The French government has suspended plans for an already watered-down ecotax designed to raise 500 million euros ($638 million) a year that has led to nationwide truck driver protests, citing difficulties in putting them into action.
The move was announced by the environment and transport ministries on Thursday a week after France confirmed it would break its promise to European Union partners to bring its budget back within agreed limits next year, reports Reuters.
Environment minister Ségolène Royal said she was in favour of imposing a levy on profits from lucrative motorway toll operations to replace revenue from a suspended "ecotax" on heavy lorry traffic.
"My priority leans towards a levy on profits from the motorways...This levy must be put in place," Royal said, adding that it was "shocking" to see toll operators taking advantage of monopoly-like positions.
A source close to the matter has also told Reuters the government would have to pay 850 million euros in compensation to the Ecomouv consortium that won the contract to build the toll collection system if it scraps the ecotax definitively.
Royal and transport minister Alain Vidalies "acknowledge the difficulties in implementing the ecotax, including in the trial phase, having spoken to road haulage federation representatives", they said in a statement.
Truck drivers, thousands of whom previously blocked French roads in protest over the tax aimed at raising funds to finance rail infrastructure projects, had said they were planning further protests from Monday. These have now been suspended.
Read more of this report from Reuters.