Horses for Courses: Determining the Optimal Pricing Strategy for a Tolled Highway Facility



Horses for Courses: Determining the Optimal Pricing Strategy for a Tolled Highway Facility

Authors

RUSSELL C and BAIN R, Steer Davies Gleave, UK

Description

The imposition of tolling for roads, bridges and tunnels has become increasingly common in recent years. The toll charging regimes can vary widely, in terms of absolute toll levels, differential pricing structures, toll collection methods and so forth. Th

Abstract

The imposition of tolling for roads, bridges and tunnels has become increasingly common in recent years. The toll charging regimes can vary widely, in terms of absolute toll levels, differential pricing structures, toll collection methods and so forth. This variety can reflect differences in the objectives of the agencies involved (public authorities, concession holders, users) and the type of facility (urban/inter-urban/rural, road/bridge etc.). However not all toll regimes operate with equal efficiency.

This paper argues that the appropriateness of the chosen toll strategy should reflect the objectives of planners/policy-makers and accommodate the interplay of the agencies involved in the scheme, particularly in public-private sector partnerships.

The paper draws on the authors' recent experience on projects carried out in Indonesia (interurban toll road), Canada (rural toll road) and Puerto Rico (urban toll road and toll bridge).

In each case

(i) the objectives of the agencies differed somewhat, ranging from revenue maximisation to an acceptable mix of toll revenue and public subsidy,

(ii) the development of the tolling strategy for each scheme involved different mixes of research methods (traffic modelling, market research, pricing experiments etc.),

(iii) the process of negotiation between interested parties differed significantly.

This paper will report how the objectives and the role of interested parties (including consultants) vary by type of toll facility, which research methods are therefore appropriate and, ultimately, which tolling strategy (in broad terms) appears to be appropriate for different types of scheme.

Publisher

Association for European Transport