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China's first expressway hikes tolls to raise funds for expansion

(Xinhua)
Updated: 2009-04-18 11:02

Ma Yinghong got a surprise on his way to a friend's wedding this week, when he found that the toll for his trip on the Shenyang-Dalian Expressway had risen to 155 yuan ($22.50) from 120 yuan.

Staff at the toll booth showed Ma a notice on the wall, which said that tolls on all 15 expressways in Liaoning province had risen about 20 percent on April 10.

"Why did they raise the tolls?" asked the bank clerk, who lives in the provincial capital of Shenyang. He was headed to the coastal city of Dalian for the wedding.

Liu Mingzhu, deputy transport chief of Liaoning, told Xinhua Friday that the tolls were raised because the transport administration needed more money for debt service.

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The 348-kilometer expressway, China's first, was built starting in 1984. But that expressway, and the 14 others built since then, are no longer adequate for the traffic in Liaoning.

Building more roads meant the province would have to borrow about 90.6 billion yuan, which would mean annual debt service of 7 billion yuan. But the provincial expressways' annual revenues are only about that much, so almost nothing would be left over for maintenance and other expenditures, the official said.

The province had 2,700 km of expressways as of the end of 2008. Another 1,300 km are either under construction or planned, at a total cost of 16 billion yuan.

"When tolls fail to cover costs, the authorities will raise tolls to ease the burden," said Xiao Xingzhi, a professor at the Research Academy of Economic and Social Development, Dongbei University of Finance and Economics.

Xiao said he was concerned that higher tolls might keep drivers off expressways, reducing revenue and worsening the debt situation. He also expressed concern that other parts of China would follow Liaoning in raising tolls.

The Shenyang Jingwei Passenger Transport Company, which operates more than 100 routes, faces a deficit because of the higher tolls in Liaoning. A manager surnamed Sun said it would cost the company an extra 3 million yuan a year to pay the higher tolls.

Ma, who owns a car and often travels between Shenyang and Dalian, said he would avoid travel on expressways in the future.

In 2004, China drew up a regulation on highway tolls that stipulates a maximum of 15 years of toll collection after a highway opens. When the 15 years is up, the highway is supposed to be free for all.

The Shenyang-Dalian Expressway cost 2.2 billion yuan and fully opened to traffic in 1990. It underwent a 7.2 billion-yuan renovation from 2002 to 2004, expanding from four lanes to eight.

Cao Wenbin, head of the provincial expressways administration, said the province had no individual debt service schedule for each expressway, and it had not set a date to abolish tolls on the Shenyang-Dalian Expressway.

All expressways in Liaoning are publicly owned. Public-private partnerships are common in other parts of China.

At the end of 2008, there were 60,300 km of expressways in China, the second-largest amount in the world after the United States, which has nearly 100,000 km.