Matching Public Road User Charging with Private Partnership

In the past few decades several developments have lead to a new view on the division of roles between the public and the private sectors when performing public tasks. Developments like the application of information technology on a large scale combined with the notions of new public management increased the involvement of the private sector in public service. Now it seems that the private sector is being granted a prominent role in one of the most public of public tasks, taxation, in particular free flow, GPS based, road user tax. Next to various technical challenges this leads to new questions like how to get the levying of a tax financed by a private company. It appears that many factors play a role in the way the various actors, public authorities, toll charging companies and financers behave in this particular Public Private Partnership process. In this paper the arguments and considerations of the parties involved are being analysed. The thread in the story is that a tax levying process performed by a private partner can only be successfully implemented if there is a positive business case. The demand for ex ante full private financing of the collection of the tax can be an obstacle for that business case if financing cannot be made fully profitable. To close the gap and to achieve the business case the administration could for instance facilitate the financing of the road user charges with a guarantee. Putting the financing risks and costs entirely with the private partner could ill mean that the project is not financeable, or that it is only financeable at a very high fee that will be included in the DBFMO price. The latter option could be the most attractive if the road user charges also widens the tax basis for instance if tax money can also be gained from foreigners.