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The Netherlands: Progress Toward a National Road Pricing System

Wednesday, April 21, 2010

Strategy Director, Road Pricing Project, The Netherlands



POWERPOINT: Road Pricing in The Netherland: Lessons Learned

The Netherlands is facing increasing congestion. Pricing has been attempted 6 times since 1988 and is currently being developed as a kilometer charge. However, the cabinet is not currently able to make decisions due to the withdrawal of one party. Revenue generation has never been a primary purpose of previous Dutch road pricing attempts. The primary goal is always congestion reduction. All parties have sought to implement, not just one. Opposition is currently for political reasons.

Several alternatives were investigated, including:

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Previous attempts at implementing pricing have failed due to a lack of support amongst stakeholders. The ministers implementing the current configuration decided to approach opponents, starting with a motorcycle organization, to generate support.

The guiding principles for the system are as follows:

There are several aspects to the pricing system, the first of which is the on-board unit (OBU). The OBUs are based on “open sources” and it is hoped that they can be combined with other road based services. Travel reporting, invoicing and collections account for the next phases. The last phase is enforcement, which will always be handled by the government as private enterprise is barred from such activities. There are essentially two tracks: The low tech “guarantee” track and the more technologically advanced "main" or "market-based" track. The first step in system development was to open the market by setting specifications that would fulfill system goals.

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System Overview

Messages are sent to system provider on an intermittent basis. It does not matter which track this occurs on. The system provider gives the user a bill.


Implementation 3.8 Billion  
Exploitation 1.8 Billion (during scaling up period)
Total 5.6 Billion  

It is not known yet what the cost of the private back office will be, but the system does not cost much compared to other European systems. It is hoped that administrative costs can be kept at around 5 percent. The government will be paying for the first round of OBUs, which will be a substantial cost. The Netherlands is currently in crisis along with other European nations, and it is believed the new government will reconsider whether it will pay for these units. It is believed that the presence of added services will encourage people to purchase an OBU on their own. The system will need to cover about 9 million vehicles, 1 million of which will be trucks, lorries, busses and other special vehicles.

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Current State of Affairs

On March 11th, the house declared that the Different Payment for Mobility project was "controversial" and, as a consequence, the Minister of Transport, Public Affairs and Water Management has given instructions to:

The Netherlands will continue to work on other mobility projects and international projects such as the EETS.

The Ministerie van Verkeer en Waterstaat has learned to work in steps of three years due to the typical length of time cabinets stay together, which presents a problem for system development. Most of the parties involved want to continue road pricing. Not listening to stakeholders has resulted in failure of previous attempts at road pricing. However, the Netherlands is attempting to incorporate all stakeholder concerns in the current system, which has resulted in the system being very complex.

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Lessons Learned

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Audience Questions

Q. Has the Netherlands considered not applying registration fees to people who have already paid and then charge only the mileage fee moving forward?

Jongman answers: The system was developed too technically with the only consideration being the number of vehicles. It was assumed that vehicles would turnover .In this system, money goes to the minister of finance and they want their money every year. There are some insurance companies that want pricing but will not invest in the system. Furthermore, everyone is doing their own thing in project development and there is not a lot of communication.

Q. As a new governmental coalition takes place, how will you advise them on simplifying the system?

Jongman answers: The problem is not with the km fee… it is with congestion pricing and privacy. If we could have an OBU based only on kilometers and not rely on location for congestion pricing then it would be more acceptable. However, we are not sure how the government will want to move.

Q. What happens to the money and the concept of revenue neutrality? If money goes into the infrastructure fund, then it seems that road users are paying for expensive public transportation. This does not seem like revenue neutrality. Would it not be simpler to put money into a road fund as opposed to an infrastructure fund (IF) and then people would feel that they are paying for and getting something?

Jongman answers: At this moment there is no acceptance issue with regards to putting money into the IF and transit. Maybe that will change but it is not an issue right now. And when we talk about revenue neutrality we are talking about neutrality in terms of the km charge. Before money was going into schools and other non-infrastructure items but now it is going into transportation infrastructure. The current laws say that we charge about 6.3 cents but we only need about 5, so we are getting more than we need.

Q. What benefits are being advertised to the public and what is their acceptance?

Jongman answers: It depends on who you are. We think that drivers will drive less because of the charge, so for a business they will see benefits from reduced congestion from fewer drivers. Most individual drivers already drive less and will now pay less as a result of their reduced driving.

Q. I understand that operating costs are not to exceed 5 percent of revenues, but what we have seen is that significant funds have to be spent on the front end to get it up and working. Is there a schedule for meeting that 5 percent?

Jongman answers: Yes. We think we need about three years to change the pricing system and about 5 years to change the taxing system. By 2020 I expect we will reach the 5% operating cost.

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