European road tolls: Road rage

Date: 24/01/04

Germany's truck tolls crash

IT WAS meant to be a showcase for public-private partnership: harnessing satellite-positioning technology and mobile telephony to charge trucks for using German motorways. But the project is in tatters, mainly because of problems with software, and is costing the government around €6m ($7.4m) a day in lost revenue. It is unlikely to start working before the autumn, despite angry threats from Chancellor Gerhard Schröder to cancel the contract and start all over again.

DaimlerChrysler, Deutsche Telekom and Cofiroute of France make up the hapless consortium behind Toll Collect. It has been paying penalties for the failure since December 1st, but only €250,000 a day. An arbitration panel will decide how much more it must pay; an opening offer from Toll Collect reportedly stands at €500m. The eventual shortfall for the government is likely to exceed €2 billion.

There are knock-on effects elsewhere. Since the end of last August all new road works and related public-works projects have been put on hold because of the revenue shortfall. The building industry anticipates that a quarter of transport ministry projects may be cancelled in 2004, threatening 70,000 construction jobs.

More happily for some, the 1.4m heavy trucks that use German motorways each year - 400,000 of them foreign - have been getting a free ride. And the 800 ministry staff supposed to be checking tolls are instead carrying out vehicle-safety checks.

Toll Collect has until the end of January to come up with a new launch timetable, and must agree to pay higher penalties for any more overruns. If its plan is unconvincing, the transport ministry already has ample grounds to cancel the contract. But then Germany could be years away from having a working system.

A possible alternative is a rival Austrian/Italian system called Europpass, which is based on a short-range radio system installed on tollgates. But it too has teething troubles: false readings, for example, from trucks with metallic windscreens. Toll Collect's system is tantalisingly close to the ideal concept for an enlarged EU, because new road systems, and even entire countries, could be added without building new infrastructure.

Toll Collect involves installing in trucks a unit about the size of a radio. This identifies the truck and its position to a control centre, which avoids the need to build hundreds of checkpoints. But important features were left out of the software, such as the ability to work with the payment cards and accounting systems used by most trucking firms. Worse, gremlins charged trucks for being near motorways, rather than on them, or drained batteries while engines were switched off.

Toll Collect remains confident. It is expected to propose phasing in charging in October with the full system running by the start of 2006. And the government's revenue shortfall? One thought is to let VIFG - a government agency set up last year to channel revenues from roads, shipping and waterway charges into infrastructure projects - to borrow €2.1 billion against future cash flows. But that requires a change in VIFG's charter. The only people smiling are the truckers, many of whom are not German taxpayers.

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