Monday, 7 December 2009

The Economic Advantages of Toll Roads

The Economic Advantages of Toll Roads

Although many people view toll charges as a hassle and just one more thing the government do to take every penny we have, there are many benefits that come with toll road charges that not many people notice.

Many economists and transportation experts see that toll roads offer a solution to our road transportation problems. Toll charges benefit road transportation because...

Firstly, toll charges are much fairer than other types of methods to reduce traffic congestion. The users of toll charges pay in proportion to their use and the distance that they travel along the road. This is much fairer than schemes like the Congestion Charge, where the price is implemented and the users pay for the cost of their journey (congestion-loss of time, wasted energy, etc.)
Secondly, also they make the roads more efficient. When toll roads are used to reduce congestion through charges that reflect current utilisation, it sends signals to consumers about the full cost of using the road. This includes costs other than damage costs, but also the costs imposed by an additional driver on the travel speed of all other drivers.
Thirdly, toll charges reduce urban sprawl. Urban sprawl or congestion is the direct result of under-pricing of roads. If drivers were required to pay the true cost of using a road or a motorway, there would be less incentive to keep driving and more people would either take public transport, or move their location that they travel to closer (e.g., work from home).
Fourthly, the toll road charge increases fuel economy. This is so because by increasing the overall capacity of a region’s transportation system, toll roads are able to absorb some of the traffic that would otherwise use non-toll highways and interstates. The result is a decrease in overall traffic congestion. Vehicles on both toll and non-toll roadways are able to move at more fuel efficient speeds.
Fifthly, according to studies, the accident rate on toll roads is lower than other roads, because the flow of traffic is more even.
Finally the toll road charges help with the financing of new facilities. If congestion rises, prices rise and that provides a signal for expansion of facilities. In such situations bond financing can be raised to pay for the project, with the future toll collections used as collateral.

One of the most well known toll roads in the UK is the M6 toll road which runs past Birmingham.
Here is a video on how Russia are planning to use toll roads to help their congestion problems on their motorways.