Toll rates and related factors on China's highways

Abstract

Toll rates and traffic volumes (or demand) are the two major factors affecting revenue as well as investment strategies on toll roads. Although China has been experiencing dramatic growth in its highway systems during the past 10 years, there has been a lack of understanding in maintaining and operating its toll roads. Since most of the freeways in China are toll roads, it is necessary to establish a methodology for the toll road system based on the characteristics of China's transportation systems and social economy. A methodology to determine the toll rates for China's toll road systems is introduced. Factors affecting the toll rate are analyzed, including gross domestic product, total number of vehicles, growth rates of passenger and freight transport, and roadway conditions. The theory of elasticity is applied in a case study to investigate the effect of toll rate on traffic volumes. A critical-volume model is established on the basis of the analyses of various factors such as construction costs, operating costs, expected time of return, and internal rate of return.