TOLL FINANCING: HOW TO REDUCE THE OPERATING COSTS?.

Toll financing has been used in Norway to finance new roads as a supplement to public funds. The net revenue from toll financing makes up to 25-35% of the annual budgets for road construction. An increasing proportion of the tolls are collected using electronic fee collection (EFC). The AutoPASS tag is used in all new toll projects. The Norwegian Public Roads Administration conducted a study to establish a cost function that could identify the main cost drivers in toll projects. The cost function covered the following variables: total number of paying vehicles, total debts, number of lanes in the toll station, number of years since the opening of the project, and percentage of vehicles using on board units (OBUs). The larger the project the lower the operating costs. The number of lanes was the most important cost driver. The introduction of the AutoPASS tag has reduced the need for cash handling and staff. The results showed that the cost of toll financing is lower than public finance when the traffic level is high and the toll is low. The key characteristics for minimising the operating costs were identified as high traffic levels, few lanes with no toll booths and coin machines, EFC and a high OBU share, tolling in urban rather than rural areas, and no passenger charging.