Unlike most other state-owned toll-road operators, however, CMHPs assets arent confined to a specific province. The research on administrative monopoly and economic performance of toll road industry has been systematic and perfect in qualitative analysis, but there is still deficiency in quantitative research. 182184, 2014. JTSE operates 11.57 km length toll road connected to the toll roads operate by BMN, from the Tallo bridge to the Mandai Makassar intersection and providing direct access to the Sultan Hasanuddin International Airport. For the most of congested Expressway corridors, particularly in urban and peri-urban areas, it would be wise to maintain also the option of additional congestion pricing, whether as part of the road tolling system or supplemental to a vignette system, as the function of such a charging system is not just to recover construction loans but to manage traffic levels and reduce congestion. The results of the robustness test show that we can still obtain parameter estimation results that are highly consistent with those based on the reference after toll highway density (a proxy variable) is replaced. That pushed its gearing up from zero to 40%. 24, p. 79, 2017. Distribution of toll road mileage in China from 2017 to 2020, by ownership [Graph]. Traffic volume on China's expressways increased 5.4% year-on-year from May 6 to October 26, according to data from the Ministry of Transportation. However, the positive effect is weakened by fiscal decentralization. This is not just an economic problem and a livelihood issue, but is also related to a countrys political and ethical standards. Gaps remain in the Expressway network and continuation of the NTHS program is both sustainable and desirable. Chang [39] conducted a correlation analysis on the degree of administrative monopoly and economic performance of toll roads, and concluded that there is a negative relationship between them, which preliminarily verified the conclusion that administrative monopoly would cause performance loss. 12531267, 2018. Today, local government debt incurred from the investment in infrastructure (e.g., toll highways) has received increasing attention, as it will bring about hidden trouble for local governments. He figures the threshold for this would be when shares in CMHP rise above their net asset value of 76 cents apiece. If maintenance is inadequate it can deteriorate quite rapidly, particularly in adverse climates or with high axle loads. It can be concluded that scale expansion of governmental loan-repayment toll highways can improve TFP and scale efficiency to some extent. Although Chinas toll highways are world-renowned, they suffer from indisputable operational inefficiencies. Toll plaza at the junction of National Highways G106 and G316 in Tongshan County, Hubei Nearly all Chinese expressways and express routes charge tolls, although they are not often networked from one toll expressway to another. 396, no. X. L. You and S. H. Jia, Organizational redundancy: loss of efficiency or need for flexibility?, South China Journal of Economics, vol. In economic terms a similar argument can be made; after an Expressway has been built, the capital cost of construction having been sunk (and irrecoverable) it can be argued that it makes sense to set tolls equal to short-term marginal cost only and maximize use of the new infrastructure. 88, no. Are the hundreds of millions of yuan in loans really used for new toll road construction? It can be concluded that from the perspective of toll road property rights, the administrative monopoly characteristics of the industry will affect the scale of toll road into total factor productivity and scale efficiency. There is no commonly accepted economic definition of a social good but the term is generally used to refer to goods that have high social benefits and are often provided by the public sector from general revenue free of charge or at minimal cost (such as, in many countries, basic health care and primary education). Statista. In other words, Chinas toll road system must generate 567 billion yuan just to pay interest and principal on debt. The Minister, by Toll Road Order dated April 8, 2002, granted a concession to NROCC to design, finance, construct, maintain and operate Highway 2000 and levy, collect ant retain toll with respect to the toll road. What are the specific expenses that are included in operational and management expenditure? Road infrastructure has a very long life if maintained properly. It should begin contributing to CMHPs bottom line for the full 2HFY2011. H. Z. Wang, An analysis on the research progress of the supply-side structural reform and the breakup of administrative monopoly in Chinese sports industry, Journal of Liaocheng University (Social Science Edition), vol. Serving a quarter of a million drivers each day on The Toll Roads, The Transportation Corridor Agencies continue to meet the region's growing needs for tax-free, congestion-free transportation alternatives. By comparison, Hong Kong-listed Hopewell Highway Infrastructure distributes all of its earnings as dividends. Jasa Marga, the Indonesian state owned enterprise, which operated toll road almost the last three decades. What exactly are the so-called other expenses of up to 10.4 billion yuan ($1.5 billion)? The Spaniards "modernized" a huge network of Native American trails and roads from South America to Louisiana to California and north through Indian Territory during their colonial reign in the Americas. Chinas toll road system is a profitable monopoly industry. 7, pp. [Online]. The best of the best: the portal for top lists & rankings: Strategy and business building for the data-driven economy: Industry-specific and extensively researched technical data (partially from exclusive partnerships). The Malmquist model of the global reference proposed by Pastor and Lovell [69] is a Malmquist index calculation method. Shouldnt the company hold on to its cash ahead of these deals. Yet many countries, probably the majority, have found it difficult or impossible to provide from general budget sources sufficient resources for the optimal maintenance and rehabilitation of roads. Get full access to all features within our Corporate Solutions. The Toll Roads are owned by the state of California and operated by The Transportation Corridor Agencies (TCA). 5, no. H. Y. Wei, Y. D. Zhang, and B. Lin, Research on the efficiency risk of military civilian integration resources in national defense science and technology industry, Science and Technology Management Research, vol. A vignette system may offer other advantages: it may be economical to administer; it would help overcome the criticism of toll variability by automatically equalizing the cost of accessing Expressways across a Province; it would provide an incentive to users to maximize utilization of the Expressways rather than use less safe and more congested parallel roads . Indiana isn't the first time one of Macquarie's bets on American toll roads has gone bad. 266271, 2005. Zhuhai, Huizhou and Dongguan in China's south Guangdong province close to Hong Kong have announced cash rewards for people who report suspected illegal crossings from the Hong Kong Special Administrative Region (HKSAR) amid reports of people fleeing to mainland by road and sea to escape the spread of the contagion, state-run Global Times . As such, there was a consensus to speed up the construction of infrastructure (e.g., highways). Existing studies and evidence show that the economic performance of governmental loan-repayment highway enterprises is the worst in the toll highway sector (in 2018, governmental loan-repayment highways alone incurred an income deficit of 201.85 billion yuan), and such enterprises are universally insufficiently-motivated to reduce costs and improve efficiency. Toll roads now fell under the jurisdiction of public authorities financed by bonds. I tell them the share price is low because of lack of liquidity.. Learn how your comment data is processed. For a country such as China, with annual transport demand growing in double digits, a rapidly growing fleet of road vehicles, but a road network that is far from being complete, the critical policy focus is finance. L. Chen and W. P. Zhu, The economic performance of regional administrative monopoly: an empirical research based on instrumental variable method, Comparative Economic & Social Systems, vol. Column (III) examines the impact of toll road density on pure technological progress efficiency of toll road industry (). 152161, 2019. Diane Sawyer reporting on U.S. bridge projects going to the. Toll roads across the country collect more than 400 billion yuan (US$60 billion) each year. 5, pp. It is also costly to Provinces in the imposition of premature reinstatement or replacement costs. 23, no. Launched in 1990, the program to build the NTHS has delivered an Expressway network of nearly 85,000 km, Class-I highway of 68,000 km, and Class-II highway of 320,000 km, Expressways are multi-functional facilities, used by private cars, public buses and coaches, taxis, paratransit services, own-account goods transport, commercial road haulage services and emergency vehicles (ambulances, police vehicles, fire trucks). Although the above arguments favor maintaining the principle of road tolling, a number of issues have arisen in the implementation of policy that may suggest improvements in application. 4, pp. Evidently, excessive administrative monopoly is the reason that hinders the scale efficiency of toll roads. The administrative monopoly in the toll highway sector, which manifests itself through one authority for one province or one group company in one province, has caused various problems. 71903016 and 71803147) and MOE (Ministry of Education in China) Project of Humanities and Social Sciences (grant no. The vignette revenues would be consolidated into a pooled revenue at the province level and to support network-wide maintenance and rehabilitation, as well as use the excess funds to cross-subsidies network expansion. [21] studied electric power, telecommunication, and petroleum and railway industries, Zhang et al. Moreover, the operation mode of one highway by one company has caused huge losses from scale efficiency and directly suppressed any improvement to the economic performance of the toll highway sector. 23, p. 6831, 2019. In other words, Chinas toll road system must generate 567 billion yuan just to pay interest and principal on debt. China is a global leader in building a modern, high-standard national road network to promote economic development, regional integration and social cohesion. 333, no. 37583769, 2019. Logistics costs account for 50 percent of commodity prices, 70 percent of agricultural and sideline products prices. By the end of 2018, the total length of China's expressway network reached 142,500 kilometers, the world's largest expressway system by length, having surpassed the overall length of the American Interstate Highway System in 2011. At the sector level, two proxy variables are used. 19YJA790097). The numerous studies reach a consensus that a monopoly leads to significant X-inefficiency at different levels. When the administrative monopoly reaches a degree where the MR is equal to the MC, the effect of the administrative monopoly on the toll highway sector is optimal or rather appropriate. Over the past 12 months, covering much of 2018, revenue is up to 10.1 billion CNY. S. F. Bi, A review of economic efficiency theory, Economic Review, vol. Queensland toll roads are a fast and safe way to get around. T. H. Zhang and S. H. Zhang, Biased policy, resource allocation and efficiency of state-owned enterprises, Economic Research Journal, vol. NROCC currently falls under the Ministry of Economic Growth and Job Creation. As early as Dec. 24, 2014, The Beijing News questioned the validity of losses claimed by the toll roads bureau year after year. 13, 1991. For one thing, toll rates are determined by individual provincial governments. Therefore, the premise of the role of the market mechanism is for the government to restructure its functions and role in the toll road industry. Y. Crozet and E. Bougna, Towards a liberalised European rail transport: analysing and modelling the impact of competition on productive efficiency, Research in Transportation Economics, vol. Among the toll highways, expressways are characterized by the highest technical standard, the highest construction cost, and the highest operation efficiency, and they account for at least 80% of toll highways. G. Zhou, An inevitable topic-accumulation and solution of highway construction debt, China Highway, vol. Highway group companies or highway authorities set up branch offices or management offices, which are responsible for the operation management of specific highway sections. Are non-toll road loans, and even urban road loans, also included in the toll road repayments? Notify me of follow-up comments by email. These results imply that the total factor productivity of toll road industry will increase significantly with the increase of toll road scale, but this is mainly due to the improvement of pure technical progress efficiency, rather than the improvement of scale efficiency. The Harris County Toll Road Authority ( HCTRA, pronounced "Hectra") maintains and operates a 103-mile (165.8 km) toll road system in the Houston / Harris County area. Yongtaiwen is a good road too. The Guihuang expressway links the provincial capital, Guiyang, to the airport and also to the popular Huangguoshu waterfall. According to the analyst, CMHP has distributed no less than 50% of its earnings since it acquired its first set of toll-road assets. Maintenance and rehabilitation costs in China will inevitable increase over time and it is important to recognize that the Expressway system will face a big financial challenge when the concentration of road building in the last 20 years generates a corresponding spike in renewal needs in the future. [11] and Wei et al. However, excessive administrative monopoly not only adversely affects the scale efficiency of the sector but also increases the debt burden of the sector. This includes personalizing content and advertising. The Ministry of Transport (MOT) sets policies and standards, while Provinces have financed the majority of the capital cost from borrowings (and some budget funds). Yet, it wasnt until July that it obtained approval from the authorities for the purchase of a 51% stake in the Yongtaiwen expressway for RMB 2.2 billion ($442 million). 10761151, 2011. The forms of administrative monopoly in the toll highway industry mainly include the unity of government and enterprise, and the failure of regulation caused by it [4]; the government uses administrative power to exclude market competition in the concession stage [8]; and the hierarchical management system of toll highways. Copyright 2021 Yan Xu et al. Creating Chinas National Trunk Highway System has been an outstanding national achievement. 157179, 2019. Z. Dai, L. Guo, and Q. Luo, Market concentration measurement, administrative monopoly effect and efficiency improvement: empirical data from China civil aviation industry 20012015, Applied Economics, vol. Parent commenter can toggle ^NSFW or ^delete. Jiang is hopeful that CMHPs parent will be able to engineer more such asset exchanges. F. F. N. Van Hulten, Probing the Limits of the Economic Basement in Northwest Europe, American Association of Petroleum Geologists, International Conference and Exhibition, London, UK, 2005. Y. Pu and H. F. Wang, Effect mechanism of ownership structure on technical efficiency of agricultural listed company, Technology Economics, vol. PT Waskita Transjawa Toll Road owns shares in three toll road business enterprises that operate Kanci - Pejagan, Pejagan - Pemalang, and Pasuruan - Probolinggo toll roads. How much of the loan payments is applied to the buildings and compounds belonging to highway management departments? There have been five U.S. leases of toll roads under a long-term public-private partnership concession agreement.

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