The booming Czech tolling market

Date: Thursday November 12, 2015

Map of the MYTO CZ electronic tolling network


While Russian hauliers protest against the introduction of km based road pricing and Germany faces stagnant or falling revenue from its existing LKW MAUT network, the Czech Republic is enjoying a surge in tolling income and activity. In October, the MYTO CZ programme generated revenues of Kč 899 million (€33.3 million); an 11 per cent increase on the previous year. Total revenue in 2014 was approximately Kč8.7bn (€322 million). At the end of October, revenue for 2015 had already reached Kč7.4bn (€275 million). If the current growth continues, MYTO CZ will end the year with revenues of around Kč9.7bn (€357 million). Since its inception nine years ago, the system has registered more than 830,000 on board units (OBUs) and demand is growing at a rate of roughly 7,000 per month.

However, the Czech heavy vehicle toll is not without its problems, and almost all are self-made. Chief among these is a lack of responsiveness from the Government. This has led to both a shortage of OBUs and an almost impossible timeframe in which to plan and negotiate the next phase of the operational contract, currently due to expire at the end of 2016.

Since the beginning, MYTO CZ has been managed by Kapsch, who were initially granted a 10 year contract. To ensure continued operation of the toll beyond 2016, the Czech Transport Ministry has engaged the services of consulting firm Deloitte to prepare the tender for a new three year contract. The shorter duration is a result of plans for an upgraded MYTO CZ programme, potentially integrating new roads and GNSS based charging, from 2020 onwards.

The selection of Deloitte as a consulting partner perhaps represents the most mismanaged aspect of the entire project. On 5th October it was announced that the firm had been granted a Kč52 million (€2 million) contract to assist the Czech Transport Ministry in preparing the new electronic tolling tender. This was awarded without a tender of its own and without any competition from other consulting firms.
Yet, an open tender for ETC consulting services had been in fact initiated much earlier, with a reported value of half the sum awarded to Deloitte, although this process was cancelled before reaching the market. Minister Dan Ťok argued that the lack of time in which to select a successor to Kapsch necessitated a quick decision, leading to the appointment of Deloitte. This decision has been roundly criticised by the Czech media and questioned by several members of the Czech Government. Why the contract sum is so high has still not been explained.

Unless the agreement with Deloitte is cancelled – which has been discussed, although seems unlikely at this stage (especially as unofficial reports suggest that the Kč52 million has already been paid) – the tender is expected on the market in the new year and a firm contract signed by October 2016. This will provide the wining bidder with just three months to put everything in place in order to begin collecting the toll on 1 January 2017. Kapsch has already expressed serious concerns with regards to the proposed timeline, arguing that it is unrealistic to reach an agreement with a potentially new operator and transition to a new system by the end of 2016. However, one could argue that this is good news for Kapsch themselves, who could easily continue with the current DSRC based system if successful in the tender.

The Czech scheme exemplifies the potential of electronic road charging in terms of existing revenue potential and future growth. Nonetheless, it has also demonstrated the level of naivety and lack of expertise with which governments often approach road tolling. For a more detailed examination of present and future developments in a broader context, download a copy of the ETC Global Study, which includes over 35 country profiles and the most comprehensive review of tolling technology available on the market.