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Reason Foundation

How to Enable Private Toll Road Development

Robert Poole
May 1, 1993

Executive Summary

By using the private sector to finance and operate highway, bridge, and tunnel facilities, states can supplement limited public-sector resources. There are a number of possible modes of public/private partnerships, for both the creation of new facilities and the rebuilding or upgrading of existing facilities.

Public/private partnerships such as the use of private tollways offer significant economic benefits. Private capital can make up some or all of the shortfall in America's highway investment, thus resulting in improved transportation (via congestion relief and improved road quality). Thanks to provisions in the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), states can now use private capital to match federal highway funds, bringing about significant additional investment. The sale or lease of some existing highway, bridge, or tunnel facilities can also provide a new source of state revenues for transportation or other purposes.

Thus far, five states and Puerto Rico have enacted private tollway legislation, and a number of others are considering doing so, especially following enactment of ISTEA's tollway public/private partnership provisions. Many leading engineering and construction firms and investment banking firms are already involved in privatized infrastructure projects, either at home or abroad.

This report addresses a number of key public policy issues involved with private tollways, including economic regulation, land acquisition, environmental reviews, labor issues, public control, and opposition to tolls. Also included are previous outlined tollway legislation and ways to avoid them. To this end, suggested model legislation which could be adapted to any state is included.


Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy

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