PRIVATE TOLL ROADS IN THE UNITED STATES: THE EARLY EXPERIENCE OF CALIFORNIA AND VIRGINIA

A growing number of states have expressed interest in privately financed, built and operated toll roads as a way of quickly and economically increasing highway capacity. This report assesses the prospects for private toll roads in the United States by examining the experience of five private toll proposals in Virginia and California. Although none of these five projects has been built yet, they are the most advanced proposals of their type and two are close to construction. Private toll roads are unlikely to be a significant portion of the U.S. highway system in terms of either mileage or dollar investment. The most important limitations are (1) the sheer size of the existing U.S. road system, which means that many of the potential opportunities for profitable toll roads have already been preempted, and (2) the difficulties of attracting landowner contributions or government aid to supplement tolls. Tolling may not be politically acceptable in some situations and the high costs of delays will make private investors avoid roads with significant environmental or siting opposition. Nevertheless, private toll roads may make a contribution far greater than their mileage or investment by serving as a benchmark against which the performance of public highway authorities can be measured and stimulated. The principle advantages are not likely to be in lower cost construction or operation or in bringing some roads on stream faster than the public sector could, although these may sometimes prove to be the case. The main contribution of private toll roads is more likely to be their willingness to be more innovative, more willing to explore new technologies and techniques.