The experiment with the M-11 highway toll sections has shown that our drivers prefer worse, but free, roads.
The experiment with the development of toll roads in Russia has not been a success as of yet. For example, the tariffs for driving along the M-11 highway section from MRHW to Solnechnogorsk were established not so long ago, but they had to be reconsidered soon thereafter. In spite of the fact that it is one of the best roads in Russia, people did not pay to use it. Why not?
At the end of 2014, a section of the new Moscow – Saint Petersburg toll highway from MRHW to Solnechnogorsk was put in operation. It had been known from the beginning that it would be a toll road, but until October 2015 the road was free.
The highway allows drivers to get from MRHW to Sheremetyevo quickly. It should be noted that, when free, it drew drivers, as there were no jams of the type so prevalent in Moscow and the Moscow region.
The situation changed significantly when, last autumn, tariffs for driving on the road were announced. On learning of them, many drivers considered the tolls extraordinary and returned to the old free roads, so the toll highway became deserted. This is not surprising – to zoom from Moscow to Sheremetyevo, one had to pay from 100 to 250 rubles, depending on the time of the day. A drive to Zelenograd cost from 150 to 350 rubles, and the most expensive trip – to Solnechnogorsk – cost 200 – 500 rubles.
A special tariff was developed for trucks and buses. The basic principle for this was as follows: the larger the car is, the more expensive the drive will be. But the most expensive was the drive along the section from Solnechnogorsk to Moscow for multiaxial trucks: it cost 1,200 rubles from 6 a.m. to 10 p.m. and 1,000 rubles in the opposite direction. From the very beginning, both drivers and experts claimed that the cost was too high and the distance from the MRHW to Solnechnogorsk is not so long as to justify it.
The situation escalated, and even the RF President spoke on it. Delivering a speech at the All-Russia People’s Front interregional forum, Vladimir Putin claimed that the prices for driving “had been forced up so much that nobody uses the road”.
Moscow region governor Andrei Vorobiev called the current tariffs a catastrophe. He remarked that any concession model (http://www.rcmm.ru/ekonomika-i-biznes/22543-gchp-v-dorozhnom-stroitelstve.-kak-sohranit-dengi-chastnogo-investora-v-sluchae-ostanovki-proekta.html) hardly works if a man cannot afford to drive on the toll road.
The Prosecutor-General’s Office got in on the action
Hardly had journalists commented on the President’s statement when (as often happens with us) the Prosecutor-General’s office drew attention to itself. The institution warned the head of “Avtodor” GC, Sergei Kelbach, about the impermissibility of breaking the law and exceeding his authority while executing concession agreements in federal road construction and exploitation.
This was the way the Prosecutor-General’s office reacted to Kelbach, who had announced that the tariff level for driving along the M-11 toll section was the exclusive domain of the concessioner. The supervisory agency thinks this standpoint unjustified, as it does not take into account the norms of the RF Government regulations of tariff threshold levels for driving on toll roads. Besides, the Prosecutor-General’s office traced the violation of the law on state service, according to which officials are forbidden to speak and assess superior authorities publicly.
The First Deputy Prosecutor General, Alexander Buksman, gave a warning to Kelbach, the Prosecutor-General’s Office reported.
Thus, from February 4th until April 1st, 2016, discounts for driving along the highway have been introduced on the road sections Moscow – Zelenograd, Moscow – Small Ring of the Moscow Rail (MRR), Moscow – Solnechnogorsk, and Zelenograd – Solnechnogorsk. The tariff decrease does not depend on the method of payment. However, the payment itself will be calculated flexibly, taking into account the time of a vehicle’s movement and the vehicle’s class.
The decrease in price is agreeable, but some people expected it to be more significant. If, formerly, a car owner paid 500 rubles to go from Moscow to Solnechnogorsk or back, now on working days in the rush hour (06:00—10:00 a.m. and 4:00—10:00 p.m.) he will pay only 100 rubles less, i.e 400 rubles.
In the daytime (10:00 a.m.—6:00 p.m.) it will be a bit cheaper on weekdays — 350 rubles. On weekends, a driver will pay from 150 to 350 rubles, depending on the time of day. Night-driving fans are lucky – they will pay only 150 rubles, regardless of the day of the week.
A drive from Moscow to Sheremetyevo on weekdays will cost 200-250 rubles. The cheapest is at night or on Sunday – 100 rubles one way. Driving from MRHW to Zelenograd on weekdays now costs 150 – 250 rubles, and at night and on Sunday, 100 rubles; from MRHW to MRR costs from 100 rubles on Sunday morning to 350 rubles in the rush-hour.
The use of a transponder may decrease the cost of driving along the M-11 highway section.
An expert’s commentary
We asked Ekaterina Reshetova, senior research assistant at the Institute for Transport Economics and Transport Policy of the National Research University / Higher School of Economics, to comment on the situation.
— Why is there such an issue over the M-11 highway?
— “Avtodor” GC deals with toll roads in Russia. It constructs roads according to two schemes: the first one is only at the expense of the state budget, without private finance. The toll on these roads is 1 ruble for 1 km, set by the state. Everybody is satisfied with such a tariff.
The other scheme is with private investment. They may hold any share: a quarter, more than a half, etc. An investor makes his business plan on the investment turnover. Roughly speaking, automobile traffic intensity calculations are made, and then, on this basis, the toll is calculated.
Three toll roads are now operating according to this scheme: round Odintsovo, MRHW – Solnechnogorsk and round Vyshny Volochiok. Of course, the tariffs on these roads are considerably higher than on M-4 “Don”, which was built without private financing.
Taking into account the lack of finance for road construction in the state, the limits are annually reduced, and the necessity of private investments in the sphere has been constantly talked about for several years already. Something like, ‘they will come and build excellent roads – everybody will be glad…’
Investors have come, and they have built a road, but the tariffs turned out to be very high, and because drivers and authorities did not like paying for driving, an administrative decision was taken to lower the price.
But there is no reason to celebrate, as administrative measures scare business away from road construction. It should be understood that any investor has a risk-sharing approach towards such concession agreements. The company’s payback volume will hardly drop, as the money will return not from collecting tolls, but from general tax revenues collected by the state.
Of course, it is not very pleasant to consider this, but on the other hand, one should keep in mind that new roads have been built. And they have only been repaired and reconstructed over the last several years.
— Do you think the tariff was initially too high or are we so accustomed to using free roads that we do not want to pay for driving?
— As a road user, I’d prefer free roads, but our transportation tax is low. In Moscow, half of the money for road construction is from taxes taken from vehicle owners, and the rest is paid for from the city budget. On the whole, Russian road construction is 75% financed at the expense of the tax-paying car owners.
I am speaking about this because we are really not accustomed to paying for road usage, and that’s why such payments seem too high - and they really are, if we compare them with the tariffs in Europe.
However, first of all one should be critical of an investor who has calculated the advantages, to him, of a tariff, but his expectations turned out to be too high, as people refused to drive on the road.
Still, the road is good and it should not be without cars. That’s why the tariff has been decreased: to see how the drivers would react. Sometime later there will be a decision on what to do next: to prolong the new tariffs, to increase them, or to decrease them. It also should be taken into account that the agreement was concluded in 2011 in absolutely different economic conditions, which have changed crucially. The tariffs should be geared towards our new realities.
— How do you assess the prospects for toll road network development taking into account that the state is short of money for road construction?
— Currently, investors are not demonstrating strong intentions to invest in road construction. First of all, the general economic conditions are not favorable, and secondly, they see the far-from-successful experience of their colleagues.
But the country is in great need of road network growth, as, I repeat, it has not grown a bit for the last decade. That is why, be they tolled or free, it is important that new roads should appear.
Besides this, the development of road infrastructure will aid the overcoming of the economic crisis.
It is depressing that less money is being allotted for these purposes from the state budget.
— What conclusion may be drawn from the situation with the tariffs on the M-11 highway?
— Firstly, a more careful marketing study should be undertaken. A PR company should explain to the users the necessity of the tariffs, taking the average salary in the region into account. These measures are necessary, as road construction is a very input-intensive industry.
— As far as marketing is concerned, you are absolutely right. Even with all of the ruble fluctuations, there are lots of questions for marketing consultants who have calculated the economy of toll road sections in a way that means nobody is using them. By the way, such flips and flops are impossible in the West: their pricing policy is organized from low to high, and not vice versa. And driving along such short road sections is usually free there.
— Our state has taken a number of measures to increase the attractiveness of road projects. Investors react to these perks, but they might better imagine the economic policy to be conducted after putting the objects in operation.
New tariffs (from February 4th until April 1st, 2016)
Moscow — Zelenograd
Sun. — 100 rub.
Sat. — 100 rub. (10:00p.m.—6:00a.m.), 150 rub. (6:00a.m.—10:00a.m.), 250 rub. (10:00a.m.—10:00p.m.)
Weekdays — 100 rub. (10:00p.m.—6:00a.m.), 250 rub. (6:00a.m.—10:00p.m.)
Moscow — MRR («concrete»)
Sun. — 100 rub. (6:00a.m.—2:00p.m.), 150 rub. (0:00—6:00a.m., 2:00—12:00p.m.)
Sat. — 150 rub. (0:00—6:00a.m., 10:00—12:00p.m.), 200 rub. (6:00—10:00a.m.), 300 rub. (10:00a.m.—10:00p.m.)
Weekdays — 150 rub. (0:00—6:00a.m., 10:00—12:00p.m.), 300 rub. (10:00a.m.—4:00p.m.), 350 rub. (6:00—10:00a.m., 4:00—10:00p.m.)
Moscow — Solnechnogorsk
Sun. — 150 rub. (0:00—2:00p.m.), 200 rub. (2:00p.m.—10:00p.m.)
Sat. — 150 rub. (0:00—6:00a.m., 10:00p.m.—12:00p.m), 250 rub. (6:00—10:00a.m.), 350 rub. (10:00a.m—10:00p.m.)
Weekdays — 150 rub. (0:00—6:00a.m., 10:00p.m.—12:00p.m), 350 rub. (10:00a.m.—4:00p.m.), 400 rub. (6:00—10:00a.m., 4:00p.m—10:00p.m.)
Zelenograd — Solnechnogorsk
Sun. — 50 rub. (0:00—2:00p.m., 10:00p.m.—12:00p.m.), 100 rub. (2:00p.m.—10:00 p.m.)
Sat. — 50 rub. (0:00—6:00a.m., 10:00p.m.—12:00p.m.), 100 rub. (6:00a.m.—10:00p.m.)
Weekdays — 50 rub. (0:00—6:00a.m., 10:00p.m.—12:00p.m.), 100 rub. (6:00a.m.—10:00p.m.)
Source: North –Western concession company