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The long and winding path to private financing and regulation of toll roads


  • Estache, Antonio
  • Romero, Manuel
  • Strong, John


Road transport has long been the dominant form of transport for freight and passenger movement throughout the world. Because most road projects require investments with long amortization periods and because many projects do not generate enough demand to become self-financing through some type of user fee or toll, the road sector remains in the hands of the public sector to a much greater extent than other transport activities. But governments throughout the world, including those of many poor African and South Asian countries, are commercializing their operations to cut costs, improve user orientation, and increase sector-specific revenue. There seems to be demand for toll roads in specific settings, but the problems met by many of this"first generation"of road concessions-from Mexico to Thailand-have given toll projects a bad reputation. Many mistakes were made, and tolling is obviously not the best solution for every road. Most of the alternatives aim at improving efficiency (lowering costs). But there are many ways of getting the private sector involved in toll roads, thus reducing public sector financing requirements for the sector. Understanding the context in which toll roads are viable is essential both for their initial success and for effective long-run regulation. The authors provide a broad overview of issues at stake from the viewpoint of both privatization teams and regulators responsible for supervising contractual commitments of private operators and the government, to each other and to users.

Suggested Citation

  • Estache, Antonio & Romero, Manuel & Strong, John, 2000. "The long and winding path to private financing and regulation of toll roads," Policy Research Working Paper Series 2387, The World Bank.
  • Handle: RePEc:wbk:wbrwps:2387

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    References listed on IDEAS

    1. Eduardo M. R. A. Engel & Ronald D. Fischer & Alexander Galetovic, 2001. "Least-Present-Value-of-Revenue Auctions and Highway Franchising," Journal of Political Economy, University of Chicago Press, vol. 109(5), pages 993-1020, October.
    2. Small, K. & Winston, C., 1998. ""The Demand for Transportation: Models and Applications"," Papers 98-99-6, California Irvine - School of Social Sciences.
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    Cited by:

    1. Babatunde, Solomon Olusola & Perera, Srinath, 2017. "Analysis of traffic revenue risk factors in BOT road projects in developing countries," Transport Policy, Elsevier, vol. 56(C), pages 41-49.
    2. Beatriz Marulanda & Miguel Montes, 2004. "Desarrollo de proyectos viales y aportes del estado en terrenos," IDB Publications (Working Papers) 3242, Inter-American Development Bank.
    3. Asquer, Alberto, 2011. "Liberalization and regulatory reform of network industries: A comparative analysis of Italian public utilities," Utilities Policy, Elsevier, vol. 19(3), pages 172-184.
    4. Andreas Wibowo, 2005. "Estimating general threshold traffic levels of typical build, operate, and transfer toll road projects in Indonesia," Construction Management and Economics, Taylor & Francis Journals, vol. 23(6), pages 621-630.
    5. Beatriz Marulanda & Miguel Montes, 2004. "Desarrollo de proyectos viales y aportes del estado en terrenos," IDB Publications (Working Papers) 49398, Inter-American Development Bank.
    6. Beckers, Thorsten & Miksch, Jan, 2002. "Die Allokation des Verkehrsmengenrisikos bei Betreibermodellen für Straßeninfrastruktur: Theoretische Grundlagen und Anwendung auf das A-Modell," Discussion Papers 2002/10, Technische Universität Berlin, School of Economics and Management.
    7. Shanjiang Zhu & David Levinson & Lei Zhang, 2007. "An Agent-based Route Choice Model," Working Papers 000089, University of Minnesota: Nexus Research Group.


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