A private highway is a

highway A highway is any public or private road or other public way on land. It is used for major roads, but also includes other public roads and public tracks. In some areas of the United States, it is used as an equivalent term to controlled-access ...

owned and operated for profit by private industry. Private highways are common in

Asia Asia (, ) is one of the world's most notable geographical regions, which is either considered a continent in its own right or a subcontinent of Eurasia, which shares the continental landmass of Afro-Eurasia with Africa. Asia covers an are ...

and

Europe Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...

; in addition, a few have been built in the United States on an experimental basis. Typically, private highways are built by companies that charge tolls for a period while the debt is retired, after which the highway is turned over to government control. This allows governments to fulfill immediate transportation needs despite their own budget constraints, while still retaining public ownership of the roads in the long term. An obstacle to private highways is that government regulation can stifle price flexibility and introduce negotiation and paperwork requirements that increase operational expenses, while having to compete against free public roads. In addition, private highways lack some advantages that governments have, such as

sovereign immunity Sovereign immunity, or crown immunity, is a legal doctrine whereby a sovereign or state cannot commit a legal wrong and is immune from civil suit or criminal prosecution, strictly speaking in modern texts in its own courts. A similar, stronger ...

against liability for accidents, the use of eminent domain power to acquire private property for roads and the ability to issue

tax-exempt Tax exemption is the reduction or removal of a liability to make a compulsory payment that would otherwise be imposed by a ruling power upon persons, property, income, or transactions. Tax-exempt status may provide complete relief from taxes, redu ...

securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...

.Hakin, Simon & Blackstone, Edwin (August 1, 1999)
Making inroads in private highway construction
American City & County. Retrieved on January 10, 2008. Free-market roads are generally advocated by Libertarians, who consider them safer and more cost-effective than government operated roads.

History

The

Interstate Highway System The Dwight D. Eisenhower National System of Interstate and Defense Highways, commonly known as the Interstate Highway System, is a network of controlled-access highways that forms part of the National Highway System in the United States. T ...

provided for in the Federal Aid Highway Act was a federally funded, non-toll system. According to Simon Hakim and Edwin Blackstone, "by 1989, rivateroads comprised just of the 3.8 million miles (6.1 million km) of streets and roads in the United States and only out of the of the interstate system."

Recent trends

The

National Center for Policy Analysis The National Center for Policy Analysis (NCPA) was a non-profit American think tank whose goals were to develop and promote private alternatives to government regulation and control. Topics it addressed include reforms in health care, taxes, ...

and the

Cato Institute The Cato Institute is an American libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Ed Crane, Murray Rothbard, and Charles Koch, chairman of the board and chief executive officer of Koch Industries.Koch Ind ...

have proposed that the Demsetz auctions commonly used to award franchises be replaced with Present Value of Revenues auctions in order to reduce risk and thus required rates of return by private highway owners. Under this system, contractors would bid an amount equal to the present value of cash flows from user fees they are willing to accept for the project. The lowest bid would win. Boarnet and DiMento believe that private highways will become more important as the rise of gasoline-efficient hybrids causes a decline in gas tax revenues. Many highways are constructed under a " build-operate-transfer" model in which ownership ultimately goes to the government.

Around the world

Asia

As of 2003, the

Hong Kong Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China (abbr. Hong Kong SAR or HKSAR), is a List of cities in China, city and Special administrative regions of China, special ...

government was planning to securitize five toll tunnels and a toll bridge through bond issues. India also has a

private highway A private highway is a highway owned and operated for profit by private industry. Private highways are common in Asia and Europe; in addition, a few have been built in the United States on an experimental basis. Typically, private highways are b ...

under-construction between the two cities of Bangalore and Mysore in the state of Karnataka. A vast number of the country's road projects have been upgraded under a public-private partnership, thus operating similar to private highways. In Indonesia, many toll roads are built by private companies, and private toll roads are being built in Bangladesh.

North America

Mexico has some highways operated by private companies. The 108 km Highway 407 ETR through the

Greater Toronto Area The Greater Toronto Area, commonly referred to as the GTA, includes the City of Toronto and the regional municipalities of Durham, Halton, Peel, and York. In total, the region contains 25 urban, suburban, and rural municipalities. The Greater ...

is operated privately under a 99-year lease agreement with the provincial government. The highway uses electronic toll collection. Users who do not have a toll tag (called a ''transponder'') in their vehicle are tracked by

automatic number plate recognition Automatic number-plate recognition (ANPR; see also other names below) is a technology that uses optical character recognition on images to read vehicle registration plates to create vehicle location data. It can use existing closed-circuit tel ...

, with the toll bill being mailed to the address of the plate on file. There are also some

private highways in the United States There are relatively few private highways in the United States, compared to other parts of the world. The Philadelphia and Lancaster Turnpike, opened in 1795 between Philadelphia, Pennsylvania and Lancaster, Pennsylvania, was the first major Ame ...

Europe

Of the 11,000 kilometers of France's highways, 8,000 km are under private concession. 3,120 kilometers of

Italy Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the homonymous geographical ...

's highways (comprising 56% of the country's toll roads) are controlled by Autostrade Concessioni e Costruzioni Autostrade. According to

Forbes ''Forbes'' () is an American business magazine owned by Integrated Whale Media Investments and the Forbes family. Published eight times a year, it features articles on finance, industry, investing, and marketing topics. ''Forbes'' also r ...

, "Autostrade was an early Electronic Age entry, computerizing to its highway system in 1988". The

M6 Toll The M6 Toll, referred to on signs as the Midland Expressway (originally named the Birmingham Northern Relief Road or BNRR), and stylised as M6toll, connects M6 Junction 3a at the Coleshill Interchange to M6 Junction 11A at Wolverhampton with ...

was the first private toll motorway in the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and ...

. The project was described by as a "43 km dual three lane (plus hard shoulder), £485.5 million motorway" with six toll stations.Birmingham Northern Relief Road, United Kingdom
, urbantransport-technology.com.

References

External links

IBTTA
International Bridge, Tunnel and Turnpike Association.

The Growth Management Institute, May, 1996.

''Mother Jones'' magazine, Jan 2007 {{DEFAULTSORT:Private Highway Road transport Public economics