The debate was over before it ever began. The relevant legislation snuck through Parliament, which ultimately greenlighted the Toll System for Heavy Trucks, due initially in August 2019 onwards.
One should note the revenue expectations level – a breathtaking 800 million leva – a 2.5 times increase over current funding for road maintenance. These days the prime minister really “nailed” the new figure of the expected revenues from the toll system at 1.5 billion leva. The more the PR needs, the higher the figure will go.
All barriers before the Toll System have been removed, with the exception of the barrier of common sense. The system has never passed close public scrutiny, adequate information campaigns or in-depth cost-benefit and alternatives’ studies.
I feel reasonably confident on the topic, having been part of a team that conducted the first feasibility study on a potential toll system in Bulgaria, some 27 years ago – on the only existing Sofia-Plovdiv part of the highway.
What were the conclusions in this professional and well-intended study?
Most of the details now escape me, but the outline is still clear. If the goal of establishing a toll system was to raise missing revenues, the exercise seemed too costly, the risks too high and the net benefits too problematic.
It is poignant that former Prime Minister Simeon Saxe-Coburg-Gotha chose to abandon his mastery of silence and solitude and express regrets – that drive striking parallels between the NPP Belene and the toll system projects. Being a royal, he can certainly remain at the general message level, sparing himself and the public greater details. Yet, when it comes to big public spending, the devil hides in the details. Most often high public speak from top politicians is aimed to conceal the pursuit of personal or group gains from public project spending, enriching a few to the detriment of taxpayers.
As a general observation, paid highways are designed explicitly for toll system use. This explains why the Bulgarian road system, instead of having toll roads, has so far followed the German pattern – where the state budget is funding the design, engineering, construction, operation and maintenance stages. The funds are accumulated via collections of vignette system payments, road and vehicles taxes, excise duties on fuel and other indirect taxes.
The feasibility study done 27 years ago concluded that the costs of implementing and operating a toll system between Plovdiv and Sofia are certain to be very, even prohibitively high, while the benefits are stretched over time and are uncertain. Hence, it is not worth the risk, judged against the set of more affordable and less risky alternatives.
Let’s look at the situation today and see if things have changed. Are there are alternatives that are less costly and more effective to control and manage?
In our case, the mandatory scope of works and procurement for a toll system operation would imply both capex and opex for payment terminals, access control portals – toll booths and bypass roads (an indispensable element for every highway – a hundred or more traffic control cars and checkpoints. In a nutshell, what the control system at the border checkpoints does will now proliferate throughout the country into numerous terminals, toll booths, check points, video and mobile control groups, etc.
The comments and observations here are not sensitive to the specific company, that has won the tender; they are of a more basic and principled nature.
The issue at stake is the lack of strategy, the deficient approach and the associated risks that are likely to translate into greater costs to taxpayers and car owners against deficient funds for road maintenance and development.
Indeed, in many Eastern European countries, governments have seen themselves forced to fund maintenance and road system developments via toll systems – some considering them as panacea and quick fix. The exaggerated expectations for revenues overwhelm the decision making and public scrutiny process.
Let’s consider the chances of success of the toll system in Bulgaria. To begin with, they are neither obvious nor sizeable.
First, it is well known that control over the spending of public funds in this country has been the Achilles’ heel of all governments, pertaining especially to budgets for road network development. If funds are seen accumulating somewhere, including revenues from a potential toll system, the gravity of private interests and personal zeal always comes into play – leading to quick fund siphoning via political and business schemes. There is no reason to believe it will be different this time.
Let us assume that we all share a minimum level of trust in the government and that ab initio it has proposed the toll system with an open, sincere and well-intended mindset. The track record of the government in comparable projects for good governance is miserable – at least when judged by the most basic criteria – cost control at inception and the execution phase. It is difficult to quote a single case of a large public project where costs have been kept at bay and completion was on time. While examples to the opposite are abundant – suffice to recall the history of South Stream – the cost hiked from 1.7 to 4.2 billion euros; the total failure in project management in the HPP ‘Tsankov Kamak’, where cost rose from Euro 80 to 600 million for just 80 MW of capacity; and the Belene NPP – with Euro 1.5 billion spent without a single watt in generation capacity installed.
Second, one must apprehend the lack of basic logic in assuming that while it is difficult to control the heavy truck traffic and collect the due at the roughly 15 border checkpoints, it will be easier to do the same at more than 500 of them!? Add to this that the operational costs for the toll system are enormous, both fixed and variable, direct and indirect. Both the capital investment and the opex will have to be offset by the generated revenues – where the assumptions are brave but hardly independently tested for realism.
Given the state of affairs in the country – the toll system could easily become the next landmark of grand corruption.
End of part One