SkyToll CEO: Czech road toll ‘in flagrant violation’ of EU law

PROMOTED CONTENT: This post is sponsored by a third party.

Automatic toll collection gate on the highway in the Czech Republic. [Shutterstock]

The situation with tolling in the Czech Republic is unlawful and could happen again if the European Commission doesn’t intervene, says Matej Okáli.

Matej Okáli is CEO and chairman of the Board of SkyToll, a Slovak road toll operator.

Road charging has become a hot topic in Europe as individual EU member states move forward in selecting their national tolling operators. How do you see this as a representative of satellite technology?

Six years ago, Slovakia was the second country after Germany to opt for electronic toll collection using satellite (GNSS) technology. Today, countries with satellite-based tolling systems have grown in numbers, and other countries are considering using GNSS in the selection of contractors for the construction of new or takeover of existing systems based on microwave (DSRC) technology.

We see GNSS not only as a technology enabling toll collection for vehicles over 3.5 tonnes, or the per-use fees for the use of roads by passenger vehicles. The use of satellite technology in the context of Intelligent Transport Systems is a key benefit not only for the states, but also for the carriers.

The inclusion of the entire road network, or its relevant parts, in the system is an invaluable source of various data to improve comfort and driving safety, but also, for example, a means of prevention and reduction of offences related to tax evasion known as carousel or missing trader fraud.

EU member states are not the only ones selecting their tolling systems. The European Electronic Toll Service (EETS) is also being introduced. Where do you see the biggest pitfalls of this system with respect to the use of different technologies in different countries?

The pitfall, as you call it, is especially money. More specifically, its allocation. The individual states and the toll chargers managed or owned by the states are the end recipients of the money collected from the toll roads. In addition, a new group of entities are also coming into play – the European Toll Service Providers (ETSP) which simply said are providers of on board units (OBU) communicating with national systems to carriers all over the EU.

The carrier will have a single contract with its ETSP no matter which countries’ roads are being used instead of having to agree as many contracts as there are countries. However, the national TS Providers (TSP) continue to exist and the money collected in any given country is allocated at the national level.

By introducing the EETS, it becomes necessary to introduce the Toll Service Providers funding model. They can receive the money as a commission for their services from the national toll chargers as the provision of one OBU and one invoice is provided to the carrier operating in different European countries. Alternatively, toll service providers can also receive money from the carriers for the European Electronic Toll services included among other services, currently provided e.g. by the fleet cards issuers (FCI).

Commissioner calls for standardised road pricing in member states

European Union Transport Commissioner Violeta Bulc called for the introduction of a standardised European-wide road pricing system in comments she made to a German Sunday newspaper.

Both models have their pros and cons. In our view, a fairer model is the inclusion of EETS in the package together with other services and its financing by the carriers.

The second cause of the delay is legislation. EU member states are more or less prepared; they have implemented the existing European directives. Some things, however, are not clearly defined and allow for different interpretations. It seems that the details are not crystal-clear even at EU level, even though a new directive is under consideration.

In your view, is Slovakia ready to implement the EETS as a country where you operate the toll system?

SkyToll, Slovak TC,  is technologically prepared. But for a functioning EETS, the toll charger must cooperate with the ETS Provider. When a new ETS provider wants to establish itself on the Slovak market, its system must be able to communicate with ours which means preparedness on the other side. To answer this part of your question, I have to say I do not know.

Have you applied for operating the toll system in other countries?

Currently we are participating in the tender in Poland. In the long run, we are interested in taking over the Czech electronic toll system.

At what stage is the selection process in these countries?

Let me mention Germany before Poland and the Czech Republic. The subject of the German tender is to sell shares in Toll Collect and conclude a new 12-year contract for the operation of the toll system. The primary objectives of the Contracting Authority are to ensure smooth operation of the toll system after 31 August, 2018 and a fair and transparent tender procedure. Germany has 22 months to do all necessary steps.

In Poland, the new operator should be responsible for several activities, out of which the most essential ones are the collection of fees and provision of a complete set of services related to electronic fee collection since November 2018. The Polish Contracting Authority has nearly two years for the tender, conclusion of the contract and implementation of the transition from the old to the new operator.

These two countries have thought out and planned all the necessary steps to implement the changes within approximately two years, and proceed in strict compliance with the EU legislation.

EU gears up for more road toll schemes

The European Commission announced it will propose a new law to make road toll schemes across Europe more user-friendly if it fails to achieve it through non-binding measures.

The Czech Republic is quite the opposite. The whole process “managed” by Minister of Transport Daniel Ťok led to a flagrant violation of the Czech and European law and the extension of the contract with the current operator Kapsch for another three years.

If we were to compare the situation, the Czech Republic wants to achieve results identical to Poland. Their system is almost identical and is built by the same supplier. The Polish will select a new entity within two years and continue to collect the toll without a “technical outage”. Although the Czechs have been discussing the expiry date of the contract for the last six years, the result is that the system was directly awarded to the old operator and a fine was levied by their own Competition Authority.

Can you please describe the situation in the Czech Republic in more detail?

The Czech Republic had a ten-year contract to operate the toll system with the Kapsch consortium, which expired on 31 December, 2016. This deadline was widely known. The ministry of transport, however, constantly postponed the solution of the toll problem.

By omission or negligence, whether intentional or due to ignorance, the government got into a situation where it was impossible to open a new tender for the operation of the toll system on January 1, 2017 in time. Therefore, it chose to extend the contract with the current operator for another three years through a non-public procedure, whereby a contract of 5.3 billion Czech crowns (€196 million) was concluded over the course of one weekend.

Our company offered the same services for at least 1.5 billion (€56 million) less. The minister said that the situation is not his personal fault, but the responsible officials have been working at the ministry the entire time and they knew where the situation was going, that is why we forwarded the issue to the competition authority.

What was the conclusion of the Czech competition authority – ÚOHS?

ÚOHS stated that the ministry of transport committed an administrative offence by signing the amendments to the contract concluded with Kapsch in a non-public procedure without fulfilling the conditions for this type of procurement. The Authority fined the ministry 1 million Czech crowns (€37,000), which the minister of transport described as trivial.

The ÚOHS also noted multiple crucial violations of the Public Procurement Act and confirmed that all the legal conditions for the imposition of a ban on executing the contract had been met.

Our proposal for a ban on the execution of the contract was, however, rejected by ÚOHS for alleged reasons of special concern. In our view, it is not possible to promote economic interests (toll collection) over respect for the law therefore we turned to the European Commission.

What do you expect from the European Commission’s decision?

We seek to remedy a situation where a member state fails to comply with EU law. The unlawful conduct of the Czech minister of transport should not be swept under the carpet and the same scenario should not be used in three years’ time, because 2016 created a precedent.

After the experience in the Czech Republic, SkyToll is almost certain that this will happen again if the European Commission doesn’t intervene. This is the conclusion we draw from the current circumstances around tolling in the Czech Republic.