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REVENUE Revenue Use from Transport Pricing Deliverable 3 REVENUE Revenue Use from Transport Pricing Contract: GMA2-2001-52011 Funded by European Commission – DG TREN Fifth Framework Programme Competitive and Sustainable Growth Programme Key Action 2 – Sustainable Mobility and Intermodality Deliverable 3 Case Studies Specification Version 2.0 Date: 9th March 2005 Authors: S. Suter and U. Springer (ECOPLAN), A. de Palma and R. Lindsey (adpC), S. van der Loo (KULeuven), A. Ricci and P. Fagiani (ISIS), P. Moilanen (STRAFICA), M. van der Hoofd and M. Carmona (TIS), J. Baker (TTR) with contributions from partners Project co-ordinator: ISIS (Italy) Partners: ISIS (It), ADPC (Be), CERAS (Fr), DIW (De), ECOPLAN (Ch), INFRAS (Ch), ITS (UK), IWW (De), KULeuven (Be), LETS (Fr), NEA (Nl), PW (Pl), STRAFICA (Fi), TIS (Pt), TOI (No), TTR (UK) REVENUE D3 CASE STUDIES SPECIFICATION Revenue Use from Transport Pricing Deliverable 3: Case Studies Specification Date: 9th March 2005 Authors: S. Suter and U. Springer (ECOPLAN), A. de Palma and R. Lindsey (adpC), S. van der Loo (KULeuven), A. Ricci and P. Fagiani (ISIS), P. Moilanen (STRAFICA), M. van der Hoofd and M. Carmona (TIS), J. Baker (TTR) This document should be referenced as: S. Suter, U. Springer, A. de Palma, R. Lindsey, S. van der Loo, A. Ricci, P. Fagiani, P. Moilanen, M. van der Hoofd, M. Carmona and J. Baker, (2004), Case Studies Specification, REVENUE Project Deliverable 3. Funded by 5th Framework RTD Programme, ISIS, Rome, 9th March 2005 PROJECT INFORMATION Contract: GMA2-2001-52011 Website: http://www.revenue-eu.org/ Commissioned by: European Commission – DG TREN; Fifth Framework Programme Lead Partner: ISIS (It) Partners: ISIS (It), ADPC (Be), CERAS (Fr), DIW (De), ECOPLAN (Ch), INFRAS (Ch), ITS (UK), IWW (De), KULeuven (Be), LETS (Fr), NEA (Nl), PW (Pl), STRAFICA (Fi), TIS (Pt), TOI (No), TTR (UK) DOCUMENT CONTROL INFORMATION Status: P (P=Public ; C=Confidential) Version : 2.0 Quality assurance: Co-ordinator’s review: 2 REVENUE D3 CASE STUDIES SPECIFICATION Table of Contents EXECUTIVE SUMMARY .............................................................................................9 1. INTRODUCTION ................................................................................................22 1.1. THE REVENUE PROJECT..................................................................................22 1.2. KEY CONCEPTS AND CASE STUDY APPROACH ....................................................24 1.3. STRUCTURE OF DELIVERABLE 3 ........................................................................29 2. REVIEW OF CURRENT PRACTICE IN TRANSPORT PRICING AND REVENUE USE....................................................................................................31 2.1. INTRODUCTION ..................................................................................................31 2.2. OVERVIEW OF PRICING SCHEMES IN EUROPE .....................................................31 2.2.1. Pricing classifications .............................................................................31 2.2.2. Observed pricing schemes.......................................................................34 2.3. EARMARKING AND OTHER REVENUE ALLOCATION RULES..................................42 2.3.1. Allocation classifications.........................................................................42 2.3.2. Observed allocation schemes ..................................................................42 2.4. PUBLIC-PRIVATE-PARTNERSHIPS ......................................................................48 2.5. COMBINATIONS OF PRICING, REVENUE USE, SCOPE AND INSTITUTIONAL ARRANGEMENTS. ...............................................................................................49 2.5.1. Pricing and revenue use ..........................................................................49 2.5.2. Revenue use and investment ....................................................................49 2.5.3. Regional scope of a pricing-/revenue allocation scheme and role of private actors in implementation.............................................................50 2.5.4. Government subsidies and their targets ..................................................51 2.5.5. Geographically defined earmarking and allocation schemes .................51 2.5.6. Other revenue allocation schemes..........................................................51 2.6. FIRST COMPARISON OF PRACTICE AND THEORY .................................................52 2.7. CONCLUSIONS ...................................................................................................54 3. THEORETICAL GUIDANCE............................................................................55 3.1. INTRODUCTION ..................................................................................................55 3.2. KEY THEORETICAL ISSUES, RESEARCH QUESTIONS AND PRACTICAL GUIDANCE TO APPLICATION OF THE THEORY......................................................55 3.2.1. Theoretical issue 1: The Cost Recovery Theorem...................................55 3.2.2. Theoretical issue 2: Funding investments and optimal transport pricing by a benevolent government........................................................60 3.2.3. Theoretical issue 3: Tax and investment rules in an economy with several government levels........................................................................61 3.2.4. Theoretical issue 4: The common agency model.....................................65 3.2.5. Theoretical issue 5: Earmarking in a dynamic political model ..............66 3.2.6. Theoretical issue 6: Procurement of infrastructure services and the role of investment agencies .....................................................................67 3.3. KEY FEATURES OF OPTIMAL REGULATION SCHEMES ..........................................72 4. THE MOLINO MODEL .....................................................................................75 4.1. INTRODUCTION ..................................................................................................75 4.2. SCOPE OF THE ASSESSMENT WITH MOLINO .....................................................75 3 REVENUE D3 CASE STUDIES SPECIFICATION 4.3. DATA REQUIREMENTS........................................................................................75 4.4. A SIMPLE ILLUSTRATIVE EXAMPLE: TWO ROUTES IN PARALLEL........................77 4.4.1. Demand and generalized price................................................................77 4.4.2. Input and output data: Summary.............................................................80 4.4.3. Other costs...............................................................................................81 4.4.4. Social Welfare .........................................................................................82 4.4.5. The decision process and the market structure .......................................84 4.4.6. The flow of funds .....................................................................................85 4.4.7. Numerical example: Input parameters....................................................85 4.4.8. Numerical example: Output results.........................................................90 5. ASSESSMENT OF THE REGULATION SCHEMES.....................................94 5.1. INTRODUCTION ..................................................................................................94 5.2. EFFICIENCY .......................................................................................................94 5.2.1. Approach and definitions ........................................................................94 5.2.2. Major efficiency issues and sources of inefficiencies..............................95 5.2.3. Assessment methods and tools.................................................................99 5.3. EQUITY............................................................................................................102 5.3.1. Approach and definitions ......................................................................102 5.3.2. Major equity issues................................................................................103 5.3.3. Assessment methods and tools...............................................................105 5.4. TECHNICAL AND ORGANISATIONAL FEASIBILITY .............................................108 5.4.1. Approach and definitions ......................................................................108 5.4.2. Major technical and organisational/institutional issues.......................109 5.4.3. Assessment methods and tools...............................................................112 5.5. ACCEPTABILITY...............................................................................................113 5.5.1. Approach and definitions ......................................................................113 5.5.2. Step 1: Identification of the key acceptability issues of a regulation scheme ...................................................................................................114 5.5.3. Step 2: Stakeholder analysis..................................................................118 5.5.4. Step 3: Assessment of impacts as perceived by the stakeholder groups119 5.5.5. Step 4: Assessment of the overall acceptability of the regulation schemes ("conclusion") .........................................................................119 5.5.6. Assessment methods and tools...............................................................119 6. DATA COLLECTION.......................................................................................121
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