Edition 1279
26 July 2014
Edition: 1279

Read this week's issue online exactly as it appears in print.

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Dead Loss

by Brendan de Beer, in News · 13-06-2013 10:32:00 · 20 Comments

“Toll revenues - Lost stability” read the Power Point presentation earlier this week as Estradas de Portugal (EP) roads chief António Ramalho, disclosed how administration fees on previously unpaid motorways (SCUT) were eating into the company’s already waning profits.

Dead Loss

Combined with plummeting road usage and a growing number of users failing to pay tolls, EP chairman, Ant-ónio Ramalho expressed real concern over the sustainability of the company.


This position is now further exacerbated following an investment, approved last week by the cash-strapped government, to spend €111 million on urgent road upgrades and maintenance this year, up from €80 million spent in 2012.


António Ramalho had already explained last month that cars travelling on SCUT motorways without an electronic tagging device cost as much to bill as the amount they pay for using the toll road.

 

“The system is unsustainable and we hope it doesn’t stay the way it is. If it doesn’t change, we will not have enough money to conserve, preserve and maintain a road network which is considered the fourth best amongst OECD member nations”, Mr. Ramalho argued.


Currently, 29 percent of all monies collected from these motorways are channelled towards administrative fees, which rose from €17 million in 2011 to €42 million last year.


Mr. Ramalho, this week, meanwhile promised a stringent revision of the system, which is expected to come into force after the October municipal elections.


He had earlier this year pledged to have a new system operational by April, but it seems that persistent glitches during testing have resulted in yet another postponement.


Overall, revenue from SCUT motorways plummeted by 74 percent in 2012 on the previous year, EP said, and with traffic figures dropping even further in 2013, there seems to be no apparent end to the rot.


The EP chief openly admitted that the expected revenue from these motorways is “frankly well below those indicated by initial studies” commissioned by the government.


While there is little that can be done to boost revenue from these much-maligned motorways, Mr. Ramalho has announced renewed efforts to obtain money through enforced payments from motorists who use these routes without paying, many of them repeatedly so.


Last year, EP failed to collect a total of €30.6 million from offending drivers.


On average, 19 percent of toll-road users fail to pay for using a SCUT motorway.


The chasing down of these outstanding payments has been handed over to tax officials, who could go as far as ordering police to seize transgressing drivers’ vehicles to secure payment of tolls, though no such action has yet been reported.


Another headache for EP has been that thousands of cars have streamed onto secondary roads across the country since the introduction of tolls on SCUT motorways.


The Algarve, in particular, has seen thousands more cars flood the EN125 while the A22 motorway has seen traffic more than halved.

 

This has left the Government in a situation where not only has it to pay road operators more to maintain secondary roads (based on ballooning traffic counts) but it has also lost income from toll roads, boycotted by a combination of cash-strapped and angry motorists.


Concerns are now being consistently raised as to the profitability of charging tolls on previously unpaid or so-called SCUT motorways.


Revenue from tolls on SCUT motorways are paid to EP by road operators, who in turn are paid back by the state, based on traffic and monies generated on routes they are contracted to maintain.


The situation is slightly different on secondary routes, but private contractors on roads such as the EN125 have benefitted from an increase in traffic as they too, are paid by the car.


Based on figures from 2012, traffic on the EN125 can expect an increase of around 3,000 cars each day during the summer months. Certain stretches, such as the one between Odiáxere and Estômbar (an alternative to one of the more costlier stretches on the A22) witnessed traffic climb by an average of 5,400 vehicles a day in August.


But the rising demand of the EN125 has not translated into any visible improvements.

 

The opposite has in fact been true, with the Government cutting back €150 million euros (roughly a third) from the budget the road was allocated even prior to the introduction of tolls.

 

In recent comments to The Portugal News, the leader of the Commission of Via do Infante (A22) road-users, João Vasconcelos, stressed that “tolls don’t have any future in the Algarve.”


“The introduction of tolls in the Algarve has seen the region go back 20 years and has compounded the economic woes of its people.”

 

Comments

Right now in Gauteng, South Africa, etoll compliance rate is at about 40%. The roads agency has just appointed two prosecutors to start looking at the possibility of prosecuting non-paying motorists, totalling about 1 million.

My guess is that this process will get nowhere. In a few months time we will havce a similar article like this one, just replace the words "Portugal" with "South Africa"
by Wayne from Other on 16-07-2014 12:02:00
Right now in Gauteng, South Africa, etoll compliance rate is at about 40%. The roads agency has just appointed two prosecutors to start looking at the possibility of prosecuting non-paying motorists, totalling about 1 million.

My guess is that this process will get nowhere. In a few months time we will havce a similar article like this one, just replace the words "Portugal" with "South Africa"
by Wayne from Other on 16-07-2014 12:01:00
In South Africa the brown stuff is hitting the fan right now on the electronic tolling system which was introduced here on Dec 3, 2013!

In the province of Gauteng at least 2/3 of users have not registered nor purchased the electronic e-tag device for their car which allows for automated electronic debiting of pre-paid 'airtime' as you pass under the gantry. There is an active 'Arab Spring' type movement using social media and blogs etc online which is fighting these tolls all the way until the corrupt highway-robbery scheme is destroyed.

We pay for roads and maintenance already with a levy on each litre of fuel - about 20% of the cost of that litre!

We will not tolerate this additional tax burden, designed to fleece citizens of our country by the corrupt and greedy government.

We are many - they are few - we will WIN this fight!
by Stewart from Other on 08-01-2014 04:09:00
Stop this ridiculous, dishonest grabbing of the public's money
by Des Alexander from Other on 30-10-2013 05:44:00
So it is not working? Find a simpler method Sr Ramalho. E-tolling is not simple, and does not bring in the money. Besides, have we not paid for these roads by now?
by Joao from Algarve on 22-10-2013 08:05:00
They are now doing the same thing in South Africa with E-Tolling! The president signed it into law 2 weeks ago despite public outcry. Massive civil disobedience now from trade unions expected!

HELP!
by Koeks from Other on 12-10-2013 10:26:00
They are thinking of bringing a similar system to South Africa... Everyone but the Government and the Road Agency thinks it won't work... Politicians are really thick in the head...
by Lesiba from Other on 27-06-2013 05:57:00
SCUT = "Sem Custo para os Utilizadores".

Yes that's what SCUT means.......... cost free for users, and they haven't even had the decency to take the signs down. Now that is taking the mickey.......
by steve from Algarve on 20-06-2013 10:13:00
I used to go once or twice a year out of season from Spain to Portimao for a break, we liked Praia da Rocha, as we are getting old the Hotels and Restaurants were ideal for us - we also enjoyed a mid day trip out to local villages/towns for lunch & shopping most days.
The toll system stopped us going now, just too much hastle - having to travel when a post office was open etc -rather a bad system that discourages tourists, and it would be better if they had a 24 hour toll booth just inside the border where you could buy a tourist electronic card for say €20 and valid for say a month that would be easier and certainly cost effective. who the hell thought up such a daft way, also the EC paid for the main roads to be built and maintained so really it should be free.
Sorry Portugal but your now losing my €1500 holidays, we now go to other parts of Spain.
by El Ted from UK on 18-06-2013 09:42:00
GPS systems don't recognise the A23 (and possibly other SCUTS motorways) as toll roads, so it is easy for tourists and others to drive on them unintentionally or in ignorance. In central Portugal, where most workers are on the minimum wage, some have no alternative but to use the toll road. A pre-paid vignette or higher fuel tax are the only possible solutions.
by Wendy Grindle from Beiras on 18-06-2013 03:24:00
If there's an easy way or a common sense way or an idiotic way, how will Portugal go,,we know but the reason for this idiocy is that someone is making big bucks out of others suffering,,,, keep watching this channel. I do like the 30 EURO a year ticket,, i would pay that, just for the convenience of knowing i have it.
by Mr John from Algarve on 15-06-2013 11:04:00
If it costs 30% of total revenues to collect these ridiculous tolls on the A22, then the senior officials of the Ministries of Transport and Finance that dreamed up this foolish scheme should be fired. That would be a productive step consistent with the IMF Troika aim to downsize the unproductive civil service. Bear in mind too that European taxpayers have already paid for this road at least twice over already - once through the provision of EU structural funds to build the road and again through the bailout money for the Portuguese state not to mention the EU allocation for maintenance of the road which was diverted to other purposes. Another example of official incompetence is the state of the "roundabout" at Quatra Estradas on the turnoff to Praia da Luz on the EN125 where a perfectly serviceable traffic light system was removed and a roundabout construction begun but then stopped and left unfinished and this to a major tourist destination in the Western Algarve! Talk about shooting one's self in the foot. This official incompetence is a total turnoff for tourists and must further undermine the recovery of the Portuguese economy.
by Robert Johnson from Algarve on 15-06-2013 11:52:00
The picture tells me everything. That´s Portugal.
Selling the motorway system to the public??? Why? should I??. Having non-collecting days or hours as Promotion. Why ?. Should I?? Selling non-performing debt collections at a discount to professional debt collection agencies? Why??. Should, I??

Antonio Ramalho you could form a comic duo with Álvaro Santos Pereira (Minister of Economy and Employment - ´Investing in Portugal is a nightmare`-) and call yourselves ´Two of a Kind´ Good for a laugh.
by Martin from Lisbon on 15-06-2013 08:12:00
They could have used the Swiss model; buy a sticker valid for one year at a cost of 30 euro - zero administration and a cost so low that no one would bother to cheat
by Nuts from Algarve on 14-06-2013 04:33:00
Proof if proof was needed that toll roads don't work. Put the duty on fuel especially diesel bringing cost up to similar cost of petrol. This would more than cover the cost of maintaining all roads.
by Dave from Other on 14-06-2013 01:15:00
Why did'nt they just put €5-00 on the road tax instead of all the cost of making the scut roads toll roads.
by John in Lagos from Algarve on 14-06-2013 01:06:00
Why should I have to pay more for fuel when I never ever need to use a Scut !

I object strongly to the idea that I should supplement
other drivers journey cost.
The payment system as it is now is a balls up.
So they should sort this out
by Ingles from Other on 14-06-2013 12:16:00
I lived in the Algarve in 1979, there were so many deaths on the road running across the Algarve that the motorway was built to get rid of this problem with people dying. The Algarve has now gone back in time and by pushing this ridiculous toll, has not hurt the economic industry but is causing deaths daily... I can only assume that the person who decide to introduce these tolls has no insight or is just greedy using any way to make revenue
by Julie Pires from UK on 14-06-2013 10:57:00
Has it not occurred to the authorities that the reason drivers are avoiding the toll roads is not just the cost but the sheer inconvenience and difficulty in paying? Especially for visitors, having to make a separate journey go to a post office, and experience the queues there, is a complete pain, whereas throwing a few coins into a basket at a toll gate would be so much simpler. I don't mind paying a modest toll at the time I'm driving (and there's certainly an issue about cost too, but that's more easily resolved) but I simply won't go to a post office to pay later.
by Jonathan Copeland from UK on 14-06-2013 10:35:00
For crying out loud. Just PUT the CHARGE ON THE PETROL ! Tolls defy logic and common business sense. Admin and default costs just mean everyone has to pay Twice over.
by Phil Perry from Alentejo on 14-06-2013 09:23:00

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Edition 1279
26 July 2014
Edition: 1279

Read this week's issue online exactly as it appears in print.

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