International Handbook of Network Industries
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International Handbook of Network Industries

The Liberalization of Infrastructure

Edited by Matthias Finger and Rolf W. Künneke

This extensive, state-of-the-art Handbook provides a comprehensive overview of the various experiences of liberalization across different sectors, regions and disciplines.
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Chapter 15: Road Infrastructure and Institutional Reform: Tolling and Pricing

David A. Hensher and Demi Chung


David A. Hensher and Demi Chung INTRODUCTION The provision of road infrastructure globally is undergoing major institutional change as governments increasingly put budgetary constraints on traditional sources of public sector financing. The funding of roads from common sources (for example, fuel taxes) is becoming more problematic than ever before. While in some jurisdictions it is a matter of allocation, in other contexts it is a more serious concern about the total amount available to allocate. In California, for example, a 2007 Road User Fee Task Force Program issued a White Paper from the Californian Performance Review. Initiated by the Californian Governor and reporting back directly to the Governor’s Office, it has been promoted in response to the diminished proceeds from fuel taxes. Funding ‘by the gallon’ from fueluse taxes no longer suffices, despite some additional Federal Government contributions. Paying by the kilometre is now on the political agendas of many countries. The ‘new’ funding sources are primarily private capital and road user charges. The former is being increasingly mobilized, with the European Commission suggesting that 20 per cent of the trans-European network should be financed from private capital. The growth in congestion in many urban areas accompanied by increased emissions (air pollution and enhanced greenhouse gas) from cars and trucks has refocused interest on user charging, to both reflect efficient internal cost recovery as well as to internalize the increasingly damaging negative externalities of road transport activity. Kilometre fee development (all networks) with or without fuel tax compensation, is an...

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