Toll Policy and Feasibility Studies
Tolplan has performed about 10 major toll policy studies over a period of more than 20 years, covering policy issues such as the appropriate role or an increased role of toll financing, an increased role for the private sector in the application of toll financing and many vehicle classification and light and heavy vehicle toll tariff policy studies.
The toll feasibility study services offered by Tolplan are unique in that it combines transportation engineering/economics and financial analysis to offer both modelling of potential toll road traffic and traffic reaction to various levels of toll and financial modelling for State and Build-Operate-Transfer (BOT) toll policy studies.
Tolplan has a proud record of accurate modelling of potential toll road traffic and its reaction to toll as well as accurate financial modelling for both State and Build-Operate-Transfer toll projects. Its sound predictions of toll road traffic and financial performance for South African State toll roads over almost 3 decades is a prime example of this ability.
A toll road feasibility study usually involves the following process:
- formulation of alternative tolling strategies
- formulation of potential tariff discount strategies for affected local and frequent user groups
- the execution of traffic and origin-destination surveys
- determination of benefits likely to be perceived by potential toll road users
- modelling of potential toll road traffic and, more specifically, the reaction of traffic to various toll levels, using an appropriate traffic model such as VISUM or SATURN determination of toll-related capital, operating and maintenance costs. Determination of revenue-maximising toll tariffs and/or tariffs for project feasibility.
- financial modelling, analysis and evaluation of toll projects and alternative toll strategies.
The development of an appropriate tolling strategy is a vital prerequisite for the successful and efficient implementation of toll financing. Tolplan has significant experience in this regard, having formulated and analysed the equitability and financial feasibility of alternative toll strategies in more than 50 toll road feasibility studies. Apart from numerous toll roads with conventional toll plazas, Tolplan was also responsible for the formulation and analysis of toll strategies for the Gauteng Open Road Tolling project.
Tolplan has significant transportation modelling experience, including in EMME, VISUM and SATURN. The VISUM software is, in many cases,
proposed for network assignment due to its graphical capabilities and its purposed-developed toll modelling, procedure, TRIBUT.
Whilst transportation modelling techniques are absolutely indispensable, a complementary approach to toll traffic modelling has been to not simply accept modelling results in a "black box" fashion but to also identify major traffic streams and analyse the reaction of each stream to tolling strategies, using a simplified version of the traffic capture model in order to enable the analyst to retain insight into the prediction process. The use of an understandable simplified traffic capture model rather than only a "black box" type traffic modelling tool is recommended by Standard and Poors, the international credit rating agency, as the most important step transportation engineers should take to ensure more accurate toll road traffic forecasts.
Tolplan was responsible for the creation of and application to more than 50 toll projects of the "Loan Supportable by Revenue" (LSR) financial model for State toll roads. Important outputs of this model are the present value of the loan that can be supported by predicted future toll revenue (the LSR) and debt service cover ratios and debt levels during the loan life cycle. For the financial modelling of Build-Operate-Transfer (BOT) projects, the company has developed its own TOLLBOT financial model and applied it in respect of a number of BOT toll projects. Apart from the predicted debt service cover ratios and debt levels for a project, the TOLLBOT financial model also provides the predicted rates of return upon equity capital and project capital respectively.
The projects to which the above-mentioned expertise was applied are described in the “South African Experience” and “International Experience” sections.