Asian Toll Road Development Program (1999)
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The World Bank Ministry of Construction, Japan Asian Toll Road Development Program Review of Recent Toll Road Experience in Selected Countries and Preliminary Tool Kit for Toll Road Development Draft Final Report May 1999 in association with Highway Planning Inc., and Value Management Institute, Inc. ACKNOWLEDGMENTS This report was prepared based on a study financed by the World Bank for the Asian Toll Road Development Program. It was prepared under the direction of the World Bank Steering Committee chaired by Alfred Nickesen; the Steering Committee of the Ministry of Construction, Japan, headed by Junichi Matoba; and the Japanese Advisory Committee headed by Prof. Yataro Fujii. They have all provided valuable assistance and comments to the authors during the study period. The authors also would like to acknowledge various others including Setsuo Hirai of the World Bank, the Task Leader of this project; the advisory team of the Expressway Technology Center and the Express Highway Research Foundation headed by Yoshimichi Kawasumi; and Mitchel Stanfield of MSA. Their assistance in information collection and comments on the earlier drafts has been helpful. Finally, the authors wish to extend their gratitude to a number of individuals who kindly shared their valuable experience and insights with us during the country visits to the Hong Kong Special Administrative Region, Singapore, Malaysia, Indonesia, Thailand, and the Philippines. A complete list of the members of the Steering and Advisory Committees mentioned above, and a list of individuals who were interviewed by the consultants are included in the Appendicies of this report. The primary authors of this report were Chiaki Kuranami, Bruce P. Winston, and Jeffrey J. Sriver of PADECO Co., Ltd.; Masayoshi Iwasaki of Value Management Institute, Inc.; and Shigeru Iwama of Highway Planning Inc. Kenji Kimura and Yoshiya Nakagawa of PADECO assisted in the preparation of earlier drafts. Baker & Mackenzie International Lawyers of Singapore provided the study team with a useful resource paper on the legal and institutional framework for toll road concessions in China, Indonesia, Thailand, Malaysia, and the Philippines. Critical support during the field visit portion of this study was provided by Handoko Ngadiman in Indonesia, Dr. Tai Tuck Leong in Malaysia, and Victor E.S. Dato in the Philippines. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors and should not be attributed in any manner to the World Bank or Ministry of Construction, Japan, nor to their affiliated organizations, members of the Steering and Advisory Committees, or any other individuals mentioned above. Seminar on Asian Toll Road Development in an Era of Financial Crisis Table of Contents Table of Contents Acknowledgments Table of Contents PART I: EXECUTIVE REPORT A. Study Background ................................................................................................... I - 1 B. Toll Road Development Trends in Selected Countries ............................................. I - 2 C. Key Issues and Lessons Learned ............................................................................. I - 6 PART II: PRELIMINARY TOOL KIT; ISSUES AND LESSONS A. Introduction ............................................................................................................ II - 1 B. Planning and Institutional Issues ............................................................................. II - 4 C. Legal and Regulatory Frameworks ....................................................................... II - 11 D. Concession Contracts ........................................................................................... II - 18 E. Government Support ............................................................................................ II - 21 F. Traffic Forecasting ............................................................................................... II - 27 G. Setting and Adjusting Toll Rates .......................................................................... II - 29 H. Financing Structure and Sources .......................................................................... II - 34 I. Public Acceptance ................................................................................................ II - 40 J. Role of Donor Agencies ....................................................................................... II - 42 PART III: CASE STUDIES 1. Argentina: Toll Concessions for Maintenance, Rehabilitation, and Construction ..........................................................................................................III - 1 2. Brazil: Infrastructure Priorities Uncertain in Wake of Economic Crisis..................III - 6 3. Chile: Mobilization of the Private Sector for Modernization of the Road Sector .III - 12 4. China: Emergence of a New Policy Framework with Support from the World Bank ...........................................................................................III - 16 5. Colombia: The World Bank Assisted Toll Road Concession Project ....................III - 25 6. France: A Process of Trial and Error ...................................................................III - 32 7. Hong Kong SAR: A Sophisticated Toll Adjustment Mechanism— But is it Enough?..................................................................................................III - 39 8. Hungary: Toward Public-Private Partnerships? ...................................................III - 49 9. Indonesia: Coping with Political and Financial Crises.........................................III - 58 10. Italy: Toll Motorway Development Through Semi-Public Concessionaires..........III - 69 11. Japan: Expressway Network Development through Public Corporations ............III - 75 12. Malaysia: Public-Private Partnerships in an “Asian Way”....................................III - 84 13. Mexico: The Rapid Rise (and Fall) of Private Toll Road Development ...............III - 99 14. Philippines: Model Legislation with Mixed Implementation .............................III - 109 i Seminar on Asian Toll Road Development in an Era of Financial Crisis Table of Contents 15. Spain: A Revival of Toll Road Concessions ......................................................III - 126 16. Thailand: Weak Inter-Agency Coordination and Delayed Implementation .......III - 132 17. United Kingdom: Structured Experiments in Public-Private Partnership ..........III - 145 18. United States: Reluctance to Toll in the Land of the Free (Ride) .......................III - 157 LIST OF APPENDICES A. List of the Members of Bank Steering Committee, Japanese Advisory Committee, and MOCJ Steering Committee................................A-1 B. Introduction Letters Prepared and Sent by the World Bank and MOCJ ..................... B-1 C. List of Requested Information and Detailed Points of Discussion ............................. C-1 D. List of Toll Road Projects in Selected Asian Countries .............................................D-1 E. List of Interviewees and Agencies contacted during the Field Visits ......................... E-1 F. List of Institutions Contacted by Telephone, Fax, or Internet for Supplementary Data Collection ...........................................................F-1 G. Impact of Asian Financial Crisis on Toll Road Development in Selected Asian Countries ...........................................G-1 H. Toll Road BOT Model ..............................................................................................H-1 LIST OF TABLES Part I Table 1 Indicators of Toll Road Development in 18 Selected Economies ..................... I - 2 Table 2 Advantages and Disadvantages of Alternative Forms of Toll Road Operating Entities............................. I - 8 Table 3 Essential Elements of a Toll Road Concession Contract ................................ I - 10 Table 4 Advantages and Disadvantages of Common Government Support Measures for Toll Road Development ..................I - 11 Table 5 Selected Examples of Toll Adjustment Procedures ........................................ I - 13 Part II Table 1 Long-Term Planning Framework of Countries with Developed Toll Road Systems................................... II - 5 Table 2 Main Features of Public Corporations in Different Countries.......................... II - 8 Part III Table 2-1 The Five First-Phase Projects (Federal Program)...........................................III - 7 Table 2-2 Details of the Initial São Paulo State Projects................................................III - 9 Table 3-1 Indicative Chilean Toll Road Concessions...................................................III - 13 Table 4-1 List of China’s Planned National Trunk Highways ......................................III - 17 Table 5-1 Comparison of Government Undertakings in Colombian Road Concessions .......................................................................................III - 28 Table 9-1 Toll Road Projects to be Continued or Rescheduled.....................................III - 63 Table 11-1 Budgets of JHPC, MEPC, HEPC, and HSBA in Fiscal 1997 .......................III - 77 Table 12-1 Status of Privately-Financed Toll Roads, February 1999..............................III - 92 ii Seminar on Asian Toll Road Development in an Era of Financial Crisis Table of Contents Table 16-1 Summary of DOH Toll Roads in Operation or Under Construction, January 1999 ...............................................III