Proposal for a Directive of the European Parliament and of the Council on the widespread introduction and interoperability of electronic road toll systems in the Community
Date: 2003-04-29
Institutions: European Commission
Subjects: charges for use of infrastructure, financing, intelligent transport system, road network, toll, trans-European network, transport infrastructure, transport policy

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 23.4.2003
COM(2003) 132 final

2003/0081 (COD)

COMMUNICATION FROM THE COMMISSION

Developing the trans-European transport network:

Innovative funding solutions
Interoperability of electronic toll collection systems

Proposal for a

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the widespread introduction and interoperability of electronic road toll systems in the
Community

(presented by the Commission)

TABLE OF CONTENTS

PART I: MORE EFFECTIVE FINANCIAL AND MANAGEMENT INSTRUMENTS FOR

DEVELOPING THE TRANS-EUROPEAN TRANSPORT NETWORK ................. 6

1.

1.1.

1.2.

1.3.

1.4.

1.5.

1.6.

2.

3.

3.1.

3.2.

3.3.

3.4.

3.5.

Financing the trans-European transport network: Diagnosis of the current situation.. 8

An under-funded network ............................................................................................ 8

Public funds in need of better coordination ................................................................. 9

Highly selective private investment ........................................................................... 11

Exclusively private funding ....................................................................................... 11

Joint public/private funding ....................................................................................... 11

The funding requires a more appropriate framework ................................................ 14

Resolving the issue..................................................................................................... 16

Towards better coordination and synergy based on new structures........................... 17

Funds .......................................................................................................................... 17

Structures ................................................................................................................... 18

Setting up transnational legal entities to coordinate individual projects.................... 18

The development of new Community funding instruments....................................... 20

EU guarantees for the political risks of the trans-European transport network ......... 20

PART II – TOWARDS A EUROPEAN ELECTRONIC TOLL SERVICE ........................... 23

1.

2.

3.

4.

5.

6.

Introduction................................................................................................................ 24

Update on standardisation work................................................................................. 25

Access to toll systems in new Member States, and the situation for heavy goods
vehicles....................................................................................................................... 25

Aim of the Directive................................................................................................... 26

Achieving that aim ..................................................................................................... 27

Combining satellite positioning and mobile communications with microwave
technologies in the short and medium term, but opting exclusively for the more
modern technology in the long term .......................................................................... 27

2

7.

8.

9.

The long-term technical solution for deploying the European service: imposition of
the satellite solution from 2008 for new systems and from 2012 generally .............. 28

Timetable for implementing the European service .................................................... 29

Implementation of the European service: a Regulatory Committee .......................... 29

3

COMMUNICATION FROM THE COMMISSION

Developing the trans-European transport network:
Innovative funding solutions
Interoperability of electronic toll collection systems

Without  high-performance  transport  networks,  economies  cannot  be  competitive.  The
creation and smooth operation of the trans-European transport network, which became official
Community policy 10 years ago, is a key condition for the success of the internal market and
to  ensure  sustainable  mobility  in  an  enlarged  EU.  However,  traffic  on  the  network  is
continuing to grow apace but unevenly, while at the same time there is growing insistence on
sustainable  development  and  an  imminent  need  to  incorporate  the  networks  of  the  future
Member States. Moreover, transport infrastructure is still under-financed, for lack of adequate
funds and the absence of a framework conducive to investment.

Accordingly,  in  its  White  Paper  European  transport  policy  for  2010:  time  to  decide1  the
Commission already drew attention to the clear mismatch between the  advertised objectives
and  the  financial  means  available  from  the  Union.  The  fact  is  that  the  budget  the  Member
States put aside for developing such transport infrastructure and the funds made available by
the EU are insufficient. It is no small paradox to note that the Treaty makes the Community
responsible  for  producing  guidelines  for  the  development  of  the  trans-European  transport
network without granting it the financial resources to execute that task.

There seems to be little possibility at present of seeing a significant short-term increase in the
public  funding  allocated  to  these  infrastructure  projects,  in  view  of  the  combined  effects  of
the  current  economic  slowdown  and  budgetary  constraints.  The  Member  States  are  setting
themselves other priorities for using this public funding, even though people and businesses in
the  EU  suffer  every  day  the  tangible  consequences  of  increasingly  pronounced  modal
imbalance  and  the  failure  to  adapt  the  network  to  growing  mobility.  Use  of  public-private
partnerships  (PPPs)  to  supplement  public  financing  may  be  envisaged  for  some  types  of
project. However, there are still too many unknowns regarding the projects to be carried out –
particularly railway  and  cross-border  projects  –  and  regarding  transport  policy  choices.  The
private  sector  has  insufficient  confidence  to  commit  to  financing  them.  Moreover,  PPPs
almost always require major public financial support in the form of subsidies or guarantees.

There  is  no  denying,  however,  that  one  of  the  keys  to  a  successful  enlargement  will  be  the
creation  of  a  proper  transport  infrastructure  network  which  supplies  the  links  still  missing
between the Fifteen and with the new member countries and enables full benefit to be derived
from  the  European  single  area.  This  will  involve  infrastructure  being  modernised  or  newly
built not just in the future member countries, but also in the existing EU Member States, given
that some projects have not yet been carried out, that new traffic flows will develop and that
connections between the two zones are few and far between.

The  question  of  how  to  fund  this  new  infrastructure  clearly  appears  to  be  one  of  the
main issues in the context of enlargement.

1

COM(2001) 370, 12.9.2001.

4

                                                
In the meantime, we need to make sure that the collection of fees through the introduction of
infrastructure charging does not compromise traffic fluidity. This means making sure that toll
systems are interoperable.

This Communication  examines the situation of infrastructure  in  the  trans-European  network
and  its  financing  and  shows  the  need  to  implement,  without  delay,  a  set  of  complementary
measures  centring  on  a  more  effective  use  of  the  funding  earmarked  for  trans-European
infrastructure. These measures rest on two major pillars:

(cid:1)  better  coordination  of  public  and  private  financing  of  the  trans-European

transport network,

(cid:1) 

together with an effective European electronic toll service.

These  measures  should  help  make  the  policy  framework  more  stable  in  the  long  run  and
create  stable  conditions  for  financing  major 
trans-European  network  projects.  The
presentation  of a legislative  instrument,  through  an amendment of  Directive  1999/62/EC  on
the charging of heavy goods vehicles for the use of certain infrastructures (the "Eurovignette")
by June 2003, following the Brussels European Council of 20 and 21 March 2003, will enable
a Community approach to be taken to the question of infrastructure charging and will define
the  conditions  for  implementing  the  cross-financing  evoked  in  the  Transport  White  Paper.
The  "European  electronic  toll  service"  will  offer  travellers  on  the  trans-European  road
networks a single subscription contract as a basis for providing new services.

5

PART  I:  MORE  EFFECTIVE  FINANCIAL  AND  MANAGEMENT  INSTRUMENTS

FOR DEVELOPING THE TRANS-EUROPEAN TRANSPORT NETWORK

Introduction

The  Maastricht  Treaty,  which  entered  into  force  in  1993,  made  the  Community
responsible  for  a  policy  promoting  the  interconnection  and  interoperability  of
networks  to  enable  Europe  to  derive  full  benefit  from  an  area  without  frontiers.  In
this context, the Community was given the task of establishing a series of guidelines
covering the objectives, priorities and broad lines of action envisaged in the sphere of
trans-European  networks.2  This  led  inter  alia  to  the  adoption  in  1996  of  Decision
1692/96 on guidelines for the transport network.3 The main objective of this policy
was – and still is – to fill in the gaps in the major infrastructure networks, gaps which
hamper  the  free  movement  of  goods  and  persons  (transport),  electricity  and  gas
(energy) and ideas (telecommunications). This Communication covers only the trans-
European  transport  network  (TEN-T),  however,  given  the  significant  differences
with the energy and telecommunications sectors.

The gaps in the networks are due primarily to the fact that, until recently, networks
were planned on a national basis. They did not always take due account of the trans-
European  dimension.  Today,  this  lack  of  a  trans-European  perspective  has  left  its
mark  in  the  form  of  the  persisting  barriers  to  smooth  operation  of  the  internal
market4.  In  this  context,  the  White  Paper5  pointed  to  the  delays  in  completing  the
projects planned for the trans-European transport network as one of the chief sources
of  inefficiency  and  congestion  on  the  main  corridors  which  comprise  it.  The  fast-
approaching enlargement, which will inevitably generate significant growth in traffic
volume6 on the road and rail infrastructure – some of which is obsolete or offers far
less capacity than required – only adds to the need to fill in the missing links in this
network. Ten years after the entry into force of the Maastricht Treaty and almost as
long  after  the  Essen  Summit,  the  development  of  the  trans-European  transport
network is stagnating. There are many reasons for this, mainly as a result of:

– 

the lack of political will on the part of the decision-makers in the Member States
who  have  taken  insufficient  account  of  the  trans-European  dimension  of  the
projects;

2

4

3

Article 155.
European Parliament and Council Decision of 23 July 1996, OJ L 228, 9 September 1996.
The closure of the Mont Blanc tunnel following the accident on 24 March 1999 combined with the lack
of suitable alternatives, particularly rail services, is symptomatic of this situation, which had an adverse impact
on the economy of the Valle d'Aoste region, and of Italy as a whole, in terms of  gross domestic product. The
amount of the impact between 1999 and the beginning of 2002 is estimated in a range between 3000 and 3200
million €, due one third, to an increase in transport costs and for the remaining to a deficit of exports towards
other countries of the Union (Source: Dipartimento per lo Sviluppo delle Economie Territoriali della Presidenza
del Consiglio, 2003).
5

COM(2001) 370.
The White Paper forecasts growth of 24% in passenger traffic and 38% in freight traffic over the period
1998-2010 in the fifteen current European Union countries. If nothing is done to spread the demand more evenly,
heavy goods traffic is expected to increase by around 50%. The increase in traffic could easily be twice as high
in the new Member States and between them and the current Union countries, bearing in mind, in particular, the
relocation of highly labour-intensive industries to these countries.

6

6

                                                
– 

the  inadequacy  of  the  financial  resources  dedicated  to  the  trans-European
network from public (national and Community) and private sector sources, since
full use has not been made of public-private partnership option;

– 

the  fragmentation  of  the  entities  responsible  for  the  projects,  leading  to  serious
difficulties with the coordination of resources and the management of the projects;

This  document  sets  out  to  take  stock  of  the  situation  regarding  transport
infrastructure financing, explore ways of making that financing more  effective, and
relaunch the debate, among the parties concerned, about the means to be deployed in
future to ensure the efficiency of the transport network on which the competitiveness
of the enlarged EU will depend to a large extent over the next few decades.

7

1. 

FINANCING  THE  TRANS-EUROPEAN  TRANSPORT  NETWORK:  DIAGNOSIS  OF  THE
CURRENT SITUATION

Though the Community was given new powers over the planning of trans-European
networks, these were not accompanied by a large enough financial package to build
such networks. At the same time, beyond intentions, the Member States are running
into  problems  as  a  result  of  budgetary  constraints  in  financing  the  infrastructure
identified  in  the  European  Parliament  and  Council  Decision  on  guidelines  for  the
development  of  the  trans-European  transport  network,  particularly  the  cross-border
sections. A framework better adapted to these financing problems is needed to meet
the challenges of building this infrastructure. The funds available – especially public
funds  (including  Community  funds)  –  are  often  poorly  coordinated,  making  them
less  effective,  while  private  investment  remains  highly  selective  and  is  far  from
sufficient to meet the funding requirements for building the network.

1.1. 

An under-funded network

The difficulty facing trans-European network projects is funding. The estimated cost
of  the  trans-European  transport  network  alone  is  around  €350 billion  for  all  the
projects to be completed by 2010, plus over €100 billion more for projects involving
the future Member States. Although the objectives set by the EU for development of
the networks are, rightly, ambitious, the results are failing to live up to expectations,
with spending on the priority transport projects by the end of 2001 still no more than
25% of the total estimated cost. Only three of the 14 priority projects endorsed by the
Heads of  State  and  Government in  Essen in December  1994 have been completed7
and some of the other 11 are still at the preliminary studies stage. The longest delays
are on the cross-border sections of these projects, which are less profitable and have
lower priority than the national sections. This is particularly true of the projects in the
Alps and the Pyrenees.8

The Member States, which used to invest, on average, 1.5% of their GDP on building
transport  infrastructure  in  the  1980s,  now  invest  less  than  1%.9  Consequently,  the
Member States put €15 to €20 billion a year into the various trans-European transport
network  projects.  This  funding  is  clearly  inadequate  to  complete  all  the  planned
projects by 2010 and, strictly speaking, takes no account of the new needs which will
emerge  with  enlargement.  This 
transport
infrastructure  could  be  regarded  as  surprising,  considering  the  very  sharp  parallel
increase  observed  in  demand  for  mobility  and  the  importance  of  transport  to  the
functioning of the economy.

lack  of  commitment 

to  funding 

As  well  as  funding  from  the  Member  States,  the  trans-European  transport  network
also receives Community financing, as in addition to the part it plays in identifying
the individual components of the trans-European network, the Community's mandate

7

The Øresund fixed link between Sweden and Denmark, Milan–Malpensa airport and the upgrading of

the Cork–Dublin railway line.
8

See report by the European Parliament's Committee on Budgets on the Commission proposal to amend

the Regulation on the granting of financial aid in the field of TENs (rapporteur: Mr Turchi).
9

All transport infrastructure combined.

8

                                                
also covers the financial aspects. Accordingly, a budget has been earmarked for the
trans-European networks, backed up by Council Regulation (EC) No 2236/95 laying
down general rules for the granting of Community financial aid in the field of trans-
European  networks,  as  amended  by  Regulation  No 1655/99  of  the  European
Parliament and of the Council (the "TEN Financial Regulation"), to support projects
of common interest, studies and works.  This  co-financing mainly takes the form of
direct grants, though the TEN Financial Regulation also allows guarantees for loans
or  subsidies  of  the  interest  on  loans.  Alongside  this,  the  Community  also  helps
finance these networks via the Structural Funds (Cohesion Fund and ERDF). In the
case  of  links  inside  the  future  Member  States,  the  Pre-Accession  Structural
Instrument  is  helping  to  develop  the  networks  in  these  countries.  The  total
Community contribution in the European Union (all instruments combined excluding
European Investment Bank loans) for the entire period from 2000 to 2006 adds up to
around €20 billion.10 Clearly, the Community support therefore covers only a (very)
small  fraction  of  the  funding  requirements  and  is  far  from  sufficient  to  make  a
contribution to developing the networks.

include 

those  relating 

It  is  clear  from  these  figures  that  the  budget  the  Member  States  are  allocating  to
investment in  the  trans-European  network  and  the  funds  made  available  by  the  EU
itself are insufficient. To put it plainly, at the current rate of investment it would take
almost  20  years  to  implement  the  schemes  scheduled  for  completion  by  2010.  The
new  priorities  which  have  emerged  since  the  trans-European  networks  policy  was
introduced 
the
(re)construction  or  upgrading  of  networks  not  only  in  the  new  Member  States  but
also  in the current members of  the  European  Union,  plus  interconnections  between
these  two  zones.  Another  new  factor  which  must  be  highlighted  is  the  need  to
contribute towards an effective shift to the most environmentally friendly modes of
transport, as called for by the  Göteborg  European Council,  by  targeting  investment
on  such  modes.  Added  to  this,  there  is  the  need  to  contribute  towards  building  a
knowledge-based  society  by  adapting 
to  use  new
technologies, following the example set by the Galileo project.

to  enlargement  –  which  will  entail 

transport  networks 

the 

The fact is that while demand for mobility is growing, the construction of new and,
in  particular,  cross-border  transport  infrastructure  seems  to  be  at  a  standstill.  This
transport  policy,  with  its  ambitious  objectives  for  building  new  infrastructure,  still
lacks adequate financial resources to turn them into reality. As  clearly  stated  in the
White Paper on transport policy, if this state of affairs were to persist, it could have
far-reaching consequences for safety, the environment and the quality of life of local
communities  and  for  the  competitiveness  of  the  entire  production  system  in  the
enlarged Europe of the future.

1.2. 

Public funds in need of better coordination

Apart  from  looking  for  new  sources  of  funding,  one  of  the  most  striking  aspects
raised  by  implementation  of  these  major  projects  is,  without  doubt,  the  lack  of
coordination  between  the  different  sources  of  public  funds.  This  coordination  is  a
problem  since  it  is  necessary  to  establish  a  delicate  balance  between  different

10

The trans-European transport network budget for 2000-2006 totals no more than €4.17 billion, which is

nowhere near the real needs.

9

                                                
priorities,  which  do  not  necessarily  coincide,  at  regional,  national  and  Community
and level.

to 

Taking  the  Community  funding  first,  the  Structural  Funds  (ERDF),  the  Cohesion
Fund and PASI can make a significant contribution – often over 50% of the total cost
–  to  projects,  which  gives  the  Community  authorities  considerable  weight  in  the
programme for implementing them , while complying with the subsidiarity principle.
This  situation  is  conducive  to  the  development  of  the  TENs  but  this  possibility  is
less-developed  regions.
the  "cohesion  countries"  and 
limited  principally 
Assistance from the trans-European transport network budget, on the other hand, is,
in theory, intended to act as a catalyst for starting up such projects, by demonstrating
their feasibility and economic and financial viability.  It can also serve  as  a  lever to
mobilise  other  sources  of  funding,  both  public  and  private,  and  to  provide  easier
access  to  loans.  However,  this  option  is  rarely  used.  Given  the  complexity  of  the
projects  and  their  ever-increasing  cost,  the  current  rules  on  financial  aid,  limiting
support to 10% of the total cost, do not provide sufficient incentives to start up some
of these projects. Under these circumstances, it is becoming harder and harder for the
trans-European  transport  network  budget  to  perform  these  catalyst  and  leverage
functions.

Secondly,  experience  also  shows  that,  when  applying  for  financial  support,  States
prefer  to  spread  Community  resources  among  a  host  of  projects  instead  of
concentrating on a more limited number to enable the Community funding to act as a
catalyst. This failure to choose targeted priorities is highly damaging to the general
effectiveness of these funds.

This  is  why,  in  terms  of  managing  the  trans-European  network  budget,  the
Commission  cannot  accept  a  scattering  of  funds  among  many  small-scale  projects
but wishes instead to focus on financing the priorities identified in the White Paper
(bottlenecks, short sea shipping, improving links with the outlying regions).

In addition, unlike the Community support from the trans-European network budget
or the Cohesion Fund, which takes the form of direct grants (donations in a way), the
contribution from the  European  Investment  Bank consists  of  loans  at  advantageous
rates,11 often guaranteed by the Member States. As a result, the European Investment
Bank is one of the leading providers of funds for major trans-European infrastructure
projects and its lending policy is guided by the Bank's own assessment  criteria  and
operates under an independent management system. For example, the proportion of
European  Investment  Bank  loans  allocated  to  rail  (24%  of  all  loans  granted  to
transport between 1997 and 200112) is far lower than the percentage of direct grants
from the trans-European transport network budget allocated to railway infrastructure
(approximately two-thirds in 2000). Consequently, road  continues  to  take  the  lion's
share (35% between 1997 and 2001) of the European Investment Bank loans.

11

The European Investment Bank can grant 20-year or longer term loans at advantageous rates based on

its AAA rating.
12

Part of this 24% is earmarked for purchases of transport  equipment  but  also  covers  infrastructure  not
forming  part  of  the  TENs.  This  means  that  the  share  taken  by  TEN  railway  infrastructure  is  even  smaller.  In
compensation, the European Investment Bank has a separate line for loans granted to major infrastructure (6% of
the total) for all modes together, but of which rail takes a substantial share.

10

                                                
Finally,  at  national  level,  planning  of  trans-European  transport  infrastructure  often
involves  a  proliferation  of  uncoordinated  projects13  rather  than  a  selection  of
consistent  priorities  responding  to  the  growth  in  traffic  flows  within  the  EU  and
between the EU and its leading partners (and future members) outside.

The  degree  of  commitment  of  the  Member  States  to  the  development  of  the  trans-
European  transport  network  also  depends  on  certain  factors,  such  as  their
geographical  location,  and  in  particular  their  degree  of  isolation  from  the  centre  of
the EU. It also depends on their attachment to a traditional approach to infrastructure
planning  which  tends  to  discourage  innovative  solutions,  and  relies  almost
exclusively on public funding.

1.3. 

Highly selective public investment

In view of the severe budgetary constraints on the Member States and of the no less
severe need for new infrastructure – particularly with enlargement on the horizon –
fully public funding of such infrastructure in the medium term appears increasingly
Utopian.  To  rely  solely  on  funding  of  this  type  would  pose  a  risk  of  delays  in
completing  these  networks  –  with  unacceptable  consequences  –  as  already  pointed
out in the White Paper.

1.4. 

Exclusively private funding

Experience  shows  that  exclusively  private  funding  of  transport  infrastructure  is  not
the  best  option  for  bringing  large-scale  projects  to  fruition.  One  of  the  rare  recent
examples  of  any  significance  is  the  Channel  tunnel  which  –  leaving  aside  its
undeniable technical success – is in financial terms no model for investors wishing to
venture  into  building  infrastructure  of  this  type.  Because  of  the  nature  of  the
constraints involved, investment in major transport infrastructure does not lend itself
to funding by the private sector alone. Apart from the substantial sums involved, the
operating risks plus those inherent in the construction phase, the payback period on
the infrastructure, the uncertainty surrounding both the returns14 and the long term all
militate against fully private funding of such infrastructure. Consequently, the public
authorities  tend  not  to  look  for  mixed  (public-private)  financing  solutions.  This
traditional view therefore discourages private investors.

1.5. 

Joint public/private funding

Though  budgetary  constraints  thus  weigh  very  heavily  on  the  capacity  for  public
funding, there are nevertheless means of strengthening the leverage exerted by public
money to attract private capital, such as the concession system,15 which has proved
its  worth  and  is  continuing  to  do  so.  Throughout  the  19th  century  the  granting  of
concessions fuelled the boom in the railways, a sure sign that, at the time, funding of
railway  infrastructure  predominantly  by  private  investors  appeared  sufficiently
attractive  and  profitable.  Nevertheless,  in  the  vast  majority  of  cases,  infrastructure
funding  remained  the  prerogative  of  the  authorities,  with  private  investors
responsible  only  for  track-laying  and  infrastructure  management.  In  more  recent

13

14

15

For which funding is not always provided.
Especially taking account of the running costs which are added to the construction costs.
Or  other  forms  of  public-private  partnership  based  on  the  principle  of  the  public  and  private  sectors

sharing both risks and profits.

11

                                                
times,  motorway  or  airport  concessions  have  become  common  practice  in  many
countries, where they have proved their worth.16 Starting in the 1950s, the motorway
networks  of  France,  Italy  and Spain  were  built largely  with  the  aid  of  concessions,
allowing rapid development of this infrastructure without massive State debts.

Today  public  private  partnerships  (PPPs)  are  still  a  viable  option  for  financing
transport infrastructure in Europe, but they face major economic, legal and, in some
cases,  political  obstacles.  The  Commission  believes  that  good  practice  needs  to  be
spread and that, in the medium term, the existing regulatory framework needs to be
updated to make PPP schemes even more attractive, particularly for private investors.
In a number of Member States, a start has already been made on such revision of the
classic administrative law on concessions.

It is in this context that the Commission is going to produce a Green Paper on public-
private  partnerships  and  European  public  contracts  law.  The  purpose  of  the  Green
Paper will be to launch a major public consultation regarding the rapid development
of  various  forms  of  PPP  and  the  legal  regulation  of  public  contracts  through
Community law. To produce an informed debate, the Green Paper will examine the
current situation, identify points of legal uncertainty and suggest possible options for
the future. This consultation will enable the Commission to assess whether the legal
framework  needs  to  be  improved  and/or  supplemented  in  order  to  give  economic
operators  better  access  to  the  various  PPP  operations  undertaken  in  the  European
Union.  In  the  context  of  trans-European  transport  networks,  PPPs  need  to  meet  a
series of basic conditions:

the definition of the project in question must be clear;

there needs to be a clear long-term political will, so as to avoid calling into question
the initial decisions;

the players involved must work to ensure a high-quality partnership;

perfect transparency must exist concerning the costs, the terms of the concession and
the operating conditions, and the project in general. In particular, guarantees must be
given  that  the  private  sector  will  not  be  forced  to  bear  a  series  of  additional  costs
beyond the forecasts which it took into consideration when it was selected;

financial  guarantees  must  be  clearly  specified  and  there  must  be  an  established,
stable legal environment;

the project must be on an appropriate scale, from the economic point of view;

the  project  must  be  capable  of  generating  revenue  within  a  reasonable  timescale,
including from ancillary activities;

the  project  must  provide  for  revenue-sharing  beyond  a  jointly  agreed  minimum
revenue guaranteed by the State (though without such revenue being comparable to
disguised aid);

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

16

Whether through the introduction of real or shadow tolls.

12

                                                
(9)

the  project  must  also  provide  for  clear,  detailed  risk-sharing  so  that  each  partner
remains in control of the risk it is best placed to bear.

In practice, however, these conditions are not always met. What these projects offer
is a  (low)  financial  return  in  the  long  term  plus  a sometimes  high  construction  and
operating (traffic) risk. The complexity of PPPs also produces the situation that the
abovementioned criteria for achieving success are rarely met properly for the whole
of a major trans-European transport network project. Nevertheless, it  is  feasible for
the  cross-border  parts  of  a  specific  project  and  clearly  defined  sections  of  a  trans-
European transport network to meet these conditions and, no doubt, interest private
capital.

Alongside 
underestimated:

this,  other  restrictions  emerging 

in 

this  process  must  not  be

(1) 

reticence on the part of some Member States to encourage PPPs;

(2) 

the increasingly protracted negotiations, another disincentive;

(3) 

(4) 

(5) 

the  amount needed  in order to  take part  in  a  tendering  procedure,  related  to
the size and complexity of the project;

the desire for returns in the short term, whereas most of the projects are long-
term to very long-term;

the political context, which is often fluctuating,  generates  uncertainty  which
has an impact on the economics of the projects and made discourage private
investors.

PPPs are an attractive instrument, and are proving very popular in many sectors, but
their  success  depends  on  certain  factors  or  conditions  being  present:  small-scale
projects,  projects  with  easily  calculable  returns  and  risks,  motorways,  bridges  or
airports. They can also be useful whenever the input from the private sector provides
a means of maximising the results and keeping closer control over costs than could
be  achieved  by  a  similar  project  managed  by  the  public  sector.  By  contrast,  this
solution is rarely neutral in terms of costs, which in many cases end up to be higher
than  in  the  case  of  fully  public  financing,  because  of  private  investors'  higher
transaction costs17 and capital costs. Clearly, then, use of PPPs cannot be held up as a
"miracle" solution for a public sector facing budgetary constraints. On the contrary,
experience shows that a poorly prepared  PPP can  generate  fairly  high  costs  for  the
public sector.

The  technical  characteristics,  structural  complexities  and  political  uncertainties
surrounding  the  conditions  for  operating  trans-European  railway  network  schemes
make  this  type  of  project  a  difficult  case  which  goes  far  beyond  the  examples  of
PPPs  to  date.  However,  a  close  watch  will  have  to  be  kept  on  the  attempt  by  the
French  and  Spanish  governments  to  award  a  concession  for  operation  and
construction by a private consortium of the Perpignan-Figueras international stretch
of priority project No 3 (TGV Sud). Generally, the process of opening up the railway
market to competition – already underway within the EU – will bring improvements

17

Relating particularly to the identification, sharing and cover of risk.

13

                                                
in railway companies' commercial services and make it even more attractive to invest
in projects of this type.

1.6. 

The funding requires a more appropriate framework

Specifically, experience of funding projects through PPPs has been confined mainly
to infrastructure  costing  far less than  what  is  forecast  for  the  major  trans-European
infrastructure  projects  on  the  drawing  board  today.18  The  greater  the  private-sector
participation  in  these  projects,  the  greater  the  need  to  put  in  place  guarantee
mechanisms;  in  particular,  recent  PPPs  have  included  arrangements  to  provide
financial  compensation  to  the  operator  should  actual  traffic  levels  fall  short  of  the
forecasts,  a  solution  which,  in  some  cases,  could  prove  particularly  costly  to  the
State.  In  this  context,  the  diversity  of  the  projects  suggests  it  would  be  difficult  to
come  up  with  a  single  model  for  PPPs  and  that  a  case-by-case  approach  is  more
appropriate.  However,  it  is  worth  doing  more  to  promote  PPPs  at  trans-European
level, targeted on specific projects or parts of projects19 of a kind which could fit in
with these constraints (roads, airports,20 terminals and ports). New ideas, innovative
clauses and something going beyond a traditionally "public" approach are necessary
to encourage this trend at Community level.

Coordination  between  the  various  (public  or  private  sector)  parties  involved  in  a
project is one of the most influential aspects involved in the success of a project, in
particular  in  the  case  of  trans-frontier  infrastructure.  Establishing  a  structure  to
manage the project and with responsibility  for its funding is a particularly complex
problem.

The transport network is characterised by the wide range of projects which need to
be implemented, their service life (sometimes spanning several centuries), the major
risks  entailed  (financial,  technical,  environmental  and  political)  and  the  resultant
highly  uncertain  rate  of  return.  Consequently,  there  is  no  single  answer  to  the
question  of  infrastructure  funding.  Solutions  must  be  sought  through  a  variety  of
instruments  which  it  must  be  possible  to  use  in  combination  and  which  need  to  be
adapted  to  each  category  of  project.  In  this  context,  the  creation  of  -  single  -
structures for the management of projects, capable of dealing with both the financial
and administrative constraints, is a priority.

In  a  context  marked  by  a  shortage  of  resources,  the  objective  is  to  create  a  more
appropriate  framework  for  funding  major 
infrastructure,  drawing
principally on instruments which already exist but which need to be reinforced.

transport 

In the case of the PPP framework, for example, the Commission largely responded to
this  demand  over  four  years  ago  when  it  published  a  communication  on  public-

18

For example, the international section of the Lyon–Turin project alone will cost over €6.5 billion and

the Brenner section almost €5 billion.
19

HSL Zuid is a prime example. The private sector is financing 20% of the project, corresponding to the
superstructure,  while  the  public  funds  are  intended  for  construction  of  the  infrastructure  and  cover  all  the
associated risks.
20

In  Greece  the  new  Athens  Spata  airport  was  built  and  co-financed  by  a  consortium  of  private
undertakings  and  banks  and  by  the  Structural  Funds.  To  guarantee  sufficient  revenue,  the  concession  contract
stipulated that the existing airport was to be closed when the new one opened.

14

                                                
private partnerships for financing trans-European transport network projects21 which
clearly  defined  the  conditions  for  forming  PPPs  for  infrastructure  projects.
Regulation No 1655/99 provides for contributions to venture capital (maximum 1%
of  the  trans-European  transport  network  budget)  under  the  aegis  of  the  European
Investment  Bank  to  help  set  up  public-private  partnerships  on  trans-European
network projects.

In  practice,  the  Community  has  at  its  disposal  four  budget  instruments  actively
funding  major  trans-European  transport  infrastructure:  the  ERDF,  the  Cohesion
Fund, the Pre-Accession Structural Instrument (PASI)22 and the budget line for trans-
European networks, which provide funding in the form of grants. The Cohesion Fund
Regulation  already  stipulates  that  "the  Commission  shall  support  beneficiary
Member States' efforts to maximise the leverage of Fund resources by  encouraging
greater use of private sources of funding". In fact, Community co-financing from the
ERDF  and  the  Cohesion  Fund  can  be  used  to  support  projects  following  a  PPP
format.23  This  is  made  possible  by  the  high  rate  of  support  available  from  these
Funds. In this way, after fruitful discussions with the Commission, Greece took the
decision to form PPPs for some of its road projects so that the money "saved" could
be put towards rail projects.

Another  important point to note  is  the considerable progress  made, in recent  years,
with  the  economic  and  regulatory  framework  and  financial  instruments,  making  it
easier,  in  theory,  to  put  PPPs  in  place.  Reference  ought  to  be  made  here  to  the
initiatives already taken by the Commission:

–  In  an  interpretative  Communication  of  29 April  2000,  the  Commission  clarified
the  position  of  Community  law  regarding  concessions.  Concessions  are  not
currently  covered  by  the  Directives  on  public  contracts  (except  for  works
concessions,  the  award  of  which  is  subject  to  certain  provisions  of  Directive
93/37).  In  its  interpretative  Communication,  the  Commission  clarified  the
principles  deriving  from  the  provisions  of  the  EC  Treaty  regarding  fundamental
freedoms,  and  in  particular  the  obligations  of  opening  to  competition  and  equal
treatment.  The  Court  of  Justice  has  confirmed  this  interpretation,  notably  in  its
judgment in the Telaustria Case.24

–  The Commission took the opportunity of the recasting of the Directives on public
contracts25  to  introduce  a  new  procedure  for  awarding  contracts,  known  as
"competitive  dialogue".  This  procedure  applies  to  complex  contracts,  especially
where  the  awarding  body  is  unable  to  determine  which  technical  means  might
meet  its  requirements,  or  the  legal  and/or  financial  package  of  a  project.  The
competitive  dialogue  procedure  allows  dialogues  to  be  pursued  with  different
candidates  in  parallel  in  the  initial  stage.  Once  the  awarding  body  is  able  to
identify  the  solution  or  solutions  liable  to  meet  its  requirements,  the  dialogue
ends. It is then followed by a phase of submission and evaluation of tenders.

21

COM (97) 453: Communication from the Commission on public-private partnerships in trans-European

transport network projects.
22

Commission staff are studying forms of PPP which could qualify for funds from the PASI. DG REGIO

"Guidelines for successful public-private partnerships" (March 2003).
23

24

25

This should also be the case with the PASI.
Case 324/98, judgment of 7 December 2000.
COM(2000) 275 final.

15

                                                
–  In July 2000, the Commission also adopted a proposal for a regulation amending
the existing Regulation on State aid (Regulation No 1107/70)  authorising certain
State aid to help set up PPPs.

–  The introduction of the single currency offers considerable advantages for funding

cross-border projects, particularly by removing the exchange risk.

2. 

RESOLVING THE ISSUE

A  fresh  approach  is  needed  to  promote  a  new  culture  of  transport  infrastructure
funding  in  Europe  which  complies  with  Article 155  of  the  Treaty  establishing  the
European  Community  ("the  Community  may  support  the  financial  efforts  of  the
Member States  and  ...  the  Commission  may,  in  close  cooperation  with  the
Member States, take any useful initiative to promote such (financial) coordination")
and to facilitate synergy between the public and private sectors.

Transport  infrastructure  plays  an  essential  part  in  the  proper  functioning  of  the
economy  since  it  enables  economic  growth  potential  to  be  increased  through
economies of scale and network economies.26 Certain avenues need to be explored to
make  the  management  of  these  limited  resources  more  efficient  and  to  locate
possible new sources of funding. This presupposes, among other things, that single
management  instruments  will  be  put  in  place  for  each  project.  The  new  approach
proposed is therefore based on the following range of options:

Greater synergy in public investment: whatever  the principal method of funding,
whether  it  is  public  or  private,  the  size,  complexity  and  cross-border  nature  of  the
main  trans-European  transport  network  projects  mean  there  is  a  need  for  better
definition of priorities and coordination of funding.

The  introduction  of  legal  and  financial  management  structures  modelled  on  a
European company: The introduction of structures specially created for each major
project  and  benefiting  from  European  company  rules  could  provide  the  legal  and
financial transparency and coordination that are lacking in many financial packages
for infrastructure projects.

Active promotion of the involvement of private capital requires innovative clauses
and politically courageous action to overcome the conditions and restrictions set out
in 1.5. The options tried out in practice include:

(a)  Concession  schemes  under  which  most  of  the  risks  are  borne  by  the  private
investor on the basis of active demand management.

(b) Various systems enabling private partners to be involved as early as the project
design  phase,  e.g.  the  private  initiative  system  or  the  organisation  of  opening  to
competition on the basis of general functional requirements (output specifications).

1. 

2. 

3. 

26

What a network gains through the addition of a new node in terms of traffic generated and the scope for
new  links.  Missing  links  create  special  network  effects  (e.g.  the  high-speed  line  which  bypasses  Paris  to  the
south). A network must attain a critical mass to survive in competition with rivals. It therefore needs strong and
coordinated funding.

16

                                                
(c) The introduction of quality indicators and "progress clauses" enabling the private
investor to realise profit on the initial investment throughout the lifetime of a project.

(d)  The  possibility  of  extending  these  methods  to  cover  several  interconnected
projects (possibly beyond national frontiers).

It will need to be ensured that these solutions are compatible with the requirements
of  transparency  and  equal  treatment.  For  example,  experience  shows  that  Member
States  often  have  difficulty  reconciling  private  initiative  with  the  obligations  of
transparency  and  equal  treatment  of  all  potential  candidates.  Some  Member  States
even  contend  that  where  the  initiative  comes  from  the  private  sector  there  is  no
longer any need for  an opening to competition, though this is of  course contrary to
the Treaty.

The definition of a stable and predictable Community framework for charging
for  infrastructure  use.  Such  an  approach  would  increase  the  efficiency  of
infrastructure  use,  thereby  making  infrastructure  more  profitable  and  attractive  to
investors.  It would help to improve service quality by  financing  maintenance  costs.
Reflecting  the  generated  costs  of  transport  more  accurately  could  in  some
well-defined  cases  enable  investments  to  be  recouped.  The  presentation  of  a
legislative  instrument,  through  an  amendment  of  Directive  1999/62/EC  on  the
charging  of  heavy  goods  vehicles  for  the  use  of  certain  infrastructures  (the
"Eurovignette")  by  June  2003,  following  the  Brussels  European  Council  of  20  and
21 March  2003,  will  enable  a  Community  approach  to  be  taken  to  the  question  of
infrastructure  charging  and  will  define  the  conditions  for  implementing  the  cross-
financing evoked in the Transport White Paper.

4. 

5. 

Lastly,  consideration  could  also  be  given  to  increasing  specific  funds  and
introducing Community loans or guarantees for other loans which are specifically
dedicated to targeted trans-European transport network projects.

3. 

TOWARDS BETTER COORDINATION AND SYNERGY BASED ON NEW STRUCTURES

3.1. 

Funds

In its resolution on the White Paper on the common transport policy27, the European
Parliament  favours  a  coordinated  approach  by  setting  up  "within  the  Financial
Perspective  a  new  European  transport  fund  as  a  financial  instrument  with  a
substantial budget allocation, which would be applied across all Member States and
deal  with  all  modes  of  transport".  Apart  from  this  proposal,  the  scope  and  precise
content of which still have to be determined, the need for coordinated management
of  all  public  and  private  sector  funds  dedicated  to  the  trans-European  transport
network remains a priority, since public funds – whether national or Community – do
not  appear  to  be  used  optimally.  In  the  context  of  the  trans-European  transport
network they are often scattered among a large number of projects with no real order
of  priority  being  observed.  This  scattering  of  resources  sometimes  has  a  negative
effect on the development of the trans-European transport network, as witnessed by
the delays in completing these projects.

27 Resolution of 12 February 2003. Rapporteur Mr Juan de Dios Izquierdo Collado. Point 82.

17

                                                
The  Commission's  proposal  to  increase  its  maximum  share  of  funding  in  trans-
European transport network projects from 10% to 20% reflects its desire to focus on
a  limited  number  of  priority  projects  with  high  trans-European  added  value.  The
emphasis thus placed on certain infrastructure, and its translation in a financial sense
into  Community  public  funding,  would  also  send  the  markets  a  strong  signal  of
public commitment to these projects and should thus make it possible to attract other
resources to them.

3.2. 

Structures

Where  the  promotion  and  active  coordination  of  trans-frontier  trans-European
network projects is concerned, the idea of creating a European structure to promote
and act as a catalyst deserves consideration.

3.3. 

Setting up transnational legal entities to coordinate individual projects

While European Economic Interest Groups (EEIG) seem to be suitable for handling
the initial project phases (studies), they often prove far less flexible during the actual
works,  on  account  of  the  fact  that  the  EEIG  partners  are  responsible  without
limitation, and not solely as regards their participation.

In view of the number of players involved in setting up a European project, and the
financial resources and technical expertise needed, the funds allocated to the project
need to be managed in a coordinated manner during the development phase and not
just the initial phase. It is therefore essential to find a legal instrument which allows
more effective coordination at transnational level.

The  approval  by  the  Council,  on  8 October 2001,  of  the  Statute  for  European
companies already goes some way to providing part of the answer. When it becomes
effective in 2004, the approval of such companies should make it much simpler to set
up  companies  to  manage  cross-border  projects  and  should  produce  substantial
economies  of  scale.  It  is  within  this  European  company  framework,  and  in
accordance  with  Community  law  on  public  contracts,  that  consideration  could  be
given  to  setting  up  project  companies  for  every  major  cross-border  trans-European
transport  network  project,  in  line  with  the  spirit,  though  not  the  structure,  of  the
Galileo joint undertaking.

The  introduction  of  a  coherent  legal  structure  is  a  key  step  towards  increasing  the
prospects  of  success  of  cross-border  projects,  in  particular  to  secure  the  necessary
funding.  A  European  company  would  have  a  key  advantage  in  this  respect  since  it
will  have  a  single  legal  personality  enabling  it  to  operate  in  several  EU  Member
States.  Eurotunnel  has  already  indicated  that  this  would  be  a  benefit  which  would
enable it, over time, to avoid the need to comply with both English and French law.
In this respect, a European company will also have a psychological advantage: if, for
instance,  a  French  company  is  taken  over  by  an  Italian  company,  the  resulting
company will not be Italian but European.

European companies will be governed by Community legislation directly applicable
in all Member States or, failing this, by the law of the place  where  the  company is
registered.  It  will  be  governed  by  Community  legislation  directly  applicable  in  all
Member States.

18

– 

– 

– 

In  this  context,  the  setting  up  of  European  companies  to  manage  each  major
transport  network  project  could  prove  a  considerable
trans-European 
advantage.  The  creation  of  a  company  to  manage  a  trans-European  transport
network project would in particular enable companies with registered offices in
more  than  one  Member  State  to  merge  and  operate  throughout  the  European
Union and especially in the two countries concerned by the project;

From the financial point of view, the setting up of a company would enable the
various players to have a clear picture of the economic and financial situation
regarding  the  project,  which  is  not  easy  if  there  are  several  companies
operating under different laws;

Having  a  single  company  would  also  reduce  administrative  and  legal  costs.
Such  savings  are  generally  quite  considerable  in  the  case  of  a  multinational
group;

–  With  regard  to  the  choice  of  tax  regime,  which  is  probably  one  of  the  most
important aspects and which has not been satisfactorily dealt with up to now, in
particular  because  it  requires  unanimity  within  the  Council,  European
companies  should  be  free  to  choose  which  law  will  apply  once  they  have  a
subsidiary in a given country. In this way, European companies could make it
more  attractive  for  the  private  sector  to  participate  in  such  projects28;  in
particular, if a European company is set up by merger, any value added that is
still latent will not be immediately taxed, which will be an advantage compared
with ordinary law;

– 

– 

Better  coordination  should  allow  economies  of  scale  and  probably  make  it
possible to lean more heavily on the  financial markets  to borrow  capital. The
existence of a single company is likely, for example, to make it easier to sign a
global funding agreement for the project through competitive tendering;

The  existence  of  a  single  entity  will  make  it  easier  to  identify  the  roles  and
responsibilities of the various players and the risks to be shared between them,
in particular those of the public sector and those of the private sector. First of
all,  it  is  essential  to  ensure  that  the  tasks  of  this  type  of  company  are  clearly
defined. The main task of the company should be to complete the development
of the cross-border project by bringing in public29 and possibly private funds.
To guarantee the transparent operation of such companies, it will be necessary
to put a supervisory body in place to ensure that their decisions properly reflect
the thinking of the public, national or Community authorities. This means that
European companies, with their flexible arrangements, will be able to employ
both  a  single-tier  system  (Chairman  and  Board  of  Directors)  and  a  two-tier
system (Executive Board and Supervisory Board).

28

Except  as  regards  very  specific  adjustments  to  existing  tax  legislation,  the  tax  regime  issue  for
European  companies  is  still  unresolved,  as  it  is  for  any  company  with  places  of  business  in  several  different
countries. Initially it is planned to allow companies to  choose  their  tax  base  as  soon  as  they  have  at  least  one
subsidiary  in  the  country  in  which  they  wish  to  be  taxed.  The  longer-term  objective  is  to  achieve  a  single
consolidated tax base at EU level for company taxation.
29

See, for instance, the Øresund consortium.

19

                                                
It  should  also  be  remembered  that  European  companies  provide  for  the  broad
involvement of their staff in operation and control functions, whether through social
negotiations  or  the  minimum  requirements  already  laid  down  in  the  Regulation.
These aspects are particularly important in the framework of railway infrastructure,
an area in which employers and employees in most Member States remain attached
to the public dimension of the undertaking.

3.4. 

The development of new Community funding instruments

Nearly ten years after the publication of the Commission's White Paper on Growth,
Competitiveness and Employment, which proposed that Community loans be issued
to fund trans-European networks, existing financial and budgetary instruments have
been shown to be inadequate, as witnessed by the growing delay in the completion of
the trans-European transport network programme, especially the priority projects. It
will be recalled that the European Council (meeting in Brussels in December 1993)
agreed  that  "Additional  funding  will  be  provided,  as  far  as  is  necessary,  to  ensure
that priority projects do not run into financial obstacles which would jeopardise their
implementation. With this in mind, the European Council called upon the ECOFIN
Council  to  study,  together  with  the  Commission  and  the  EIB,  procedures  which
would  enable  the  Community  to  mobilise  up  to  an  additional  ECU 8  billion  per
annum  in  loans  for  operators  involved  in  setting  up  networks.  The  possibility  thus
provided should not run  counter to the  efforts undertaken  by  the  Member  States  to
reduce public debt, nor to the stability of financial markets".

The redirection and reprogramming of financial  resources decided on  by the  Berlin
European Council, the second review of the trans-European transport network master
plans now under way (for all modes) and the definition of a trans-European network
for  rail  freight  open  to  competition  are  providing  fresh  momentum  for  trans-
European transport network policy in an enlarged Europe. This will need to be at the
heart of the next review of the Financial Perspective.

In this context, it is hard to see how the  EU  will be able to avoid a debate  about a
substantial  increase  in  the  Community  funds  given  over  to  building  the  trans-
European transport  network.  This  in no way prejudges the work in progress  on  the
new  Financial  Perspective,  but  illustrates  the  specific  nature  of  the  trans-European
network,  the  completion  schedule  for  which  goes  well  beyond  the  traditional
financial  planning  framework.  A  future  increase  in  funds  for  completing  the  trans-
European  networks  would  make  it  possible  to  create  major  arteries  linking  the
countries of the enlarged EU.

3.5. 

EU guarantees for the political risks of the trans-European transport network

Guarantees  provide  an  essential  service  for  loan  activity  since  they  cover  the
associated  risk,  even  if  they  are  as  not  as  publicly  visible  as  loans.  It  should  be
emphasised that the rules for monitoring public debt do not refer to guarantees given
by States and regions. Sovereign guarantees may therefore ensure the flexibility need
to cope with the current budgetary constraints.

20

Title XV of the Treaty30 refers to the possibility of Community action in the form of
a guarantee for trans-European transport network projects. This possibility, which is
formulated very clearly, has been used only rarely up to now in the trans-European
network  Financial  Regulation  to  provide,  as  a  form  of  support,  assistance  with  the
cost of premiums on loan guarantees granted by financial institutions where:

- the project is considered cost-effective;

-  the  project  is  already  benefiting  from  the  mobilisation  of  public  and  private
funding;

- the project is receiving Community funding;

- the project is partly funded from revenue derived from charging.

With  these  four  conditions,  it  would  be  possible  to  consider  using  Community
guarantees or a Community loan.31

For external actions, there is a Guarantee Fund32 which receives payments from the
Community  budget  to  cover  such  operations.  The  Guarantee  Fund  under  the
Community budget also provides guarantees for European Investment Bank loans to
third  countries.  At  the  moment,  these  guarantees  cover  only  political  risks,  namely
the risks associated with the non-transfer of foreign currencies, expropriation, armed
conflict  and civil unrest,  and  commercial  risks.  However,  the  European  Investment
Bank has been asked by the Council to cover commercial risk through non-sovereign
guarantees for 30% of its loans.

Given  the  options  which  exist  at  EU  level,  the  political  decision  not  to  carry  out  a
project could be interpreted as being a political risk due to environmental, budgetary,
etc.  causes.  This  interpretation  could  be  extended  to  the  non-completion  of  related
network projects which are economically crucial for a project (network risk) but not
for  meeting  the  EU's  formal  commitments  (to  open  up  markets).  The  EU  could
provide  guarantees  for  projects  jointly  with  the  Member States  involved  and  the
European Investment Bank. The main function of these guarantees is demonstrate the
EU's interest and confidence in a particular project. They would be joint guarantees
and the biggest backers would be the Member States benefiting from the project. The
EIB's involvement would lend technical credibility to these guarantees since it would
be  responsible  for  assessing  the  project's  vulnerability  to  the  risks  covered.  In
particular  if  a  member  State  does  not  fullfil  its  commitments  in  terms  of  transport
infrastructure  implementation,  or  if  it  changes  its  priorities,  without  previously
consulting  other  member  States  or  interested  parties.  For  instance,  this  consists  in
assessing what would  be  the  economic  damage to  the  Lyon-Turin  project  of a new

30

There  are  also other  references  to  guarantees  in  the  Treaty.  Article 103(1)  stipulates  that  "A  Member
State shall not be liable for or assume the commitments ... of another Member State, without prejudice to mutual
financial  guarantees  for  the  joint  execution  of  a  specific  project".  The  European  Investment  Bank  may  also
provide guarantees, under Article 267, though it very rarely makes use of this option.
31

The  same  concern  led  to  the  creation  of  the  European  Investment  Fund  (EIF)  in  1994.  In  2000,

responsibility and expertise in this area were taken over by the European Investment Bank.
Article 3 of Regulation 2728/94: "The Fund shall rise to an appropriate level, hereinafter referred to as
32
'the  target  amount'.  The  target  amount  shall  be  10%  of  the  Community's  total  outstanding  capital  liabilities".
Article 4(1):  "The  payments  provided  for  under  the  first  indent  of  Article 2  shall  be  equivalent  to  14%  of  the
capital value of the operations until the Fund reaches the target amount".

21

                                                
road development in the Alps (doubling the Fréjus road tunnel, Mercantour tunnel).
To  cover  these  guarantees,  a  fund  to  mutualise  risk  between  the  various  trans-
European transport network projects could be set up. As with all insurance systems,
it would be a question of mutualising the risks of a maximum number of projects.

A reserve fund, adopting a form to be agreed with the EIB could be set up, based on
premiums  paid  by  participating  enterprises  and  the  public  authorities  concerned,
including the EU.

The  allocation  of  the  reserve  would  be  commensurate  with  the  probability  of
materialisation  of  the  limited  risks  run.  The  contributions  from  the  Community
budget  to  the  reserve  would  come  from  the  TEN  budget  line  with  the  need  for  an
amendment  to  the  current  Regulation,  or  possibly  from  contributions  from  the
Structural  Funds  and  the  Cohesion  Fund.  The  practical  implications  of  such  an
approach  should  be  examined  in  the  context  of  the  work  on  the  new  Financial
Perspective.

CONCLUSIONS

Financing  of  the  trans-European  transport  network  in  an  enlarged  European  Union
will in future make it necessary to:

– 

– 

– 

use  innovative  means  to  promote  the  involvement  of  private  capital  so  as  to
overcome the conditions currently preventing the general use of public-private
partnerships;

ensure coherence and complementarity between the management structures for
these types of project, in particular by setting up new transnational entities such
as "European companies";

review the level of Community resources in the context of the ongoing debate
about the future Financial Perspective.

22

PART II – TOWARDS A EUROPEAN ELECTRONIC TOLL SERVICE

23

EXPLANATORY MEMORANDUM

1. 

INTRODUCTION

Electronic  road  toll  systems  first  appeared  in  Europe  in  the  early  1990s  on
motorways operated  under  a  concession where the  toll served  to  finance  motorway
construction and maintenance. The main objective of such systems is to speed up toll
collection,  thereby  increasing  the  capacity  of  the  motorway.  Various  systems  were
introduced,  at  local  and  then  at  national  level,  but  these  systems  are  mutually
incompatible. This has created problems for motorists, who have to affix several tags
to  the  windscreen  of  their  vehicle  (sometimes  even  within  a  single  conurbation)  in
order  to  subscribe  to  the  various  systems.  Italy,  Portugal,  France,  Switzerland,
Slovenia  and  Norway  have  national  systems,  but  they  are  incompatible.  In  view  of
the  growth  in  international  traffic,  it  is  now  desirable  for  these  systems  to  be
interoperable at European level.

Moreover,  particularly  at  peak  periods,  but  also  more  persistently  at  certain  very
busy points in the European road network, the collection of tolls causes congestion,
delays, accidents and incidents which are detrimental both to road users and to the
environment.  Electronic  tolls  put  the  users  and  their  vehicles  at  the  centre  of  the
transport system. They are an excellent tool for reducing congestion, provided that a
sufficient  number  of  equipped  lanes  are  available  at  toll  stations  and  that  a  high
proportion of road users take out a subscription (and therefore that a large number of
vehicles are fitted with the equipment). They allow subscribers to be separated from
occasional users  as they arrive  at or approach the toll  stations.  The  subscribers  can
then  enter  dedicated  lanes  where  they  will  not  have  to  stop  or  perform  any
transactions but simply continue to drive at a slow speed. This is the case even if the
lane is equipped with automatic barriers,  as the  dimensions  have been  designed for
this  purpose.  While  the  maximum  flow  for  a  lane  equipped  with  a  credit  card
machine or a manual toll is 120 vehicles per hour, a lane with an electronic toll can
handle between 200 and 300 vehicles per hour, depending on its configuration.

By  eliminating  these  bottlenecks  and  making  the  traffic  flow  more  smoothly,
electronic  tolls  also  help  reduce  the  number  of  accidents  and  thus  improve  road
safety.  By  limiting  cash  transactions  at  toll  stations,  they  also  reduce  the  risks
associated with the transport of money.

Electronic tolls are the potential key to developing the information society in road
transport,  as  the  same  equipment  installed  in  vehicles  will  allow  value-added
telematic  services  and  safety  systems  to  be  deployed  for  travellers:  an  automatic
emergency  call  in  the  event  of  an  accident,  real-time  information  on  traffic
conditions  or  journey  times  etc.  They  therefore  help  to  strengthen  the  European
electronics industry, which is at the forefront of this technology and is calling for the
implementation  of  technical  standards  in  order  to  avoid  market  fragmentation.  In
addition,  vehicle  manufacturers  will  also  be  able  to  incorporate  electronic  toll
equipment into their new vehicles.

24

2. 

UPDATE ON STANDARDISATION WORK

All  existing  electronic  toll  systems  are  based  on  short-range  microwave
technology,  many  variants  of  which  are  available  on  the  market.  The  European
Committee for Standardisation (CEN) worked on standards for several years, and in
January  2003  it  adopted  a  draft  definitive  standard.  This  draft  nonetheless  contains
two variants.

In 1997 CEN adopted pre-standards, but these did not ensure compatibility between
systems and  left  scope for varying  interpretations. As a  result,  Europe  now  has  the
two variants referred to above. In addition to these pre-standards, there are also many
older  but  widely  deployed  systems,  some  of  which  have  a  large  number  of
subscribers.

A  European  directive  is  therefore  needed  to  ensure  migration  towards  the  future
interoperability  of  the  various  systems  from  the  user's  perspective,  because  the
Member  States  will  otherwise  continue  to  adopt  technically  incompatible  national
electronic toll systems, thereby creating additional difficulties for international road
traffic  and  hampering  the  smooth  operation  of  the  internal  market.  Without  this
directive,  drivers  will  have  to  equip  their  vehicles  with  several  country-specific
boxes to ensure problem-free driving throughout the European road network.

This  Directive  is  based  on  preparatory  work  carried  out  under  the  Research  and
Development  Framework  Programmes  and  in  the  context  of  the  trans-European
networks.

3. 

ACCESS  TO  TOLL  SYSTEMS  IN  NEW  MEMBER  STATES,  AND  THE  SITUATION  FOR
HEAVY GOODS VEHICLES

Electronic  toll  systems  first  appeared  in  just  a  few  countries,  but  they  are  now
spreading  throughout  Europe.  A  number  of  European  countries  have  recently
introduced, or are planning to introduce, electronic tolls as a tool of traffic regulation
policy, either in urban areas (Netherlands, United Kingdom) or for certain categories
of  vehicles  (heavy  goods  vehicles  in  Germany,  Austria  and  Switzerland).  Some  of
these  countries  are  moving  towards  more  recent  technologies,  such  as  satellite
positioning  (global  navigation  satellite  system  (GNSS):  GPS,  then  Galileo)  in
conjunction  with  mobile  communications  (using  the  GSM/GPRS  standard).  This
choice eliminates the need for costly investments in roadside equipment, and allows
the  most  advanced  technology  to  be  used,  but  depends  on  further  developments  in
satellite navigation systems, in particular Galileo. These countries are thereby opting
for  a  reference  technology  in  the  future  development  of  road  transport.  Without
waiting for the operational implementation of Galileo in 2008, the EGNOS precursor
system  will,  as  of  2004,  enable  a  higher  degree  of  positioning  accuracy  than  that
given  by  GPS  alone.  Satellite  positioning 
in  conjunction  with  mobile
communications is also the only solution that allows easy application of “zone tolls”,
i.e.  tolls  applied  to  vehicles  entering  or  leaving  a  given  geographic  area  (e.g.  a
conurbation).  However,  other  countries  have  taken  a  more  conservative  approach,
depending on their road-charging policies and the topology of their network, and are
continuing to opt for microwave technology.

There  are  no  plans  in  the  Member  States  to  introduce  new  toll  systems  using  any
technology other than that based on microwaves or the GPS/GSM combination.

25

Thus  electronic tolls  in Europe  will in  future  be  based  on  the multiple  use  of  three
technologies, which could cause real difficulties for travellers. Take the situation of
heavy goods vehicles (HGVs) for example. For some years HGVs have had to pay a
tax  in  Switzerland,  a  country  through  which  a  high  proportion  of  transalpine  road
traffic has to pass. To that end they have to install a complex device in the cab, which
must be visible from the outside so that police and customs officers can see that it is
working and being used correctly. The Swiss system combines the use of the DSRC
microwave system and GPS. At the end of May 2002, Austria announced its decision
to implement a different system, based solely on DSRC, to apply charges to HGVs.
Germany announced  a similar decision in June 2002, with the combined  use of  the
three  technologies.  The  situation  will  become  even  more  complicated  when  other
European countries such as the Netherlands and the United Kingdom introduce HGV
charges, or countries like France allow HGVs to use their existing national electronic
toll  systems  (Italy  already  allows  this).  Can  it  be  acceptable  that  HGV  drivers  will
eventually have to accommodate half a dozen electronic boxes (each measuring 1.5-
2.5 dm³ and weighing 1-2 kg) in their cab  merely in order  to  pay toll fees?  Such a
situation would also be unacceptable on account of the price of the equipment. There
is thus an urgent need for boxes capable of reading all the systems used in Europe to
be  made  available  to  drivers  who  engage  in  international  transport.  The  industry
believes this can be done and that it will not involve any major increase in the price
of  the  box.  Indeed,  some  manufacturers  believe  the  current  price  of  €20  for  a  box
capable of communicating with one single microwave system would increase to €25
for an interoperable box capable of reading all the microwave systems in use in the
Union.  The real increase  in the  price  of  boxes  will  be  linked  to  the  addition  of  the
satellite/mobile  communications  system.  However,  the  price  of  a  box  with  satellite
communication would not increase significantly through the addition of microwave-
reading equipment.

Moreover, as the methods for operating these boxes are different, there is a growing
risk that HGV drivers will make mistakes, whereby they may accidentally break the
law  (e.g.  by  incorrectly  declaring  the  trailer  or  the  number  of  axles),  which  will
create  difficult  situations  for  users  and  infrastructure  operators.  Action  therefore
needs to be taken to harmonise and rationalise boxes.

4. 

AIM OF THE DIRECTIVE

This  Directive  was  announced  in  the  White  Paper  European  transport  policy  for
2010:  time  to  decide.  It  lays  down  the  conditions  necessary  for  a  European
electronic toll service to be put in place as soon as possible on all parts of the road
network subject to tolls. This service will be based on the principle of "one contract
per customer, one box per vehicle".

The Directive does not deal with road-charging policy as such and does not prejudge
possible future road-charging policy options. On the contrary, the technical solutions
adopted mean that all the policies currently planned at EU and Member  State level
can be implemented.  And by ensuring  the interoperability of toll  systems  in  the
internal  market,  the  Directive  will  facilitate  the  implementation  of  a  Europe-
wide infrastructure-charging policy. The recommended technologies can cover all
types of infrastructure (motorways, roads, bridges, tunnels, etc.) and vehicles (HGV,
light vehicles, motorbikes, etc.).

26

5. 

ACHIEVING THAT AIM

Motorway operating companies have invested large sums of money (several hundred
million euros per network) to install systems on their networks which were originally
intended to provide a better service to the drivers of light vehicles. Account must be
taken of these investments and their amortisation (in accounting and technical terms)
so as to migrate progressively towards interoperable systems as part of the "European
service". It will be possible for existing national and local systems to be maintained
alongside the European service for local use until they are decommissioned, though
the  obligation  for  operators  to  make  interoperable  receivers  available  to  users  who
want  them  will  make  an  appreciable  contribution  towards  easing  this  situation  for
users.

In  this  way  progress  can  be  made  towards  the  interoperability  of  existing  systems.
However, some of the countries referred to above want to introduce an electronic toll
system for HGVs in 2003 or 2004. Certain cities,  such  as  Rome  and  London,  have
decided to install a toll system to control vehicle access to the city centre. Technical
guidelines therefore need to be laid down now to ensure the interoperability of future
systems. Moreover, the market is in favour of establishing a reference system for the
future.

In response to these twin problems, the European electronic toll service will be based
on a short-term solution (until 2005) taking account of existing systems, and then on
a long-term solution (2008-2012), decided on and presented below.

The  Commission  is  asking  manufacturers  to  pursue  action  to  lead  as  quickly  as
possible to the adoption of common standards for the three technologies.

6. 

COMBINING  SATELLITE  POSITIONING  AND  MOBILE  COMMUNICATIONS  WITH
MICROWAVE  TECHNOLOGIES  IN  THE  SHORT  AND  MEDIUM  TERM,  BUT  OPTING
EXCLUSIVELY FOR THE MORE MODERN TECHNOLOGY IN THE LONG TERM

This combination, presented in Article 2, is intended to allow charging on the road
network  without  having  to  build  new  stations.  The  widespread  introduction  of
road-charging  policies  requires  new  technological  solutions  capable  of  covering  all
road  infrastructure.  Toll  lanes  cannot  be  built  on  all  parts  of  the  road  network,
including town centres, for financial, environmental and safety reasons.

This proposal is based on the use of new technologies that are already available: the
GNSS/GSM combination, together with microwave technology, which is already in
widespread  use  in  the  Union.  These  three  technologies  are  the  only  ones  currently
being considered for new toll systems in Europe.

The  use  of  satellite  positioning  and  mobile  communications  technologies  is
advocated for the deployment of the European electronic toll service as well as
for all new national systems, these technologies being more flexible and better suited
to the new Community charging policies. Moreover, they are a component of many
active  safety  systems,  which  manufacturers  are  starting  to  install  in  their  vehicles.
However, operators who want to use microwave technology for new systems will be
allowed to do so until 2008.

27

This choice safeguards the continuity of investments which have already been made
in several European countries, whilst taking into account the fact that the qualities of
the new technologies will inevitably dominate in the  near  future,  especially as they
will open the  door  to  the  new  value-added  services  aimed  at  travellers  which  were
mentioned  in  the  introduction.  This  choice  also  gives  operators  the  freedom  to
choose  the  best  solution  for  their  specific  problem,  whilst  ensuring  the  conditions
necessary for the deployment of the European electronic toll service.

7. 

THE LONG-TERM TECHNICAL SOLUTION FOR DEPLOYING THE EUROPEAN SERVICE:
IMPOSITION  OF  THE  SATELLITE  SOLUTION  FROM  2008  FOR  NEW  SYSTEMS  AND
FROM 2012 GENERALLY

In 2008, microwave  technology, a product of the 1970s, will  be over  30  years  old,
and will have been left behind by new technological developments, even if it is still
in use on the motorway networks. Satellite technology, on the other hand, boosted by
the full implementation of Galileo in 2008, will have matured and had the time not
only to prove itself but also to acquire the necessary experience to be able to support
the  European  electronic  toll  service  by  itself.  In  particular,  the  difficult  problem  of
fraud  prevention,  which  is  currently  handled  by  means  of  complex  short-range
roadside-vehicle  communication,  should  become  easier  to  deal  with  thanks  to  the
emergence of new technological solutions.

There  is  also  a  risk  that  between  now  and  2008  there  may  be  further  attempts  to
introduce  new  microwave  systems,  creating  more  problems  of 
technical
interoperability.

That is why the  Directive stipulates that in 2008 the satellite solution involving the
combination of satellite positioning and mobile communications must be adopted, in
preference to microwave technology, for all new systems brought into service on or
after  that  date  as  part  of  the  European  electronic  toll  service.  To  safeguard
investments  recently  planned  or  made  in  certain  countries,  notably  Austria,  Spain,
France, Greece, Portugal and Italy, microwave systems which are still in service may
nonetheless continue to be used, though a migration strategy will have to be drawn
up for 2010 in all the countries which continue to use them. Migration will have to be
completed by 2012.

The  Commission  will  have  to  produce  a  report  by  31 December  2007  to  assess
whether  the  problems  in  evidence  today  regarding  the  utilisation  of  the  satellite
solution have been properly dealt with. If this report, drawn up in collaboration with
the  Electronic  Toll  Committee,  shows  that  systems  based  on  satellite  and  mobile
communications  technology  have  still  not  solved  all  the  utilisation  problems,  the
Commission will put forward a proposal to allow microwave systems to continue to
be used alongside satellite/mobile communications systems.

It  should  be  noted  that  adoption  of  the  technical  solution  based  on  satellite
technology and mobile communications technology will also mean the disappearance
of toll barriers for the majority of users, who will be able to pay without stopping. A
limited number of installations will remain for occasional users and those without the
requisite equipment.

28

In  this  context,  it  is  very  important  for  manufacturers  to  ensure  that  the
standardisation work in the European standardisation bodies is completed not just for
microwave technology but also, and above all, for technologies based on satellite and
mobile communications technology.

8. 

TIMETABLE FOR IMPLEMENTING THE EUROPEAN SERVICE

The technical and contractual arrangements for the full deployment of the European
service on the technical bases described  above  will be  examined  by  the  Committee
set up pursuant to Article 5.

The service will be deployed in two stages:

–  from 2005 for electronic toll payments by HGVs, buses and coaches,

–  from 2010 for cars.

By  2010,  technological  progress  will  have  made  it  possible  to  install  in  all  four-
wheeled vehicles equipment communicating with the outside world via microwave,
GSM/GPRS and GNSS interfaces supporting a range of telematic services, including
electronic tolls. This technological leap, which has already started, will bring the cost
of equipping a vehicle down to the current cost of a microwave tag (between 20 and
50 euros).

The European service will permit the full implementation of all HGV-charging and
urban congestion-charging policies which the European Union or the Member States
wish to introduce. In addition to being more appropriate for the "zone tolls" defined
above,  satellite  positioning  in  conjunction  with  mobile  communications  avoids
having to install equipment at a later date on road networks which were not built with
space for toll plazas.

By  2010,  interoperability  between  national  electronic  toll  systems  will  have  been
achieved by the deployment of a "European service" offered to all types of customer.

9. 

IMPLEMENTATION OF THE EUROPEAN SERVICE: A REGULATORY COMMITTEE

The  essential  principles  of  the  European  service  are  described  in  Article 3.  As  the
service will be offered by all toll infrastructure managers, it puts the traveller at the
centre  of  the  road  transport  system.  Open  to  all  and  available  throughout  the  road
network by means of a single subscription contract, it will provide a single interface
between  the  customer  and  infrastructure  managers,  in  accordance  with  the  basic
principles  of  European  legislation,  particularly  as  regards  the  protection  of  privacy
and personal data.

A precise definition is required of the details of the European service and of a large
number  of  accompanying  technical  measures.  For  example,  a  memorandum  of
understanding needs to be established between European infrastructure managers for
the deployment of the service and the establishment of a netting system.

The Commission is responsible for defining the "European service" and is taking the
necessary  technical  decisions  to  this  end,  in  accordance  with  the  committee

29

procedure referred to in Article 5 of the Directive. Article 5 of the proposed Directive
sets  up  a  committee  to  assist  the  Commission,  composed  of  representatives  of  the
Member  States  with  practical  experience  in  the  fields  of  electronic  tolls  and  road
management. Such a committee does not currently exist, and will therefore have to
be set up. It will base its work on the findings of research projects conducted under
the  Research  and  Development  Framework  Programme  and  in  the  context  of  the
trans-European  networks.  Preparatory  work  has  already  been  carried  out  under  the
auspices of the Commission, involving  national authorities, infrastructure  managers
and manufacturers.

The following issues inter alia will have to be addressed:

–  precise  definition  of  the  service  offered:  in  particular  functional  and  technical
specifications of the service, the quality of the service and its level of deployment
at toll stations with a view to limiting queues, slow-moving traffic and incidents
of  all  kinds  resulting  from  toll  collection.  Payment  methods  relating  to  the
subscription contract, and after-sales service, etc., will also be addressed;

–  definition  of  the  electronic  toll  applications:  i.e.  a  single  method  of  using  the
electronic toll equipment. For example, smart cards used as bank cards and smart
cards  used  for  health  and  health  insurance  purposes  are  technically  compatible,
but  only  the  former  enable  you  to  withdraw  bank  notes  from  an  automatic  cash
dispenser. The same type of problem arises here;

–  launching and following up technical harmonisation activities with the European

standardisation bodies;

–  any  technical  additions  to  the  standards  or  pre-standards  used  and  which  ensure
interoperability; procedures for taking account of technological developments, in
particular the development of mobile communications;

–  harmonisation  of  electronic 

toll  procedures  between  operators:  vehicle
classification,  signs  on  toll  gates,  occasional  users  without  the  necessary
equipment;

–  specifications for incorporating equipment into vehicles;

–  procedures  for  approving,  at  European  level,  on-board  equipment,  roadside
equipment and the way equipment is incorporated into vehicles, particularly from
the point of view of road safety;

–  validation of the chosen technical solutions vis-à-vis the European rules protecting
the  freedoms  and  fundamental  rights  of  individuals,  including  their  privacy.  In
particular,  conformity  will  have  to  be  ensured  with  Directives  95/46/EC33  and
2002/58/EC34;

33

Directive  95/46/EC  of  the  European  Parliament  and  of  the  Council  of  24 October  1995  on  the

protection of individuals with regard to the processing of personal data and on the free movement of such data.
34

Directive 2002/58/EC of the European Parliament and of the Council  of  12 July  2002  concerning  the
processing of personal data and the protection of privacy in the electronic communications sector (Directive on
privacy and electronic communications).

30

                                                
–  procedures  for  dealing  with  operating  anomalies  (equipment  breakdown,
intentional  or  unintentional  incorrect  use,  incidents,  etc.),  essentially  in  the
international context where the customer is from a country other than the country
of payment;

–  definition  of  a  memorandum  of  understanding  between  road  operators  enabling
the  service  to  be  implemented  on  the  European  road  network,  and  a  single
contract  for  customers.  It  should  be  possible  to  extend  this  memorandum  of
understanding  at  a  later  date  to  banks,  whose  payment  cards  will  be  associated
with electronic toll systems.

The  Commission  and  the  committee  will  seek  technical  advice  from  groups  of
experts  appointed  for  this  purpose.  In  particular,  the  Commission  will  work  with  a
group of experts made up of representatives of operators of the "European electronic
toll  service",  the  electronics  and  motor  vehicle  industries,  and  users  of  the  service,
professionals  and  individuals  These  groups  of  experts  can  be  given  the  task  of
drafting the preparatory documents for the work of the committee. The Commission
will  also  be  able  to  seek  the  opinion  of  other  committees  or  working  parties,
including  the  Working  Party  on  the  Protection  of  Individuals  with  regard  to  the
Processing of Personal Data set up by Article 29 of Directive 95/46/EC.

31

2003/0081 (COD)

Proposal for a

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the widespread introduction and interoperability of electronic road toll systems in the
Community

(text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular
Article 71(1) thereof,

Having regard to the proposal from the Commission,35

Having regard to the opinion of the European Economic and Social Committee,36

Having regard to the opinion of the Committee of the Regions,37

Acting in accordance with the procedure laid down in Article 251 of the Treaty,

Whereas:

(1) 

(2) 

By its resolution of 17 June 1997 on the development of telematics in road transport,
in particular with respect to electronic fee collection (EFC),38 the Council called on the
Commission  and  Member  States  to  develop  a  strategy  for  the  convergence  of  EFC
systems in order to achieve an appropriate level of interoperability at a European level,
The communication to the Council, the European Parliament, the Economic and Social
Committee  and  the  Committee  of  the  Regions  on  interoperable  electronic  fee
collection systems in Europe39 presented the first stage of this strategy.

The  majority  of  European  States  which  have  installed  electronic  toll  systems  to
finance road infrastructure costs or electronic systems to collect road use fees (jointly
referred  to  hereinafter  as  “electronic  toll  systems”)  use  short-range  microwave
technology and frequencies close to 5.8 GHz, but these systems are currently mutually
incompatible.  The  work  on  microwave  technology  undertaken  by  the  European
Committee  for Standardisation  (CEN) resulted in  January  2003  in  the  preparation  of
technical standards making for the compatibility of 5.8 GHz microwave electronic toll
systems, following the adoption of pre-standards in 1997.40 However, these technical

35

36

37

38

39

40

OJ C […], […], p. […].
OJ C […], […], p. […].
OJ C […], […], p. […].
OJ C 194, 25.6.1997, p. 5.
COM (1998) 795 final.
The CEN pre-standards on 5.8 GHz short-range microwave transmission are known under the technical

name of Dedicated Short-Range Communications (DSRC).

32

                                                
standards encompass two compatible variants which are not totally  compatible. They
are  based  on  the  Open  Systems  Interconnection  (OSI)41  model  defined  by  the
International  Standardisation  Organisation  for  communication  between  computer
systems.

(3)  Manufacturers  and  infrastructure  managers  have  nonetheless  agreed,  within  the
Member States of the European Union, to develop interoperable products based on the
pre-standards  adopted  in  1997,  favouring  the  option  of  high-speed  transmission
between  roadside  units  and  on-board  units.  This  choice  should  mean  that  new
electronic toll systems can be introduced that will be technically compatible with the
latest systems installed in the Community (in France, Spain and Austria).

(4) 

(5) 

(6) 

(7) 

It  is  essential  that  this  standardisation  work  be  completed  as  quickly  as  possible  to
establish  technical  standards  ensuring  the  compatibility  of  electronic  toll  systems
based  on  microwave 
technology.  Other  standardisation  work  concerning  a
combination  of  satellite  and  mobile  communications  technology  for  electronic  toll
systems  should  also  be  completed  rapidly  in  order  to  avoid  further  fragmentation  of
the market.

It is necessary to provide for the widespread deployment of electronic toll systems in
the  Member  States  and  neighbouring  countries,  and  the  need  is  arising  to  have
interoperable  systems  suited  to  the  future  development  of  road-charging  policy  at
Community level.

Application  of  the  new  satellite  positioning  (GNSS)  and  mobile  communications
(GSM/GPRS)  technologies  to  electronic  toll  systems  will  serve  to  meet  the
requirements  of  the  new  road-charging  policies  planned  at  Community  and  Member
State level. These technologies enable the number of kilometres covered per category
of road to be counted without requiring costly investment in infrastructure equipment
or  the  construction  of  new  toll  stations.  They  also  open  the  door  to  new  safety  and
information services for travellers, such as the automatic alarm triggered by a vehicle
involved in an accident and indicating its position, and real-time information on traffic
conditions,  traffic  levels  and  journey  times.  With  regard  to  satellite  positioning,  the
Galileo  project  launched  by  the  European  Union  in  2002  will,  as  of  2008,  provide
information of higher quality than that provided by the current GPS system and which
is optimal for road telematic  services. The  EGNOS precursor  system  will  already be
operational  in  2004  providing  similar  results.  However,  these  innovative  systems
could  raise  problems  concerning  the  reliability  of  checks  and  with  regard  to  fraud
prevention.

The proliferation of technologies already in use or planned for electronic toll systems
in  the  coming  years  (mainly  5.8  GHz  microwave,  satellite  positioning  and  mobile
communications) and the proliferation of specifications imposed by the Member States
and neighbouring countries for their electronic toll systems may compromise both the
smooth  operation  of  the  internal  market  and  transport  policy  objectives.  Such  a
situation is liable to lead in future to the proliferation of incompatible and expensive
electronic  boxes  in  the  driving  cabs  of  heavy  goods  vehicles,  and  to  drivers  making
mistakes when using them or committing involuntary fraud.

41

Reference to be added.

33

                                                
(8) 

(9) 

Artificial  barriers  to  the  free  movement  of  persons  and  goods  between  the  Member
States need  to  be removed,  while still allowing  the  Member States  and  the  Union  to
implement a variety of road-charging policies for all types of vehicles at local, national
or  international  level.  The  equipment  installed  in  vehicles  must  allow  such  road-
charging  policies  to  be  implemented  in  accordance  with  the  principles  of  non-
discrimination  between 
the  citizens  of  all  European  Union  countries.  The
interoperability  of  electronic  toll  systems  at  Community  level  therefore  needs  to  be
ensured as soon as possible.

Drivers  are  legitimately  concerned  to  see  improved  quality  of  service  on  the  road
infrastructure,  particular  in  terms  of  safety,  as  well  as  a  substantial  reduction  in  the
length  of  queues  at  toll  stations,  especially  on  busy  days  and  at  certain  particularly
congested  points  in  the  road  network.  The  definition  of  the  European  electronic  toll
service needs to address that concern.

(10)  Electronic  toll  systems  contribute  significantly  to  reducing  the  risk  of  accidents,  and
thus  increasing  traveller  safety,  at  toll  gates,  to  reducing  the  number  of  cash
transactions  and  to  reducing  congestion  at  toll  gates,  especially  at  busy  times.  They
also  preclude  the  negative  environmental  impact  of  installing  new  toll  gates  or
expanding existing toll stations.

(11)  The introduction of electronic toll systems will entail the processing of personal data.
Such processing needs to be carried out in accordance with European rules, as set out
inter alia in Directive 95/46/EC and Directive 2002/58/EC. The right to protection of
personal  data  is  explicitly  recognised  by  Article 8  of  the  Charter  of  Fundamental
Rights of the European Union.

(12)  Given that the objectives of the proposed action, including the interoperability of toll
systems  in the  internal  market  and  the  introduction  of  a  European  electronic  toll
service  covering  the  entire  Community  road  network  on  which  tolls  are  charged,
cannot  be  achieved  sufficiently  by  the  Member  States  and  may  therefore  be  better
achieved,  by  reason  of  their  European  dimension,  at  Community  level,  the
Community  may  take  measures,  in  accordance  with  the  principle  of  subsidiarity
established  in  Article 5  of  the  Treaty.  This  Directive  does  not  go  beyond  what  is
necessary in order to achieve these objectives, and is therefore in accordance with the
principle of proportionality as set out in the said Article.

(13)  The measures necessary for the implementation of this Directive should be adopted in
accordance  with  Council  Decision  1999/468/EC  of  28  June  1999  laying  down  the
procedures for the exercise of implementing powers conferred on the Commission,42

HAVE ADOPTED THIS DIRECTIVE:

Article 1
Objective and scope

This Directive prescribes the conditions necessary to ensure the widespread introduction and
interoperability of electronic road toll systems in the Community. It applies to the electronic
collection of  all  types of road fees, on  all  parts  of the Community  road  network,  urban  and

42

OJ L 184, 17.7.1999, p. 23.

34

                                                
interurban, motorways, major and minor roads, and various structures such as tunnels, bridges
or ferries.

To achieve the objective set in the first paragraph, a European electronic toll service shall be
created. This service must ensure the interoperability, for users, of the electronic toll systems
that have already been introduced at national or regional level by the Member States and of
those to be introduced in future throughout the Union's territory.

Article 2
Technological solutions

1.

All new electronic toll systems brought into service on or after 1 January 2005  and
intended for use by all categories of heavy goods vehicles and/or buses and coaches
shall, for carrying out electronic toll transactions, use one or more of the  following
technologies:

(a)

satellite positioning;

mobile  communications  using  the  GSM-GPRS  standard  (reference  GSM  TS

(b)
03.60/23.060);

(c)

2.

3.

4.

5.

6.

7.

5.8 GHz microwave technology.

A European electronic toll service shall be set up pursuant to Article 3 on 1 January
2005.  As  of  this  date,  operators  must  make  available  to  interested  users  on-board
equipment which is suitable for use with all electronic toll systems in service in the
Union and in all types of vehicle, in accordance with the timetable set out in Article
3(3), and which is interoperable and capable of communicating with all the systems
operating in the territory of the Union.

It  shall  also  be  possible  to  link  this  on-board  equipment  to  the  vehicle's  electronic
tachograph for the purposes of calculating the fees due.

As of 1 January 2008, all new systems brought into service as part of the European
electronic toll service referred to in Article 3 shall use only the satellite positioning
and mobile communications technologies referred to in Article 2(1).

Systems  brought  into  service  as  part  of  the  European  electronic  toll  service  before
1 January 2008 must have abandoned the 5.8 GHz technology by 1 January 2012. A
migration  strategy  for  such  systems  must  be  formulated  and  implemented  between
1 January 2008 and 1 January 2012.

To satisfy itself that satellite and mobile communications technology meets the needs
of  the  operators  of  electronic  toll  systems,  the  Commission  shall,  by  31 December
2007, present a report drawn up with the assistance of the Electronic Toll Committee
and, if necessary, a proposal to extend the period of use of microwave systems.

Member States shall take the necessary measures to increase the use of electronic toll
systems. They shall ensure inter alia that at least 50% of toll lanes in each toll station
are equipped with electronic toll systems by 2005 at the latest.

35

8.

1.

2.

3.

(a)

Member  States  shall  ensure  that  processing  of  personal  data  necessary  for  the
operation of the European electronic toll service is carried out in accordance with the
European  rules  protecting  the  freedoms  and  fundamental  rights  of  individuals,
including Directive 95/46/EC and Directive 2002/58/EC.

Article 3
Setting-up of a European electronic toll service

A  "European  electronic  toll  service"  shall  be  set  up  which  encompasses  all  road
infrastructure in the Community on which tolls or usage fees are collected. A single
subscription  contract  shall  give  access  to  the  service  on  the  whole  of  this  network
and subscriptions shall be available from the manager of any part of the network.

The European electronic toll service shall be independent of the level of charges and
the  purpose  for  which such  charges  are levied.  It  shall  concern  only  the  method  of
collecting  tolls  or  fees.  The  service  shall  be  the  same  irrespective  of  the  place  of
registration  of  the  vehicle,  the  nationality  of  the  subscriber,  the  nationality  of  the
operator who issued the subscription, and the  zone or point on the  road network in
respect of which the toll is due.

All network managers concerned must offer the European service to their customers
according to the following timetable:

for all vehicles exceeding 3.5 tonnes and vehicles carrying more than nine passengers
(driver + 8), as of 1 January 2005,

(b)

for all other types of vehicle, as of 1 January 2010 at the latest.

Article 4
Features of the European electronic toll service

1.

(a)

(b)

(c)

(d)

(e)

The European electronic toll service shall encompass the following:

functional and technical  specifications  of  the service,  the  quality  of  the service and
its level of deployment at toll stations with a view to limiting queues, slow-moving
traffic and incidents of all kinds resulting from toll collection;

launching  and  following  up  technical  harmonisation  activities  with  the  European
standardisation bodies

any  technical  additions  to  the  standards  or  pre-standards  used  and  which  ensure
interoperability;  procedures  for  taking  account  of  technological  developments,  in
particular the development of mobile communications, with the aim of updating the
list of technologies on which the European electronic toll service is based;

specifications for integrating equipment into vehicles;

procedures  for  approving,  at  European  level,  on-board  equipment,  roadside
equipment and the way equipment is incorporated into vehicles, particularly from the
point of view of road safety;

36

(f)

(g)

(h)

(i)

(j)

2.

3.

4.

5.

classification of vehicles;

transactional models;

a  memorandum  of  understanding  between  the  managers  of  the  road  network
concerned  enabling  the  service  to  be  implemented  on  the  European  road  network,
and a single contract for customers;

handling of special cases, such as occasional users and any type of malfunction;

validation  of  the  chosen  technical  solutions  vis-à-vis  the  European  rules  protecting
the  freedoms  and  fundamental  rights  of  individuals,  including  their  privacy.  In
particular,  conformity  will  have  to  be  ensured  with  Directive  1995/46/EC  and
Directive 2002/58/EC.

The European electronic toll system shall employ the technical solutions referred to
in Article 2.

Technical decisions relating to the definition of the European electronic toll service
shall  be  taken  by  the  Commission  in  accordance  with  the  procedure  stipulated  in
Article 5(2).

The  Commission  shall,  in  accordance  with  the  procedure  laid  down  by  Directive
98/34/EC,  ask  the  European  standardisation  bodies,  and  in  particular  the  European
Committee  for  Standardisation,  to  make  every  necessary  effort  rapidly  to  adopt
standards applicable to electronic toll systems, particularly with regard to microwave
technology,  and  systems  using  satellite  positioning  and  mobile  communications
technology.

Equipment  for  the  European  electronic  toll  service  must  comply  in  particular  with
the requirements of Directives 1999/5/EC (R&TTE) and 89/336/EC (EMC).

Article 5
Committee

The  Commission  shall  be  assisted  by  an  Electronic  Toll  Committee  composed  of
representatives of the Member States and chaired by the representative of the Commission.

Whenever  reference  is  made  to  this  paragraph,  Articles 5  and  7  of  Decision  1999/468/EC43
shall apply, subject to the provisions of Article 8 thereof.

(The  period  provided  for  in  Article  5(6)  of  Decision  1999/468/EC  is  hereby  set  at  three
months.)

The Committee shall adopt its rules of procedure.

43

OJ L 184, 17.7.1999, p. 23.

37

                                                
Article 6

Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative  provisions
necessary  to  comply  with  this  Directive  not  later  than  30  June  2004.  They  shall  forthwith
inform the Commission thereof.

When Member States adopt those provisions, they shall contain a reference to this Directive
or be accompanied by such a reference on the occasion of their official publication. Member
States shall determine how such reference is to be made.

This Directive shall enter into force on the twentieth day following that of its publication in
the Official Journal of the European Union.

Article 7

Article 8

This Directive is addressed to the Member States.

Done at Brussels, […]

For the European Parliament
The President

For the Council
The President

38

LEGISLATIVE FINANCIAL STATEMENT

Policy area(s): Energy and Transport

Activit(y/ies): Sustainable mobility policy

TITLE  OF  ACTION:  DIRECTIVE  OF  THE  EUROPEAN  PARLIAMENT  AND  THE  COUNCIL  ON  THE
WIDESPREAD INTRODUCTION AND INTEROPERABILITY OF ELECTRONIC ROAD TOLL SYSTEMS IN
THE COMMUNITY

1.

BUDGET LINE(S) + HEADING(S)

B2-7040  A:  Sustainable  mobility  policy  –  Expenditure  on  administrative
management (for 2003)

06  01  04  03  Sustainable  mobility  policy  -  Expenditure  on  administrative
management (from 2004)

2.

OVERALL FIGURES

2.1.

Total allocation for action (Part B): € million for commitment: none

2.2.

Period of application: yearly

Commencing in 2003 and ending in about 2009

2.3. Overall multiannual estimate of expenditure:

(a)

Schedule  of  commitment  appropriations/payment  appropriations 
intervention) (see point 6.1.1)

(financial

€ million (to three decimal places)

Year
2003

2004

2005

2006

2007

Total

2008
and
subs.
yrs

Commitment
appropriations (CA)

Payment
appropriations (PA)

(b)

Technical and administrative assistance and support expenditure (see point 6.1.2)

0.150

0.150

0.150

0.150

0.100

0.200

0.900

0.150

0.150

0.150

0.150

0.100

0.200

0.900

CA

PA

Subtotal a+b

CA

0.150

0.150

0.150

0.150

0.100

0.200

0.900

39

PA

(c)

0.150

0.150

0.150

0.150

0.100

0.200

0.900

Overall  financial  impact  of  human  resources  and  other  administrative  expenditure
(see points 7.2 and 7.3)

CA/PA

0.158

0.158

0.158

0.158

0.158

0.158

0.948

TOTAL a+b+c

CA

PA

0.308

0.308

0.308

0.308

0.258

0.358

1.848

0.308

0.308

0.308

0.308

0.258

0.358

1.848

2.4.

Compatibility with financial programming and financial perspective

XX Proposal compatible with existing financial programming.

This  proposal  will  entail  reprogramming  of  the  relevant  heading  in  the
financial perspective.

This  may  require  application  of  the  provisions  of  the  Interinstitutional
Agreement.

2.5.

Financial impact on revenue44

XX Proposal  has  no  financial  implications  (involves  technical  aspects  regarding

implementation of a measure)

OR

Proposal has financial impact – the effect on revenue is as follows:

(NB All details and observations relating to the method of calculating the effect on
revenue should be shown in a separate annex.)

(€ million to one decimal place)

Budget line

Revenue

Prior to
action
[Year n-
1]

[Year
n]

Situation following action

[n+1]

[n+2]

[n+3]

[n+4]

[n+5]

a) Revenue in absolute terms

b) Change in revenue

 (cid:1)

(Please specify each budget line involved, adding the appropriate number of rows
to the table if there is an effect on more than one budget line.)

3.

BUDGET CHARACTERISTICS

44

For further information, see separate explanatory note.

40

                                                
Type of expenditure

New

EFTA
contribution

Contributions
form applicant
countries

NCE

NDA

NO

NO

NO

Heading in
financial
perspective

No [3…]

4.

LEGAL BASIS

Article 71(1) of the Treaty

5.

DESCRIPTION AND GROUNDS

5.1.

Need for Community intervention45

5.1.1. Objectives pursued

For  several  years,  the  Commission  has  been  encouraging  the  Member  States  to
harmonise  their  projects  in  this  field  in  order  to  avoid  the  creation  of  as  many
incompatible  national  systems  as  there  are  Member  States,  with  each  system
requiring  the  installation  of  special  electronic  equipment  in  vehicles.  Despite  the
many  millions  of  euros  invested  in  the  research  and  development  framework
programmes and in the Euro-regional projects, this strategy has failed. Proof of this
came  in  May  2002  when  Germany  and  Austria  simultaneously  decided  to  adopt
incompatible national systems.

The  Directive  creates  the  conditions  necessary  for  implementing  a  European
electronic toll service based on the principle of one single contract and one piece of
on-board  vehicle  equipment  giving  access  to  the  entire  toll  network  in  the
Community.

The service is based on two technologies:

–  the 5.8 GHz microwave systems used today on European toll motorways;

–  satellite  positioning  in  conjunction  with  mobile  communications,  an  innovative
solution  based  in  the  long  run  on  Galileo,  and  the  only  one  enabling  the
Commission and the Member States to implement the new road-charging policies
they favour in order to manage demand more effectively, improve safety and help
traffic flow more freely throughout the primary urban and interurban network. For
the future, the Directive advocates the use of this second solution in preference to
the first.

The Directive sets up an Electronic Toll Committee responsible, in consultation with
the Member States, for handling  all technical and  contractual  matters  necessary  for
the implementation of the European service.

5.1.2. Measures taken in connection with ex ante evaluation

Not applicable

5.1.3. Measures taken following ex post evaluation

45

For further information, see separate explanatory note.

41

                                                
Not applicable

5.2.

Action envisaged and budget intervention arrangements

A precise definition is required of the details of the European service and of a large
number  of  accompanying  technical  measures.  For  example,  a  memorandum  of
understanding needs to be established between European infrastructure managers for
the deployment of the service and the establishment of a netting system.

To  that  end,  Article 5  of  the  proposed  Directive  provides  for  a  committee  of
representatives  of  the  Member  States  with  practical  experience  in  the  fields  of
electronic  tolls  and  road  management,  whose  technical  skills  can  help  the
Commission  decide  on  a  properly  informed  basis.  Such  a  committee  does  not
currently  exist,  and  will  therefore  have  to  be  set  up.  It  will  base  its  work  on  the
findings  of  research  projects  conducted  under  the  Research  and  Development
Framework  Programme  and  in  the  context  of  the  trans-European  networks.
Preparatory work has already been carried out under the auspices of the Commission,
involving national authorities, infrastructure managers and equipment manufacturers.

The Commission  will refer the  matters listed  below  (and  possibly  other  matters)  to
the Committee:

–  Precise  definition  of  the  service  offered:  in  particular  functional  and  technical
specifications of the service, the quality of the service and its level of deployment
at toll stations with a view to limiting queues, slow-moving traffic and incidents
of  all  kinds  resulting  from  toll  collection.  Payment  methods  relating  to  the
subscription contract, and after-sales service, etc., will also be addressed.

–  Definition  of  the  “electronic  toll  applications”:  i.e.  a  single  method  of  using  the
electronic toll equipment. For example, smart cards used as bank cards and smart
cards  used  for  health  and  health  insurance  purposes  are  technically  compatible,
but  only  the  former  enable  you  to  withdraw  bank  notes  from  an  automatic  cash
dispenser. The same type of problem is involved here.

–  Launching and following up technical harmonisation activities with the European

standardisation bodies.

–  Any technical additions to the standards or pre-standards used and which ensure
interoperability; procedures for taking account of technological developments, in
particular the development of mobile communications.

–  Harmonisation  of  electronic 

toll  procedures  between  operators:  vehicle
classification,  signs  on  toll  gates,  occasional  users  without  the  necessary
equipment.

–  Specifications for incorporating equipment into vehicles.

–  Procedures  for  approving,  at  European  level,  on-board  equipment,  roadside
equipment and the way equipment is incorporated into vehicles, particularly from
the point of view of road safety

–  Validation  of  the  chosen  technical  solutions  vis-à-vis  the  European  rules
protecting  the  freedoms  and  fundamental  rights  of  individuals,  including  their

42

privacy.  In  particular,  conformity  will  have  to  be  ensured  with  Directives
95/46/EC46 and 2002/58/EC47

–  Procedures  for  dealing  with  operating  anomalies  (equipment  breakdown,
intentional  or  unintentional  incorrect  use,  incidents,  etc.),  essentially  in  the
international situation where the customer is from a country other than the country
of payment.

–  Formulation of a memorandum of understanding between operators  enabling the
service to be implemented on the European road network, and a single contract for
customers.  It  will  have  to  be  possible  to  extend  this  memorandum  of
understanding  later  to  banks,  whose  payment  cards  will  be  associated  with
electronic toll systems.

The  budget  requested  will  cover  all  expenditure  on  studies  needed  to  underpin  the
Committee’s work.

5.3. Methods of implementation

This  work  will  be  carried  out  by  groups  of  outside  experts  chosen  jointly  in
collaboration  with  the  Committee  and  paid  by  the  Commission,  which  will  be
responsible for monitoring the groups. These experts will be selected by invitation to
tender.

6.

FINANCIAL IMPACT

6.1.

Total financial impact on Part B - (over the entire programming period)

(The method of calculating the total amounts set out in the table below must be explained by
the breakdown in Table 6.2. )

6.1.1. Financial intervention

Commitments (in € million to three decimal places)

Breakdown

[Year n]

[n+1]

[n+2]

[n+3]

[n+4]

Total

[n+5 and
subs.
years]

Action 1

Action 2

etc.

TOTAL

46

Directive  95/46/EC  of  the  European  Parliament  and  of  the  Council  of  24 October  1995  on  the

protection of individuals with regard to the processing of personal data and on the free movement of such data.
47

Directive 2002/58/EC of the European Parliament and of the Council  of  12 July  2002  concerning  the
processing of personal data and the protection of privacy in the electronic communications sector (Directive on
privacy and electronic communications).

43

                                                
6.1.2. Technical  and  administrative  assistance,  support  expenditure  and  IT  expenditure
(commitment appropriations)

[Year n]

[n+1]

[n+2]

[n+3]

[n+4]

Total

[n+5 and
subs.
years]

1) 
administrative assistance

Technical 

and

Technical 

a) 
offices

assistance

b)  Other 
administrative assistance:

technical 

and

- intra muros:

- extra muros:

which 

of 
construction 
maintenance 
computerised
management systems

for
and
of

Subtotal 1

2) Support expenditure

a) Studies

0.150

0.150

0.150

0.100

0.200

b) Meetings of experts

c) Information and
publications

Subtotal 2

TOTAL 0.150

0.150

0.150

0.100

0.200

Calculation  of  costs  by  measure  envisaged  in  Part  B  (over  the  entire

6.2.
programming period)48: None

(Where  there  is  more  than  one  action,  give  sufficient  detail  of  the  specific  measures  to  be
taken for each one to allow the volume and costs of the outputs to be estimated.)

Breakdown

Commitments (in € million to three decimal places)

Type
of outputs
(projects, files )

Number of
outputs

Average unit
cost

(total for years
1…n)

Total cost

(total for years
1…n)

1

2

3

4=(2X3)

48

For further information, see separate explanatory note.

44

                                                
Action 1

- Measure 1

- Measure 2

Action 2

- Measure 1

- Measure 2

- Measure 3

etc.

TOTAL COST

If necessary explain the method of calculation

7.

IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE

7.1.

Impact on human resources

Types of post

Staff to be assigned to management of the
action using existing and/or additional
resources

Number of
permanent posts

Number of
temporary posts

Officials 
temporary staff

or

1

A

B

C

Other human resources

Total

Sub-groups 
experts

of

Total

1

Description of tasks deriving from the
action

Management and secretariat of the
Electronic Toll Committee, supervision
of the work of the groups of experts
used by the Committee, follow-up of the
Committee’s decisions and
implementation of any resulting
legislative action.

7.2. Overall financial impact of human resources

Type of human resources

Amount (€)

Method of calculation *

Officials

Temporary staff

Other human resources

108 000

(specify budget line)

Total

108 000

The amounts are total expenditure for twelve months.

7.3. Other administrative expenditure deriving from the action

Budget line

(number and heading)

Amount €

Method of calculation

45

4  meetings  a  year  –  reimbursement  of
travel expenses

Regulatory Committee

Overall allocation (Title A7)

A07031: 50 000

A0701 – Missions

A07030 – Meetings
A07031 – Compulsory committees 1
A07032 – Non-compulsory committees 1

A07040 – Conferences

A0705 – Studies and consultations

Other expenditure (specify)

Information systems (A-5001/A-4300)

Other expenditure - Part A (specify)

Total

50 000

The amounts are total expenditure for twelve months.

1 Specify the type of committee and the group to which it belongs.

I.

II.

III.

Annual total (7.2 + 7.3)

Duration of action

Total cost of action (I x II)

€158 000

6 years

€948 000

The  needs  in  terms  of  human  and  administrative  resources  shall  be  covered  within  the
allocation granted to the managing DG in the framework of the annual allocation procedure.

8.

FOLLOW-UP AND EVALUATION

8.1.

Follow-up arrangements

The  Electronic  Toll  Committee's  work  will  be  monitored  according  to  its  work  programme
and the associated timetable (as detailed at its initial meetings) for tackling the objectives of
the  Directive.  The  first  of  these  objectives  is  to  introduce  the  European  service  for  heavy
goods  vehicles  across  the  entire  toll  road  network  in  the  Community  by  1  January  2005.
Monitoring of planning operations will allow checks to be made that work is proceeding as
required.

The following service deployment indicators will then be defined: number of lanes in each toll
station  equipped  for  the  service,  number  of  subscriber  points,  etc.  (to  be  specified  in
consultation with the Committee). The service will be put in place in 2004, at which point the
indicators will be measured by a direct survey of the Member States.

8.2.

Arrangements and schedule for the planned evaluation

A planning review of the Committee’s work will take place every three months.

For  the  purposes  of  deploying  the  service,  the  measures  based  on  the  indicators  defined  in
collaboration with the Committee will be updated initially every three months, and then every
month from the second half of 2004.

An ex post assessment will take place in March 2005 to check that the whole of the service is
functioning properly. This assessment will be contracted out to an external bureau selected by

46

invitation to tender. Its aim will be to check that the service has been deployed in accordance
with  the  objective  and,  above  all,  to  canvass  the  views  of  the  customers  concerned  with  a
view to measuring levels of customer satisfaction and further developing the European service
prior  to  its  extension  to  motor  vehicles  in  general.  It  will  be  possible  for  this  study  to  be
conducted in  two stages: the first after  three  months  (March  2005)  and  the  second  once  the
service has been in operation for a year (January 2006).

9.

ANTI-FRAUD MEASURES

Not applicable

47

IMPACT ASSESSMENT FORM
THE IMPACT OF THE PROPOSAL ON BUSINESS WITH SPECIAL REFERENCE
TO SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs)

TITLE OF PROPOSAL

Directive of the European Parliament and of the Council on the widespread introduction and
interoperability of electronic road toll systems in the Community

DOCUMENT REFERENCE NUMBER

THE PROPOSAL

Taking  account  of  the  principle  of  subsidiarity,  why  is  Community  legislation

1.
necessary in this area and what are its main aims?

For  several  years,  the  Commission  has  been  encouraging  the  Member  States  to
harmonise  their  projects  in  this  field  in  order  to  avoid  the  creation  of  as  many
incompatible  national  systems  as  there  are  Member  States,  with  each  system
requiring  the  installation  of  special  electronic  equipment  in  vehicles.  Despite  the
many  millions  of  euros  invested  in  the  research  and  development  framework
programmes and in the Euro-regional projects, this strategy has failed. Proof of this
came  in  May  2002  when  Germany  and  Austria  simultaneously  decided  to  adopt
incompatible national systems.

The  Directive  creates  the  conditions  necessary  for  implementing  a  European
electronic toll service based on the principle of one single contract and one piece of
on-board  vehicle  equipment  giving  access  to  the  entire  toll  network  in  the
Community.

The service is based on two technologies:

–  the 5.8 GHz microwave systems used today on European toll motorways;

–  satellite  positioning  in  conjunction  with  mobile  communications,  an  innovative
solution  based  in  the  long  run  on  Galileo,  and  the  only  one  enabling  the
Commission and the Member States to implement the new road-charging policies
they favour in order to manage demand more effectively, improve safety and help
traffic flow more freely throughout the primary urban and interurban network. For
the future, the Directive advocates the use of this second solution in preference to
the first.

The Directive sets up an Electronic Toll Committee responsible, in consultation with
the Member States, for handling  all technical and  contractual  matters  necessary  for
the implementation of the European service.

THE IMPACT ON BUSINESS

2.

Who will be affected by the proposal?

–  Which sectors of business? The manufacturers of electronic equipment for the car

industry, infrastructure managers, and freight transport companies.

48

–  Which  sizes  of  business  (what  is  the  proportion  of  small  and  medium-sized
firms)?  From  1  to  5 000  people.  All  the  manufacturers  are  SMEs.  The
infrastructure  managers  range  from  200  people  for  the  smallest  companies  to
5 000 for the largest. The size of freight transport companies varies considerably
from one to several hundred employees.

–  Are there particular geographical areas of the Community where these businesses
are found? No, they are more or less evenly spread out, and will be even more so
in the future.

3.

What will business have to do to comply with the proposal?

The  infrastructure  managers  will  have  to  direct  future  investment  towards  the
technical  solutions  indicated.  They  will  have  to  equip  their  toll  networks  with  the
equipment  indicated  even  if  they  do  not  currently  offer  electronic  tolls.  The  old
investments will nevertheless be maintained until they become obsolete.

The  automotive  suppliers  will  be  given  technical  directions  to  follow  to  ensure  the
interoperability of all the systems used in Europe. This will facilitate their work for
the years ahead as the indicated solutions are already well known and in use.

4.

What economic effects is the proposal likely to have:

–  on  employment?:  New  skilled  jobs  will  be  created  in  the  industrial  and  service
sectors. For Germany alone, it is estimated that 40 000 new jobs will be created. It
is estimated that for the 15 Member States, more than 200 000 skilled jobs will be
created. The industry will be given a considerable boost in promoting its products
on  the  world  market,  especially  as  the  Directive  promotes  innovative  solutions
which are suitable for all conceivable types of road-charging policy.

–  From the infrastructure managers' point of view, job losses could occur in the long
run  but  these  would  all  be  seasonal  jobs.  In  terms  of  permanent  jobs,  the  staff
which  might  be  affected  in  2010  could  easily  be  reassigned  to  tasks  such  as
subscriber services, after-sales service or motorway maintenance.

–  on investment and the creation of new businesses? New businesses will be created
in  the  fields  of  fee  collection  services,  customer  management  and  monitoring
cross-border fraud. Other companies providing systems maintenance may also be
created. This will already be the case in Germany in 2003.

–  on the competitiveness of businesses? The competitiveness of businesses will be
fostered  by  the  implementation  of  open  systems,  which  will  no  longer  be
proprietary as they often are at present. By means of its standardising effect and
through its Committee, the  Directive  will ensure an open market from which no
supplier  will  be  excluded.  It  has  been  checked  that  no  currently  known  supplier
would be excluded from the market by this Directive.

Does the proposal contain measures to take account of the specific situation of small

5.
and medium-sized enterprises (reduced or different requirements, etc.)?

The whole  technical sector of this  market  is  made  up  of  SMEs.  The  clauses  of  the
Directive  are  perfectly  suited  to  this  situation.  All  of  these  businesses  have  for
several  years  been  asking  the  Commission  to  take  legislative  action  to  remedy  the

49

blockage in the European Standardisation Committee and to allow them to base their
products  on  a  normative  reference  document.  In  the  absence  of  compatibility  with
CEN standards,  "EC Directive  compatibility"  will  be  a  reference  label  expected  by
the whole profession.

CONSULTATION

List the organisations which have been consulted about the proposal and outline their

6.
main views.

Suppliers of electronic toll systems equipment: THALES e-transactions, CS ROUTE,
KAPSCH,  COMBITECH  and  Q-FREE  indicate  that  the  feasibility  of  equipment
which  would  be  interoperable  and  could  communicate  with  all  the  electronic  toll
systems currently found in Europe:

–  needs to be validated in terms of marketing,

–  would  require  an  infrastructure  manager  to  issue  an  invitation  to  tender  for  one

million units, and

–  would call for a minimum of three years' development, finalisation and testing.

They make no commitments regarding the price of such equipment.

Infrastructure  managers:  ASECAP  (European  Association  of  Tolled  Motorway
Companies), ASFA (Federation of French Motorway and Toll Facility Companies),
ASETA (Spanish Toll Road and Tunnel Association), AISCAT (Italian Association
of  Tolled  Motorway  and  Tunnel  Companies),  ASFINAG  (Austrian  road  toll
concession holder), TOLL COLLECT (concession holder for the German electronic
toll  system),  BRISA  (Portuguese  motorway  concession  holder)  and  RAPP  AG
(consulting  firm  for  Swiss  electronic  toll  systems)  delivered  a  mixed  opinion  in
respect of certain lines taken in the Directive, particularly the choice of technology.

Bilateral  consultation  meetings  have  taken  place  with  the  authorities  of  many
Member States working with electronic toll systems (UK, FR, BE, NL, ES, PT, IT,
AT,  DE),  as  well  as  with  Switzerland  and  the  EFTA  countries.  A  general
presentation  was  made  on  27  June  for  representatives  of  the  15  Member  States.
Comments made by various of the Member States have been taken into account.

50