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Efficiency and fairness the cornerstones of future transport

Efficiency and fairness the cornerstones of future transport

Press release 14.06.2012 13.12 fi en

This past spring a Ministry of Transport and Communications working group has begun its enquiry into how transport in Finland can be developed in a fair and intelligent way. The working group is headed by Jorma Ollila. The enquiry delves into matters such as the way in which Finland should progress in the introduction of the road toll systems in the long-term.

"Development of future transport will be based on two key starting points, efficiency and fairness. The transport system must be developed in such a way that it is efficient and fair for all of society. Matters that must be taken into consideration when planning development are efficiency of transport, the environment as well as safety, says Jorma Ollila.

On 12 June the working group for fair and intelligent transport held its first interest group seminar. Topics discussed at the seminar included fair pricing of transport, the objectives for road tolls and international experiences. The working group's work is still in its initial stages and will continue to the end of 2013.

Road tolls one option for achieving objectives set for new transport policy

Road tolls cannot be an objective in and of themselves, but one possible option for achieving objectives that have been set for transport policy. According to the Government Transport Policy Report, which Finland's Parliament is presently discussing, the methods used for development of the transport system must be more effective and influential than they are presently; one example of a better method is financial steering.

According to the report, pricing of transport will be developed to guide the use of the transport system and make it more efficient, to improve safety and reduce environmental impacts, as well as to fund the maintenance and development of the transport system. The objective is to specify a long-term pricing strategy as well as its links to such issues as transport system funding and taxation of motoring.

Information and communication technology, i.e. intelligent transport, can be used to improve the smooth running and safety of transport. Regardless of whether road tolls are instated in the future, an intelligent transport system is being developed in Finland.

Present pricing system for transport does not allow effective financial steering

The working group is looking into the effects of road tolls on the realisation of the three key objectives set for transport policy, i.e. in the areas of efficiency, the environment and safety. According to the working group, the present system for pricing transport does not allow efficient management of road traffic, because taxes cannot be imposed or adjusted according to time and place.

In Finland, taxation of traffic comprises an automobile tax paid upon registration of a vehicle, an annual vehicle tax and a tax on the fuel used by transport vehicles. Traffic taxes are thus aimed at purchase of a vehicle, availability of a vehicle and actual use of a vehicle.

The present system includes certain problems with regard to fairness. It may be said that the present system favours those who drive a lot, the wealthy, city residents and foreign vehicles.

The working group brought forth that when considering the fairness of road tolls it is essential to look at the whole picture, i.e. how the costs and benefits of road tolls are distributed between different groups.

Road tolls a part of everyday life internationally

This spring the working group has reviewed international practices for the pricing of transportation. There are already different systems in place for charging use of roads around the world, including the European Union's 21 Member States. In the majority of countries electronic kilometre-based charge systems currently only apply to heavy vehicles. Generally, the charges that apply to private motoring are only in use for highways or some other main roads. Some countries also have regional charges in use, such as congestion charges.

The EU has set its own objective to instate equal charges for all forms of transportation with so-called "user pays" and "polluter pays" principles. The aim is to eliminate incentives that have a negative influence on transportation behaviour.

One of the long-term objectives of the EU transport policy is to apply user charges to every vehicle in the EU's entire transport network. This could at least help the region meet the costs that arise from maintenance, congestion, air pollution and noise pollution.

In February, Minister of Transport Merja Kyllönen appointed a working group to look into ways in which to develop transport in a more fair and intelligent direction. The working group is chaired by Jorma Ollila, and its members include upper management from the Ministry of Transport and Communications and government offices under its administration as well as the Ministry of Finance. Additionally, members include representatives from the research and science world. The working group will hear a significant number of interest groups during the enquiry.

For further information on the working group and its enquiries please see the ministry's website at www.lvm.fi/tulevaisuuden-liikenne.

Further information:
Senior Adviser Tuomo Suvanto, tel. +358 295 34 2403
Director of the Unit, Senior Adviser Risto Murto, tel. +358 295 34 2639