European Transport / Trasporti Europei (2009) 43/XV

The text explores the optimal infrastructure charges of an unbundled activity where the infrastructure manager sells the use of the infrastructure to operators providing services to a downstream market made up of atomistic customers. This situation has been widely analysed under the assumption that the upstream market is competitive, but more rarely in the case of imperfect competition. Typical examples are the railways activity in Europe and air transport. Various market structures are considered, illustrated by situations encountered in the transport field: a single mode operated by a single operator, two operators competing within the same mode, and two modes competing in a Bertrand way. In each case, situations are analysed using analytic formulae with a simplified demand function and a simplified cost function, and performing simulations with sensible parameter values drawn from current average situations. The main result is that the analysed imperfections make a dramatic departure from the conventional Marginal Cost pricing doctrine. Conclusions are drawn regarding infrastructure charging policy.

One of the key objectives of rail infrastructure charges has been stated as being to promote the efficient use of the infrastructure. Much effort has been put into the derivation of charging regimes by infrastructure managers and regulators throughout Europe, and a mix of differing regimes have been put in place. However, relatively little work has been undertaken to examine the impacts and incentivisation effects that these charging regimes produce. This paper gives consideration to relevant theory in this area, what one might expect - from first principles - and then reports on a number of interviews and case studies undertaken to explore these impacts and incentives. Finally, it discusses a number of methodological issues surrounding this area of research, and proposes further lines of enquiry that might reasonably be pursued.

This paper explores the relationship between charges on motorways and on other types of road. It draws on a model-based study of different pricing scenarios which was conducted within an EU-funded investigation of differentiated infrastructure charges (the DIFFERENT project). The scenarios covered strategies ranging from full charging on all roads irrespective of category, on motorways only, on motorway access roads, on urban roads only, and at cordons. A number of different charge levels were tested. The test results suggested that positive impacts and revenues are maximised by applying charges to each link which reflect the contribution to externalities made by the marginal user of that link - irrespective of whether it is a motorway link or an urban link. However, when implementation costs are taken into account, the best performing scheme was a cordon charge combined with a per-km charge for use of motorways outside the cordon. Fixed per-km charges on motorways or on urban roads are much less effective than charges which are differentiated to reflect congestion on individual links. The introduction of charges only on motorways produces little benefit and causes unwanted diversion to urban roads, and although the introduction of a charge designed to protect the level of service enjoyed by strategic motorway traffic succeeds in achieving that goal, it yields little revenue and has little overall impact on delay or other externalities. The paper highlights the practical implications of these results and notes that, although it is likely to be easier to gain political support for introducing charges on motorways than on other types of road, the benefits from so doing are generally lower than can be obtained by introducing charges on congested urban roads.

This paper discusses the impact that tolling schemes with a higher degree of differentiation of tariffs among demand categories can have on road demand. The question addressed in the paper is whether the differentiation of inter-urban road tolls can help to manage demand and meet targets like alleviating congestion, reducing emissions or making feasible project financing schemes, where toll revenues are used to cover construction and operating costs. The paper is mainly based on the results of the DIFFERENT research project, co-funded by the European Commission DG TREN, where a number of modelling tests have been carried out using two different transport network models. Based on modelling results we conclude that a trade-off between alternative targets of toll differentiation exists and that results vary according to the specific context of the application. In non-congested corridors charge differentiation can raise money, but there is little room for social benefits, whereas in congested areas travel speed on the road network can be improved by introducing charges on congested non-motorway links. Additionally, achievement of benefits from differentiated charges may require the co-ordinated introduction of charges on ordinary roads as well as on motorways.