Type
General Knowledge
Author
Cesar Queiroz, Barbara Rdzanowska, Robert Garbarczyk and Michel Audige
Organization
The World Bank
Published in
2008
Submitted by
Olim Latipov
Related theme(s)
Finances & Economics
Region
Eastern Europe, Caucasus, and Central Asia (EECCA)
Country
International

Road User Charges: Current Practice and Perspectives in Central and Eastern Europe

Over the last decade, several transition countries have experienced diminishing funding for their road infrastructure which significantly affected their capacity to expand, maintain and rehabilitate their road networks. The severity varies from one country to another in terms of budget cutbacks, but in many cases, total road expenditures (including construction) has amounted to less than 0.8 percent of GDP. This ratio compares unfavorably to the 1 to 2 percent of GDP generally considered necessary to adequately maintain highway networks and to carry out a modest amount of construction.


As a result of such low expenditures, networks have been fast deteriorating and vehicle operating costs increasing. In a large number of countries, more than one third of the main road network is in poor condition. The problem is further exacerbated by the rapid increase in road vehicle fleet and commensurate road usage. This serious situation has led several countries in Central and Eastern Europe (CEE) to consider establishing improved, modern road user charging (RUC) systems that would provide more funds for maintaining and expanding their road networks. Use of such systems can also help decision makers to take advantage of increased private sector involvement in financing and operating highway assets.
 

While countries such as Chile have seen motorways as an important means to attract private savings, especially from abroad, in Central and Eastern Europe there has been limited experience. So far, only Hungary, Croatia, and Poland have concessioned some motorway projects to private contractors or consortia. Nevertheless, several countries in the region (Russian Federation, Serbia, Albania, Slovakia and Latvia) are currently making good progress toward launching PPP (public-private partnerships) programs in highways.
 

This paper covers the most commonly used means to charge road users, including fuel taxes, vehicle taxes, vignettes and tolls. It presents a brief survey of road user charging systems in selected European countries and a more detailed overview of current status and perspectives of road user charges in Poland.
 

Consideration is also given to private financing of roads through different forms of public-private partnerships (PPP), including a review of potential applications of the World Bank Toolkit for PPP in Highways as an instrument to help decision makers and practitioners to define the best PPP approach for a specific country.