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What Are The Costs?

Operational costs of existing systems

A conference in Paris on 1 June 2006 (ECMT, 2006) focused on technology choice and cost effectiveness of road charging systems. An extract of a table put together on the basis of conference presentations is shown in Table 4 1. The single most important determinant of the cost to revenue ratio is the level of the charges levied. This explains to a large extent the low cost ratio for the Swiss heavy vehicle fee in comparison to the equivalent German and Austrian charges. Recalculating cost to revenue ratios for each of the three systems with a uniform charge level would reveal all to have roughly equivalent cost to revenue ratios (ECMT, 2006).

Table 11 Charges, Income and Operating Costs of Schemes in 2005


Average charge

Annual fee income (millions €)

Operating costs as a percentage of revenues


€ 0.27 / km (40 t truck)


9 %


€ 0.12 / km (40 t truck)

2 860

16 % **


€ 0.67 / km (40 t truck)


4 %


€ 7.4 / day


48 %

Stockholm *

€ 2.7 / day


25 %


€ 0-2 per trip


7 %

* Stockholm figures for 2006

** Including costs of deployment, construction, operation and development of the infrastructure network

(Source: ECMT, 2006)

The most recent figures for Stockholm (1 August 2007 - 31 July 2008) are € 85.5 millions in total income and € 38 millions in costs, giving € 47.5 millions in net revenue . This means that operating costs are 44 % of total income.

Annual operating cost as a percentage of annual gross revenue for the Norwegian toll rings dating back to their early period of operation (1992), were 10 % for Trondheim, 11 % for Oslo and 16 % for Bergen (Tretvik, 2003). The relatively high share for Bergen can be explained by a low entry charge and manual operation at that time. Currently, transaction cost (i.e. the average operational cost to charge one passage) in fully automated RUC systems in Norwegian cities is around € 0.125. In the Norwegian URUC schemes DSRC now constitute 90% and ANPR based charging 10% of total passages. Users without tags are usually invoiced once a month and the operational cost per transaction depends on how many passages the user has. Only one passage per month is of course quite expensive for the operator. However, due to the high percentage of tags the cost for the “lonely riders” is very small compared to the overall costs.

It is too early to draw reliable comparisons between these operating cost rates and the proportion that they form of gross revenues, for a number of reasons. First, they will differ depending on the objectives; other things equal they would be expected to be a lower percentage of revenues in Norway, where the principal objective is to raise revenue. Secondly the proportions will depend on the level of charge, which may well be lower than optimal in some cities, in the interests of acceptability. Thirdly there is still some inconsistency in reporting; for some cities enforcement revenues are included, while in others the revenue is solely that from charges. Fourthly, and most importantly, operating costs will depend on the technology and administrative systems used. They can be expected to be lower in mature schemes such as those in Norway, where the opportunity has been taken over several years to streamline the operations. They will also be lower in situations where much enforcement can be automated than in situations like London where operating procedures depend principally on information from automatic number plate recognition.

However, it will in all cases be desiderable to keep operating costs to a feasible minimum, since they are both a direct resource cost which needs to be set against the resource savings from congestion relief, and a drain on revenues. Further research is needed to understand the cost structures of different systems and the opportunities for value engineering to be applied to reduce costs.


Costs estimates of a new nationwide system

In The Netherlands, the national government still plans to introduce nationwide time, location and emission based road pricing on all roads and for all road users. The Dutch ‘cost monitor’ is aimed at verifying the previously conducted cost calculations (Ministerie van Verkeer en Waterstaat, 2006a) and updating the calculations with respect to the progress of industry. It was based upon a market consultation process, in which more than 40 professional private parties shared their vision on the different choices and costs that are connected with the introduction of road pricing. Five companies made a public estimate of the investment and operational costs: Siemens, T-Systems, Vodafone, DaimlerChrysler and Efkon.

On average they stated that introducing such a system is possible for around two billion EUR, which is a third lower than the average of the cost assessment in 2005. Also the operational costs are estimated to be lower. See Figure 4 3 and Figure 4 4.


Only the cheapest variant of each of the five companies that meet the system requirements, given by the Dutch government, are shown. Each of these variants consists of an on board unit (OBU) and satellite navigation (GPS/Galileo). For communication between vehicle and processing centre, GSM/GPRS is mostly proposed. At this time however, warnings of some other organisations that attribute a liability of only 90% to the GPS/GPRS-system concern the Ministry of Traffic.

The minimum variant, which Efkon was asked to assess, does not meet the requirements. These estimates should not be seen as tenders, because they contain different assumptions on choices in for example functionality and organisation. When the system is really put to tender, real prices will show. The current estimates only form a bandwidth.

The costs for the OBEs remain a very significant factor in total investment costs of road pricing. As a result of market and technology developments, prices decline. Where the costs per OBE were estimated at €180 in 2005, in 2006 most companies expected them to be between €85 and €140. In the long term, new vehicles are expected to have OBEs equipped at source, causing the prices to drop further.

A sensitivity analysis shows that the total costs are mainly influenced by the OBE, the complexity of the charging scheme, the requirement to show the actual charge in the vehicle, a secondary system for special groups such as foreign vehicles, and the European Directive on Interoperability. Extra requirements like these exclude cheaper solutions. With respect to the costs, but also to the communication, many experts advise to keep the system simple.

However, the requirement to charge all roads and to base the charge upon the location of the vehicle demands a fairly complex system; an accurate position on all different roads in the Netherlands is necessary.