By the end of 2020, China had a total of 179,200 km of toll roads ( 2020 National Toll Road Statistical Bulletin in China), ranking first in the world and far ahead of other countries worldwide. As soon as this statistic is updated, you will immediately be notified via e-mail. The Toll Roads are owned by the state of California and operated by The Transportation Corridor Agencies (TCA). Since then, analysts have touted the possibility of CMHP gradually acquiring more toll roads from its parent. The estimation results are reported in Table 8, where columns (I) and (II) list the least squares estimation results of heteroscedasticity robustness, and columns (III) and (IV) list the results of panel GMM estimation. 146154, 2019. In recent studies, the estimated administrative monopoly degree of toll road industry is about 88.64% [47] or 81.8% [37], and the rent dissipation degree of government loan-repayment highways caused by administrative monopoly is about 63.5% [48]. Again, government regulations and policies could be a key stumbling block here. S. Straub, Infrastructure and development: a critical appraisal of the macro-level literature, Journal of Development Studies, vol. So, even if CMHP were to do three share placements equivalent to 20% of its market capitalization, its parent could still have a controlling 51% stake, Jiang points out. X. Mao, J. Gan, and X. Zhao, Debt risk evaluation of toll freeways in Mainland China using the grey approach, Sustainability, vol. The fact is that without the stream of revenues promised by a long-term tolling commitment, it may not be possible to service the loans that make the building of the Expressway possible. Show publisher information Access to this and all other statistics on 80,000 topics from, Show sources information ", Ministry of Transport of China, Distribution of toll road mileage in China from 2017 to 2020, by ownership Statista, https://www.statista.com/statistics/759691/china-toll-road-length-by-ownership/ (last visited January 18, 2023), Distribution of toll road mileage in China from 2017 to 2020, by ownership [Graph], Ministry of Transport of China, October 28, 2021. 34, pp. Countries as diverse as Australia, Brazil, France, Germany (goods vehicles) India, Italy, Japan, Mexico, Switzerland and others have widely adopted road tolling (through various means). C. H. Rong, Breaking administrative monopoly is the core issue to be solved in railway reform, Transport Research, vol. In the just over 20 countries that have toll roads, the proportion of toll roads to regular roads is only about 1 percent. Whatever the case, it will clearly take time for CMHPs parent to work out a deal. But with a higher dividend payout, it can raise its valuation so that it can tap equity and do a combination of internal funds, equity financing and bank borrowing for an acquisition, he says. The Expressway network has transformed the efficiency and effectiveness of inter-regional road transport in China. Indeed, Jiang says it would be safe for CMHP to raise its gearing to 60%. This study focuses on the potential of state-owned toll roads as candidates for this kind of monetization. 22, no. 30, no. Yong of DBS Vickers says that withholding dividends in order to preserve cash wont really help CMHP, because it would be at least three years before CMHP has saved enough for an acquisition. J. H. Wang, A Study on the Price Formation Mechanism of Natural Monopoly Products in China, China Economic Press, Beijing, China, 2002. On the one hand, the government has interfered too much with the market players, constraining the vitality and space of social capital and creating power rent-seeking and corruption. 2, pp. Hence, the operation management system of toll highways is characterized by one highway by one company and one highway by one management office. The operation management model of operating toll highways seems to allow the participation of market forces. Earlier this month, in a triumph for Gov. Following the track of Adam Smith, researchers continue to deepen and verify the understanding of how transportation infrastructure provides an effective support for economic development. Will you take two minutes to complete a brief survey that will help us to improve our website? China Merchant Pacific 2011 sep 13 vickers(function() { var scribd = document.createElement("script"); scribd.type = "text/javascript"; scribd.async = true; scribd.src = "http://www.scribd.com/javascripts/embed_code/inject.js"; var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(scribd, s); })(); I run a free Singapore Dividend Stock Tracker . Learn more about how Statista can support your business. Chart. But strangely, this profitable monopoly industry reports huge losses year after year. Second, it is necessary to realign the toll operations and management model. First, what of the idea that Expressways and other high standard roads are a social good and should be provided free of charge, paid out of taxes? Now, Jiang is seizing the opportunity to drum up interest in CMHPs shares. This study investigates this genuine problem and attempts to find a solution to it. Although the above arguments favor maintaining the principle of road tolling, a number of issues have arisen in the implementation of policy that may suggest improvements in application. 17, pp. In China, 95.45% of highways are built on a user-paid basis. Distribution of toll road mileage in China from 2017 to 2020, by ownership [Graph]. Please create an employee account to be able to mark statistics as favorites. [16], Li et al. 514518, 2019. Expressway feasibility studies should estimate a matrix of traffic levels, traffic diversion and toll income at various toll rates taking account of elasticity of demand to price of tolls relative to specific alternative roads. [27], respectively, evaluated the maintenance performance and operational efficiency of toll roads, and the empirical test showed that administrative monopoly is an important factor influencing infrastructure operational and maintenance performance. Profit from the additional features of your individual account. CMHP can continue to leverage its parents network and connections to buy more quality toll-road assets either from CMG itself or other third parties.. This special nature is manifested in the bureaucratic organizational system with the integration of political centralization and financial decentralization [49], which can be referred to as an authoritarian system with regional decentralization [50, 51]. In economic terms a similar argument can be made; after an Expressway has been built, the capital cost of construction having been sunk (and irrecoverable) it can be argued that it makes sense to set tolls equal to short-term marginal cost only and maximize use of the new infrastructure. But he intends to fund these deals through placements of new shares. The regression results in columns (I) and (III) show that, after an interaction term is introduced, toll highway density has a positive effect on the TFP of the toll highway sector. However, during 20102017, the compound annual growth rate of toll road mileage is 1.03%, while the annual compound growth rate of the SEC is only 0.56%, which is much smaller than the former. 218, 2019. The variables and are individual effects and random error terms. Road tolling is a productive and beneficial policy and should be retained. There is nothing intrinsically inefficient in having different roads with different toll rates, indeed may be more efficient if the disparities were cost-reflective, though this is probably not the case in China. How well do these arguments stand up against the real and enduring achievements of road tolling policies? Currently, you are using a shared account. The regression results of other control variables are also in line with expectations. The price of agricultural products, for example, is no longer decided by production season, but by fluctuations in transport costs. By the time of his death in 1958 at the age of 95, Albert was . More innovative financing methods accessing private investment may be sought, though is not a full solution for funding Expressways where there is lower traffic density and/or more costly terrain, where financial returns may be lower and more risky. Q. Li, Harm and breaking path of the administrative monopoly for tolling road, Highway, vol. And finally, how much has been the annual collection of various tolls across the country over the years? China chalks up $667-billion debt pile over toll roads By Reuters Staff 2 Min Read SHANGHAI (Reuters) - China's toll roads have stacked up a debt pile of 4.45 trillion yuan ($666.96. "Percentage of Toll Roads in The Overall Road Mileage in China from 2014 to 2020. A number of levels and institutions have been set up, and the increase in economies of scale is first shackled by the operating system. 134142, 2003. Creating Chinas National Trunk Highway System has been an outstanding national achievement. 269, pp. This is because the cash flow of toll-road operators is higher than their net profit, Says Yong. 358367, 2016. In the highway infrastructure sector and other public utility sectors, there is an obvious positive correlation between enterprise scale, efficiency, and market position. As the development of the Expressway system reaches a more mature stage (a total of about 108,000 km is targeted for 2015) some voices in China have been raised against either the principle of road tolls, or their practical application, or both. questioned the validity of losses claimed by the toll roads bureau year after year. For the panel data selected in this paper, the global reference DEA-Malmquist index is used to measure the operational efficiency of Chinas toll roads from 2010 to 2017. Toll Road Operatio in China industry outlook (2022-2027) poll Average industry growth 2022-2027: x.x lock Purchase this report or a membership to unlock the average company profit margin for this industry. and represent two sets of control variables, among which includes some provincial-level control variables: regional urbanization rate , i.e., urban population/total regional population, regional unemployment rate, , proportion of employed persons in the regional road transport industry , i.e., the employment of the regional road transport industry/the total urban employment population; includes some industrial-level control variables, such as the number of toll gates on toll roads, recorded as , road carrying capacity , i.e., natural logarithm of highway freight turnover, labor value level of highway industry, recorded as , i.e., average wages of transportation, storage, and post/average wages of regional cities and towns. Before you leave, wed love to get your feedback on your experience while you were here. Technological Progress Change Index (TC) is 0.9829 while the Efficiency Change Index (EC) is 1.1545. In the context of worldwide governmental system reform, Dan [60] discussed the reform model for Shaanxis comprehensive transportation management system. Are you interested in testing our corporate solutions? Chinas decentralized institutional and funding mechanisms for delivery of the Expressway network have been instrumental. I-635 in Texas is being rebuilt with underground tolls from I-35 to I-45 and is contracted to a CHINESE firm for over $5 billion. Therefore, no significant scale effect has emerged in the toll highway sector over a long period. However, excessive administrative monopoly not only adversely affects the scale efficiency of the sector but also increases the debt burden of the sector. The results of these calculations are shown in Tables 1 and 2 . Last week, Gamuda said it was in favour of accepting the federal government's offer to take over Lingkaran Trans Kota Holdings Bhd . Foreign Companies Are Buying Up American Highways and Bridges Built by U.S. Taxpayers. By end-2010, China had 65,055km of expressways. 1, pp. Want to save some money of your own? 2, pp. Many researchers analyzed the loss mechanism of the operational efficiency of toll highway enterprises from different perspectives, such as property rights structure [5], market structure [6], and administrative monopoly [4]. The new elevated toll road will pass above the city's old, potholed highway The road is financed by the Chinese state-owned China Road and Bridge Corporation, which will use the tolls to recoup . The unique management system of toll highways produces the market structure and property rights structure with Chinese characteristics. In. There have been five U.S. leases of toll roads under a long-term public-private partnership concession agreement. 12, pp. Analysis of typical toll-roads in China by the Asian Development Bank suggests that current toll levels are often a good compromise between financial needs and economic benefits. However, any excess revenues from a specific Expressway can find good use in building new Expressway capacity elsewhere, recognizing that as Expressway development gradually extends and brings economic benefit to more mountainous central and western regions, average traffic density will be lower but the higher proportion of bridge and tunnelling works will increase average construction costs. In column (I), the explained variable is the total factor productivity of toll road industry (). 63, no. They figured that the 4.45 trillion yuan loan debt requires annual interest payments of 267 billion yuan and principal payments of 300 billion yuan. But, Hilton isn't exactly 1005 American-owned, either. The Malmquist model of the global reference proposed by Pastor and Lovell [69] is a Malmquist index calculation method. Global data and statistics, research and publications, and topics in poverty and development. Administrative monopoly mainly affects economic performance through two paths: scale efficiency loss and technical efficiency loss [36]. Statista. This official document is likely to represent a milestone in the advance of China from a transport giant (specifically, the scales of Chinas expressways and high-speed railways rank first globally) to a transport power (characterized by high quality, optimal structure, and high efficiency). The vignette revenues would be consolidated into a pooled revenue at the province level and to support network-wide maintenance and rehabilitation, as well as use the excess funds to cross-subsidies network expansion. In the field of toll highways, a wide range of studies on administrative monopoly and economic performance mainly focuses on the form of administrative monopoly in the toll highway industry and the influence mechanism of administrative monopoly on performance. The nonparametric method is represented by data envelopment analysis (DEA). More and more scholars realize that the root of improving the operational efficiency of infrastructure lies with the institution [10]. The results of the robustness test show that we can still obtain parameter estimation results that are highly consistent with those based on the reference after toll highway density (a proxy variable) is replaced. Highway group companies or highway authorities set up branch offices or management offices, which are responsible for the operation management of specific highway sections. E-470 Toll Road is owned and maintained by the E-470 Public Highway Authority Pikes Peak Highway is owned and maintained by the city of Colorado springs. But I think that is a chicken-and-egg situation, Jiang says of his dealings with officials of CMHPs parent. Logistics costs account for 50 percent of commodity prices, 70 percent of agricultural and sideline products prices. The compensation paid to CMHP in the past has been as high as 50% above the value of the assets. Therefore, the suggestion is to actively pilot a 2-level operating and management mode of branch office-toll station and explore the management mode of large administrative regional branch company-management office-toll station. Adopting the operational model innovation by lowering the cost and increasing efficiency will lead to operational management intensification and help in achieving the goal of realizing industry operational efficiency with economies of scale. 6879, 2013. So what is really behind these huge stated losses? However, beginning with the Jingshen Expressway, tolls are gradually being networked. TCA is comprised of two Joint Powers Authorities formed by the California legislature in 1986 to plan, finance, construct and operate the 73, 133, 241 and 261 Toll Roads in Orange County. As noted, toll collection is currently decentralized based on the tolls established of individual companies or in some cases based on a provincial system under which tolls are collected by the Province and reallocated to the companies operating in the Provinces. This outcome means that the increase in toll road mileage in the western and northeastern provinces has not improved scale efficiency. TII can charge and collect tolls from vehicles under the Roads Act 1993. Delaware There are three toll roads in Delaware: John F. Kennedy Memorial Highway (Delaware Turnpike) Korean War Veterans Memorial Highway U.S. Route 301 (US 301) Who Owns Delaware Toll Roads 53, no. Therefore, to continue improving the economic performance of the toll road industry, it is necessary to govern an excessive administrative monopoly by bringing out the effect of the economies of scale and overall improve the toll road industrys economic performance. Table 9 lists the GMM estimates using panel data. THE recent RM6.2 billion privatisation deal involving four intra-city toll roads in the Klang Valley linked to Gamuda Bhd has turned the spotlight on the major highway concessionaires, especially those that are ultimately owned by Bursa Malaysia-listed companies. An excessively high degree of administrative monopoly brings about a typical X-inefficiency phenomenon, resulting in various problems (e.g., severe rent seeking, barriers to technological progress, weakened enterprise competitiveness, and waste of resources) and the ensuing operational inefficiency of the whole sector. Since there are no toll roads in general in Hainan and Tibet, after removing the Hainan, Tibet, Hong Kong, Macao, and Taiwan regions, this paper selects the remaining 29 provinces as research samples. The historic high reliance on debt finance from State and commercial banks is risky given the likely volatility of interest rates and the large debt-carrying burden which results. The second is the ratio of cumulative capital funds for the construction of governmental loan-payment toll highways to the total investment of the toll highway sector, since cumulative capital funds are completely sourced from local governments and are highly representative of administrative monopoly. The virtual inflation of operating costs has become a bottleneck to the improvement of economic performance in the sector. The multilevel analysis and empirical test above show that these factors affect the transformation from sector scale to TFP or scale efficiency. 4, pp. Yet, it wasnt until July that it obtained approval from the authorities for the purchase of a 51% stake in the Yongtaiwen expressway for RMB 2.2 billion ($442 million). In each Province, some toll-roads and toll-road companies are not generating enough toll revenue to cover their debt payments and operating costs. "Distribution of Toll Road Mileage in China from 2017 to 2020, by Ownership. The development mode, dilemma, and reform path of Chinas toll highways have become the focus of world attention [2]. The government will give us fair compensation because not only are we an SOE [state-owned enterprise] but we are listed, Jiang says. 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