Private highway

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A private highway is a highway owned and operated for profit by private industry. Private highways are common in Asia and Europe; in addition, a few have been built in the United States on an experimental basis. Typically, private highways are built by companies that charge tolls for a period while the debt is retired, after which the highway is turned over to government control. This allows governments to fulfill immediate transportation needs despite their own budget constraints, while still retaining public ownership of the roads in the long term.

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An obstacle to private highways is that government regulation can stifle price flexibility and introduce negotiation and paperwork requirements that increase operational expenses, while having to compete against free public roads. In addition, private highways lack some advantages that governments have, such as sovereign immunity against liability for accidents, the use of eminent domain power to acquire private property for roads and the ability to issue tax-exempt securities. [1]

Free-market roads are generally advocated by Libertarians, who consider them safer and more cost-effective than government operated roads. [2]

History

The Interstate Highway System provided for in the Federal Aid Highway Act was a federally funded, non-toll system. According to Simon Hakim and Edwin Blackstone, "by 1989, [private] roads comprised just 4,657 miles (7,495 km) of the 3.8 million miles of streets and roads in the United States and only 2,695 miles (4,337 km) out of the 44,759 miles (72,033 km) of the interstate system." [1]

The National Center for Policy Analysis and the Cato Institute have proposed that the Demsetz auctions commonly used to award franchises be replaced with Present Value of Revenues auctions in order to reduce risk and thus required rates of return by private highway owners. [3] Under this system, contractors would bid an amount equal to the present value of cash flows from user fees they are willing to accept for the project. The lowest bid would win.

Boarnet and DiMento believe that private highways will become more important as the rise of gasoline-efficient hybrids causes a decline in gas tax revenues. [4]

Many highways are constructed under a "build-operate-transfer" model in which ownership ultimately goes to the government.

Around the world

Asia

As of 2003, the Hong Kong government was planning to securitize five toll tunnels and a toll bridge through bond issues. [5] India also has a private highway under-construction between the two cities of Bangalore and Mysore in the state of Karnataka. A vast number of the country's road projects have been upgraded under a public-private partnership, thus operating similar to private highways. In Indonesia, many toll roads are built by private companies, and private toll roads are being built in Bangladesh.

North America

Mexico has some highways operated by private companies. [6] The 108 km Highway 407 ETR through the Greater Toronto Area is operated privately under a 99-year lease agreement with the provincial government. The highway uses electronic toll collection. Users who do not have a toll tag (called a transponder) in their vehicle are tracked by automatic number plate recognition, with the toll bill being mailed to the address of the plate on file. There are also some private highways in the United States.

Europe

Of the 11,000 kilometers of France's highways, 8,000 km are under private concession. 3,120 kilometers of Italy's highways (comprising 56% of the country's toll roads) are controlled by Autostrade Concessioni e Costruzioni Autostrade. According to Forbes, "Autostrade was an early Electronic Age entry, computerizing to its highway system in 1988". [7] The M6 Toll was the first private toll motorway in the United Kingdom. [8] The project was described by urbantransport-technology.com as a "43 km dual three lane (plus hard shoulder), £485.5 million motorway" with six toll stations. [9]

See also

Related Research Articles

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Toll road Roadway for which a fee (or toll) is assessed for passage

A toll road, also known as a turnpike or tollway, is a public or private road for which a fee is assessed for passage. It is a form of road pricing typically implemented to help recoup the costs of road construction and maintenance.

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Electronic toll collection Wireless system to automatically collect the usage fee or toll charged to vehicles

Electronic toll collection (ETC) is a wireless system to automatically collect the usage fee or toll charged to vehicles using toll roads, HOV lanes, toll bridges, and toll tunnels. It is a faster alternative which is replacing toll booths, where vehicles must stop and the driver manually pays the toll with cash or a card. In most systems, vehicles using the system are equipped with an automated radio transponder device. When the vehicle passes a roadside toll reader device, a radio signal from the reader triggers the transponder, which transmits back an identifying number which registers the vehicle's use of the road, and an electronic payment system charges the user the toll. A major advantage is the driver does not have to stop, reducing traffic delays. Electronic tolling is cheaper than a staffed toll booth, reducing transaction costs for government or private road owners. The ease of varying the amount of the toll makes it easy to implement road congestion pricing, including for high-occupancy lanes, toll lanes that bypass congestion, and city-wide congestion charges. The payment system usually requires users to sign up in advance and load money into a declining-balance account, which is debited each time they pass a toll point.

Rest area Public area, usually adjacent to limited-access highway, used for rest from travel

A rest area is a public facility located next to a large thoroughfare such as a motorway, expressway, or highway, at which drivers and passengers can rest, eat, or refuel without exiting onto secondary roads. Other names include: motorway service area (UK), services (UK), travel plaza, rest stop, oasis (US), service area, rest and service area (RSA), resto, service plaza, lay-by, and service centre (Canada). Facilities may include park-like areas, fuel stations, public toilets, water fountains, restaurants, and dump and fill stations for caravans / motorhomes.

Dual carriageway Type of road

A dual carriageway or divided highway is a class of highway with carriageways for traffic travelling in opposite directions separated by a central reservation (BrE) or median (AmE). Roads with two or more carriageways which are designed to higher standards with controlled access are generally classed as motorways, freeways, etc., rather than dual carriageways.

Autostrada A3 (Italy) Controlled-access highway in Italy

The Autostrada A3 is a motorway in Southern Italy, which runs from Naples to Salerno, in the region Campania.
Until 2017 the route was much longer, going after Salerno further south until Reggio Calabria; on this year, this section became part of the new A2 motorway and of its two spur routes.

Limited-access road High-speed road with many characteristics of a controlled-access highway (freeway or motorway)

A limited-access road, known by various terms worldwide, including limited-access highway, dual-carriageway, expressway, and partial controlled access highway, is a highway or arterial road for high-speed traffic which has many or most characteristics of a controlled-access highway, including limited or no access to adjacent property, some degree of separation of opposing traffic flow, use of grade separated interchanges to some extent, prohibition of some modes of transport such as bicycles or horses, and very few or no intersecting cross-streets or level crossings. The degree of isolation from local traffic allowed varies between countries and regions. The precise definition of these terms varies by jurisdiction.

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Controlled-access highway Highway with regulated traffic flow

A controlled-access highway is a type of highway that has been designed for high-speed vehicular traffic, with all traffic flow—ingress and egress—regulated. Common English terms are freeway, motorway and expressway. Other similar terms include throughway and parkway. Some of these may be limited-access highways, although this term can also refer to a class of highway with somewhat less isolation from other traffic.

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A toll road is a road over which users may travel over on payment of a toll, or fee. Tolls are a form of use tax that pays for the cost of road construction and maintenance, without raising taxes on non-users. Investor's bonds necessary for the construction of the roads are issued and sold with the expectation that the bonds will be paid back with user tolls. The toll roads may be run by government agencies that have bond issuing authority and/or private companies that sell bonds or have other sources of finance. Toll roads are usually a government guaranteed road monopoly that guarantees limited or no competing roads will be built by government agencies for the duration of the bonds. Private toll roads built with money raised from private investors in expectation of making money from the tolls probably dominated early toll roads. Government sponsored toll roads often guarantee a minimum payment to the bond holders if traffic volume and toll collections are less than predicted. If the toll authority is a private company there is often a maximum amount of fees that they may extract from users. Toll road operators are typically responsible for maintaining the roads. After the bonds are paid off the road typically reverts to the government agency that authorized the road and owns the land it was built on. Like most government taxes it is not unusual for tolls to continue to be charged after the bonds have been paid off.

Private highways in the United States

There are relatively few private highways in the United States, compared to other parts of the world.

Autostrada A15 (Italy)

The A15 is an Italian autostrada (motorway) connecting Parma and La Spezia through the valleys of the Taro and Magra Rivers. The road is also known as Autocamionale della Cisa because it crosses the Northern Apennines at the Cisa pass. The main 101-km expanse of the motorway connects the A1 with the A12, thus directly linking the Po Valley with the Italian Riviera and the Versilia region.

Autostrada A91 (Italy)

The Autostrada A91, also called Autostrada Roma-Fiumicino, is an Italian motorway which connects Rome to the Fiumicino Airport.

High-occupancy toll lane Traffic lane or roadway on which high-occupancy vehicles are exempt from tolls

A high-occupancy toll lane is a type of traffic lane or roadway that is available to high-occupancy vehicles and other exempt vehicles without charge; other vehicles are required to pay a variable fee that is adjusted in response to demand. Unlike toll roads, drivers have an option to use general purpose lanes, on which a fee is not charged. Express toll lanes, which are less common, operate along similar lines, but do not exempt high-occupancy vehicles.

This article describes the highway systems available in selected countries.

Highways in Albania Transport network in Albania

The Highways in Albania are the central state and main transport network in Albania. The motorways and expressways are both part of the national road network. The motorways are primary roads with a speed limit of 110 kilometres per hour (68 mph). They have white on green road signs such as in Italy and other countries nearby. The expressways are the secondary roads, also dual carriageways, but without an emergency lane. They have a speed limit of 90 kilometres per hour (56 mph). They have white on blue road signs.

References

  1. 1 2 Hakin, Simon & Blackstone, Edwin (August 1, 1999). Making inroads in private highway construction. American City & County. Retrieved on January 10, 2008.
  2. Free to Choose, Milton Friedman
  3. National Center for Policy Analysis (January 17, 2003. New Auctions Could Improve Private Highway Franchises Archived 2008-10-27 at the Wayback Machine . Retrieved on January 10, 2008.
  4. Stanek, Steve (February 1, 2005). California Law Provides Lessons for Private Transportation Archived 2006-12-04 at the Wayback Machine . Budget & Tax News.
  5. "Hong Kong Plans Massive Privatization | National Center for Policy Analysis". Archived from the original on 2008-10-24. Retrieved 2008-01-20.
  6. PRIVATE HIGHWAY MANAGEMENT COMPANIES TEMPORARILY REDUCE TOLLS TO ATTRACT CARGO TRUCKS | SourceMex Economic News & Analysis on Mexico | Find Articles at BNET.com
  7. Heller, Richard: The Fast Lane, Forbes, April 15, 2002.
  8. Judge Orders Discovery of Secret BNRR Deal Archived 2005-04-26 at the Wayback Machine , Alliance Against the Birmingham Northern Relief Road.
  9. Birmingham Northern Relief Road, United Kingdom Archived 2005-04-11 at the Wayback Machine , urbantransport-technology.com.

Further reading