• What is the Dutch ‘kilometre price’, and will it really happen?

    The Dutch government has announced it wants to have a fully operational distance-charging scheme for lorries by 2011. Chris Nobel of T&E's Dutch member N&M looks at what the scheme involves and whether it is likely to happen.

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    [mailchimp_signup][/mailchimp_signup]The process that has led to the Dutch government’s announcement has been going on for 20 years, and people are entitled to wonder whether this is just another wonderful idea that will not quite make it into reality. What is different is that all past Dutch initiatives have been for the next government to deal with – this one is supposed to be completed in legislative terms by the time the centre-left government’s current term ends in 2011.

    The ‘kilometre price’ is to be differentiated by location, environmental properties of the vehicle, and time of day (effectively a peak/off-peak or congestion charge). It is to be introduced for all vehicles on all roads in the entire country, starting with lorries in 2011 and phasing in a scheme for cars from 2012 to 2016.

    The government’s aim has been to take a substantial and irreversible step, but knows that to do this it needs to keep broad support. That explains why the system will be cost-neutral for the average driver, so the current fixed road tax and the purchase tax for new cars will be abolished so that drivers in general will not pay more under the new system than they do now. The system will also use satellite tracking technology, thereby avoiding unpopular eyesores such as GSM devices and arches over roads.

    The news is obviously good, and if political feasibility requires a cost-neutral scheme in the kilometre price’s first phase, we will have to accept that. But if the current fixed costs of road freight are converted into a cost-neutral flexible kilometre price, it will mean a charge for hauliers that is far too low and contravenes the polluter pays principle. The best idea is probably to raise these costs the moment the kilometre price is introduced.

    Starting with road freight is good, as it uses the technological systems that will ultimately be used for the entire scheme. But the decision not to have a pilot congestion charge around Amsterdam is a pity, as this would have had a positive short-term effect. And while abandoning the fixed costs in return for distance-based charging is a good idea, it would be better to reduce purchase taxes on new cars to 75% of their current level (rather than abolish them) so there is still a consumer incentive to buy the cleanest vehicles.

    The freight charge will almost certainly happen, as lorries don’t carry many votes and this part of the scheme can be completed by the current government.

    The period of 2012-16 for phasing in the kilometre price for cars looks a little shaky. But we at N&M are confident the scheme will happen for cars eventually. There is broad support among transport users and the many benefits are widely accepted. In short, the government can’t really afford not to introduce the kilometre price.

    This news story is taken from the December 2007 edition of T&E Bulletin.