UBC Theses and Dissertations
Development of toll roads Chang, Joyce
Toll roads have re-emerged over the last few decades as a result of growing transportation problems outpacing government funding sources. This thesis provides a general background on tolling and public-private-partnership issues that arise when developing public and private toll roads. The following are some of the major findings: (1) Build-operate-transfer arrangements are extremely complex financially and legally. (2) The major obstacle in developing toll roads is overcoming public opposition. Where public opposition has been fierce, the issues have become political agendas, which have delayed or stopped the project. (3) Most toll roads have failed to meet their toll revenues. Based on a report by Muller and Morgan (1996), 10 of 14 toll roads missed their projections by 20% to 75% in the initial years after opening. The cost and time to develop the agreements are grossly underestimated. (4) Private toll projects are costly and delayed because of lengthy land negotiations, lack of definition in the preliminary design, and stringent environmental reviews and approvals. The findings from this study show that the use of private toll roads will be limited unless government is willing to support the private sector by providing financial contributions and clearing the project of land and environmental approvals, where possible. If government does not provide substantial support for development of private toll roads, the future trend will lean towards public toll road development, assumed by an authority that would be responsible for a number of toll projects for the following reasons: (1) Lack of available private toll road projects that would be profitable and capable of being supported by tolls alone. To increase revenues and reduce diversion, a system of toll roads will be required. (2) Based on past toll road revenues, the private sector will be more cautious in entering build-operate-transfer (BOT) agreements and lenders will be more cautious with their funds. Non-recourse financing will be more difficult to obtain. (3) Reduced project cost by reducing the time required to develop private agreements and to obtain right-of-way and environmental approvals.
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