Finemore tears strips off CRRP's "laughable" road pricing proposal

Ron Finemore Transport lambasts proposal to slap tracking devices on heavy vehicles as part of radical new charging scheme

Finemore tears strips off CRRP's "laughable" road pricing proposal
Finemore tears strips off CRRP's “laughable” road pricing proposal
By Brad Gardner | September 22, 2011

One of the nation’s most respected trucking operators has blasted the government agency responsible for road charging reforms, accusing it of misleading industry and propagating "flawed and incorrect" assumptions.

Ron Finemore Transport has weighed into the debate over mass-distance-location pricing, which uses GPS trackers and on-board mass monitors to charge trucks based on their weight, distance travelled and roads used.

The Council of Australian Governments Road Reform Plan (CRRP) earlier this year recommended governments radically realign the existing charging model built on registration fees and the fuel excise by applying mass-distance-location to multi-combination vehicles and truck trailers.

But Finemore has accused the CRRP of failing to give industry enough time to respond to its proposal and for publishing calculations that significantly underestimate the cost of the scheme to industry.

"The time allocated for review of the findings was grossly inadequate given that the charges being considered by the CRRP, if adopted by Government, could herald the most fundamental changes in addressing charging and road supply issues in Australia if not the world," the company says in a written submission to the CRRP process.

The proposal was released on July 27 and industry was given until August 22 to respond.

However, Finemore only obtained the data used by the CRRP to calculate the impact of mass-distance-location pricing less than two weeks out from the deadline.

In its proposal, the CRRP claims a B-double travelling 600km on mainly local roads in a region of NSW will pay $104.60 under mass-distance-location compared with $108.55 under the current PAYGO method.

Yet Finemore claims the data provided to it shows the B-double will pay $145.75 compared to $126.97 under PAYGO – a 14.8 percent increase. The figure jumps to $225.89 if the B-double is operating under concessional mass limits.

Under this scenario, Finemore argues it would cost $95,000 in total taxes and charges each year to keep the B-double on the road, compared with $50,000 under PAYGO.

The company says it is concerned the "significant errors" in the CRRP’s work might have given the industry the wrong idea that shifting from PAYGO to mass-distance-location pricing wouldn’t lead to higher charges on local roads.

It called for the CRRP to immediately "alert the industry to the mis-leading and what we believe are clear errors" and to publish the charges data on its website.

"Industry has been provided with insufficient information and time to meaningfully consider and scrutinise and then comment on the heavy vehicle pricing options under consideration by CRRP," the company says.

"The negative impacts of implementation of the CRRP mass/distance/location charging option could be dramatic and extremely damaging."

Finemore says the CRRP’s recommendation is "premature and unsubstantiated" based on the information provided to industry so far.

The company says the assumption that mass-distance-location pricing is needed to deliver benefits is "flawed and incorrect" and that other pricing options, such as fuel-based and distance charging, could show similar net benefits if the agency fixed its errors.

Finemore accuses the CRRP of naivety in believing that slapping GPS trackers and scales on trucks is the panacea to resolving years of bickering between all levels of government over road funding and service delivery.

The company says industry is being asked to take a "giant leap of faith". It says the idea government culture will automatically change when mass-distance-location pricing is introduced "is not realistic and is laughable if it wasn’t so serious, based on our past experience".

"Imposed mandatory technology will deliver few benefits in the longer run unless it is associated with fundamental institutional reform in road agencies," Finemore says.

It wants the consultation process extended and greater scrutiny of the CRRP’s calculations and methodology work. The CRRP says it is finalising its report that will go to COAG in March or April next year, when the nation’s leaders will decide whether to proceed with the proposal.

The CRRP only released its data to the trucking industry following a request from the Livestock and Bulk Carriers Association (LBCA).

The group claims mass-distance-location represents "one of the most significant threats to regional Australia’s viability" because charges under the scheme will be higher on local roads compared to the PAYGO system.

It says public forums held in the wake of the proposal’s release have only engendered concerns among its members.

"These forums have in fact only fuelled the perception that we are heading towards another bureaucratic nightmare where industry views have not been listened to as some senior regulators pursue their goal of monitoring the movement of every truck movement in the country, no matter what the cost is," LBCA President Barney Hayes says.

While there is strong support in the industry for fuel-based charging, which the CRRP opposes, the Australasian Railway Association (ARA) is encouraging government to forge ahead with mass-distance-location.

ARA CEO Bryan Nye wrote to the CRRP saying the scheme will ensure road revenues are aligned with road maintenance costs and that it should be trialled on key freight routes such as the Newell Highway.

"The ARA notes that rail operators have long been charged for the use of rail infrastructure based on weights carried, distance travelled, and location and quality of the track," Nye says.

"The ARA believes that some of the challenges associated with the introduction of MDL have been overstated."

According to the CRRP, it is technically and economically feasible to introduce a mass-distance location scheme. It says it will cost $12 billion over 30 years if applied to the whole heavy vehicle fleet and about $4 billion if limited to multi-combination vehicles and heavy truck trailers.

The CRRP, which is made up of bureaucrats from state-based road departments, says most of the cost involved in switching to mass-distance-location charging is due to installing equipment in trucks.

It claims mass-distance-location will encourage operators to use vehicles and routes more efficiently, which Finemore says it already does.

The CRRP says the use of registration fees and the fuel excise provides no incentive for operators to use roads efficiently. It says a direct charging model will deliver funding certainty to road providers and lead to greater investment in infrastructure.

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