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Project to Support Private Highway Management

Project to Support Private Highway Management

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Author Jihyung PARK, Hyejinh LEE Date August 31, 2019
Publisher The Korea Transport Institute Page(s)
Keywords Private Highway, Traffic policy
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As the Korean Government has established a national political agenda called the ‘Public Enhancement of the National Highways Network’, the expensive tolls on private highways, which are toll roads managed by the private sector, are identified as one of the main flaws in publicness. The average toll of seven of the major private highways was 1.60 times higher than those of national roads as of 2018. It is clear that the roadmap for toll management is needed to achieve real progress. Thus, this report was initiated to establish national strategies in order to enhance the publicness of a private highway by reducing tolls.
While many experts have emphasized the publicness of roads, the research on specific factors of road publicness has not been carried out. This report defines the definition and specific requisites of the publicness of private roads. AFter this national policies and strategies are reviewed based on the definition of the publicness of private roads. Throughout this process, the paper reveals the links between the publicness of roads and tolls. Publicness should even be considered in various ways. Higher tolls are the main obstacle of enhancing road publicness, especially on Korean road networks because there is no significant improvement in the service quality for private roads. In order to have fair services for both private and national roads, the policymakers should manage the level of tolls on private roads based on the service quality of roads.
The main issue of management policies for private highways is the private roads of the operation. Unlike national highways, the private highway have a variety of aspects such as tolls, traffic, and operating expenses. This is attributed to each characteristic of the private companies that run those roads. The guarantee of an enforcement agreement, including a dividend rate, sometimes overrides the publicness of roads. Eventually, the specific strategies considering details of each private road section must be launched to manage tolls in private roads to enhance the publicness of private highways.
This report developed specific strategies for reducing and controlling tolls in each private road sector. Strategies are developed based on case studies. The report classified toll-cut methods based on case studies and identifies the necessary conditions and requirements for applying the methods. New toll-cut methods were also developed using expert advice. As a result, the reports suggested 6 types of methods for lowering tolls.
Specific strategies for the road section were deduced by financial analysis based on cash flow following five steps. First, the report prioritized the private road sectors based on the level of tolls. In the second step, multiple potential methods were adopted before financial feasibility. Each private road section has multiple alternatives in this step. In the third step, financial feasibility decides the realistic possibility of alternatives. An alternative that shows the highest feasibility was adopted for the roadmap as an ideal strategy. Following this, a specific process was arranged to push forward a plan.
As a result, the roadmap includes not only strategies but also time tables to implement strategies. The time table suggested a sequential process. This is because resources, such as manpower and budget, were limited. The roadmap shows that road sections with high tolls should be moved forward with priority. In addition, this report also suggests the policies for a complementing roadmap such as the utilization of specialized institutions or amendments to related legislation. The government is able to establish a comprehensive toll management system in Korea by referring to the various alternatives and strategies.