Road Pricing as a Modern Mechanism for Road Sector Financing

Total government spending on road construction and maintenance in Russia are about 2.5 times lower than the funds required by the technical norms. This happens due to the lack of the interconnection between road funding and taxes and charges levied on road users. The mechanism of road funds has been introduced in 2011, but the problem still exists. Taxes, which are concerned with the car ownership and road usage (transport tax, fuel tax, utilization fees, custom dues) cover about 50 % of the total governmental spending on road infrastructure (and about 25 % in Moscow), the rest is covered by the general taxes. The road pricing is seen as a good alternative way of road funding. The involvement of the private investor into the construction of the toll roads was first implemented in the end of 1990s, when several pilot projects were realized. The large-scale implementation of the PPP principles is connected with the creation of The State Company Russian Highways (Avtodor). The mission of the company is to form and develop Russia's national toll highway network using the private investments. Toll roads are also constructed or discussed in the big cities, such as Moscow, St. Petersburg, Ryazan, etc. In cities where the majority of offices, plants, and shopping malls are concentrated the road pricing is not only the best source of funding, but also the transport demand management instrument. Some other sources of road funding are emerging in the largest cities (Moscow, St. Petersburg, Kazan): parking fees, cordon tolls, pollution charges. Moreover the heavy vehicles (more than 12 ton) have been obliged to pay for the distance travelled on federal road network since November 2015. This is expected to provide additional income of about 50 billion rubles per year for the federal road fund. This chapter provides a detailed overview and appraisal of the road pricing implementation in the Russian Federation.