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467502-1 Report Abstract

Analysis of Input Variables for a Pre-Feasibility Evaluation Model for Toll Highways

Juan J. Orozco and B. Frank McCullough, University of Texas at Austin, May 1998, 100 pp. (467502-1)

In recent years, private industry has been more involved in highway financing and operation. Many countries have started to apply new or improved strategies to promote the development of highway projects using sources other than the State. The most widely used concept is the scheme known as Build-Operate-Transfer (B-O-T). The major problem related to private highway participation is the high financial risk involved. This is caused mainly by the difficulty to forecast future revenue because the toll traffic usage, which is the major source of income, is hard to predict accurately. This report analyzes the main variables affecting a toll highway project, and develops mathematical models that describe their behavior. These models can serve as a tool in the decision-making process during the planning and operation of the facility. This study focuses on the development of a toll traffic estimation model based on the attributes of the highway and the elasticity of the demand. The goal is to estimate the amount of traffic that could be diverted to the toll facility in an existing corridor with a free access road as an alternate route. Some possible methods to estimate the toll price are discussed as well as an analysis to determine the optimum toll. The Mexican experience is used as a case study to develop empirical models.

Keywords: Build-Operate-Transfer (B-O-T), Mexico Concession Scheme, Case Study, Average Daily Traffic (ADT), Toll Roads, Free Access Roads, Toll Elasticity

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Reference Report #467502-1