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Actual VMT-based systems exist for heavy vehicles but tion costs could be higher. One company did an analysis for
again offer a limited basis for cost comparison. Heavy vehi- the Dutch project looking at the potential cost savings of
cles in the United States traveling interstate have fuel taxes reducing various requirements and found that there was
determined by the reported mileage driven in each state potential for substantial cost reductions if various require-
rather than by where fuel is purchased. Mileage and fuel pur- ments were relaxed.
chases by state are reported based on IFTA. This information
is used to calculate the fuel tax that would have been paid to
4.4.2 Method for Generating Cost Data
each state if fuel for travel in that state had been purchased
for Dutch VMT Fee Systems
there. This is compared with the actual fuel taxes paid in each
state and amounts due or overpayments by state are calcu- The Ministerie van Verkeer en Waterstaat (Ministry of
lated. The trucking company then makes up any shortfall or Transport, Public Works and Water Management) in the
receives a rebate of overpayment and IFTA settles the differ- Netherlands worked with a number of private companies to
ences among the states. This relatively crude system is VMT develop cost estimates for a proposed system of road pric-
based, but it does not provide a good basis for cost compar- ing. Some of the cost estimates focused on specific topics,
isons. First, the majority of the revenue is collected as fuel such as the design and cost of different onboard units
taxes so the system is directed more toward redistributing (OBUs), but four of the companies were asked to provide
that revenue among the states and preventing strategic pur- comprehensive cost estimates covering all aspects of the
chases of fuel to avoid state fuel taxes than toward actually pricing system. These companies were provided with a long
collecting revenue. Second, most of the enforcement is left to list of required features that were designed to reflect realis-
the states. Third, most heavy vehicles in commercial opera- tic operating requirements and create comparable cost esti-
tion must keep track of mileage for other reasons. mates. An English translation of the report to the Dutch
Germany instituted a mileage-based fee on heavy vehicles Parliament was published as "Cost Benchmark for Kilome-
using its major roads. Some cost information is available ter Pricing in the Netherlands." This report contains appen-
from this program, as discussed below. However, the system dices with the reports from the individual companies, and
is limited to heavy vehicles and specific roads. Oregon charges these reports contain information on the approaches taken
heavy vehicles a weight-mile charge based on mileage in the by the different companies and summary cost data for vari-
state. The system is well established, but it is based on self- ous categories. The four companies that provided comprehen-
reported mileage data. Most analysts conclude that self- sive cost estimates were Siemens, DaimlerChrysler, T-Systems,
reported mileage data are not suitable for a comprehensive and Vodafone. Unfortunately for this study, Daimler provided
system (Sorenson et al., 2009). their data in a separate spreadsheet that was not included in the
The cost data for the proposed Dutch VMT system is based report. Hence, there are three estimates of cost based on initial
on detailed estimates provided by large, reputable companies start-up, annual operating cost, and annual depreciation, for
that have experience with the technology and customer ser- five major categories.
vice. One of the providers is Siemens, which makes the The reports provide extensive discussion of many impor-
onboard unit used in Germany, and another is T-Systems, tant issues accompanying the Dutch cost estimates. The
which manages the German system. Although the cost data following represents a brief summary of some key issues,
are preliminary estimates and subject to adjustments in oper- including thick versus thin OBUs, communication and record-
ation, they are the most realistic estimates that are available at ing use, visitors and interoperability, and enforcement.
the present time. Hence, these sources were chosen as the The major cost of such a system will be an OBU that is capa-
basis for the cost comparison. The original cost estimates ble of determining the time, location, and distance traveled for
were required to include a 15% contingency and a 19% value- each vehicle. While there are other options, the consensus was
added tax (VAT). It was decided to omit the VAT in convert- that the system would have to use satellite navigation systems
ing the cost data from euro to dollar estimates for comparison (GPS/Galileo) as the basic method for determining location.
with the cost of existing revenue systems in the United States. One company did propose using cell phone communication
In addition, the euro-to-dollar conversion rate was based on towers as an enforcement mechanism to check the reported
the approximate rate at the time of the estimates. Also, the travel; however, all of the systems had the same basic technol-
proposed system is quite complex and comprehensive. The ogy to determine location and road usage. They did, however,
cost estimates are a valuable benchmark for understanding differ on what functions should be performed in the vehicle and
the potential cost of such a system; however, it would cer- what should be done in the back office. The complexity of the
tainly be possible to design less comprehensive systems that pricing system affects the cost of the OBU since more complex
also had lower costs. On the other hand, it should also be rec- systems require more precise location and travel information.
ognized that these are cost estimates and actual implementa- In addition, the need to accommodate temporary users of the
