Shadow toll

Shadow tolls are payments made by government to the private sector operator of a road based, at least in part, on the number of vehicles using the road. First proposed by the UK Government in 1993, they are currently in operation on some roads in the UK. The system of shadow tolling provides the revenue for privately-funded road schemes under the Private Finance Initiative known as the Design, Build, Finance and Operate (DBFO) programme. They have also been adopted in other countries.

A commonly claimed advantage of the shadow tolling system is that it eliminates the need for drivers to pay tolls directly, thus avoiding toll collection costs, however this claimed advantage misleadingly ignores the traditional direct government funding option which would be dependent on neither direct tolling nor the additional cost of continuous vehicle counts and complex contract arrangements between parties.^[1][2]

Disadvantages include the fact that because drivers typically pay for their road use through fuel taxes, vehicle registration fees, and other charges that are not based on time of road use, it is not possible to use this system to implement congestion pricing, which would give drivers an incentive to take alternate routes, carpool, or otherwise curtail their usage of their road during rush hour.

Another disadvantage of shadow tolls and other PFI schemes is that in the post economic collapse financial environment, the cost of private borrowing has increased dramatically in relation to the cost of direct government borrowing. In August 2011 the UK Parliamentary Treasury Select Committe announced that PFI deals were an "extremely inefficient method of financing [public infrastructure] projects" and that the rules needed to be reformed to prevent the promotion of PFI funding of infrastructure development though misleading cost calculations and perverse "off balance sheet" incentives.^[3]

The UK is still the biggest user of shadow toll roads however several schemes have been developed across Europe (Belgium, Finland, Netherlands & Spain) and also in Canada. Shadow toll projects were also introduced in Portugal in 1999 but ended up being cancelled and replaced with the "real toll" model in 2004 after the Portuguese government found that "payment obligations in connection with the shadow toll system are not compatible with the need to spend on improving and maintaining the other national motorways".^[4]

List of shadow toll roads

Belgium

• A605 / E25 Cointe Tunnel

Canada

• Alberta Highway 216 (Anthony Henday Drive) Southeast leg
• New Brunswick Highway 2 Fredericton to Moncton

Finland

• VT4 / E75 Järvenpää-Lahti

Netherlands

• A9 Wijkertunnel

Spain

• Madrid M-45 Road

UK

• A1 Darrington to Dishforth
• A1(M) Alconbury to Peterborough
• A13 Limehouse to Wennington (Greater London)^{[citation needed]}
• A19 Dishforth to Tyne Tunnel
• A249 Stockbury (M2) to Sheerness
• A30 Exeter to Bere Regis
• A417 Gloucester to Cirencester
• A419 Swindon to Cirencester
• A50 Stoke to Derby link
• A55 Llanfairpwll to Holyhead
• A69 Carlisle to Newcastle
• M1 Lofthouse to Bramham link road
• M40 Denham to Warwick
• M80 Stepps to Haggs (Under Construction)

See also

• Toll road
• Highways Agency

References

1. ^ Shadow Tolls, a secretive drain on public finance
2. ^ Toll Roads and Concessions at the World Bank Group
3. ^ Committee publishes report on Private Finance Initiative funding
4. ^ Portugal: Shadow Toll System is Replaced

External links

• Highways Agency DBFO