Most states will back road pricing reform: Q-Free

Tolling company says most jurisdictions will support mass-distance-location charging, but two states might hold out

Most states will back road pricing reform: Q-Free
Most states will back road pricing reform: Q-Free
By Brad Gardner | August 12, 2010

Most governments will support mass-distance-location charging except for two states, according to a former high-level bureaucrat and now general manager of global tolling firm Q-Free.

Peter Martin, who recently left his job as the general manager of NSW Roads and Traffic Authority's tolling branch for the private sector, says there is broad support for an overhaul to heavy vehicle pricing in Australia.

Because most heavy vehicles travel through NSW, Martin says the state’s government will support reform to ensure it gets a return from interstate trucks using its routes.

"NSW definitely, they have to. Western Australia would want it because of the size of the state. South Australia would vote for it," he says.

"The only two who aren’t are the only ones getting all the national registrations – Queensland and Victoria.

Martin says Queensland and Victoria currently benefit from existing arrangements due to the money they receive from the Federal Interstate Registration Scheme (FIRS).

"If you’re Victoria and Queensland you don’t want to really give up the registration [revenue], do you?" he says.

"They’re the states that are going to hurt the most."

Under mass-distance-location pricing, trucking operators will be charged based on the weight of the vehicle, how far it travels and where it travels to.

A sub-group of the Council of Australian Governments is currently looking at the feasibility of the scheme and will report its findings at the end of 2011.

Governments are looking at reforming the current charging system of registration fees and the fuel excise due to concerns it is inequitable and not recouping enough costs to cover road expenditure.

"All heavy vehicles in a given class pay the same vehicle registration fee even though some of those trucks may typically carry less mass than others, or travel different distances on different road types," the National Transport Commission says.

However, Martin adds that the establishment of the National Heavy Vehicle Regulator will help the states reach an agreement on reform.

But he questions who will be in charge of operating a mass-distance-location scheme, saying the issue "will be the next sticking point".

"Why would a [heavy vehicle] regulator do operations?"

The Australian Trucking Association (ATA) opposes mass-distance-location, arguing it will be too expensive to administer because GPS tracking devices will need to be installed in trucks to monitor their movements.

Furthermore, it has raised concerns over the administrative complexity of the scheme because operators will be charged each time they pass through a particular zone.

It wants fuel-based charging with a flat $400 registration fee for trucks and trailers, arguing it will lead to a user-pay system because those who travel further will pay for it in the form of higher fuel bills.

The ATA’s proposal is a two-tier model that will charge two-axle rigids differently to articulated trucks and three-axle rigids.

The fuel tax credit will be reduced to offset the blanket registration fee and heavy vehicles will pay a higher charge to represent their impact on the road network.

According to the ATA, mass-distance-location charging will cost $1 billion upfront and another $800 million annually in administrative and maintenance costs.

However, Martin has refuted the figures.

"Those costs are if you have to start from scratch…Those costs quoted are ridiculous," he says.

Martin says there is already technology available in Australia to establish a mass-distance-location scheme.

Q-Free was responsible for setting up a truck tolling system in Slovakia based on charging heavy vehicles each time they entered a zone.

In a recent trip to Australia from his home in Norway, Q-Free Vice President Steinar Furan told ATN the country was split into about 5000 zones.

"For every zone you drive into you pay a fare. The more zones you go through…the higher the cost," he says.

Slovakia, Furan says, decided to introduce truck tolling because the level of transit traffic through the country meant trucks were using its roads without paying for the damage caused.

Q-Free also established the Stockholm congestion charging scheme based on number plate recognition.

Martin says the technology can be transferred from Europe to Australia and that there is no reason why the industry will be hit with administrative complexities.

"Technology is not like that," he says.

Martin says a back office will collate multiple charges into one document for operators, meaning they will not receive separate bills each time they pass through a zone.

But depending on what governments choose to do, Martin says small operators might suffer financially.

"The one thing you can be sure of in Australia is they will tie it into IAP [Intelligent Access Program]," he says.

"That brings in a challenge for the smaller operator…because at the moment it is not cheap."

IAP is an in-vehicle GPS tracker that monitors trucks to ensure they comply with access restrictions. It is mandatory for higher mass limits in NSW and Queensland and for higher productivity vehicles in South Australia and Victoria.

With greater strain being put on roads due to a rise in the freight task and general traffic, Furan says people need to think differently about the road network.

"It’s a good idea that people start to see a road service as something else than just a free thing that is taken for granted because it is quite a valuable asset."

"Road capacity isn’t unlimited."

Martin agrees, sayng the public has incorrectly seen it as a free service for too long. He says the fuel excise governments receive is still not enough to cover the costs of building new roads and maintaining existing assets.

The comments preceded the release of a discussion paper by the National Transport Commission outlining five options for a new truck charging scheme.

The NTC will investigate the feasibility of a fuel-based, kilometre-based and distance and location charging. It will also look at mass and distance charging and mass-distance-location pricing.

Under existing arrangements, the NTC says some operators benefit at the expense of others because all vehicles in the same class pay the same registration fee regardless of how far they travel or the freight they carry.

It says operators will use their vehicles more productively if they are charged for the road wear they cause. This might include changing their fleet and travelling on certain routes to reduce costs.

"Prices that are more closely aligned to the actual costs of a heavy vehicle trip will encourage more efficient use of the road network," the NTC says.

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