Examination of Norway’s tolling companies finds much to praise, and some criticisms too, as Torill Eidsheim told delegates at the ASECAP conference.
The cost of collecting tolls has a substantial effect on the profitability, or otherwise, of tolling companies and is within the company’s control to a far greater degree than, for instance, traffic volumes. And while it is easy to assume that all tolling companies incur similar collection costs, that is not always the case according to Torill Eidsheim, pres
Torill Eidsheim
Examination of Norway’s tolling companies finds much to praise, and some criticisms too, as Torill Eidsheim told delegates at the ASECAP conference.
The cost of collecting tolls has a substantial effect on the profitability, or otherwise, of tolling companies and is within the company’s control to a far greater degree than, for instance, traffic volumes. And while it is easy to assume that all tolling companies incur similar collection costs, that is not always the case according to Torill Eidsheim, president of Norvegfinans, the association of Norwegian road financing companies.
She told delegates at the486 ASECAP meeting that there is a total of around 50 toll companies in Norway, roughly one for each project, and each company has 15 years in which to recoup their construction costs. In addition to bridge and tunnel projects there are also city Toll-rings financing a number of road projects as well as public transport.
Talking to1846 ITS International after the conference she said: “As the toll bridges usually replace ferry services, perspective bridge operators will have very good traffic figures on which to base their business model. Replacing ferries with toll bridges cut travel times and is better for drivers and the environment. The bridge tolls are usually the same as or higher than the cost of travelling on the ferry it replaces and we usually see traffic figures rise when a bridge opens.”
At the end of the 15-year period all tolls are dropped and the state then has to meet the cost of maintaining the bridge.
Since 2004 the use of free flow tolling has effectively been a requirement for successful bids to run a tolling concession although existing operators did not need to retrofit electronic systems. Today the use of AutoPASS or Brobizz electronic tag tolling systems is normal and offers full interoperability between the different tolling points across Norway. These systems capture tolling information on both private cars and heavy vehicles and while onboard units (OBUs) are not mandatory, Eidsheim said in some areas up to 80% of cars are fitted with OBUs. In 2011 tolls totalling some €900m were collected and this is expected to rise to €1,200m this year.
In 2012 both Norway’s Office of the Auditor General and an independent consultant working for the country’s Public Roads Administration carried out audits of the tolling companies to look at several aspects of the operations including the cost of collecting the tolls. These studies concluded that in 2011 the average operational cost was 12.5% of the toll revenue, which Eidsheim said is among the lowest in Europe.
Provisional data also indicates a further reduction, to 11.3%, in 2012. While overall the toll collection was efficient the reports highlighted big differences in financial conditions between the companies, some relating to the financing system selected at the outset.
The Auditor General’s report reflects these variations and shows the cost of collecting tolls in five particular companies. However, Eidsheim sounds a note of caution, saying that calculating costs as a percentage of the income does not provide a good basis for measuring efficiency, as an increased toll fee would indicate an improvement in efficiency. Cost per vehicle is somewhat better but varies depending on factors like traffic volume and number of charging points, so cost must therefore be assessed based on a number of parameters.
An important finding of the independent research was that losses constitute a significant part of operational costs and that these were caused by a number of factors from simple technical glitches right up to problems in the operational framework. Eidsheim also highlighted a surprising conclusion from the independent survey: neither the contractors or toll companies had adequate incentives to implement efficient operations.
“If operators have no incentive to renew equipment and follow up on quality in general, registrations will be lost and work load related to corrective actions and customer relations will increase,” she says. She also questioned the Norwegian authorities’ use of a common standard for specifying tolling systems saying: “Personally I question if this is adequate for the variations, for instance climate, in the different parts of Norway and for operating from sea level to locations in the mountains. We have examples where the tolling equipment hasn’t collected data because it was covered with snow.”
The independent survey also concluded that the cost of collecting tolls from drivers of unequipped vehicles is between four to seven times higher than from those fitted with OBU equipment. For its part the Auditor General found drivers with OBU equipped vehicles considered the system far more convenient than the alternatives.
Eidsheim said interoperability and the use of OBUs are seen as important in both reducing costs and improving user experience so Norvegfinans encourages cooperation between the toll companies both domestically and in other countries. To that end Norway is participating in the1702 EasyGO scheme (along with Denmark, Sweden and Austria) which allows car drivers to use their AutoPASS or BroBizz systems at many locations and on ferry services. Currently around 1.7 million Norwegian drivers and 500,000 Swedish and Danish drivers use the OBUs.
On the subject of evaluating the performance of tolling companies she says: “We are having ongoing discussions about exactly how we should make measurements to get a fair comparison as there are many different factors between one company and the next and between companies in different countries. For instance in Norway there is no VAT on tolls while another country may have 25% VAT,” she says.
Going forward, a process to reduce the number of toll companies from the current 50 to ‘a significantly lower number’ has already been initiated with the intention of increasing the efficiency and quality of Norway’s tolling operations. Norvegfinans believes one way of increasing overall quality is to agree common performance indicators and improve the quality of the data being reported from the individual toll companies. This will mean all parties involved in toll collection (users, toll companies, service providers and contractors) will then have an incentive to contribute to the overall effectiveness. The EasyGo cooperation has already initiated work to implement a common quality system for all the tolling companies in Norway, Sweden, Denmark and Austria.
Toll fees are also being restructured to motivate (rather than mandate) the use of OBUs and to eliminate the need for the users to enter into several contracts in order to benefit from local discounts. To counter the significant number of foreign trucks failing to pay tolls, the Norwegian authorities are considering making OBUs mandatory for vehicles above 3,500kg.
Eidsheim also highlighted a large number of uncollected tolls from cars, some of which are foreign registered and says there is debate about the mandatory fitment of OBUs in cars and vehicles below 3,500kg. But in common with many other societies she says the Norwegians are concerned about the ability to track individuals.
“But with OBUs this can only be done when they pass a toll point so I believe it would less intrusive than would be the case with a GPS-based system.”
The new Hardangerbrua bridge opened in August 2013 in a region popular with tourists. Once the traffic patterns have settled (with, for instance, local drivers installing OBUs), the bridge should give the Norwegian authorities more information about usage by foreign visitors. “It will be interesting to see if the tourists use the bridge or make a detour and if they do use the bridge how can we make it easy for them to pay the toll.”
She concluded by saying that the aim of the Norwegian model was that in the end a bridge becomes toll-ree and by focusing on reducing operational costs and maximising toll collection, the project is paid off faster. This provides a better understanding for road user charging in Norway and provides possibilities for establishing new sustainable community projects in the region.
The cost of collecting tolls has a substantial effect on the profitability, or otherwise, of tolling companies and is within the company’s control to a far greater degree than, for instance, traffic volumes. And while it is easy to assume that all tolling companies incur similar collection costs, that is not always the case according to Torill Eidsheim, president of Norvegfinans, the association of Norwegian road financing companies.
She told delegates at the
Talking to
At the end of the 15-year period all tolls are dropped and the state then has to meet the cost of maintaining the bridge.
Since 2004 the use of free flow tolling has effectively been a requirement for successful bids to run a tolling concession although existing operators did not need to retrofit electronic systems. Today the use of AutoPASS or Brobizz electronic tag tolling systems is normal and offers full interoperability between the different tolling points across Norway. These systems capture tolling information on both private cars and heavy vehicles and while onboard units (OBUs) are not mandatory, Eidsheim said in some areas up to 80% of cars are fitted with OBUs. In 2011 tolls totalling some €900m were collected and this is expected to rise to €1,200m this year.
In 2012 both Norway’s Office of the Auditor General and an independent consultant working for the country’s Public Roads Administration carried out audits of the tolling companies to look at several aspects of the operations including the cost of collecting the tolls. These studies concluded that in 2011 the average operational cost was 12.5% of the toll revenue, which Eidsheim said is among the lowest in Europe.
Provisional data also indicates a further reduction, to 11.3%, in 2012. While overall the toll collection was efficient the reports highlighted big differences in financial conditions between the companies, some relating to the financing system selected at the outset.
The Auditor General’s report reflects these variations and shows the cost of collecting tolls in five particular companies. However, Eidsheim sounds a note of caution, saying that calculating costs as a percentage of the income does not provide a good basis for measuring efficiency, as an increased toll fee would indicate an improvement in efficiency. Cost per vehicle is somewhat better but varies depending on factors like traffic volume and number of charging points, so cost must therefore be assessed based on a number of parameters.
An important finding of the independent research was that losses constitute a significant part of operational costs and that these were caused by a number of factors from simple technical glitches right up to problems in the operational framework. Eidsheim also highlighted a surprising conclusion from the independent survey: neither the contractors or toll companies had adequate incentives to implement efficient operations.
“If operators have no incentive to renew equipment and follow up on quality in general, registrations will be lost and work load related to corrective actions and customer relations will increase,” she says. She also questioned the Norwegian authorities’ use of a common standard for specifying tolling systems saying: “Personally I question if this is adequate for the variations, for instance climate, in the different parts of Norway and for operating from sea level to locations in the mountains. We have examples where the tolling equipment hasn’t collected data because it was covered with snow.”
The independent survey also concluded that the cost of collecting tolls from drivers of unequipped vehicles is between four to seven times higher than from those fitted with OBU equipment. For its part the Auditor General found drivers with OBU equipped vehicles considered the system far more convenient than the alternatives.
Eidsheim said interoperability and the use of OBUs are seen as important in both reducing costs and improving user experience so Norvegfinans encourages cooperation between the toll companies both domestically and in other countries. To that end Norway is participating in the
On the subject of evaluating the performance of tolling companies she says: “We are having ongoing discussions about exactly how we should make measurements to get a fair comparison as there are many different factors between one company and the next and between companies in different countries. For instance in Norway there is no VAT on tolls while another country may have 25% VAT,” she says.
Going forward, a process to reduce the number of toll companies from the current 50 to ‘a significantly lower number’ has already been initiated with the intention of increasing the efficiency and quality of Norway’s tolling operations. Norvegfinans believes one way of increasing overall quality is to agree common performance indicators and improve the quality of the data being reported from the individual toll companies. This will mean all parties involved in toll collection (users, toll companies, service providers and contractors) will then have an incentive to contribute to the overall effectiveness. The EasyGo cooperation has already initiated work to implement a common quality system for all the tolling companies in Norway, Sweden, Denmark and Austria.
Toll fees are also being restructured to motivate (rather than mandate) the use of OBUs and to eliminate the need for the users to enter into several contracts in order to benefit from local discounts. To counter the significant number of foreign trucks failing to pay tolls, the Norwegian authorities are considering making OBUs mandatory for vehicles above 3,500kg.
Eidsheim also highlighted a large number of uncollected tolls from cars, some of which are foreign registered and says there is debate about the mandatory fitment of OBUs in cars and vehicles below 3,500kg. But in common with many other societies she says the Norwegians are concerned about the ability to track individuals.
“But with OBUs this can only be done when they pass a toll point so I believe it would less intrusive than would be the case with a GPS-based system.”
The new Hardangerbrua bridge opened in August 2013 in a region popular with tourists. Once the traffic patterns have settled (with, for instance, local drivers installing OBUs), the bridge should give the Norwegian authorities more information about usage by foreign visitors. “It will be interesting to see if the tourists use the bridge or make a detour and if they do use the bridge how can we make it easy for them to pay the toll.”
She concluded by saying that the aim of the Norwegian model was that in the end a bridge becomes toll-ree and by focusing on reducing operational costs and maximising toll collection, the project is paid off faster. This provides a better understanding for road user charging in Norway and provides possibilities for establishing new sustainable community projects in the region.
