Geographic Focus: National TRACECA Commissions Ministries of Transport & Cabinet of Ministers

Project Budget : EURO 2,000,000

Contractor : to be contracted in 2001

Implementation timetable : 24 months

REPORTS ON LINE FOR THIS PROJECT (If needed, instructions for download here)

Background and Objectives. Road transport transit fees of various types are imposed in all TRACECA states.

There is a justification for imposing user charges, particularly on heavy trucks, that cause much wear on road pavements. However, the issue of transit fees is very contentious, and the most land-locked countries feel disadvantaged by them. Also there are complaints, justified or not, of arbitrary imposition and changes of fee scales, by for example, regional authorities.

There is a general lack of transparency in the economic and legal basis for transit fees. If excessive or arbitrary fees are imposed, unrelated to any service provided by the transit country, then the regional economy suffers, and there is a general stifling of regional economic activity. The first objective of this project is to determine a unified policy and equitable levels for the imposition of road transit fees. Rail transit tariffs are set according to the so-called MTT ( International Transit Tariff - russian abbreviation ) scale, which is revised twice yearly within the OCJD (Organization of Cooperation of Railways - russian abbreviation ) forums.

The OCJD is an organisation equivalent to the UIC, but regrouping railway systems from the former eastern block. The tariff scales appear to be based on long-discredited costing methodologies dating from the central planning era. The MTT scales allow heavy discounts, which compensate somewhat for the lack of rational costing and allow some commercial flexibility. In general high transit tariffs appear to cross-subsidise domestic traffic. A previous TRACECA project attempted to set up a new tariff methodology, but in reality the MTT scale is deeply implanted. The second objective of this project is to provide further external assistance on a regional basis is needed to promote cost accounting methodology, region-wide commercial analysis, and regional collaboration.

Some of the TRACECA port tariffs are reported to be among the highest in the world (disbursement, stevedoring, etc.). Likewise maritime shipping rates services (Ukrferry, Kaspar) are reported to be high. Clearly these are factors which restrict traffic, and possibly lead to a net diminution of revenues for the operators. The third project objective is therefor to examine maritime fees, including port fees in detail, and to propose a commercially rationalised scale. The overall objective of this project is to increase the competitivness of the TRACECA route from end to end, that is from the Chinese border to European ports on the Black Sea.

Key Issues.

• Set up three working groups, road, rail and maritime, attached to the IGC. The groups are to meet at regular intervals, and members are to be deeply involved in all project activities. The project is to be managed from a regional center. The Team Leadership is to include a citizen of a TRACECA country.
• Inventory all fees, national, or regional, or any other type of fee or permit needed by road transport
• Examine the legal basis for these fees, the transparency of the publication procedures
• Analyse in depth the economic benefits and losses of transit traffic for each country
• Compare and recommend a fair standard for road transit fees
• Carry out detailed analysis with the beneficiary state railways of:
• real costs of rail service provision
• comparative costs of transit tariffs within and adjacent to the TRACECA corridor
• possible new tariff scales, methodologies for adjusting them, and the likely effect on volumes
• Carry out a detailed analysis with port authorities and shipping companies of the tariffs that they charge. As for rail transport, compare these with real costs of production, and propose rationalised scales.
• Discuss within the region the advantages and disadvantages of revising fee and tariff scales and mechanisms, bringing this debate back into the IGC for action, when a clear consensus on regional