Japan Democrats say will keep tolls wherever there's danger of congestion

September 6, 2009

Japan's Democrat Party, soon to become the government following a sweeping election victory, are rapidly retreating from their detolling campaign theme. A prominent member of the new governing party Mabuchi Sumio has said the plan for nation's expressways is to do traffic modeling of all segments. Wherever this shows that congestion would result from detolling, they'll keep tolls.

His words on TV Asahi: "We'll have the Ministry of Land, Infrastructure, and Transport conduct simulations in those places where it seems traffic jams are likely to occur, and we'll charge tolls there.... If it seems there will be traffic jams, there'll be tolls."

The party's platform has two references to detolling, each of which has a fudge factor.

The first provides for "Elimination of highway tolls" and "Eliminating highway tolls in principle" and it refers to "Stepwise implementation" and says it will cost Y1.3tr or $13b/yr.

The second proposes: "Progressively eliminate all highway tolls, thus revitalizing local communities and economies by lowering distribution costs and prices."

If elimination of tolls is going to cause traffic congestion, and eliminate the revenue stream for operations and enhancement of highways then local communities and economies will hardly be revitalized. The prospect of greater congestion following detolling provides a convenient "out" for the new government.

The party made the first steps in this direction during the campaign when they admitted tolls could not be eliminated in the Tokyo metro area and alluded to a similar exclusion in the Osaka area, the second metro area in size

Weighing also against detolling are strong commitments to social programs and a strong environmentalist program which includes reducing vehicle emissions to restrain alleged global warming.

Also opinion polls show voters oppose elimination of expressway tolls by a 2/1 margin.

Our guess is they'll end up just detolling a number of the lightly trafficked 'pork' pikes, and that the serious part of the network will remain tolled. They might do well electorally to progressively eliminate stop-to-pay tolling and convert the network to all-electronic highway speed toll collection.

BACKGROUND: Japan probably collects more toll revenue than any other country. Virtually all expressway standard highways are tolled - about 9,000km, 5600 miles.

By one account there are 4.41m tolled trips/day, 1.61b/year with an average length of 44km, 27mile at an average toll of Y25/km, Y40/mile, so revenues are Y1770b, @$1=Y93 that is $19b/yr.

At this exchange rate Japanese tolls for all vehicles average 27c/km, 43c/mile.

Under arrangements legislated in 2003 that went into effect in 2005 the toll expressways are now owned by Japan Expressway Holding and Debt Repayment Agency (JEHDRA) and leased for 45 years to six operating companies under a scheme termed "privatization."

The companies are structured as for-profit companies but so far the vast bulk of their shares are held by the government of Japan. The six expressway 'companies' operate under contracts with JEHDRA and after paying for operations and maintenance most of their revenue goes as "lease payments" to JEHDRA supposedly structured to pay off some Y40tr, $430b of accumulated debt by 2051, when the expressways would become freeways.

Toll rates are set by the government of Japan and toll revenues are "pooled" to support existing losing tollroads with the proceeds of profitable pikes.

From 2005 no new unprofitable or pork pikes are supposed to be built with toll revenues. New roads that cannot be toll financed are now supposed to be built with gasoline/diesel tax revenues.

see http://www.dpj.or.jp/english/manifesto/manifesto2009.pdf


TOLLROADSnews 2009-09-05

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