Adding New Toll Roads

Description

Toll roads use an alternative method to pay for construction costs: users of the facility pay instead of the public. Toll facilities (including roads, tunnels, and bridges) charge a fee when the user passes a collection point.

Technological advances such as electronic plazas and virtual toll points (geofences) have replaced traditional toll booths. These systems allow fees to be collected without slowing down users or causing congestion on the road.

Over half of U.S. states have passed legislation to allow partial or total private investment in roadway construction, which is recouped through user tolls. Federal aid for some toll projects and advancements in electronic toll collection are spurring further interest in the toll road concept.

Many of the negative aspects historically associated with toll roads are related to the methods used to collect tolls.¹ The limited capacity of manual toll booths and automatic coin machines requires expensive toll plazas with high operating costs and significant investments in right of way. The throughput of manual and coin-machine lanes is well below the throughput of electronic toll collection lanes.

Executive Summary

Target Market

The target market for toll roads covers a broad range, from toll corridors connecting large metropolitan areas to local toll roads within medium and large cities.

The increasing budgetary restrictions at the federal, state, and local level are making toll roads a more frequent selection. In many cases, tolling is the only funding mechanism available to advance a project or to significantly accelerate project implementation.

In general, tolls can be used to finance:

Initial construction of new roads.
Reconstruction or rehabilitation of existing toll roads.
Reconstruction or rehabilitation of existing non-toll roads that include added capacity.

How Will This Help?

Adding a new toll road provides multiple benefits, such as congestion reduction, fuel savings, and property value increases. Estimating the reduced congestion of adding a new toll road is difficult and varies on a case-by-case basis.

Provides a mechanism to fund projects where no public funds are available or funds are limited.
Accelerates implementation of projects that are funded or partially funded.
Allows revenues to be used to fund other transportation infrastructure needs in the region, or to support operations and maintenance activities for other non-toll roads.

Implementation Examples

Application Techniques and Principles

During the implementation of Loop 49 in Tyler, Texas, a comprehensive multi-year case study analysis of a mid-size urban/rural toll road implementation was conducted. The case study documented the development of Loop 49 as a toll facility, including the tolling concept, design, public acceptability, and environmental aspects of the project.

The lessons learned in this project provide a robust set of guidelines for practitioners when implementing new toll roads:³

Separate tolling from traditional highway project development issues.
Build sustainable stakeholder support.
Be flexible as project design elements evolve.
Listen to the public and gauge public perception.
Develop a public outreach plan using perception data.
Clearly explain the benefits of tolling at the project level.
Link environmental review to public outreach, and coordinate closely with all players.
Enlist key stakeholders in creating a regional mobility authority (if one is required).

Issues

Environmental Clearances

Obtaining the proper environmental clearances can cause delays for project implementation. The proposed project type (e.g., a toll facility on a new location versus tolling of an existing facility) indicates possible environmental issues. The environmental issues mainly affect construction and operation of the facility. A tolled facility with plazas may require additional right of way, may require changes in access, and may have differing impacts in terms of natural and cultural resources, air quality, noise, and visual and socioeconomic impacts.⁶

Funding

Funding is another potential issue for new toll facilities. Toll roads can be financed through general obligation bonds, revenue bonds, revenue bonds with supplemented income, private financing, or a combination of sources. A number of public-private partnership models have been developed to finance, construct, and operate toll facilities,¹ including the following models:

Build-own-operate. A private organization finances, constructs, owns, and operates the facility.
Build-operate-transfer. A private organization finances, constructs, and operates the facility for a specified time period while collecting the tolls. Facility ownership is transferred to a governmental agency at the end of the phase.
Build-transfer-operate. A private organization finances and constructs the facility and transfers ownership to the governmental agency. The organization then leases the facility from the government and operates the facility.
Buy-build-operate. A private organization buys an existing facility from the government, upgrades the facility, and operates the tolls.
Lease-develop-operate. A private organization leases an existing facility from the government, upgrades the facility, and operates the tolls during the lease period.
Temporary privatization. A private organization takes over operation of an existing toll road, upgrades the facility, and collects the tolls until the costs plus an agreed-upon reasonable rate of return on capital is attained. At that time, operations and maintenance revert back to the governmental agency that holds permanent ownership.

Who Is Responsible?

Several toll entities and toll authorities can take a leading role in building and operating tollways in Texas. These organizations include:

Regional tollway authorities, such as the North Texas Tollway Authority.
County toll authorities, such as the Harris County Toll Road Authority.
The state toll authority, such as the Texas Department of Transportation’s (TxDOT’s) Toll Operation Division.
Comprehensive development agreement concessionaires, such as the LBJ Infrastructure Group.
Regional mobility authorities, such as the Central Texas Regional Mobility Authority.

The metropolitan planning organizations and metropolitan transit agencies may also play a critical road in the planning, building, and operation of a toll facility.

Project Time Frame

The time frame for adding a new toll road differs based on the size of the facility and whether it is a new toll facility, an upgrade, or an addition to an existing toll facility. The typical time frame for adding a new toll road may span several years to more than a decade. The time frame depends on conducting the environmental review, securing funding, and addressing the community concerns.

Cost

The cost for adding a new toll road differs based on the size of the facility and whether the project is a new toll facility, an upgrade, or an addition to an existing toll facility. The costs for acquiring right of way, building the facility, and maintaining the road are similar for toll or non-toll facilities.

Expenditures exclusive to toll facilities include the costs of deploying, operating, and maintaining the toll collection system, and servicing the debt. Some of the variables related to toll facilities that impact cost are:

The size of the system (i.e., the number of lanes and toll collection points).
Gantries and signage.
The type of toll collection technology.
The project type (i.e., new, upgrade, or addition).
Back-office operations (outsourced versus in-house).

The approach TxDOT uses to evaluate and implement highway projects has rapidly evolved since the passage of House Bill 3588 in 2003. This legislation offered new financing tools for TxDOT and set in motion policies related to the way added-capacity projects are viewed for possible tolling.

For example, built in a rural setting, SH 255 (Camino Colombia) near Laredo—with a total length of 22 miles and mostly two lanes—cost approximately $90 million. In contrast, built in an urban setting, the Sam Rayburn Tollway (formerly the 121 Tollway) in Dallas—with a total length of 26 miles and 12 lanes (6 main and 6 frontage roads)—cost $1.434 billion. The DFW Connector in Dallas—with a total length of 8.4 miles and 13/14 main lanes and four toll managed lanes—cost $1.02 billion.

Data Needs

When considering adding a new toll road, some of the most important data needs are the justification and need for the new toll road, a traffic and revenue study, an environmental study, and an environmental justice and social issues assessment. This concept also requires the tolling technology selection and the desired level of interoperability.