Are US toll roads in crisis? | Jacques Cook | LinkedIn: In a recent article “On the Road: Navigating the twists and turns of US highway P3s” (Dec. 8, 2014), Michael Dunning describes some of the serious financial difficulties facing some of the most important US P3 toll roads. He notes that the Indiana Toll Road, once described as a trend setter in the US P3 market, has declared bankruptcy; while several major projects in California (SR-125), Texas (SH-130), Virginia (I-495 Hot Lanes, Pocahantas Highway) and Illinois (Chicago Skyway) are also in financial distress and in various stages of bankruptcy and restructuring. These are not encouraging signs for the US P3 market. Dunning notes however that there are important lessons to be learned from these transactions.The experience here can be applied to other costly infrastructure projects like modernizing and building out fiber optic telecommunications networks. Relying completely on user fees for its financing heightens the risk of insolvency.
While each of these projects was funded at different times and under different legal and institutional frameworks, they share one common characteristic—they were being funded entirely with tolls paid by automobiles and trucks.