Multi-billion kroner loan mulled for congestion zone

Multiple roadblocks stand in way of plans to borrow a reported 10 billion kroner to lower public transport fares

The government is preparing to borrow upwards of 10 billion kroner to improve public transport in connection with its proposed toll on cars entering and leaving the city, according to information obtained by Jyllands-Posten newspaper.

Members of the Socialdemokraterne-led coalition confirmed to Jyllands-Posten that a loan for the congestion charge it proposed during last year’s general election could be in the works, but would only say the amount was “in the billions”.

One model reportedly being considered to operate the congestion zone is a publicly held company, similar to the one that operates the Great Belt Bridge and the Øresund Bridge. The company would be responsible for obtaining the loan required to subsidise lower fares and expand passenger capacity.

The loan would be repaid using the projected 1.5 billion kroner in revenue generated by the congestion charge each year.

Taking such a large loan, however, could put the economy over the EUÂ’s debt-to-GDP ratio limit.
The plan to use loaned money on improving public transit could also be hindered by regulations requiring such funds to be used towards infrastructure, not operations.

Once potential sources of funding have been identified as early as this week, it is expected that the government will announce how much it expects the charge to be.

The transport minister, Henrik Dam Kristensen (Socialdemokraterne), has previously stated that rates will vary depending on the time of day, and that no toll will be charged during the weekend.
In addition, it is likely that public transport fares will be reduced during rush hour. Another alternative reportedly being considered is a rebate system that makes it extra attractive for commuters who today drive long distances to the city.

“We need to be careful that we don’t cut prices in areas where people are within cycling distance of the city, so they don’t stop biking and take the bus instead,” Andreas Steenberg, MP for coalition member Radikale, said.

Another of the remaining key details about the congestion zone – its size – could also fall into place this week after the publication yesterday of an environmental assessment report that appeared to find nothing to undermine the government’s position that the zone’s border should be congruous with Copenhagen’s city limits.

That position has caused rancour among mayors of towns bordering Copenhagen – including some members of Socialdemokraterne – who charge that their roads would suddenly be overwhelmed by cars seeking to avoid the congestion zone.

After seeing yesterday’s report, Kristensen said it confirmed that traffic would wind up on the motorway, “where cars are supposed to be”.