ASECAP: Cooperation needed for better toll-road risk management

Toll operators must offer a level of service for which drivers are prepared to pay because in many cases, drivers have alternative free-use routes. Incentives to attract drivers onto toll roads must include shorter and reliable journey times as well smooth and trouble free travel – all at an affordable price. Private companies running toll roads face the same difficulties as any other commercial entity, in particular financing construction before any toll revenue can be collected. Hardly surprising that fin
May 31, 2017 Read time: 3 mins
Guy Chetrit: PPPs may not be the answer
Toll operators must offer a level of service for which drivers are prepared to pay because in many cases, drivers have alternative free-use routes. Incentives to attract drivers onto toll roads must include shorter and reliable journey times as well smooth and trouble free travel – all at an affordable price.


Private companies running toll roads face the same difficulties as any other commercial entity, in particular financing construction before any toll revenue can be collected. Hardly surprising that financing was one of the major themes at a recent Study and Information Days event put on by 1103 ASECAP, the European association of toll concessionaires.

The stakes are high. ASECAP’s members operate more than 50,000km of tolled highways. Across the Atlantic, members of the International Bridge Tunnel and Turnpike Association (2793 IBTTA), ASECAP’s North American equivalent, operate more than 8,500km of highway.

A client’s tender document for a planned toll road includes all the details including the road’s proposed route and design, land surveys and – importantly - estimates of expected traffic volumes. Potential bidders base their calculations upon this data.

However, should there be significant differences between the details provided and reality, the winning bidder can make a claim for changes to the contract – especially in terms of payment. The construction phase represents one of the biggest risks - particularly as the road may not be open and therefore the concessionaire would not be receiving any toll revenue.

The moment the contract is signed, “the partnership ends and the fighting begins. Once the contract is signed it’s a zero-sum game: my gain is your loss,” said José Viegas, secretary general of the 1102 International Transport Forum.

He urged delegates, which included local authorities, concessionaires and contractors, to cooperate and not let lawyers take control.

One of the biggest changes in the tolling industry working its way through the system is European Union Directive 2014/23/EU which redefines the European model of a concession. In the new regulations, the concessionaire must accept the risk of failure. In tolling that often relates to unexpected difficulties during construction of the volume of traffic that use the new road. This introduces a degree of uncertainly which, Guy Chetrit of the 1054 European Investment bank, told the conference, means “PPPs [public-private partnerships] are not the right vehicle for funding toll road construction as a PPP needs certainty.”

For more information on companies in this article

Related Content

  • Sourcing road financing for East Africa’s network expansion
    December 4, 2015
    East Africa’s ambitious road expansion programme is seeing the network expand significantly – Shem Oirere writes The East Africa countries of Kenya, Tanzania, Uganda and Rwanda have announced ambitious road sector expansion plans in the 2015/16 financial year. This is despite their national budgets being weighed down by huge deficits and persisting lack of capacity to spend resources allocated to the sector in previous years. With the huge budget deficits, the countries will have to look for alternati
    Read More
  • ERF sets out plans for 2014 symposium
    May 19, 2014
    The road infrastructure sector, in its strive to deliver better products for its customers, such as road authorities, has worked hard to develop innovative solutions. These are intended to be more durable, making them more cost-effective in the long-run, and also more environmentally friendly. In its efforts, however, it has often been frustrated by a rigid legal framework that leaves little room for manoeuvre to its customers. Until last year, existing rules for public procurement at EU level gave almost u
    Read More
  • Traffic control to beat congestion
    November 6, 2012
    Max Lay discusses how congestion has posed problems throughout history from early civilisation to the present day One of the earliest known human settlements was at the Springs of Elisha at Jericho. Inevitably, locals collecting fresh water from the springs would encounter other water carriers. When a path was too narrow, or access to it was too limited, or it crossed another path, some carriers would find it necessary to stand aside for others. Priority in such cases might be based on common courtesy and p
    Read More
  • Contracts are about to be signed for the Fehmarnbelt Fixed Link
    March 13, 2015
    Nearly eight years after Denmark and Germany agreed to construct a major undersea road and rail tunnel, the first contracts are about to be signed. David Arminas reports. Construction is due to start later this year on one of Europe’s most ambitious, as well as the world’s longest, road and rail tunnels, the 17.6km Fehmarnbelt Fixed Link between Germany and Denmark. Fehmarnbelt is expected to cost around US$7.5 billion and be five times the length of the Øresund tunnel between the Danish capital Copenhagen
    Read More

Highlighted Content