Thursday, 28 April 2016

Jakarta abandons 3-in-1, moving to 4-in-1 as congestion charging is delayed again

You may wonder what is going on in Jakarta as it seems on the cusp of introducing a Singapore style  ERP (Electronic Road Pricing) system, but as I wrote on 5 April, it has temporarily suspended its existing high-occupancy vehicle rule (known as 3-in-1, which is self explanatory) until May 14 because of concerns of child exploitation.

Now a website called Coconuts Jakarta (a new online news website chain that started in Bangkok) has suggested that 3-in-1 may be replaced by 4-in-1 in part because of the time that would be taken to implement congestion pricing in the city (the website suggests 1.5 years, which is a reasonably minimum in my view).   The Deputy Head of the Jakarta Transportation Agency,  Sunardi Sinaga, is quoted as saying it is one option once the 3-in-1 suspension is over, but 4-in-1 would only apply in the afternoon peak (presumably because the congestion is more severe during that time).  

As the report points out, unless the Police enforce laws against people paying others to sit in their vehicles (known as jokis - (jockeys)), which was a source of concern in the first place (as it is some of Jakarta's poorest seeking to make money from this, and some either rent their children out for this role or abandon them unaccompanied whilst they "jockey"), it wont make much difference.

Meanwhile, according to the Jakarta Post, the city has banned motorcycles on one area (Hotel Indonesia Traffic Circle from Jl. MH Thamrin to Jl. Merdeka Barat), which is surprising, as they are not the least efficient vehicles from road space terms, but has refuted rumours it may expand this ban further.  The report said the tender for ERP will be released later this year for implementation next year (which still seems ambitious to me).

It is not yet clear whether reliability of number plate recognition and accuracy of vehicle registration database details for enforcement have been addressed yet.

Friday, 22 April 2016

California's Road Charge Pilot Program progressing

The most exciting trial of road charging in the world today is the one that is about to start in California.  California is going to pilot 5000 volunteers, a mix of private and commercial vehicles, for five options that it seeks to appraise.  The policy intention is clear.  The intention is to replace the fuel tax with a new way of charging for road use.  Why? Because the significant growth of electric, hybrid and ultra-fuel efficient vehicles is eroding gas tax revenue, and even the existing proposal to increase the gas tax for the first time (and remove the current fuel tax swap) will not provide a sustainable solution to California's highway funding dilemma.

It is no exaggeration to say that the rest of the US is watching California.  If the California Road Charge Pilot is a success and there is broad agreement to implement it, then it is likely other states may follow.  Yes, Oregon was first, but California has the largest GDP of any state in the USA (indeed its economy is larger than Brazil, Italy, India or Russia).  

As California prepares for the launch of its road charge pilot program on 1 July, Caltrans has  announced the companies that will be managing the accounts for the 5000 volunteers during the pilot:

- Azuga (Azuga is already an account manager for the OReGO pilot in Oregon);

- Intelligent Mechatronic Systems (a Canadian company that supplies telematics and connected car technology);

- Arvato Mobility Solutions (a German company that provides outsourcing solutions for mobility); and 

- EROAD (a New Zealand company that is an account manager for the NZ and Oregon weight-distance road charging systems).

Azuga and Intelligent Mechatronic Systems (IMS) will offer mileage based accounts and Arvato will offer a state-run account management service.  EROAD will manage all heavy vehicle accounts for the pilot.

The pilot has an excellent website here which has useful information.  There are links to other information including this fact sheet (PDF).  Details on decisions on how the pilot will be implemented are here (PDF).

The following five charging options are to be piloted:

- Time permit: Purchase of unlimited use of the roads for a set period of time (similar to "vignette" systems in various European countries);
- Mileage permit:  Purchase of a set number of miles to use the roads, in advance.  Once the permit is exhausted, an additional permit would be required  (similar to New Zealand's manual Road User Charge system);
- Odometer charge: Pay for miles used based on periodic odometer readings, after they have been driven.  This is similar to manual weight/distance taxes in a few US states.
- Automatic mileage reporting including general location: Pay based on in-vehicle technology measuring distance travelled.  A third party service provider would receive this information and bill the account holder.  Location information would only be used to avoid charging out of state and off-road miles.
- Automatic mileage reporting without general location: Similar to the above example, but no geographic data is supplied.

All but the first option involve distance charging, but all but the last distance charging option would raise the issue of crediting for out of state or off-road miles.

Volunteers will not actually pay any charge, but will choose options of simulated charges to test the technology and participant responses to the various road charge options. Azuga, IMS and EROAD may provide value added services at no cost to volunteers as part of the pilot. Volunteers will choose an account manager in June.  The graphic below outlines what volunteers need to do to participate.

California road charge volunteer process


NOTE:  This is the 500th post of this blog.  I hope you enjoy reading the posts and find them interesting and informative.  I know I have covered some matters in past years that I have not covered more recently.  Rest assured I have more time to dedicate to blog articles, so there will be consistently fresh content every week.  Best regards, Scott

Wednesday, 20 April 2016

New York toll reform plan goes to State Assembly

Some years ago there was hope that New York would join London, Stockholm and Singapore in implementing some form of congestion pricing.  Mayor Bloomberg had a plan for a lower Manhattan congestion charge cordon, but it failed to get support.  However, since then a much more nuanced and cleverer plan has emerged.

It's been a while since I've written about the Move NYC Fair plan, not least because a lot was going on behind the scenes to tweak it and get a coalition of support behind it.  I endorsed it two years ago, and believe that again - although it is not perfect - it is a great leap forward for New York City.

The plan introduces tolls on untolled crossings of the East River, but cuts tolls on seven other crossings by up to 48%, essentially changing the philosophy of the tolls from one of local cost recovery and revenue maximisation to one that reflects demand and congestion.  Given the chronic state of congestion in New York, this makes a lot of sense.  It would have peak time charges, have a cap on charges (which in the medium term might need to be revised compared to raising toll prices). 

The New York Times and New York Daily News both appear to endorse the plan.

An illustration of the plan is here:

Move NY Fair Plan to reform tolls

The net revenues are forecast to be $1.35 billion of which just under $1 billion would support public transit improvements, the rest would be to adequately maintain the bridges and address the significant maintenance deficit on New York's roads (I did say two years ago that those who pay will need to see some benefit from doing so).

The news now is that the proposal has finally reached the State Legislature as Assemblyman Robert Rodriguez (D - Manhattan) has introduced a Bill to implement it according to Crains New York.  The Bill has 14 co-sponsors, but may face problems in the Senate which is Republican controlled, and so needs a Republican sponsor to get it introduced there. 

Disappointingly, neither Governor Andrew Cuomo, nor Mayor Bill de Blasio has shown any enthusiasm for the plan, demonstrating that neither are interested in pushing something they think it politically controversial - notwithstanding that it ought to fit right into agendas both share on improving public transit, reducing pollution, reducing contributions to climate change and improving economic activity.   It ought to be a "no-brainer" in principle, even if some of the details should be ironed out (e.g.  although helpful in selling the concept, what the net revenues are spent on should be subject to independent appraisal of the net benefits of each project).

What about the FAST Act?

The FAST Act provides 50% Federal Funding for states interested in progressing various forms of road charging.  This proposal would appear to be able to be supported by that, although I have a better idea that is much wider than that.  The deadline for funding applications this year is May 20th, so it is getting almost too late for New York to make an application for funds.  Yet this would look like a project that could do with funds to consider the implementation issues for a more integrated and fully electronic free flow tolling system, including questions around enforcement.

What about heavy vehicles?

New York has a Highway Use Tax applied to heavy vehicles  that resembles the weight/distance taxes seen in Oregon, New Zealand and Europe.  Yes, it is not widely known. However, it uses manual technology, is cumbersome to collect and imposing considerable compliance costs on those that pay it.  

New York ought to consider funding a pilot that trials GPS and other technologies to update that tax and to link this towards it being used to automatically collect tolls on crossings in the state.  It could investigate how charging in New York could evolve in coming years, not only to accommodate reform of tolls around NYC, but also to better charge trucks for road us and provide an alternative to state gas taxes.  Such a pilot could be sold to the trucking industry as a way of reducing its costs, ensuring they do not pay for out-of-state miles and that they could get refunds in gas tax in exchange for a reform in distance based charge rates.

Yes, again it may be too late for New York to apply for the first tranch of funds to do this, but Oregon has shown success in a low cost transition towards electronic technology for its weight-mile tax.  It would be good for the economy and for sustainable revenues for New York to pilot reform of its Highway Use Tax.
 

Tuesday, 19 April 2016

What should the next Mayor of London do with the congestion charge?

London will have a new Mayor after the 5th of May.  The incumbent, Boris Johnson, is not standing again (he won a Parliamentary seat in the 2015 election and has his eyes on national politics) so the race is wide open, and this time the two leading contenders are existing MPs with both major political parties.  Polls indicate the Labour candidate, Sadiq Khan, has the lead, with Conservative candidate Zac Goldsmith facing an uphill battle to keep the Mayoralty for the Conservative Party.  Goldsmith doesn't have the profile or charismatic celebrity factor of Boris Johnson, and may also be disadvantaged by Labour having done much better in the General Election in London than nationwide (the Conservatives won the election across the UK, but in London Labour won more seats).   Notably, this is the first election since 2000 that Ken Livingstone isn't standing (he won in 2000 and 2004, lost in 2008 and tried once more in 2012).  London has had two Mayors (of greater London, not including the 32 boroughs within it) since the position was created in 2000.  

Now defunct Western extension of congestion charge zone highlighted
What's notable in the narrow world of road pricing is how a policy that was divisive in 2000 and 2004 elections - the congestion charge - is now not at all controversial.  Neither major candidate, nor the candidates for the three largest minor parties (Liberal Democrats, Greens and UKIP) are campaigning to abolish or shrink it.   Notably in his first term, Boris Johnson abolished the "Western extension" of the congestion charge zone, a rather blunt attempt to manage traffic in the Chelsea and Kensington suburbs to the west or a political hit by then leftwing Mayor Ken Livingstone at one of the wealthiest parts of London.  That's long been forgotten, and after an almost imperceptible increase in traffic, it wont be coming back.   However, it is also notable that the proposed new Silvertown Tunnel (a new Thames Crossing primarily to relieve the heavily congested Blackwall Tunnels - a pair of two-lane one way tunnels in east London) will be tolled along with the existing Blackwall Tunnels.  This is, in effect, a new congestion charge on an existing road, although it is in part justified to raise sufficient revenues to pay for the new crossing, it will help ensure all of the capacity along the route is effectively managed.
London's existing congestion charge zone covers a small area of greater London

Neither Sadiq Khan nor Zac Goldsmith have said much about the congestion charge.  Khan's big transport policy gimmick is to promise a freeze on public transport fares, to be funded from administrative savings (although the scope for this is disputed), Goldsmith has largely promised business as usual with more cycle lanes, improved public transport, an additional road crossing of the Thames (there is around a 17 mile gap between the Dartford Tunnels and the planned Silvertown Tunnel) and action on air pollution. Khan has since said he is uninterested in increasing the congestion charge, but Goldsmith is, at least willing to look at "smarter" charging.
Planned tolled Silvertown crossing

Beyond the two main candidates (the electoral system is preferential based, so it almost certainly will be between these two), the Liberal Democrat candidate - Caroline Pidgeon - wants an additional charge on the most polluting diesel vehicles (the congestion charge zone is already going to become an ultra low emission zone from 2020).  Green Party candidate - Sian Berry - is the most ambitious, wanting congestion charging expanded across London, based on distance, time, location and emissions rating, with all net revenue dedicated to increased subsidies for public transport and active transport modes (and the implication that cars and trucks will have punitive charges imposed on them).

 On the face of it, that seems much closer to the sort of vision I have for charging in London, although it does have three big issues:
- Public acceptability;
- Efficient use of net revenues;
- Treatment of non-London users. 

So what would I do?

Monday, 18 April 2016

Illinois proposal for vehicle mileage tax well intentioned but needs rethink. UPDATED

UPDATE:  Senator John Cullerton has announced that he is suspending his proposed Bill SB3267. I hope that it isn't the end of the idea, as there would be more merit in thinking more about policy and considering a pilot that looks at all of the issues and concerns raised in the past few days.
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Bloomberg reports that Illinois Senate President John Cullerton has proposed both a 30c/g increase in the state's fuel tax and the introduction of a vehicle mileage tax.  The proposal for the latter is well intentioned.  As with many states, Illinois faces both the revenue challenge of declining gas tax revenues and the equity problem that those who can afford a Tesla or another new electric car end up not paying for the roads.

A 30c/g (7.9c/l for those of us used to metric measures) is a lot to swallow, and probably is a negotiating position to seek a smaller increase, but even if it progresses it, that isn't sustainable.

However, the proposal for a 1.5c/g distance tax (with three concepts to implement it) has a number of flaws, and unfortunately the scathing coverage the proposal is getting in some of the Illinois media reflects this. 

The proposal

All vehicles from July 2017 would pay a mileage based tax, at 1.5c/m.   They would also pay the state gas tax, but have to apply for a refund at regular intervals (some reports say annually).  There would appear to be three options to pay:

- GPS-based on board unit that measures distance travelled on roads in Illinois and transmits this data to a back office to bill the user;
- Odometer linked on board unit that measures all distance travelled and transmits this data to bill the user;
- A flat fee of $450 for a year, equating to 30,000 miles.


What is good about the Illinois road user charge proposal

Firstly, the concept on its own is worthy of further study and to pilot.  The mere fact of suggesting it is positive.   Secondly, the concept of user choice is incorporated into the proposal, which is a good thing.  That is key to building acceptability in Oregon and now the California pilot.

What Illinois could do better?

Don't set rates now.  A rate should be based on what it is meant to be paying for.  That means first establishing an expenditure plan based on addressing deferred maintenance and network rehabilitation and high value capacity and safety projects, then allocate those costs among road users by economic analysis.  Some costs are fixed and should be common to all vehicle classes, some are weight based, which means the heaviest vehicles pay the most, some are capacity based, which means it should be based on road space occupancy.   Set principles for rate setting, don't just identify a rate that looks like a whim.  

Refund the gas tax at time of purchase:  Few are going to believe they should apply for a refund of gas tax and accept paying a new tax.  This is not only going to be unacceptable, but it is unnecessary.  Oregon did pilot a "pay at the pump" model that it did not progress, but could mean anyone using a technology based approach could be set up to pay gas with the tax refunded.  

In due course, Illinois could simply scrap the gas tax and create a new option for out-of-state visitors (also available to locals), which could be a trip pass or a time-based pass (the annual pass is a version of this, a one month and a one week pass could also be issued).  Scrapping the gas tax will prove that Illinois genuinely wants to change how vehicles are charged rather than tax them more.  However, having instant refunds would make it much more acceptable.

Address the privacy issue better: The "Big Brother" "government knows where you are" narrative is an easy one and could have been better deflected by deciding that any option involving technology will not be run by the state, and wont transmit location data from the device.  The fact that even the odometer option is seen by some as "invading privacy" demonstrates how woeful communications have been on this.   The GPS option. as in Oregon and various countries around the world, can be managed by a private company with the on board unit using location data just to assist in calculating the charge (and only charging data gets transmitted).  Failure to address these concerns well could kill this idea.

Set up a pilot:  There are reasons Oregon and California are doing pilots of distance based charging.  They aren't to prove the technology, or to prove that it can be done.  There are many years of experience proving this.  It is to get the public involved, get feedback from users and understand what works for people.   Announcing a pilot is different from a Bill that imposes a new system of charging from on high.

Increase confidence in how revenues will be used:  Many people think money raised now is wasted, and so consideration of reform as to how Illinois roads are funded and managed can not only save money, but also improve confidence in any new system of user pays.   Introduce state wide asset management systems, establish road management on a more commercial, user oriented basis and think "outside the box".  Look at what Australia is doing to optimise life-cycle management of roads, do better with what revenue there is now, and be world-class in how you manage roads and spend the revenue raised.  There are claims that Illinois has "outlandishly high workers’ compensation costs and prevailing-wage requirements", these should be tested.

What has been the media response?

The Daily Herald in Chicago editorial is one of the most positive pieces saying it makes some sense given fuel efficiency.  It is sold on the idea as a way of managing congestion, but I'd urge caution on that.  Although that could be a long term option, with one way of charging by distance, it is not the objective here.  It is difficult enough convincing people of the importance of a new way of paying for road use without adding congestion pricing to the mix.   It proposes that there be weight based charges to make up for the lack of a gas tax, which has merit for broader economic reasons.   It also wants environmental signals, which could exist too (they do with heavy vehicle systems in Europe), but let's not be distracted by multiple policy goals.  

Jim Muir in the Southern Illinoisan says it is "tax and spend", presuming that there is no refund in gas tax.

WSIL3 TV interviewed people who were worried about privacy.  Would they be so concerned if none of that data ever left the vehicle?

Jacksonville Journal Courier said people wouldn't be impressed, but makes the disproven claim that rural people drive further so would pay more (disproven by research in Oregon).  

Even TimeOut Chicago claims it is anti-environmentalist, presumably because cars should get to use the roads for free?

The Illinois Policy Institute is scathing about the idea, which is unjustified.  It is nonsense to suggest that distance based road charging needs a large bureaucracy.  Plenty of jurisdictions do this nimbly and efficiently, and most recently by having competitive private sector service providers collecting charges as a service.   Privacy is an issue, but I would have thought a think tank looking to promote personal freedom and prosperity would want solutions that embrace user pays and a more market oriented approach to providing roads.

Conclusion

Good on Senator Cullerton for advancing the idea, but it needs some rethinking and reworking because it looks fairly clear that the public will reject it outright without a pilot and without a wider consideration of how to reform road funding, charging and management in Illinois.  

Friday, 15 April 2016

Australian Federal Minister comments on road pricing

Australian Federal Minister for Major Project, the Hon Paul Fletcher, made a speech on 3 April about infrastructure spending (full speech is here).  Although the main point was that large infrastructure projects need to improve productivity for them to be worthwhile public investments, he also discussed road pricing.  The speech as a whole is worth reading for anyone interested in the modern day challenges of funding and managing transport infrastructure (it cuts across road, rail and airports), but I am focusing here on road pricing. 

The key point is that road pricing is supported over the long term, and that it requires community acceptance and understanding, which itself means demonstrating that there are net benefits in moving towards road pricing.   He wants the Federal Government to work with the states in developing answers to key issues, such as rate setting, but also minimum standards of service (this can be both in terms of maintaining infrastructure but also congestion levels) and what is called "community service obligations".  In Australia, this term is used in other sectors to mean provision of a basic service at a common price across the whole geography of the country, regardless of the cost of provision and typically includes postal services and the basic landline telephony service among others.  Clearly in Australia one issue is very long lightly trafficked roads that, if the users were charged the full costs to recover the fixed costs of those roads, they would simply not use them (and the consequences at the communities and properties they access would be abandoned).    

The Minister indicates that road pricing for heavy vehicles is a "logical first step" and the Heavy Vehicle Road Reform programme is the current process for progressing that.  Certainly I agree, although the experience of private vehicle pilots in the US may well be helpful in the long process of incorporating light vehicles in due course.  The line between commercial vehicles and private vehicles is a big one to cross in terms of public acceptability.

The segment from the Minister's speech on road pricing is reproduced below in full, the footnotes are links to specific reports and sources:

Thursday, 14 April 2016

Hong Kong congestion charge looking more likely? 是交通拥堵费可能为香港?

Harbour Times (Hong Kong) reports that the Government of Hong Kong looks like it is more determined to introduce Electronic Road Pricing (ERP) than ever before. The genesis of road pricing in Hong Kong goes back to a study in the 1990s that included some of the first trials ever of using GPS technology to measure distance, with a technology pilot located at the former Kai Tak Airport site.  Politics have got in the way of implementation in the past, and they are still an issue, but given experience that has been built up in Europe, Asia and elsewhere, it would seem easier to introduce a congestion charge in Central and Wan Chai on Hong Kong Island than ever before.

The report says that local think tank Civic Exchange supports introducing congestion pricing and it made a submission to that end.   Civic Exchange claims that 90% of trips in Hong Kong are made by public transport (I'm not so sure, as I would have thought walking would have a reasonable share), but nevertheless it is seen as indicating that there is no problem substituting car trips for public transport for most trips.  It supports minimising exemptions, except for emergency vehicles.  That means charging buses, but since they can spread charge costs among multiple occupants, it should not be a problem.

The proposal from the Government is a pilot in Central and the consultation document and background materials can be downloaded here.

The consultation questions are shown below:

Hong Kong ERP consultation Questions 1-6
Hong Kong ERP consultation Questions 7-13

As you can see there is discussion about geography, whether an area (charging all movements within) or cordon (charge entry-exit only) scheme is preferred, what charging periods should be, the basis for charges, exemptions, technology options (focusing on DSRC and ANPR only), privacy protection and any complementary measures.  These are all good questions, for what it's worth I think that give what is being discussed, a cordon scheme with charging that varies by time of day, with minimal exemptions (emergency vehicles only) and charging based on road space occupancy would be the most effective.   

The intention is for the ERP pilot to cover an area bypassed by the soon to be completed Central-Wan Chai Bypass, illustrated below:

Hong Kong Central-Wan Chai Bypass
This would enable east-west traffic to bypass the concentration of activity in central Hong Kong and Wan Chai, and get access to the Cross Harbour Tunnel (which itself is congested as it has the lowest toll of the three tunnels to the mainland, suggesting that raising that toll should also be a congestion management measure at peak times).

Wednesday, 13 April 2016

Tolling Review: Australia as the next frontier?

In the latest Tolling Review magazine, published with Thinking Highways, there is an article authored by me about the prospects for road pricing in Australia.  In short, I think it has good prospects for being the country that can progress it the furthest in the coming decade (and that was before this speech and this report).
Cover of the latest Tolling Review

You can read the whole issue here, my article is on page 20, but there are plenty of interesting articles in this issue including Justin Hamilton's article on page 12 about Russia's Platon heavy vehicle road user charging system, Bob McQueen's article about how the likes of Uber and Waze would run toll roads, Pedro Pinto's piece on Portugal's successful expansion of tolling.

So just download the whole magazine and read it.

Tuesday, 12 April 2016

South Africa raises fuel tax, as tolls continue to be problematic

South Africa's Business Day has an editorial about the latest Budget which includes a ZAR0.30/l (US$0.02/l or US$0.08/US gallon).  Most of it is for general revenue, and the question raised by the editorial is whether the fuel tax in the country is a "sin tax" to punish private motoring.

The position taken by editor Mark Smyth is that if people do not have reasonable alternatives to driving, then it is a penalty.  However, he suggests that it would be preferable to ring-fence or hypothecate the new revenue, to address road transport issues.  The controversy over the Gauteng Freeway Improvement Project tolls is what causes particular concern, because SANRAL (South African National Roads Authority Limited) had long insisted that tolls were necessary to pay for that project because fuel tax would not.  Yet it appears the Government can increase fuel tax when it seeks additional revenue, which gives the not unreasonable impression that tolls are a specific target of users of the Gauteng highway network.

Fuel tax is an easy tax to collect, but if it is introduced explicitly just to collect revenue, it risks criticism simply because those who bear the greatest burden tend to be private motorists and road transport operators.  Clearly, if it is directly related to expenditure on roads  (as is widely seen in the United States) then it is seen as a user fee, so there is a direct link between what is paid and maintenance and improvements to the network.  However, it may also be imposed as an environmental tax, incorporating a price of CO2 or factoring in the impacts of noxious pollutants on public health.   Yet that has not been presented as a justification either.

The problem of fuel tax is that it isn't very good at advancing behaviour change.  It is an ideal carbon tax, as the implicit generation of CO2 does not have a geographic specific impact, so can be imposed more generally (and fuel consumption largely reflects CO2).  However, it is less than ideal as a pollution tax, because fuel consumption does not necessarily correlate to noxious emissions.  It is a poor user fee to reflect infrastructure costs, not only because it does not discriminate by location, but it is widely understood by economists as a poor proxy for wear and tear generated by vehicle axle loads beyond around 8 tonnes Gross Vehicle Weight, as diesel consumption does not increase sufficiently to compensate for this. 

Yet fuel tax has another problem, which is one of declining yields.  As fuel efficiency improves, the amount derived reduces and this tends to create an equity problem as those who pay the most will be those least able to afford the latest most fuel efficient vehicles. 

Given the controversy over tolls in South Africa, it would be timely for the whole field of motoring taxation and tolls to be investigated.  I think there may be better scope to move away from tolls on some routes and move towards a wider network road user charging system that can replace some fuel tax and the need for geographically specific tolls.   Whether this could be more acceptable is unclear, and of course it is critical that enforcement be addressed, but it would be more financially sustainable and may be more acceptable than location specific tolls.

Thursday, 7 April 2016

Slovenia to have network heavy vehicle toll in 2017

ITS International has reported that Norwegian toll provider Q-Free in consortium with Telekom Slovenia. Q Free confirms in its own press release as well.  The contract is for US$111 million (€99.99 million), which is for system delivery, including back office, "toll tags", service, maintenance, communications and systems integration.  There will be a 10 year service and maintenance element, with a three year possible extension.  The DARS (Slovenian Motorway Company) motorway and expressway network is 610km long.  
Slovenia's vignette charged road network


Slovenia's current heavy vehicle toll road network
Slovenia's road user charging policy is a curious combination of manual tolls for heavy vehicles only (trucks and buses) on main highways and a vignette (time based charge) for light vehicles.  The heavy vehicle toll rates are based on distance.  Note the heavy vehicle toll includes buses and coaches, not just trucks.  Slovenia is, of course, a major transit point between Italy/Austria and Croatia, Hungary, with transit freight (and passenger) traffic growing now Croatia is an EU Member State.

Ptolemus reports that there were three failed bidders (Kapsch, Autostrade and Skytoll), but most interestingly,  it is a conventional DSRC tolling system that is being implemented, not a GNSS based system - essentially updating the manual toll system in place for heavy vehicles to be more akin to the systems in Austria, Czech Republic and Poland.   The new system will expand to apply to all motorways and expressways in Slovenia, not just those currently subject to the toll. One report estimated an increase in expected revenues of €13m per annum due in part to the expansion of the tolled network and the improvement in traffic conditions.

It probably makes financial sense to simply convert manual tolls to electronic free flow on this relatively small network, as it updates what DARS already has.  There are long term operational cost benefits, and reductions in delays for heavy vehicles.  However, the decision to reject GNSS technology for now means it could not be extended beyond much of the motorway/expressway network economically, and the chance to build an ITS application sector on top of it (like Hungary has done).  As DARS is a commercial highway company its decision may be assumed to make commercial sense.  

I don't have further details as of yet, but it appears that the system has been procured in the conventional manner, not a PPP, so that DARS  will continue to own and operate the toll system.  However, the procurement of this system has been problematic over some years, with the initial call for interest in August 2011, but then suspended in March 2012, restarted in February 2013 and stopped again, with the current tender having been launched in July 2015.

The choice of a DSRC approach reflects it being the lowest cost tender.  Newspaper Večer has reported (Slovenian) that, saying that the other tenders were priced at €110.11m (Skytoll and Iskratel), €114.6m (Autostrada, Cetis and Engineering Informatics) and €114.96m (Kapsch).   Kapsch has a minority shareholding in Q-Free as well.  DARS says the Q-Free consortium had the highest scoring, and those who object may appeal.

There has been a request from Kapsch to audit the procurement according to Delo (Slovenian). Claims include that the tender documentation changed and that the specifications gave the winning bidder an advantage.  Concerns over the transparency around procurement of systems in other countries are known in the industry, so there is understandably sensitivity by both DARS and bidders.  It would be a shame if there were substance to allegations and concerns to delay the project further.   One concern is that because Q-Free bought Slovenian Company Traffic Design in 2014, that this gave it an advantage.  One report claims (Slovenia) that much of Traffic Design's business was obtained without competitive tenders, but representatives of the company and DARS strongly deny there were any irregularities.

Curiously,  DARS published a press release (Slovenian) on 30 March (after the announcement of the winning bid)  responding to allegations of irregularities in the procurement of the toll system.   It would appear it is not the end of this issue.

I have used Google Translate to extract the DARS press release in response to allegations, so apologies for the fractured English:

In connection with the reporting of some media that the implementation of the procurement procedure "Establishment and operation of multitrack electronic toll system in free-flow traffic on motorways and expressways" occurred organizing tenders and irregularities DARS d.d. denies such biased statements and strongly rejects any complaints about any organizing and editing your bids so by DARS d.d. as a third party. DARS d.d. All offers submitted by tenderers in any procurement procedure, led by DARS d.d., therefore, be kept in a specially protected room at the headquarters of Dunajska 7, Ljubljana, in the same way DARS d.d. also keeps the tenders received during the procedure.

The process is carried out in accordance with the provisions of the Public Procurement Act and the Act on the legal protection in public procurement procedures, so DARS d.d. during the course of the procedure will not land on the media influences and pressures. Also due care providers DARS d.d. He will not comment on the process, which is still in progress, regardless of the pressures of some of the media. Following this process, the public will be duly informed.

We emphasize that, in accordance with the provisions of the Public Procurement Act public opening of the bids in the presence of the media, suppliers and all stakeholders. Following the decision the client has all the bidders, at their request, granted access to both the tenderers who have submitted offers as well as documentation of the client. Among the insights all providers in accordance with the provisions of the Public Procurement Act and the Companies Act, protect their interests and on the basis of a decision on the protection of business secrets is a subscriber data offers all the providers that have been marked as business secret deals adequately protect (blanketed with several layers of paper). Consequently, the bid documents of all bidders correspondingly increased.

Once again firmly and strongly reject all allegations of irregularities opening and management process.