Shadow toll explained

A shadow toll is a contractual payment made by a government per driver using a road to a private company that operates a road built or maintained using private finance initiative funding.[1] Payments are based, at least in part, on the number of vehicles using a section of road, often over a 20- to 30-year period. The shadow tolls or per vehicle fees are paid directly to the company without intervention or direct payment from the users.[2]

On more recent shadow toll schemes in the United Kingdom, payments reduce as the number of vehicles increase, to encourage availability of the road rather than the number of vehicles carried.

History

First proposed by the UK Government in 1993, shadow tolls have been widely used in the UK and also to a more limited extent in other countries, including Belgium, Canada, Finland, Netherlands, Spain and the United States. Portugal introduced schemes in 1999 but replaced these with the public tolls in 2004.

The use of shadow tolls in the UK has reduced over time with PFI funded project payments being made based primarily on the availability of the road, and not on the number of vehicles using it. Beyond a certain number of vehicles, the 'toll' paid by the government in more recent schemes is zero.[3]

Criticism

The World Bank observes that transaction costs 'can be very high' due to the difficulties surrounding legal arrangements and the need for continuous vehicle counts and that use of shadow tolls has led to significant criticism in The Netherlands.[4]

The Portuguese government removed shadow tolls in 2004 after finding that "payment obligations in connection with the shadow toll system were not compatible with the need to spend on improving and maintaining the other national motorways".[5]

List of shadow toll roads

Europe

United Kingdom
Belgium
Finland
Netherlands
Spain

Oceania

Australia

Middle East

Israel

North America

Canada

See also

External links

External websites in relation to North American shadow tolls

Notes and References

  1. Web site: FHWA - Center for Innovative Finance Support - Study Reports - Selective Use of Shadow Tolls .
  2. News: Compelling case for UK road charging, IFS study says. BBC News. 2012-05-14. 2012-05-20.
  3. Web site: Road Projects. In recent UK projects there has been movement away from demand-based payment mechanisms to those which more clearly link the project company’s entitlement to revenues, which are still generated by payments from the host government, to its achievement of certain pre-agreed, quantifiable availability, performance and service/output criteria. These criteria might include: ‘ride quality’, whether sections of the road are closed (in whole or in part) or traffic flow is otherwise impeded, safety performance and/or traffic monitoring.. FreshFields. 2012-04-09. dead. https://web.archive.org/web/20081206173111/http://www.freshfields.com/publications/pdfs/2007/may28/18802.pdf. 6 December 2008. dmy-all.
  4. Web site: Toll Roads and Concessions. World Bank. The benefits of this system do not therefore stem from the development of a new source of funds, or from making users internalize the external costs of their travel, but rather from: the Government commitment to continued financial support over several years, the involvement of the private sector and their responsibility for efficient delivery of service... The shadow toll approach does not require traffic to slow for toll collection (and does not require additional land take for widening the road around toll booths). However because it requires the Government and private sector to agree the vehicle counts and because of the difficulties surrounding legal arrangements, the transaction costs can be very high. This has led to significant criticism of the approach in the Netherlands.. 2012-04-08.
  5. Web site: Portugal: Shadow Toll System is Replaced.
  6. Web site: M1-A1 Link Road (Lofthouse to Bramham). Highways Agency. 2012-04-08. dead. https://web.archive.org/web/20120301002336/http://www.highways.gov.uk/roads/projects/5451.aspx. 1 March 2012. dmy-all.
  7. Web site: M40 Denham to Warwick. Highways Agency. 2012-04-08. dead. https://web.archive.org/web/20120406170233/http://www.highways.gov.uk/roads/projects/3769.aspx. 6 April 2012. dmy-all.
  8. Web site: M80 Stepps to Haggs, Scotland. 2012-04-08. dead. https://web.archive.org/web/20130304235311/http://www.pi.bilfinger.com/C12573D8003E9552/CurrentBaseLink/W27NKDVW511DEBBEN. 4 March 2013. dmy-all.
  9. Web site: A1 Darrington to Dishforth. Highways Agency. 2012-04-08. dead. https://web.archive.org/web/20100417222742/http://www.highways.gov.uk/roads/projects/5541.aspx. 17 April 2010. dmy-all.
  10. Web site: A1(M) Alconbury to Peterborough. Highways Agency. 2012-04-08. dead. https://web.archive.org/web/20110827095144/http://www.highways.gov.uk/roads/projects/4442.aspx. 27 August 2011. dmy-all.
  11. Web site: DBFO Briefing Pack - 2b - A13 Thames Gateway DBFO project fact sheets. http://webarchive.nationalarchives.gov.uk/20101111013919/http://www.highways.gov.uk/roads/2745.aspx#e. dead. 2010-11-11. Highways Agency. 2012-04-08.
  12. Web site: A19 Dishforth to Tyne Tunnel. Highways Agency. 2012-04-08. dead. https://web.archive.org/web/20120329130049/http://www.highways.gov.uk/roads/projects/5283.aspx. 29 March 2012. dmy-all.
  13. Web site: A249 Stockbury (M2) to Sheerness DBFO Contract. Highways Agency. 2012-04-08. dead. https://web.archive.org/web/20120406222740/http://www.highways.gov.uk/roads/projects/3981.aspx. 6 April 2012. dmy-all.
  14. Web site: A30 Exeter to Bere Regis. Highways Agency. 2012-04-08. dead. http://webarchive.nationalarchives.gov.uk/20120810121037/http://www.highways.gov.uk/roads/projects/3505.aspx. 10 August 2012. dmy-all.
  15. Web site: A419/A417 Swindon to Gloucester. Highways Agency. 2012-04-08. dead. https://web.archive.org/web/20120204040347/http://www.highways.gov.uk/roads/projects/3590.aspx. 4 February 2012. dmy-all.
  16. Web site: A50/A564 Stoke to Derby Link. Highways Agency. 2012-04-08. dead. https://web.archive.org/web/20101220051836/http://www.highways.gov.uk/roads/projects/4387.aspx. 20 December 2010. dmy-all.
  17. Web site: The shadow A55 toll that must be paid every year and is costing taxpayers millions. North Wales Live / Daily Post. 2022-02-24. 2021-09-03.
  18. Web site: A69 Carlisle to Newcastle. Highways Agency. 2012-04-08. dead. https://web.archive.org/web/20120116135105/http://www.highways.gov.uk/roads/projects/5095.aspx. 16 January 2012. dmy-all.
  19. Web site: NEW BRUNSWICK:Tolls Ended on Fredericton-Moncton TR. tollroadnews. Maritime Roads Development Corp (MRDC), the Dragados-led concessionaire has gotten a check for $20m for compensation, and for the remainder of its 30 year concession it will be paid by the provincial government on a per vehicle basis – ‘shadow tolls.’ MRDC will install inductive loops in the pavement to count and classify vehicles at four points along the road, each close to the two constructed and two planned toll plazas. Vehicles will be classed as cars and larger vehicles with a shadow toll due MRDC of $4 and $12 for each full passage. This compares to about $6 and $18 real tolls in the concession agreement. There is a cap on the amount of shadow toll revenues, but no downside guarantees. The absence of tolls will encourage traffic on the motorway which will save both distance (29km) and time as compared to existing alternative routes.. 2012-04-08. dead. https://web.archive.org/web/20080904220407/http://www.tollroadsnews.com/node/2583. 4 September 2008. dmy-all.

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