Shadow-tolls in Portugal: How We Got Here and What Were the Impacts of Introducing Real Tolls



Shadow-tolls in Portugal: How We Got Here and What Were the Impacts of Introducing Real Tolls

Authors

M Santos, B Santos, University of Coimbra, PT

Description

Discussion of the Portuguese Public-Private Partnerships (PPP) for road financing adopted since the late 1990s. In addition, given the recent abandonment of this scheme, we present a study on the elasticity of demand to the introduction of tolls.

Abstract

With the rapid economical and social growth experienced during the last century, it has been a tremendous task to keep transportation infrastructure up to speed with global needs. Consequently large capital investments have been made by national governments to develop their transportation infrastructure. This is the case of Portugal, which experienced a significant improvement of the national road infrastructure since becoming a member country of the European Union in 1986. Today, Portugal has above European average indicators in terms of freeway density.

In this paper, we discuss the road investments made in Portugal in the last decades, with particular emphasis on the Public-Private Partnerships (PPP) financing scheme that the Portuguese government adopted since the late 1990s. These road investments are part of a comprehensive road network investment plan first defined 1985 and updated in 1998. This plan became known as the Plano Rodoviário Nacional, or PRN2000, and introduced the main guidelines on which the national road network was to be based on. It defined, e.g., that the total length of the national freeway network should have been of 3118km by 2007.

Traditionally, Portuguese roads have been financed by state investments or mixed investments (tolled roads), which until recently represented 70.5% (2197km) of the total freeway network. However, given the massive financial outlays involved in the accomplishment of the PRN2000, the PPP scheme was adopted as a new approach to finance and accelerate freeway construction, especially in socio-economically deprived regions of the country. Under this scheme, the private sector assumes the risks of constructing, maintaining and upgrading freeways, in return of receiving government paid shadow-tolls, based on vehicle-kilometres driven on the roads. The users pay no tolls and the taxpayers? money is used to cover the shadow-tolls costs. In total, seven shadow-tolled freeways (called SCUT) were built, representing in 2007 almost 30% (921km) of the national freeway network. Through time, it became clear that the estimated initial suppositions were far from accurate and that the costs of the SCUT program were highly exceeded. Thus, in the last two years, this financing scheme has continuously been abandoned and real tolls have been applied to freeway users.

With this work we intend to discuss and describe the Portuguese choice for adopting PPP schemes, explaining how and in what circumstances it was introduced, and why it was abandoned. A general introduction of the different PPP schemes options and a detailed presentation of the Portuguese SCUT's is provided. We will address the evolution of this approach in terms of its costs, explaining why and how its maintenance as a viable option was rethought. Furthermore, given that the introduction of tolls in some freeway segments had impacts on travel demand and that it is already possible to estimate this demand variation in some segments, we intend to study the effect that the introduction of user tolls had on the demand. Relying on a demand model calibrated before the introduction of tolls, we propose to study the toll elasticity of travel demand for the case of two previous SCUT freeways.

Publisher

Association for European Transport