After many months of painfully embarrassing delays and a further eleven hours of marathon negotiations Monday evening, the German government cancelled the contract for the proposed heavy vehicle toll on Tuesday.

Toll Collect, the syndicate responsible for the proposed toll system which included such commercial giants as DaimlerChrysler, Deutsche Telekom and French motorways operator Cofiroute, admitted that its system would not be up and running before 2006. As a result, Berlin announced it would cancel the contract despite the months and millions invested in the project.

Now the syndicate will not only suffer a huge setback in its plans to charge trucks to use Germany's motorways but may also find itself liable for an enormous bill for revenues in income lost by the government during the debacle.

The system outfits every truck with an onboard computer to log its location with satellite signals and report the vehicle's movements by mobile phone. But the set up -- slated to be the most advanced in Europe -- has been plagued by technical problems from the start and its launch date has been repeatedly pushed back. The system should have been operational in August 2003.

Delays led to huge losses in income

The delay in rolling out the road-pricing system has allowed hundreds of thousands of trucks to use Germany's 20,000 kilometers of autobahn free of charge. The result being that the federal treasury has missed out on €156 million in revenue per month. Should the government press for Toll Collect to reimburse its losses, the matter would go to an arbitration board before compensation can be agreed.

"One thing remains clear: We need the money," said the rather exasperated Transport Minister Manfred Stolpe after the Tuesday morning meeting.

If the contract with Toll Collect had continued until the end of 2004 without a system being established, government losses would have exceeded €3 billion.

Toll Collect has so far offered to increase the penalties it pays for late performance provided the government agrees to full compensation for outright cancellation of the contract. So far the syndicate is believed to have invested some €700 million in the system.

Stolpe said that while this particular deal was now on the scrapheap, a new one is likely to only go into effect after a period of two years as it would take a rival company until at least early 2007 to get any of the tried and tested systems into operation.

A last chance for Toll Collect?

"We have struggled to find a technically viable and economically satisfactory solution with (Toll Collect)," Stolpe (photo) told reporters. "This was not possible." However, Stolpe maintained that Toll Collect still has the possibility to present an improved offer within the next two months which takes into consideration the government's demands.

Hundreds of roadside platforms housing cameras and lasers have been built across German highways to photograph every passing vehicle and automatically check if those over 12 tons are paying their tolls.

The system is linked to the U.S. global positioning system (GPS), which enables a moving truck to calculate its exact location down to a few meters, and global-system-for-mobile (GSM) phones, which enable low- cost wireless calls over the whole country.

Huge numbers of onboard units have been installed in trucks, but will probably have to be scrapped and replaced. The system was supposed to be fully automated with bank computers collecting the fees from road users' accounts

"Toll Collect has not kept to the schedule on many occasions and now the trust in the project is completely destroyed," explained Jochen Hövekenmeier, spokesperson of the Automobile Club of Germany in an interview with DW-WORLD even before the contract cancellation was announced.