Bus Fare Prices Impacts of a Toll- Based Road User Charging System

BULGARIAN NATIONWIDE TOLL SYSTEM CONSUMER GOODS & BUS FARE PRICES IMPACTS OF A TOLL- BASED ROAD USER CHARGING SYSTEM Sofia, December 5, 2019 ПЪТНА ИНФРАСТРУКТУРНА АГЕНЦИЯ CONSUMER GOODS PRICES : METHODOLOGY • Average domestic transport distance from National Statistics (NSI) • Adjustment for sub- products transportation • Adjustment for share of domestic and imported goods • Transport model used to calculate the proportion on tolled network • Estimated average truck load and accounting for empty routes • Estimated Toll cost per ton and current vignette cost per ton • Toll impact assessed by NSI average price per kg increased by Toll and decreased by vignette cost. 1 CONSUMER GOODS: ESTIMATED PRICE IMPACTS 2018 Average Share of Adjusted Alimentary goods cost per transport New Average Average transport ton without costs transport increase of price per distance to Toll costs Price increase toll with (before costs with transport unit, VAT consider vignette profit and toll cost incl.,BGN logistic chain charge VAT) 150% BGN/ton BGN/ton BGN/ton BGN Rice 2.33 83 32.38 1.8% 2.88 34.64 7.0% 0.17% 0.004 Flour 1.03 347 83.21 10.7% 10.24 92.31 10.9% 2.28% 0.023 Bread 1.41 347 83.21 7.8% 10.24 92.31 10.9% 1.67% 0.023 Bakery and pasta 5.62 347 83.21 2.0% 10.24 92.31 10.9% 0.42% 0.023 Meat 5.96 347 69.70 1.5% 8.09 76.76 10.1% 0.21% 0.013 Processed meat and 8.46 sausages 347 73.45 1.1% 8.74 81.14 10.5% 0.17% 0.015 Fish freash and frosen 7.21 83 29.04 0.5% 2.77 31.28 7.7% 0.05% 0.004 Milk 1.52 347 83.21 7.2% 10.24 92.31 10.9% 1.54% 0.023 Yogurt 2.18 347 83.21 5.0% 10.24 92.31 10.9% 1.08% 0.023 Eggs 4.17 83 22.81 0.7% 2.52 24.97 9.5% 0.09% 0.004 Vegetable oils 2.62 347 68.57 3.5% 8.00 75.56 10.2% 0.35% 0.009 Animal fats 16.64 347 68.57 0.5% 8.00 75.56 10.2% 0.06% 0.009 Fresh fruits 1.75 83 29.04 2.2% 2.77 31.28 7.7% 0.21% 0.004 Fresh and frozen 1.74 33.12 vegetables 83 30.87 2.3% 2.83 7.3% 0.21% 0.004 Dried legumes and 3.72 26.41 seeds 83 24.26 0.9% 2.55 8.8% 0.10% 0.004 Potatoes 0.89 83 27.22 4.0% 2.70 29.44 8.2% 0.33% 0.003 Sugar and 3.34 81.15 confectionery 347 73.45 2.9% 8.75 10.5% 0.30% 0.010 Sparkling beverages 0.59 92.31 and mineral water 347 83.21 18.6% 10.24 10.9% 3.98% 0.023 Alcoholic2 beverages 1.54 347 78.33 6.7% 9.49 86.73 10.7% 1.15% 0.018 CONSUMER GOODS PRICES : SPECIFIC EXAMPLE Rice (2.33 BGN / kg). Average transport distance of 189 km, the current average transportation cost with vignette are 32.38 BGN per ton. With introduction of toll, it is expected to increase to 34.64 BGN/T, which is increase by 7% for transport cost, however transportation cost are only 1.8% of the rice price. The final increase is 0.17% or 0.004 BGN/kg. Bread (1.41BGN/kg). Average transportation distance of 347 km because the product goes through several stages of processing and it calculates transport costs for raw materials. The current average transportation cost with vignette is BGN 83.21 per ton. With introduction of toll charges, they are expected to increase to BGN 92.31 / ton, which is an increase of 10.9% in transport costs. For bread, the share of transport costs is higher than for rice (7.8%). The final unit price would increase with - 1.67% or BGN 0.023 / kg. 3 BUS FARE PRICES : METHODOLOGY • Estimated of the number of trips per day on selected bus routes • Estimated bus average occupancy per line • Estimate of the annual number of trips, passengers and respective vignette cost per passenger • Transport model used to calculate the proportion on tolled network on each of the selected routes • Toll cost per route and per passenger is estimated, accounting for different Toll tariffs par type of road and euro class of the bus • Toll impact is assessed by bus ticket price increased with Toll per passenger and decreased by respective vignette cost 4 TRANSPORT MODEL: HIGHIGHTS • National transport model endorsed by the MTITC • Developed by PTV Group within Integrated transport strategy project (2016- 2017) financed by OPTTI • Based on detailed passenger and freight traffic survey • Includes entire Republican road network (19 800 km, four road categories), 356 domestic zones and 50 commodity groups • Updated in 2019 to include new road sections and adjust the scope of the network subject to toll charges 5 BUS FARE : ESTIMATED PRICE IMPACTS Vignette Difference toll- Average fare, Annual coach Average nr of Proportion of Fare increase Total charge/ vignette charge From To BGN, VAT milege, passenfers tolled due to toll distance, km passenger, per passenger, incl. km/year /coach network charge BGN BGN Burgas Sliven 113.00 11.08 101,700 15 0.0599 64% 2.5% 0.28 Pleven Lovech 37.00 3.18 33,300 10 0.1167 72% 4.7% 0.15 Plovdiv Burgas 255.00 19.00 153,000 15 0.0898 80% 4.6% 0.88 Plovdiv Kardzhali 110.00 13.00 66,000 15 0.0898 57% 1.9% 0.25 Plovdiv Pazardzhik 52.20 3.83 31,320 10 0.1750 51% 1.2% 0.05 Plovdiv Smolyan 100.00 10.00 60,000 15 0.0898 72% 2.9% 0.29 Plovdiv Sliven 159.67 8.93 95,800 15 0.0898 81% 5.9% 0.53 Plovdiv Stara Zagora 88.00 8.00 52,800 10 0.1750 98% 6.4% 0.51 Ruse Razgrad 67.00 5.17 40,200 10 0.1750 76% 5.4% 0.28 Ruse Silistra 130.00 7.56 78,000 15 0.0898 80% 6.3% 0.47 Sliven Yambol 30.00 3.00 27,000 10 0.1167 60% 1.8% 0.05 Sofia Blagoevgrad 100.90 9.55 90,810 15 0.0599 80% 2.7% 0.26 Sofia Botevgrad 64.64 5.70 38,782 10 0.1750 77% 2.8% 0.16 Sofia Burgas 417.60 24.53 125,280 20 0.1750 86% 2.7% 0.65 Sofia Lovech 152.00 10.00 91,200 15 0.0898 90% 5.0% 0.50 Sofia Montana 154.00 12.45 92,400 15 0.0898 86% 4.0% 0.50 Sofia Pernik 27.51 2.88 24,762 10 0.1167 30% -2.2% -0.06 Sofia Pleven 164.00 10.18 98,400 15 0.0898 86% 5.0% 0.51 Sofia Plovdiv 147.00 13.17 88,200 15 0.0898 81% 2.8% 0.37 Sofia Ruse 316.12 21.84 94,836 20 0.1347 85% 2.7% 0.60 Sofia Varna 450.88 31.13 135,263 20 0.1347 91% 3.1% 0.96 Varna Dobrich 50.10 4.83 30,060 10 0.1750 69% 3.4% 0.16 Varna Shumen 86.70 7.94 52,020 10 0.1750 89% 4.4% 0.35 6 BUS FARE : SPECIFIC EXAMPLE Plovdiv – Stara Zagora (88km) – low occupancy of 10 passengers, high proportion on the toll network (98%) result in 6,4% or 0.51 BGN increase of bus fare. Sofia – Varna (451km) – high occupancy of 20 passengers, high proportion on the toll network (91%) result in 3,1% or 0.96 BGN increase of bus fare. While the absolute increase is higher, the high occupancy deliver lower percent of increase. Sofia – Pernik (28km) – low occupancy of 10 passengers, however, due to the very low proportion on the toll network (30%) result in 2,2% or 0.06 BGN decrease of bus fare. 7 TOLL IMPACT: BENCHMARK OF INTERNATIONAL EXPERIENCE • Originally the German Authorities predicted transportation costs would increase by some 7-9% leading to an increase in consumer prices in Germany by 0.15%, but after one year of operation there was found to be no traceable increase in freight charges or consumer prices. Further studies showed the modelled impact on the general price level is on average +0.15%, for wood and wood products +0.16%, tobacco, +0.11%, paper and paper products 0.10% and food and food products, +0,09%. Whilst transportation costs were increased by up to 15%, there was an overall increase in consumer prices of only around 0.1%. • Switzerland: Impact on consumer price was stated as negligible at 0.11%. Transport costs accounted for on average 1-2% of final goods price. The effect on transport has been to reduce the level of truck traffic and vastly increase efficiency of truck transport with 30 per cent improvement in tonnes per kilometre. • Netherlands: Dutch study indicated that there would be a cost increase for manufacturing industry. Where transport costs are a significant proportion of overall costs, the impact could be up to 0.2% of overall costs, leading to an increase in consumer prices of up to 0.06%. • Austria: In Austria, the impact of the toll in 2004 was estimated to raise domestic prices (in terms of the consumer price index) by between 0.11% and 0.20%.

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