Brazil to let major private highway concession on existing road

Infranews reports that the ANTT (Agência Nacional de Transportes Terrestre - National Transportation Agency) has announced it will be auctioning a 30 year concession for a US$3.4 billion toll road. The route is a 817km section of federal highway BR-040 between Brasília and Juiz de Fora, Minas Gerais.

What the auction effectively means is that prospective concessionaires have to bid to finance, build, operate and toll the road, and the offer that will do so, with the lowest tolls, is more likely to win.  Studies on the project indicate it can more than generate enough toll revenue to pay for the upgrade of the highway.  The proposed maximum toll rate is BRL 0.0973 (US$ 0.041) per km, or BRL 9.73 (US$ 4.12) for 100km. The successful concessionaire will have to demonstrate it can operate, maintain and upgrade the road to the required standard at tolls with a discount on those rates.  Recent concessions have been awarded to groups that offered to do other routes with discounts of over 40% on the proposed rates.

This is quite some road, being roughly the distance from London to the top of Great Britain as the crow flies, and being most of the main highway from Brasilia to Rio.  Interesting of course, that it is to be tolled to fund the upgrade.  The section from Rio to Juiz de Fora is already tolled and subject to a concession held by the company Concer, since 1996.

Interesting that leasing out large stretches of highway to private companies to upgrade, using tolls, is being implemented by a leftwing government in Brazil.  A similar concept in the United States or the UK would provoke howls of outrage from some quarters.

UK- Vehicle Excise Duty to be made fully electronic

The BBC reports that as of October 2014, the annual (or 6 monthly) "tax disc" that is proof of payment of Vehicle Excise Duty (a tax on vehicle ownership), is to be scrapped.  Proof of payment will now be linked to number plates and Police checks of payment will be enforced by ANPR cameras.

Vehicle Excise Duty is rated on vehicle size (to charge trucks more to reflect wear and tear they impose on the network) and CO2 emissions.  It raises about £6 billion a year in revenue.  None of it is hypothecated for road spending.  The UK Government spends £9 billion a year on roads in England, funding for roads in Wales, Scotland and Northern Ireland is contained within the budgetary contribution to those devolved governments.   Of course, revenue from fuel tax exceeds £27 billion a year as well.

UK - Further comment on scrapping of toll plan for the A14

Guy Bentley at City AM argues for network road pricing to manage congestion and encourage more efficient investment in roads.

AutoExpress reports that the Labour Opposition blames the Government for a cost increase in the project due to delay, and called tolls "half-baked".

USA - California - Orange County debates free lanes over toll lanes

According to the LA Times, there is general agreement that there needs to be additional lanes on the San Diego Freeway (I-405) between Long Beach and Costa Mesa.   The debate is whether they should be HOT or untolled lanes.  Caltrans (the state entity responsible for managing the state highway network) wants toll lanes, on the basis that new capacity should be paid by those directly benefiting from it.  However, six of the boroughs that the freeway passes through want the lanes to be untolled.  

The report said, of a latter signed by the Mayors of the six cities:

"Constructing toll lanes is a breach of trust with Orange County residents," the letter stated, adding that residents agreed to a half-cent sales tax increase that would fund one additional general-purpose lane on the 405 Freeway.

One option is to add a free lane and a HOT lane, but that would seem ridiculous.   The HOT lane would have so little demand to make it not worthwhile.  Either there is money to widen the road or there isn't.

Now I consider sales taxes being used to pay for highways to be economic insanity.  Why should people shopping have to pay for an additional lane on a road many of them do not use regularly and most wont benefit from?  However, if it is there, in part, to pay for it, then it is difficult to argue against, unless of course, the sales tax is cut when the toll lanes open.

The report also says:

City leaders expressed worry that the project would push traffic onto their streets, or that motorists traveling in the toll lanes would find it too difficult to pull off the highway and patronize local businesses.

The first point makes no sense, as the lanes are additional capacity.  They will improve traffic conditions for those who pay, and a little for those who don't.  I also doubt whether those wishing to pay to use the toll lanes (who are more likely to be those on a time constrained trip) have any special interest in pulling off the highway.

If the lanes can be substantially funded by being tolled, they should be, and let sales taxes for transport be cut.

Orange County Transportation Authority website on the project.

USA - Texas - El Paso getting its first toll lanes 

I noted this proposal two years ago.

El Paso is getting its first toll lanes opening soon.  A 9 mile stretch of the I-10 will see one new lane each way from the interchange with US-54 to Zaragoza Road with a toll of US$0.10 per mile. The Camino Real Regional Mobility Authority encouraging "sticker tag" installation of users.  These lanes will be pure toll lanes, with no option for high occupancy vehicles to get a free trip.

Austin

An 11-mile stretch of Austin’s MoPac Boulevard will expand to eight lanes from six to accommodate a growing population.  Neither the Texas Department of Transportation nor any of the local entities involved in the $200 million project are predicting it will transform MoPac into a free-flowing thoroughfare.  The project is the responsibiilty of the Central Texas Regional Mobility Authority.  It is to accommodate population growth.  The key is the extra lanes are pure toll lanes, not HOT lanes.   Carpooling will not give you a free trip, the reason apparently being that the lanes are intended to maintain a minimum level of service.   By not allowing carpooling, it saves on enforcement and means that the lanes are purely managed by price.  

According to the Texas Tribune, the Capital Metropolitan Transportation Authority board is hoping it will boost bus patronage as buses will use the new lanes toll free.  Bus routes are to be revised to see how much they can usefully take advantage of the new lanes.  "Registered van pools" and emergency vehicles are also exempt.

The price will be set dynamically with the lowest price being US$0.25, and an average expected to be less than US$4 with trip lengths being a minimum of 5 miles.  However, unlike many toll systems elsewhere, there is no price ceiling.  The price will be as high as is necessary to maintain good free flow conditions.  Of course, those not liking that can use the parallel untolled lanes.

The payment system is a simple DSRC 915MHz system compatible with TxTag, TollTag or EZ-Tag.   Users without tags will be billed to their home address traced by ANPR cameras and accessing of motor vehicle registration databases.

Allied to the project are improved bicycle and pedestrian facilities ( US$5 million, including 3 miles of new path and 4 miles of footpaths).

The MoPac website says...

The project is being financed through a unique partnership with the Capital Area Metropolitan Planning Organization (CAMPO) and the Texas Department of Transportation (TxDOT). CAMPO and TxDOT have approved grants totaling $199.5 million to fund the project. As part of the partnership arrangement, the Mobility Authority has agreed to set up a Regional Infrastructure Fund, and over the next 25 years, will deposit $230 million into the fund. CAMPO can then allocate money from the fund to other transportation projects in the region.

So the lanes are taxpayer funded, but will they raise enough money to recoup that expenditure?

So it is not to be.  It appears that the proposed A14 toll road is going to be built - but not as a toll road.

In the Autumn Statement of the British Government it is to be announced that the major upgrade of the A14 will proceed, but as a conventional highway project funded by Treasury, according to the BBC.

I've written extensively before about the project:

UK investigates more tolling and private finance;

A new toll road for Britain?

UK government adds new (A14) toll road to programme

Lukewarm reception for A14 toll road idea

A14 project to have one tolled section

A lonely toll road that wouldn't come remotely close to paying for itself

So this is a story of some wishful thinking, which I'll admit, I agreed with at the time.  It was right to investigate whether tolling could usefully help pay for a project.

A very large highway project, involving mostly new capacity, was ready to go.  Then came the General Election in 2010, and a change of government.  It faced a fiscal crisis and had to rein in some major spending commitments by the previous government to address the budget deficit, and freezing development of this highway project was one way to do that.

The road itself is considered critical because it is frequently congested and carries high volumes of truck traffic linking the West and East Midlands (including the city of Birmingham) to the ports in Suffolk and Essex at Felixstowe and Harwich.  About a quarter of the traffic involves HGVs, which makes it a critical freight corridor.  It suffers from peak congestion as commuters travel between various towns, with Cambridge as a key attractor.  Whilst some efforts have been made to promote rail freight (successfully) and public transport, it is not considered likely that mode shift can alleviate the remaining regular congestion, and the route is considered to be a bottleneck on the development of the Midlands, given it provide the primary port access for the region's towns and cities.

The map above is a detailed description.  The upper part depicts the Huntingdon Southern Bypass (which looked like it could be tolled) , the lower part the doubling of capacity on the A14 northwest of Cambridge from 2 to 4 lanes each way, and then the widening of the Cambridge northern bypass (with a series of junction and link improvements.

It appears that France's EcoTax (HGV distance based road charging/tolling system) is now on hold, although the latest reports indicate that it will still be introduced on 1 January 2014.  It is not because of any technical problems, it is politics.

France does protests on a level unseen elsewhere

I am not surprised.  The politics of France is peppered with disruptive protests by vested interests unhappy whenever governments implement major changes to the status quo - typically by specific interests negatively  affected (never by the wider group of citizens positively affected).  The OTRE (Organisation des Transporteurs Routiers Européens), a trucking industry association, comprised mainly of smaller operators, has protested that it would hurt their businesses.  Their protests have included road blocks, with a deliberate attempt to halt foreign trucks (they aren't so keen on competition from their European partners).  Protests have included vandalism and arson against enforcement gantries (which include ANPR cameras, laser profilers and DSRC detectors).

It is difficult to imagine that level of anger in many other countries.

Ecotax isn't a creation of Hollande's socialist government, but wasn't opposed when in Opposition

The Ecotax proposal was approved by the previous centre-right Sarkozy administration, and was supported by the Socialists (who run the current government) at the time, but some in the government now think that the amount that Ecomouv - the consortium that won the contract to develop, install and operate the system - is paid, is excessive (Ecomouv is to receive 20% of the gross revenue, which is quite generous).  Ecomouv is a consortium comprised of Autostrada (the well known Italian toll road owner/operator), Thales (a French technology, aerospace and defence company), SNCF (the French national railway), SFR (French telecommunications company, primarily operating mobile services) and Steria (French IT-services company).  

So the socialist bent of the French Government is coming out in thinking that the private sector may be profiting too much from the system.  

My view is that costs are quite high, although they ought to come down over time, and part of the procurement is to allow for competitive service delivery, which ought to keep pressure on costs (although it isn't clear that Ecomouv has quite the same pressure). 

However, the simple point is that a large government contract to collect revenue is always going to be a chance for operators to ensure they minimise costs so they maximise their own revenue.  That obviously is controversial when it comes to a tax.  Given the system does involve GNSS based technology with on board units, communicating via the mobile phone network, the simple point is it will be costly to introduce.  owever, I would not be surprised if political risk is factored into the price - which is wise.

Meanwhile, it appears, in rather typical French style, that government is now negotiating with protestors over what to do next - even though the contract with Ecomouv binds the French Government.  In short, the key risk is that rates will be lowered, but Ecomouv will insist on receiving the fees it contracted for.  General taxpaers, the interest group that seems to be least loud, may pick up the difference for a short while at least.