7 October 2006, TU Berlin 5 th Conference on Applied Infrastructure Research. Organizational Models for the German Motorways

Transcription

1 7 October 2006, TU Berl 5 th Conference on Applied Infrastructure Research Organizational Models for German Motorways Jan Peter Klatt, Dr. Thorsten Beckers, Pr. Christian von Hirschhausen (TU Dresden) Berl University Technology Workgroup for Infrastructure Policy WIP Contact: Jan Peter Klatt, Tel.: , jpk@wip.tu-berl.de, Dr. Thorsten Beckers, Tel.: , tb@wip.tu-berl.de, Pr. Dr. Christian von Hirschhausen, cvh@mailbox.tu-dresden.de,

2 Agenda 1. Options for Organization Motorway Sector 2. Cost-Efficiency PPPs 3. Fancg 4. Conclusions TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

3 Traditional Procurement Approach and PPPs: Defitions Procurement Strategy Elements value cha Traditional Procurement Approach PPP (Public Private Partnership) Construction (newbuild, extension, renewal) Matenance Operation / Route Matenance (Wter Road Clearance, green space upkeep, cleang) Private Sector / Contractg Out Bigger Matenance Works: Private Sector / Contractg Out Smaller Matenance Works: Public Road Matenance Divisions Public Road Matenance Divisions - Functional description task - Public sector purchases a service clusion (at least) construction and matenance long term contract frequently route matenance and operation is cluded PPP-projects as well PPP (as a procurement strategy) + Operator receives its remuneration directly from users (tolls) = Concession TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

4 Options for Organization Motorway Sector Institutional Solutions for Fancial Management Production / Procurement Strategy Traditional Procurement Approach (separate contractg out construction and matenance short-term contracts) PPPs for Motorway-Stretches (newbuild, extension, renewal) combed with traditional procurement approach on or parts network PPPs for Networks Privatized Networks Budgetary System Germany (until 2002) Germany (2006) Budgetary lked Road Fund - source come: user fees and earmarked taxes (e.g. fuel tax) New Zealand Independent Road Fund - source come: user fees - state owned company Austria Concessions for Networks - concessionaire (private company) receives user fees - limited duration France Privatization Networks - unlimited duration TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

5 Agenda 1. Options for Organization Motorway Sector 2. Cost-Efficiency PPPs 3. Fancg 4. Conclusions - PPP for Motorway-Stretches - PPP for Motorway-Networks TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

6 Characteristics PPPs for Motorway-Stretches and PPPs for Motorway-Networks construction (newbuild, extension, renewal) begng project duration Share which is only to mata begng project duration Complexity (Predictability costs; degree uncertaty concerng output begng project duration / parametric uncertaty) Appropriate remuneration scheme PPPs for Motorway- Stretches high low low ( appropriate projects) PPP operator bears cost risks ( fixed-price contract ) PPPs for Motorway- Networks low high high PPP operator bears cost risks only for shorter terms (as a price-capregulation) TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

7 Higher Cost-Efficiency PPPs for Motorway-Stretches ( comparison to traditional procurement approach)? Ma Results Cost savgs applyg PPP-approach seem possible if appropriate projects are chosen newbuild, extension and renewal low parametric uncertaty ( fixed-price-remuneration schemes are appropriate) and followg conditions are fulfilled: efficient risk allocation appropriate contractual design (cludg renegotiation design) stable and competent stitutions public sector competition tenderg phase Furr effects ( ) PPP should not be an strument to bypass budgetary rules, because PPP is an appropriate approach to solve problems fancg motorway networks. Network-wide fancg solutions should be implemented to mitigate false centive usg PPP as an strument for fancg. (+) Incentives for public admistration resultg from direct competition with PPP as an alternative procurement form (+) Innovations TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

8 Agenda 1. Options for Organisation Motorway Sector 2. Cost-Efficiency PPPs 3. Fancg 4. Conclusions - PPP for Motorway-Stretches - PPP for Motorway-Networks TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

9 Characteristics PPPs for Motorway-Stretches and PPPs for Motorway-Networks construction (newbuild, extension, renewal) begng project duration Share which is only to mata begng project duration Complexity (Predictability costs; degree uncertaty concerng output begng project duration / parametric uncertaty) Appropriate remuneration scheme PPPs for Motorway- Stretches high low low ( appropriate projects) PPP operator bears cost risks ( fixed-price contract ) PPPs for Motorway- Networks low high high PPP operator bears cost risks only for shorter terms (as price-cap-regulation) TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

10 PPPs for Motorway-Networks Advantages (+) (+) Economies Economiesscale scale operation operation(wter (wterroad road clearance, clearance,green greenspace spaceupkeep, upkeep,cleang) cleang) But But costs costsfor for operation operationisislow lowcompared compared toto share shareconstruction constructionand andmatenance matenance Disadvantages High Highdegree degreeuncertaty uncertatyabout about condition condition network networkt=0 t=0 High Highparametric parametricuncertaty uncertaty Æ ÆRemuneration Remunerationschemes schemeswill willbe bedesigned designedsuch suchaa way waythat that operator operatorbears bearscost costrisks risksonly onlyfor for shorter time periods shorter time periods Æ ÆIncentives Incentivesfor forcost costpaddg, paddg,centives centivesfor for overvestment overvestment W IP TU Berl Workgroup for InfrastructurePolicy Conclusions Cost Costreductions reductionsseem seemtoto be beimprobable improbable 07 October 2006, Conference on Applied Infrastructure Research, Berl

11 Procurement Strategies and Cost-Efficiency Institutional Solutions for Fancial Management Production / Procurement Strategy Traditional Procurement Approach (separate contractg out construction and matenance short-term contracts) PPPs for Motorway-Stretches (newbuild, extension, renewal) combed with traditional procurement approach on or parts network PPPs for Networks Privatized Networks Budgetary System Germany (until 2002) Germany (2006) Budgetary lked Road Fund - source come: user fees and earmarked taxes (e.g. fuel tax) New Zealand Independent Road Fund - source come: user fees - state owned company Austria Concessions for Networks - concessionaire (private company) receives user fees - limited duration France Privatization Networks - unlimited duration TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

12 Agenda 1. Options for Organisation Motorway Sector 2. Cost-Efficiency PPPs 3. Fancg 4. Conclusions - Source Income - Institutional Solution for Fancial Management TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

13 Relation between Source Income and Institutional Solution for Fancial Management Source come Institutional solution for fancial management Distance-based toll User fees Vignette Transport taxes (petrol tax, motor vehicle tax) General taxes Budgetary system X X X X Budgetary lked road fund X X X Independent road fund X X Concessions for networks X X Privatization networks X (X) TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

14 Time Horizon and Options for Introduction Tolls for Cars Problems implementg a distance-based toll for cars on German motorways If toll level is low, a high proportion toll revenues would have to be used to cover costs tollg system. If toll level is high, re would be substantial traffic evasion on subordated network due to structure German road network. Conclusions Tolls for cars should not be troduced before chargg technology is available to raise tolls on motorways and on subordated network at acceptable costs (? 2014+) Possible terim / transitional solution: troduction car vignettes - The vignette price should not be too high to limit traffic evasion on subordated network. - The advantages and disadvantages (cost for a vignette system, efficient traffic evasion) a vignette should be well balanced. - One possible advantage a vignette: new source come which enables settg-up an dependent road fund What is potential an dependent road fund? TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

15 Agenda 1. Options for Organisation Motorway Sector 2. Cost-Efficiency PPPs 3. Fancg 4. Conclusions - Source Income - Institutional Solution for Fancial Management - Budgetary System and Budgetary Lked Road Fund - Independent Road Fund - Concessions TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

16 Current Deficits and Reform Options with Budgetary System Deficits Project appraisal Inefficient Allocation Available Funds Allocation available funds accordg to quotas on projects different federal states Not all urgently needed projects can be realized to relieve capacity constrats Possible Improvements Two-step-procedure for allocation available funds - 1 st step: Allocation funds to urgently needed projects - 2 nd step: Allocation funds accordg to distributional objectives Fixation funds for more than one year (~ budgetary lked road fund) TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

17 Independent Road Fund (1/2) Fundamental Idea Separate stitutional solutions for fancg motorways: Independent Road Fund (Source revenue: user fees) fundg or public tasks: Budgetary System (Source revenue: general taxes) The fancg motorways is separated from budgetary system Possible Advantages Possibility raisg credits beyond budgetary system as long as fancial equilibrium road fund is mataed (+) No false centive choosg procurement strategy: No false centive to realise PPPs due to fancg issues Choice between traditional procurement approach and PPP approach can be based only on cost considerations (+) Better matenance strategies (?+) Earlier realisation urgently needed projects due to separation responsibilities and vestment decisions urgently needed projects Independent road fund furr positive evaluated projects Budgetary system (Realisation depends on budgetary situation) TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

18 Independent Road Fund (2/2) Possible Disadvantages Necessity to implement user fees for cars, although costs for a tollg system are (still) high or, level efficient traffic evasion is high, respectively False centives for road fund to realise too many projects Conclusions Accurate projection future revenues and expenditures a road fund should be done before implementg an dependent road fund Details are very important to realise efficiency potentials an dependent road fund Investment rules Transparency rules TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

19 Concessions for Networks Characteristics Production: PPPs for Networks Fancg: The concessionaire raises distance-based tolls ( ) No cost savgs to expect as discussed analysis PPPs for motorway-networks ( ) No better vestment decisions compared to an dependent road fund to expect Concessionaire will undertake vestments ( capacity expansion projects) as long as he can cover his additional costs by raisg tolls (on whole network). Concessions for networks do not result efficiency gas TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

20 Agenda 1. Options for Organization Motorway Sector 2. Cost-Efficiency PPPs 3. Fancg 4. Conclusions TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

21 Comparison Organizational Models for Motorway Sector Institutional Solutions for Fancial Management Production / Procurement Strategy Traditional Procurement Approach (separate contractg out construction and matenance short-term contracts) PPPs for Motorway-Stretches (newbuild, extension, renewal) combed with traditional procurement approach on or parts network PPPs for Networks Privatized Networks Budgetary System Germany (until 2002) Germany (2006) Budgetary lked Road Fund - source come: user fees and earmarked taxes (e.g. fuel tax) New Zealand Independent Road Fund - source come: user fees - state owned company Austria Concessions for Networks - concessionaire (private company) receives user fees - limited duration France Privatization Networks - unlimited duration TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

22 Thank you very much for your attention! Contact: Jan Peter Klatt Tel.: TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

23 A-Model BACK UP Description Source Source remuneration: remuneration: - - HGV-shadow-toll HGV-shadow-toll - - subsidy subsidy max. max. 50% 50% buildg buildg costs costs from from budget budget Extension Extension motorways motorways from from 4 4 to to 6 6 lanes lanes * A A 1 1 Lower Lower Saxonia Saxonia A A 1 1 / / A A 4 4 North North Rhe- Rhe- Westphalia Westphalia ( * ( * planned) planned) A A 4 4 Thurgia Thurgia A A 5 5 Baden-Wurttemberg Baden-Wurttemberg Evaluation A A 8 8 Bavaria Bavaria ( ) ( ) Inefficient Inefficient risk risk allocation allocation (private (private operator operator bears bears 50% 50% demand demand risk ) risk ) cost cost savgs savgs improbable improbable Current Developments Tenderg Tenderg procedure procedure for for pilot pilot projects projects has has started started TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

24 F-Model Description Based Based on on FStrPrivFG FStrPrivFG (from (from 1994, 1994, modified modified and and 2005) 2005) Concessions Concessions for for motorwaystretches: motorwaystretches: tunnels, tunnels, bridges bridges and and passes passes * * Warnowtunnel Warnowtunnel Herrentunnel Herrentunnel Elbquerung Elbquerung at at Glückstadt Glückstadt ( * ( * planned) planned) BACK UP Economic Evaluation ( ) ( ) Too Too many many cost-plus-elements cost-plus-elements regulation regulation * * Current Developments Weserquerung Weserquerung ( * ( * planned) planned) Hochmoselübergang Hochmoselübergang ( * ( * planned) planned) Albaufstieg Albaufstieg ( * ( * planned) planned) Feasibility Feasibility studies studies for for planned planned projects projects (Hafenquerspange (Hafenquerspange Hamburg, Hamburg, Wernigerode, Wernigerode, Horb) Horb) Rostock Rostock (Warnowtunnel): (Warnowtunnel): Parliament Parliament Rostock Rostock has has decided decided to to extend extend concession concession period period from from to to years years Lübeck Lübeck (Herrentunnel): (Herrentunnel): Discussions Discussions on on regulatory regulatory issues issues TU Berl October 2006, Conference on Applied Infrastructure Research, Berl

25 Functional Construction Contract ( Funktionsbauvertrag ) BACK UP Description Construction Construction and and matenance matenance Availability Availability payments payments Evaluation Current Developments Tenderg Tenderg Functional Functional Construction Construction Contract Contract Thurgia Thurgia probably probably starts starts autumn autumn (+) (+) Efficient Efficient risk risk allocation allocation ( ) ( ) No No private private capital capital cluded cluded no no security security for for public public sector sector if if operator operator goes goes bankrupt bankrupt * A Rheland- Rheland- Palatate Palatate A Baden-Wurttembg. Baden-Wurttembg. (Oberndorf (Oberndorf Rottweil) Rottweil) A Bavaria Bavaria (Brannenburg- (Brannenburg- Kiefersfeld.) Kiefersfeld.) Functional Functional Construction Construction Contract Contract A 9 9 Thurgia Thurgia ( * ( * planned) planned) A NRW NRW (Lembeck (Lembeck - - Geschel Geschel / / Coesfeld) Coesfeld) TU Berl October 2006, Conference on Applied Infrastructure Research, Berl