. I take as an example the agricultural sector where, for decades, the policy-makers had decided on and pursued a consumption-oriented model, defining statically the consumer prices that would satisfy the citizens-voters. However, a surprise lay in wait for those policy-makers when they set out to reach back through the agricultural value chain. When they arrived at the first link in the chain, production, the policy-makers discovered that no producer was ready to produce at the levels dictated by the artificial, consumer-oriented scenarios which were being imposed politically. Of course, those who dictate policy know that in democratic regimes there are no dead ends - the assumption is that there are 'ways out', even if these aren't always economically ideal. They come up with something to bridge the gap between consumption cost and production cost, regulating arbitrarily with the relevant rules. Thus is born the subsidy, which of course is the parasite in a well-functioning market system. Such a system of parasites may survive for a short period and in a period of abundance but in the long term there are no more healthy 'plants' to feed the parasites and as a consequence the regulators are always obliged to recognise their mistake. We are all familiar in Europe with the issue of the Common Agricultural Policy and the final political decision at theAddressing the production side of the market first is by contrast a very healthy socio-economic process. Transport is an important market and we should always look to handle it with care. However, policy-makers in the transport field face the same temptations as those in the agriculture sector. They know that their citizens constantly ask for better and greater mobility at a lower cost. But things have already changed. In the coming years the guiding principle of the legislative framework will be the opening-up of a greener and somehow more caring transport market: transport will be thought of in terms of being a product; mobility will be more realistically measured; the wider social costs and benefits will be taken into account; greener transport will be defined; and getting the right price will be essential. The opening up of the transport market will be the guiding principle in the legislative framework. If no action is taken, transport will remain a big obscure incognita creating a permanent contradiction between wider society (which demands ever-more mobility), the economy (which is working for more and more growth), public opinion (which is becoming increasingly intolerant of chronic delays) and environment (which continues to be affected negatively by the status quo). Beyond the big political targets and phrases, things are much simpler and the citizen, or voter, or road customer (the three, in fact, being one and the same), just wants a good transport service and value for his money.
An uncertain role?
The transport world is a chain of many links. In this chain every link may at the same time be both producer and consumer. An example is the road freight traffic sector. The road hauliers plying their trade on European roads provide their services to their European consumers/users at a certain quality and a certain cost. But, before these road hauliers function as producers, they have already been consumers in another market. This other market is that of the tolled motorways which produce and provide a road service to the above hauliers (always at a certain quality and a certain cost). Of course the tolled motorways provide also their services to the private citizens/users and, moreover, serving the private citizen is a priority market for them.Collecting the charging fees just within a given region is not an easy task. Collecting them at a pan-European tolling level is a much harder and riskier job. A discussion which touches on this matter tends to polarise quickly into one between those who are looking to defend themselves against those who are eager for change. Tolling is a complex topic and being able to talk about its development in Europe at any worthwhile level demands an intimate understanding of the many years of discussion that have led us to the legal framework for a European Electronic Tolling System. The system is better known by its acronym, EETS, and is described by decision 2009/750/EC and Directive 2004/52, both accompanied by a non-binding but detailed EETS Application Guide and many standardisation documents. All the years of discussion have finally resulted in a theoretical definition of a pan-European model/system involving all of the relevant stakeholders: EETS providers, toll chargers, EU Member States and drivers/users.
We have descriptions in legal texts therefore of the different roles involved in toll collection. The legal framework: describes the EETS domains in each of the 27 EU states; identifies the relevant criteria that the EETS providers must fulfill;
lists the EETS toll chargers in all the states; defines how the contracts between toll charger and EETS provider will be signed; provides information on the conciliation body which manages dispute settlement agreements; and defines the criteria to establish EETS-notified bodies to manage and develop the relevant technical tolling standers and specifications needed.
There is one issue, though. This is a theoretical EETS framework. Still such a beast does not exist. Time will be needed to move from theory to reality and we should never forget that a good theory is not always readily transformed into a good business case.
The main player in the game will be the EETS provider.
This provider will have to deal with a 'two-edged economy', that is the toll chargers and the road users. According to the law, each EETS provider must sign bilateral contracts with all the toll chargers in all of the 27 Member States and, on the other hand, sign thousands of contracts with agreed road users/drivers in order to offer to them a tolling service on behalf of the toll chargers.
To put it simply, the EETS law creates a new theoretical role, the role of the EETS provider. The EETS provider will be tasked with sitting between the tolled road and the road user, collecting the fees from the user, securing them, and transferring them to the toll roads. The EETS provider will keep a part of the fees as a transaction cost for the service it offers.
Are there incentives, or any interest for the above roles to get into this new job? Does the private road user living in Athens, for example, find it profitable to buy an EETS service that will allow him to move on all the charged roads of the 27 states with his or her car? Is the international road haulier interested in buying such a service? How big is the interest of the motorways to invest in their roads to serve a new EETS market that will be just a small percentage of their locally/nationally oriented market schemes? And, finally, how much money does the future potential EETS provider need in order to cover all the roads in all the states?
Thoughts on paper cover issues in a general way and it is not easy to see economic models (which are always very complex) surviving in the present era of dramatic and continuous change. Technology always likes to dance to a modern beat. Road transport is creating its own version of innovation knowing that a clever idea is not always a good business case. To turn talk into action, one needs to know the opponent on the other side of the chessboard - in this case, the 'market'. Innovation in demand and innovation in supply are two different things.
