The failed car toll is expensive in Germany. The Federal Republic must pay 243 million euros in compensation after an arbitration procedure, the Austrian toll company Kapsch TrafficCom announced on Wednesday. In the summer of 2019, the European Court of Justice (ECJ) quashed the plans of the conservative CSU because the planned tax discriminated against foreign car owners.
The Austrian toll specialist Kapsch and the ticket marketer CTS Eventim, who founded the autoTicket joint venture for the toll, had received billions in orders to collect the toll and issue the electronic toll vignettes.
After the ECJ annulled the German toll plans, it initially claimed around 560 million euros in damages in the arbitration proceedings. The companies and Germany had agreed to the arbitral tribunal’s settlement proposal, CTS Eventim said on Wednesday.
The 243 million euros must therefore be paid to the company Autoticket – the joint venture of the toll specialist Kapsch and the ticket provider Eventim is to become the operator of the car toll. With the payment, “the mutual claims from the operator contract would be settled and compared,” Kapsch explains. The agreement is expected to be finalized and drafted in the coming days and thus become effective.
Toll was a prestige project of the CDU
The car toll was a prestige project of the conservative CSU, which wanted to avoid an additional burden for German motorists. The German concept therefore stipulated that all users had to pay the toll in the first instance.
However, domestic (i.e. German) car owners should be exempt from at least the same amount of motor vehicle tax, so that in the end only foreign owners would have had to pay. The toll should actually be levied from October 2020 and yield 500 million euros on balance.
Rain of money improves business results
Because of the money rain from the arbitration proceedings, Kapsch raised his forecast. The company now expects significant improvement in operating income (EBIT) with sales growth in the single-digit range in fiscal year 2023/24. Until now, Kapsch had expected only a slight increase in earnings. In the past financial year, Kapsch only earned 7.6 million euros excluding taxes and interest.
The German Transport Minister, Volker Wissing, described the compensation of 243 million euros owed as a “bitter sum”. At the same time, the FDP politician said in Berlin on Wednesday that the federal government had done damage control. Originally, more than 700 million euros in damages were claimed.
Bundestag approves arbitral award
Wissing called the failed car toll a serious mistake. He regrets that the amount of compensation is not available for infrastructure investments. Wissing said the arbitral tribunal has proposed termination by judgment. The Budget Committee of the German Bundestag gave the green light on Wednesday for the approval of the arbitral award.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
