Toll Revenue Research Articles

Forecasting Traffic and Toll Revenue for Kathmandu-Terai/Madhesh Fast Track Expressway

Forecasting Traffic and Toll Revenue for Kathmandu-Terai/Madhesh Fast Track Expressway

Exploring the willingness to pay for high-occupancy toll lanes under conditions of low familiarity

This study evaluates details of a progressive transportation development model, wherein high occupancy vehicle (HOV) lanes are transformed into high-occupancy toll (HOT) lanes. Although the management strategy of HOT lanes has been implemented for many years, the implementation of HOT lanes is limited in many regions, and thus, many people remain unfamiliar with the concept. This study aims to evaluate travelers' willingness to pay for HOT lanes based on a “low application” scenario in Shenzhen, China, wherein some HOV lanes are present and may potentially be transformed into HOT lanes, but not all area residents are aware of their intended purpose. According to the Diffusion of Innovation Theory, we leverage this situation to conduct a survey of perceptions and attitudes toward the HOT lanes and evaluate how these perspectives may translate to HOT lane utilization. We further proposed a hybrid utility and regret model considering the impacts of loss aversion caused by tolls or coordinated carpooling for single occupancy vehicles to explore relationships between travel behavior and surveyed demographic and socio-economic characteristics in the context of HOT lanes in places where they are unfamiliar. A sensitivity analysis is conducted to characterize any apparent changing influences. The results show that the model considering decision regret performs well, especially in the scenario with low tolls. Nearly 80% of travelers are willing to pay tolls for HOT lanes, even with limited prior exposure to the concept. The increased acceptance of HOT lanes can be expected to hurt total toll revenue, which may be triggered by easier access to carpool partners associated with the free pass. The study informs a deeper understanding of travelers’ willingness to pay for HOT lanes and helps policy-makers develop differentiated tolling strategies.

Investment Feasibility and Strategic Development Scenarios of Yogyakarta-Bawen Toll Road

This study examines the feasibility of the investment in the Yogyakarta-Bawen toll road project by analyzing traffic conditions, expenditure costs, toll revenues, and investment value. Simulation using PTV Visum shows a significant increase in the volume-to-capacity ratio (VCR) on the national road sections around the toll road until 2061. The modeling result also indicates that the operation of the toll road reduces traffic loads on several surrounding national road sections with a decrease in VCR. The analysis results reveal a negative net present value (NPV) amounting to -Rp.506,560,648,100, and an internal rate of return (IRR) of 11.49% is under the discount rate (12.03%). In the tariff adjustment scenario, the project shows an IRR of 12.48% with an NPV of Rp 575,501 million, and the payback period (PBP) is achieved after 16 years. In the concession adjustment scenario, the IRR is 12.12% with an NPV of Rp 123,461 million, and the PBP is achieved after 17 years. Meanwhile, the tariff and concession adjustment scenario show an IRR of 12.48% with an NPV of Rp 652,033 million, and the PBP is achieved after 16 years. Based on the investment feasibility evaluation, the recommended best strategy is tariff adjustment. This strategy allows for an optimal increase in toll revenue and investment returns. It is expected that the Yogyakarta-Bawen toll road project can achieve better investment feasibility and provide long-term benefits to investors, road users, and the overall community.

Optimal toll rates accounting for traffic accidents: A productive efficiency approach

This study analyzes the productive efficiency of the toll motorway sector in Spain over the 2003–2018 period by applying a stochastic frontier analysis with the particularity of including an undesirable output (traffic accidents with victims). Given the multioutput nature of the study and the presence of negative externalities, the method used is based on hyperbolic distance functions. The results obtained reveal that i) the average efficiency in the sector suggests that it is possible to increase the total number of vehicle-kilometers traveled by 29% and simultaneously reduce recorded accidents with victims by 23%, ii) there was technical progress of 16.5% during the study period, iii) reducing by one unit the number of accidents with victims would be equivalent to a monetary value of over 491 thousand euros in terms of the loss of toll revenue paid by light or heavy vehicles, and iv) the shadow price of accidents with victims allows us to determine that the optimal toll rate for heavy vehicles should be 1.62 times that of light vehicles.

Road Tolling and Domestic Revenue Mobilisation in Zimbabwe

The study analyses the effectiveness of road tolling-systems as an instrument for mobilising domestic revenue in Zimbabwe. The study assessed the effectiveness of road-tolling systems in mobilising revenue to recoup the costs of building, operating and maintaining road infrastructure. Revenue performance was rated using the internal and external dimensions of toll revenue, which revolve around activities such as toll revenue collection, administration (remittance) as well as the Zimbabwe National Road Administration’s (ZINARA’s) distribution and usage of the toll revenue. By way of mixed methods research design, the study conceptualised and contextualised the theory, models, technologies and practices of toll revenue collection in Zimbabwe. The study found that the Zimbabwean road tolling model as a hybrid conventional tolling model is a progressive, effective and reliable tool to raise revenue for constructing road infrastructure and related road-related capital investments in Zimbabwe and that the internal toll revenue performance is up-to-date with reduced toll revenue leakages and increased toll revenue yield. However, the study found that there is no meaningful investment on the road network and related highway infrastructure thus making the performance of external toll revenue questionable. The study recommended the strengthening of toll revenue collection, management, remittance and toll fees usage.

Productivity benefits of urban transportation megaprojects: A general equilibrium analysis of «Grand Paris Express»

The «Grand Paris Express» (GPE) reduces road congestion, a negative externality (Walters, 1961; Vickrey, 1963); while inducing job densification, which improves total factor productivity (TFP), the source of a positive externality (Marshall, 1890). To parse out the effects and interaction of these externalities empirically, we use a spatial general equilibrium model treating transportation, output, labor, real estate and land markets. The TFP externality reduces marginal costs and output prices, benefitting consumers, including those importing from the region. Wages and rents increase but only after normalization by an output price index. The unsubsidized TFP externality adds importantly to the GPE's social benefit-to-cost ratio, despite causing fiscal losses from nominal income tax, sales tax and fuel tax revenues. Pigouvian congestion tolling raises long run welfare, and although toll revenue exceeds thrice the GPE's direct cost, it recovers only 62% of the direct cost plus the fiscal losses in the short run, but only 54% in the long run when the fiscal losses are larger. In the presence of distortionary taxation, consumers elsewhere who import from the region, and the unsubsidized TFP externality, charging more than Pigouvian congestion tolls improves overall social welfare but reduces the welfare of the in-region consumers.

Tolling Value Proposition for Trucking and State Departments of Transportation

The Interstate Highway System is critically important to the trucking industry. In a 2019 report to Congress, the Transportation Research Board found that much of the system is wearing out. It recommended a 20-year, US$1 trillion program of reconstruction and modernization. However, in its 2021 Infrastructure Investment & Jobs Act, Congress took no action on interstate reconstruction. Several states are considering toll financing for this purpose, but the trucking industry has long opposed any expansion of tolling, despite its need for a modernized interstate system. This paper considers four concerns of the trucking industry—toll roads used as cash cows, the high cost of collection compared with fuel taxes, little value-added for users, and double taxation (tolls and fuel taxes on the same roadway). The paper describes a sketch-level spreadsheet model of a customer-friendly approach to toll-financed reconstruction, using realistic data and assumptions, applied to a generic mid-size state seeking to rebuild four long-distance interstates. The assumptions built into the model respond to the four trucking industry concerns. The model also addresses concerns of state departments of transportation over giving up some of their declining fuel tax revenues. It estimates the net present value (NPV) of fuel tax rebates over 30 years to be less than 7% of the NPV of toll revenues. Toll financing of interstate reconstruction also relieves state fuel tax revenues of the large costs of rebuilding aging interstates. This paper is intended to offer transportation policymakers a set of policy changes that respond to the legitimate aspects of the trucking industry’s expressed concerns.

Economic and financial feasibility analysis of Pekanbaru–Padang trans sumatera toll road, Padang–Sicincin section

The 36.6 Km Padang – Sicincin toll road project is 1 of the Pekanbaru – Padang toll road section which has a total length of 254 Km. Feasibility analysis is conducted to determine the economic and financial perspective of the project. The data consist of primary and secondary data, which will be process to obtain values such as the movement of vehicle due to the existence of the toll road using the JICA 1 model, the project costs, and the project benefits including savings Vehicle Operating Cost (VOC) using the Pacific Consultant International (PCI) method, time value using the Jasa Marga method, and toll revenue. The result of economic analysis show that Padang – Sicincin toll road is economically feasible with value of BCR is 1.387 > 1, NPV Rp 2,378,624,928,805 > 0, and EIRR 7.35 % > 5.75 % (discount rate). And financial analysis show that Padang – Sicincin toll road is financially feasible with value of BCR is 1.478 > 1, NPV Rp 2,930,837,690,021 > 0, FIRR 7.85 % > 5.75 %, and PP 28 is 28 years 3 months < 40 years (planned project life).

Enhancing the feasibility of airport PPP projects with hybrid funding

In transport infrastructure concessions, the sources of revenue to the private partner (or concessionaire) may include (i) the infrastructure users (e.g., landing fees, in the case of airports), (ii) the government (e.g. through availability payments), and (iii) both users and government, which might be called a hybrid concession. An example of the latter is a highway concession where the concessionaire charges tolls to the road users but, because of relatively low revenues, the government agency complements the toll revenue with availability payments.Focusing on airports, this paper summarizes the cases where it may be justified for the government to complement users’ revenues and describes a model developed for the financial assessment of airport concessions involving payments by both the government and airport users, through the collection of several charges. The methodology described in the paper is also used to review the flexibility in new or ongoing airport concessions to mitigate traffic risks, which have been aggravated by the COVID-19 pandemic. The methodology can also be applied to other forms of transport infrastructure.A practical application of the model is demonstrated in the paper, using publicly available information, as well as basic assumptions, to build case studies for the Larnaca and Paphos airports in Cyprus. The model can also be used to carry out sensitivity analyses of the impact of key input parameters on outputs such as the investor's return on equity and annual debt service cover ratio.

Managing Limited Access Highways for High Performance: Costs, Benefits, and Revenues

Managed lanes are a set of lanes where highway operations strategies are actively applied in response to changing conditions. High-Occupancy/Toll (HOT) and Express Toll lanes are examples of managed lanes. The transportation operations concept discussed in this article involves conversion of existing freeways (all lanes) into premium-service free-flowing highways that provide fast, frequent, and inexpensive express bus service and charge all private vehicles a variable toll—except for authorized buses and certified ridesharing vehicles. The toll would vary by level of demand and would be set high enough to guarantee that excessive demand will not cause a breakdown of traffic flow. This article discusses the advantages of this concept. It introduces a new sketch-planning tool that provides estimates of costs, benefits, and revenues from applying the concept on a highway network in a prototypical large metropolitan area. The estimates suggest that implementing the concept can provide significant net social benefits. It may also generate sufficient new toll revenue to pay for all costs for implementation and operation, including new express bus and park-and-ride services that would complement the pricing scheme.

Deriving the Value of Time for Toll Revenue Forecasting using Multiple Criteria Decision-Making

Mathematical traffic models replicate travel decisions and driver behavior. These tools have become more sophisticated, yet they remain simplified representations of more complex systems, including associated toll forecasts. A literature review shows that a substantial amount of toll revenue forecasts has fallen short of accurately representing actual road usage—by as much as 50%. In recent years, simulation-based modeling tools have emerged as an innovative approach to regional traffic forecasting. They capture time-varying traffic conditions and represent more realistic traffic flow and congestion, but this type of travel forecasting new and complex. One key variable in these traffic modeling tools is the value of time (VoT). The VoT represents how drivers perceive their willingness to pay a toll to reduce their travel time. How to properly quantify the VoT is still not completely understood, but it is the governing factor in how toll revenue forecasts are calculated. We propose three different approaches for quantifying the VoT. The first approach uses socio-economic data in terms of median income per zone. The VoT is quantified based on income levels of each origin-zone that travelers depart from. The second approach uses a traveler’s destination zone—derived based on trip purpose. The second approach uses a multiple-criteria decision-making (MCDM) methodology known as the Analytical Hierarchy Process (AHP) to develop weighting for each trip purpose. A third approach also uses AHP (combined with departure time) to derive weights for each traveler’s VoT. The three approaches were tested using a simulation-based dynamic traffic assignment (DTA) model.

Congestion tolling — Dollars versus tokens: Within-day dynamics

Tradable credit schemes (or tolling in tokens) are a form of quantity control, which promise to be an appealing alternative to congestion pricing (or tolling in dollars) owing to considerations of revenue neutrality, equity, reduced infrastructure costs, and political acceptability. The comparative performance of the two instruments under uncertainty in demand and supply has only recently received attention in the transportation setting, despite being widely studied for emission markets. In this paper, we add to this literature by considering a tradable credit scheme in a departure time context wherein users are provided an initial endowment of tokens by the regulator and incur a token charge (determined prior to all departures) to travel in a specific time-period. Tokens can be bought and sold within a marketplace at a price determined endogenously by token demand and supply. Two key features of the market model are: (1) the time-of-day dynamics of price is explicitly modeled through a smooth market clearing mechanism in each period, and (2) the selling decisions of users, which determine the distribution of token supply in the market over the day are explicitly modeled. This enables us to study the impact of selling behavior on performance of the credit system. Travel demand is modeled using a logit mixture model and supply consists of static congestion.Extensive experiments under stochastic demand show that when the tolls (in dollars and tokens) are not day-to-day adaptive, tolling in tokens outperforms tolling in dollars when congestion effects are more severe (e.g., realistic BPR models and steep congestion functions, high demand levels and high day-to-day variability). Importantly, we find that this result is robust with respect to selling behavior in the market, although there can be welfare losses in the quantity control system when selling behavior in the market is excessively irrational. These findings underscore the importance of examining disaggregate market behavior when designing tradable credit schemes. Moreover, when the supply of tokens can be adapted from day to day, the credit system was found to be superior in all tested scenarios, provided the selling behavior of individuals is rational. Finally, even in the case when toll revenues in the price instrument are equally redistributed (often difficult in practice), tolling in tokens (when tokens are equally distributed) is marginally more equitable in scenarios where congestion effects are more severe. These findings make a case for tolling in tokens.

Guardrails on priced lanes: Protecting equity while promoting efficiency

We examine the fairness of congestion pricing from two perspectives. First, using data from California’s six largest urban areas, we empirically estimate the share of the population that is both economically vulnerable and likely to be impacted by freeway congestion charges. Our estimates suggest that 13 % of households would fall into this category. Second, we consider ways to mitigate burdens for this group. In particular, we compare freeway use to use of other metered network infrastructure, like electricity grids and water systems. We suggest that assistance programs from these utilities provide useful lessons for protecting low-income drivers from road prices, and argue that policymakers would be less constrained in progressively redistributing congestion toll revenue than they would be in redistributing utility revenue.

A road pricing model involving social costs and infrastructure financing policies

This research develops a non-linear continuous optimisation model to estimate tolls for multi-class and multi-period traffic considering integral social costs such as congestion externalities, pavement damage, environmental emissions, operational travel costs, and user travel time cost, in addition to maintenance and construction of road infrastructure costs. The approach uses social welfare principles, formulating a function to calculate the social welfare of a multi-class flow that moves in multiple periods based on a stochastic discrete choice model and considering infrastructure financing constraints. A case study was conducted applying the model to a road in the Colombian Caribbean region and estimated the value of tolls using the particle swarm optimisation heuristic. Results showed that infrastructure policies considering partial financing resulted in higher social welfare values. Scenarios requiring toll revenue to be higher than infrastructure cost can shrink demand and cause distributive issues.

The Impact of Snowfall on Crashes, Traffic Volume, and Revenue on the New York State Thruway

Abstract Snow has numerous effects on traffic, including reduced traffic volumes, greater crash risk, and increased travel times. This research examines how snow affects crash risk, traffic volume, and toll revenue on the New York State Thruway. Daily data from January for a 10-yr period (2010–19) were analyzed for the Thruway from the Pennsylvania state line in western New York to Syracuse. Anywhere from 35% to 50% of crashes are associated with inclement weather, with smaller impacts, proportionally, in areas with greater traffic volumes. As expected, snow was almost always involved when weather was a factor. “Unsafe speed” was the most common cause of crashes in inclement weather with all other factors (e.g., animals, drowsiness) much less likely to play a role. The percentage of crashes resulting in an injury did not change significantly with inclement conditions when compared with crashes occurring in fair conditions, and there were too few fatal crashes to make any inferences about them. Daily snowfall rates predicted about 30% of the variation in crash numbers, with every 5.1 cm of snowfall resulting in an additional crash, except in Buffalo where 5.1 cm of snow resulted in an additional 2.6 crashes. Confirming earlier results, daily snowfall had a large impact on passenger vehicle counts whereas commercial vehicle counts were less affected. Revenue data showed a similar pattern, with passenger revenue typically decreasing by 3%–5% per 2.5 cm of snow, whereas commercial revenue decreases were 1%–4% per 2.5 cm of snow. Significance Statement While it seems obvious that snowfall increases the number of crashes, decreases traffic volume, and reduces toll revenues, research is limited to support these assumptions, especially the latter two. This study involved an analysis of such items for the New York State Thruway. We found that increasing amounts of snow did cause more crashes. While traffic counts decreased, most of the decrease was in the number of passenger vehicles; commercial vehicle traffic was much less affected. Every 2.5 cm of snow costs the New York State Thruway approximately $1300 at each toll barrier and about $331 at each exit. These findings are helpful to law enforcement, emergency responders, and highway managers.

Strategic behavior under tradeable driving permits and congestion tolls: A political economy model

This paper develops a political economy model to study strategic behavior related to the introduction of congestion policies. Our main focus is on tradeable permits, although we also study results under a congestion toll. We first study a two-period model where, in the first period, a majority decides whether or not to introduce a permit system in the next period. The model setup is such that tolls and permits can be made perfectly equivalent, both in terms of welfare effects and voting outcomes. We find that anticipatory behavior after the policy is announced but prior to its introduction induces people to drive more; the overall effect may be welfare reducing. Moreover, drivers oppose the policies even when they receive all permits for free, or toll revenues are distributed to drivers only. Consequently, strategic behavior makes it more difficult to get a political majority to support these congestion policies. We further show that, in an infinite horizon setting, tradable permits and congestion tolls are no longer equivalent. Permits are superior to congestion tolls in that they avoid strategic behavior once the system is implemented. In contrast, with congestion tolls the steady-state equilibrium implies continuing strategic behavior. One consequence is that it is easier to get a political majority for permits than for tolls: we find that drivers will always oppose congestion tolls, but they support permits if they receive a sufficient share of the permits for free.

Toll road maintenance towards minimum service standard

Start at present, investment in toll road construction is conventional investment in the form of investment within a certain period of time to obtain profits from the results of capital loans/financing obtained from toll revenues during toll road operation during the concession period by the BUJT. This means that BUJT has full authority over the implementation of road maintenance at the location of its concession. Hence toll road concessions have the obligation to maintain toll roads in accordance with minimum service standards using the company’s toll road revenues. Thus, each BUJT has their own maintenance policy. Therefore, the management of toll roads that are managed on a concession basis can lead to differences in road damage management programs in each BUJT concession. This research assesses the road maintenance program planning on BUJT toll road concession holders to see the effectiveness BUJT in carrying out road maintenance regarding of the fulfillment of SPM. The result shows that the majority of BUJT has regularly carried out efforts to improve road functions, however they have the inadequacy in conduct conditions surveys by using equipment according to the standards. with “Undertake routine efforts throughout the year to maintain road conditions” being the highest mean whereas “Perform visual assessment on foot” has the lowest mean value. Moreover, it can be determine that the road damage frequency data found is with the an “Adverse Opinion” audit findings result that is conducted by BPJT with the most frequent damage and receive an “Adverse Opinion” of an audit result was potholes with mean value of 2.100 and 2,200 that is followed by Guardrail damage with mean value of 2,1667 and 2,200. While the least frequent damage in the toll road was Drainage cross section with mean value of 2.533 and 2,700 and Rutting with mean value of 2.400 and 2,633 subsequently for damage frequency and Adverse Opinion frequency.

For whom the bell tolls: Road safety effects of tolls on uncongested SCUT highways in Portugal

We present a difference-in-differences analysis of the road safety effects of introducing tolls on SCUT highways in Portugal, a policy motivated purely by financial considerations, as congestion was never an issue. Using negative binomial count models and a comprehensive dataset on all mainland municipalities covering 2008 to 2014, we find that introducing tolls led to an increase in the total numbers of accidents and road injuries in municipalities where SCUT highways are located. Additionally, we register a change in the composition thereof, with fewer occurrences on highways (including on SCUT highways) and an increase on national and other roads. Finally, we find that most effects pertained to light injuries. No statistically significant effects were identified for fatal or serious injuries. Furthermore, as a result of introducing tolls on SCUT highways, we estimate that around 20% of the toll revenue collected is lost on the costs linked to road accidents. This questions the rationale of introducing such tolls, even from a revenue-raising standpoint.

Project financing through public-private partnerships in Colombia: A look inside of 4G highway concessions

This article analyzes the benefits of the financing scheme through Public-Private Partnerships for the Fourth Generation Highway Concessions Program in Colombia. In this program, the Government of Colombia establishes a concession for 25 years on highways and guarantees income through the Collection Difference Compensation Mechanism in years 8, 13, and 18. A case study is presented on the 4G highway "Autopista al Mar 2" to identify the commercial risks that may be caused by the difference in the collection between the concessionaire and the Colombian government. For this, three traffic scenarios are proposed to evaluate their impact on obtaining the Present Value from Toll Revenue - PVTR. Results show that this highway is financially viable for the base scenario through the project's finance scheme, and the commercial risk is not increased by the collection differences in any of the years 8, 13, or 18. The analysis foresees an additional income for the concessionaire of USD 123.19 million. Similar results were obtained in the optimistic scenario, with an additional collection of USD 655.90 million, which generates additional revenue to the concessionaire for operation and maintenance costs. However, if there is a 30% decrease in the estimated traffic in the baseline scenario, the PVTR will not be reached within 25 years of the concession, and the risk of Collection Difference is activated in the year 18, with an amount of USD 1.11 million; the Colombian State must provide this sum to the concessionaire. Finally, these results help create a roadmap on critical issues that require adjustments or improvements in the financing process to drive the effective development of 4G concessions.

Rational Drivers and the Choice between Congestion Tolls and Tradeable Permits: A Political Economy Model

People who anticipate the introduction of a policy can adapt their behavior, perhaps in ways that make the policy ineffective and exacerbate the problem to be addressed. This paper develops a political economy model to study strategic behavior related to the introduction of congestion policies, focusing on tradeable driving permits and congestion tolls. We have the following results. First, anticipatory behavior after the policies are announced but prior to their introduction may make both congestion policies welfare-reducing. Second, drivers will oppose the policies even when they receive all permits for free, or toll revenues are distributed to drivers only. As a consequence, strategic behavior makes it more difficult to get a political majority to support both congestion policies. Third, in an infinite horizon setting, tradable permits are superior to congestion tolls in that they avoid strategic behavior once the system is implemented. In contrast, with congestion tolls the steady-state equilibrium implies continuing strategic behavior. Drivers will always strictly prefer a permit system over congestion tolls as long as they receive a sufficient share of the permits for free.