Beware that schedule and costs of road pricing projects are affected by various factors including legislative outcomes, clarity and specificity of scope, and contracting methods.
Experience from road pricing programs in Europe and Asia
- Beware that schedule and costs of pricing projects are affected by various factors including legislative outcomes, clarity and specificity of scope, and contracting methods.
Stockholm: Stockholm worked with an open-ended scope, which was deemed necessary to deal with the compressed delivery schedule for the trial program and evolving legislation that was not resolved at the time of the procurement. The consequence was schedule delays in the trial startup because of scope changes to access legislative outcomes and high implementation and operating costs.
Czech Republic: The Czech Republic selected an off-the-shelf DSRC (dedicated short-range communications)-based system that had relatively high OBU (onboard unit) costs and a design-build-finance-operate PPP contract over 10 years. The contractor started receiving payments after 6 months’ worth of revenues were generated. For Berlin project, a German private consortium fronted the capital cost for a 15-year design-build-finance-operate PPP contract. Stockholm and London used more traditional design-build-operate procurement methods and found that initial capital and operating costs were high, requiring subsequent actions to reduce ongoing costs.
- Beware that PPPs have been used in some road pricing deployments by leveraging no-upfront costs to agency for implementation but incurring high operating costs.
Germany: The German Toll Collect consortium put up all the money required to develop and implement the German system through 2005, with no public funding. The private consortium is bound by contractual standards for availability and accuracy and is audited by the federal government on a regular basis. Toll Collect’s compensation is about 11 percent of total toll revenue and includes operation of the automated and manual systems; a service fee for payment providers; operation of the toll terminals, enforcement gantries, and mobile equipment; mobile communications; system depreciation; and net income before taxes and interest. The nature of the contract provides little incentive for cost efficiency, which drives disproportionate spending to ensure performance standards. Similarly, the Czech system is a PPP with a long term contract that locks in relatively high costs of operations.
Author: Robert Arnold, Vance C. Smith, John Q. Doan, Rodney N. Barry, Jayme L. Blakesley, Patrick T. DeCorla-Souza, Mark F. Muriello, Gummada N. Murthy, Patty K. Rubstello, Nick A. Thompson
Published By: Federal Highway Administration, U.S. DOT
Source Date: 12/01/2010URL: http://international.fhwa.dot.gov/pubs/pl10030/pl10030.pdf
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