Mapping the Future of Road User Charging in Developing Asia and the Pacific

• Country: Philippines
• Summary: Mapping the Future of Road User Charging in Developing Asia and the Pacific
• PHT Ref No: 78142779
• Deadline: 20 Feb 2023
• Financier: Asian Development Bank (ADB)
• Purchaser Ownership: Government
• Tender Value: Refer Document
• Notice Type: Tender
• Document Ref. No.: TA-6756 REG
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• Description:
• Improving Infrastructure Sustainability Through Better Asset Management - Mapping the Future of Road User Charging in Developing Asia and the Pacific Approval Date: 29-Jul-2021 Estimated Commencement Date: 250,000 USD Engagement Period: 12 MONTH Objective and Purpose of the Assignment 1. This assignment is part of ADB-s TA 6756: Improving Infrastructure Sustainability through Better Asset Management, which aims to enhance asset management maturity and operations across infrastructure sectors in Asian Development Bank (ADB) developing member countries (DMCs) through knowledge and technical support for development of asset management policies, strategies and improvement plans; and project preparation and capacity development to DMCs. 2. To meet increasing demand and support achieving the Sustainable Development Goals (SDGs), ADB estimates the costs of transport infrastructure requirements in Asia and the Pacific region to be more than $500 billion a year. In addition to funding this significant transport infrastructure gap, ADB estimates that the region also requires a similar amount for maintenance of existing transport infrastructure and tackling externalities including greenhouse gas emissions, air quality and road safety. A lack of adequate and reliable funding for the road sector, and especially for road maintenance, forms a serious risk to the sustainability of the road networks in the DMCs and the sustainability of past road investments by DMC governments and development partners . 3. A review of ADB-s Sustainable Transport Initiative Operational Plan identified likely weaknesses in the sustainability of several road investments due to: (i) weak asset management systems and maintenance practices; (ii) poor financial sustainability, often caused by inadequate cost recovery and weak implementation of user charges; and (iii) weak government commitment and capacity. This consultancy will focus on the second point of financial sustainability, focusing on the revenues collected from road user charges. 4. Collection of revenue from road users in emerging economies in Asia and the Pacific typically has two main purposes: (i) to charge road users for the costs that they impose both on the administration and maintenance of the roads and other users in terms of congestion, pollution and other negative externalities associated with road use; and (ii) to raise revenue for governments. The focus of this assignment is on the road use aspect, although this will necessarily look at the wider collection of road user charge revenues, even where these are not allocated to the road sector. 5. One of the most important road user charge revenues is the tax or levy applied to fuel. This exists in (almost) all countries, either as a general revenue source or as a dedicated revenue for road maintenance. This road user charge has important advantages in terms of the low collection costs and the fact that revenues increase as traffic volumes and related fuel consumption increase. At the same time, a fuel tax introduces incentives to move towards more efficient and cleaner vehicles, reducing the significant negative impacts of internal combustion engines on air pollution. The Asia and Pacific region has the highest global share of deaths from air pollution (PM2.5) at 81% . According to an ADB study, around 7 million deaths per year in the region are attributable to exposure to air pollution. Transport is an important contributor to the PM2.5 emissions that cause air pollution, contributing from 14.9% of these emissions in West Asia to 35.2% in South Asia . Further, road transport greenhouse gas (GHG) emissions in the region are increasing at a faster rate than elsewhere in the world. Addressing these negative externalities of road transport requires a move to cleaner engines and electric vehicles in the form of hybrid electric vehicles (HEV), plug-in hybrid electric vehicles (PHEV), battery-powered electric vehicles (BEV) or fuel-cell electric vehicle (FCEV) as alternatives to internal combustion engines (ICE). 6. Taxes and levies on fossil fuels as a source of road user charge revenue will increasingly become obsolete as uptake of electric vehicles and other forms of low carbon vehicles increases, leaving a growing hole in transport budgets. To address the resulting funding gap, countries will need to implement alternative road user charging systems that will at the same time continue to incentivize uptake of zero or low emission vehicles and mobility. These new road user charging systems should not be negatively impacted by the transition away from fossil fuel vehicles, ensuring a more sustainable source of funding of road maintenance into the future. In the context of this ongoing transition and the need for a new system of road user charges to replace the traditional fuel tax, this study has the following objectives: a. Current Funding Approaches: Identify the main sources of road user charge revenues such as fuel tax, vehicle purchase tax, tolling, international transit fees, vehicle registration fees, vehicle technical inspection, fee for the use of right of way, traffic fines, and others in a number of selected countries in Asia and the Pacific, assess to which degree these revenue sources are used to finance road maintenance, and determine how this will be affected by the transition away from fossil fuel powered vehicles. b. Technology Options: Undertake a comprehensive review of existing and emerging technologies and systems that could be applied to collecting road user charges, indicating how these differentiate between different vehicle types according to weight, pollution, road safety, and road usage (distance travelled) as well as other factors. c. Transition Roadmap: building on findings and recommendations from objectives (a) and (b), recommend actions and propose a road map for transitioning existing (fossil fuel reliant) approaches to more sustainable road user charging for the selected countries in light of their commitments and likely pathway to decarbonizing transport.
• Documents:

 Tender Notice