The Long and Winding Path to Private Financing and Regulation of Toll Roads Antonio

specialists, many of whom are John Strong now learning how much they did not know when they started. Summary findings Road transport has long been the dominant form of generation" of road concessions-from Mexico to transport for freight and passenger movement Thailand-have given toll projects a bad reputation. throughout the world. Because most road projects Many mistakes were made, and tolling is obviously not require investments with long amortization periods and the best solution for every road. Most of the alternatives because many projects do not generate enough demand aim at improving efficiency (lowering costs). But there to become self-financing through some type of user fee are many ways of getting the private sector involved in or toll, the road sector remains in the hands of the public toll roads, thus reducing public sector financing sector to a much greater extent than other transport requirements for the sector. Understanding the context activities. in which toll roads are viable is essential both for their But governments throughout the world, including initial success and for effective long-run regulation. those of many poor African and South Asian countries, Estache, Romero, and Strong provide a broad are commercializing their operations to cut costs, overview of issues at stake from the viewpoint of both improve user orientation, and increase sector-specific privatization teams and regulators responsible for revenue. supervising contractual commitments of private There seems to be demand for toll roads in specific operators and the government, to each other and to settings, but the problems met by many of this "first users. The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An ohjective of the series is to get the findings out quickly, even if the presentations are less than fully polished The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent.