8186, 2012. In China, there is a special economic relationship between the central government and the local governments. 683708, 2011. This paper analyzes the current situation and influence factors of the inefficient toll road operations in China and discovers that an excessive administrative monopoly weakens the economies of scale effect. Please create an employee account to be able to mark statistics as favorites. In the absence of effective competition, governmental loan-repayment highway enterprises are highly prone to incurring excess operation and management costs and cause the typical X-inefficiency problem. This has been partly offset by higher than forecast traffic growth rates. The fact is that without the stream of revenues promised by a long-term tolling commitment, it may not be possible to service the loans that make the building of the Expressway possible. In the just over 20 countries that have toll roads, the proportion of toll roads to regular roads is only about 1 percent. And finally, how much has been the annual collection of various tolls across the country over the years? You need a Statista Account for unlimited access. Compared with the results of columns (II) and (IV) of Table 4, the results of Equations (II) and (IV) in Table 6 show that high toll highway density has a positive effect, instead of a nonsignificant effect, on the scale efficiency of the toll highway sector. To fill this gap, this study examines the relationship between the administrative monopoly, operation scale, and economic performance, and analyzes the root causes of the operational inefficiency of the toll highway sector, as well as the associated transmission mechanism. Before you leave, wed love to get your feedback on your experience while you were here. After overcoming a difficult and controversial beginning, Victoria's first private toll road has generated $5.78 billion in revenue since it opened in . But Jiang first needs to get investors sufficiently interested to drive shares in CMHP high enough for its controlling shareholder to back a placement of new shares. Besides fuel taxes and toll, Chinese drivers pay many fines that cannot be tracked. Therefore, we believe Hypothesis 1 is verified and robust. 34, pp. 51, no. As the development of the Expressway system reaches a more mature stage (a total of about 108,000 km is targeted for 2015) some voices in China have been raised against either the principle of road tolls, or their practical application, or both. We face big challenges to help the worlds poorest people and ensure that everyone sees benefits from economic growth. 32, no. In, Ministry of Transport of China. We want to create the conditions and gauge market support, he says. Thereafter, it will form a critical source of funds for operating and maintaining these most valuable assets in good repair and rehabilitating them when it becomes necessary, as it certainly will. The company had accumulated some RMB 1.2 billion in cash reserves that it used, along with a bank loan of HK$1.4 billion ($231.3 million), to pay for the purchase of its Yongtaiwen stake, Jiang explains. The Toll Roads are owned by the state of California and operated by The Transportation Corridor Agencies (TCA). The above data are mainly from the public database of Chinas National Bureau of Statistics, the Wind database, and provincial statistical yearbooks under the China Economic and Social Development Statistics Database. It is the first time in seven years that the Mainboard listed company has made any acquisition, and Jiang says more such deals could be announced in the next year. Subsequent theoretical studies can be summarized according to two aspects: (1) different understanding and interpretations of the status and causes of X-inefficiency, Naughton and Frantz [12], Bi et al. Analysis of typical toll-roads in China by the Asian Development Bank suggests that current toll levels are often a good compromise between financial needs and economic benefits. Additionally, growing traffic levels will anyway reduce the average cost of collection per vehicle. Yong of DBS Vickers says that withholding dividends in order to preserve cash wont really help CMHP, because it would be at least three years before CMHP has saved enough for an acquisition. Hidden in plain sight: Alabama toll roads. 2,000km superhighway could link millions of consumers in Russia and China via toll road at lower costs. 4, pp. * Figures from 2017 to 2019 were retrieved from previous reports. 105114, 2020. 12531267, 2018. Since then, analysts have touted the possibility of CMHP gradually acquiring more toll roads from its parent. Are non-toll road loans, and even urban road loans, also included in the toll road repayments? Facing public pressure, Sun Yonghong, the deputy director of the Ministry of Transportations Roads Bureau, explained in an interview with Caijing that 80 percent of toll roads income went to pay principal and interest on loan debts. Find out how to use toll roads and how much it could cost. 120-121, 2013. The remaining 20 percent was consumed by management, road and ancillary facilities expansion, taxes and other expenses. Although Chinas toll highways are world-renowned, they suffer from indisputable operational inefficiencies. The multilevel analysis and empirical test above show that these factors affect the transformation from sector scale to TFP or scale efficiency. J. S. Yang and J. H. Yang, Administrative monopoly, political protection and excess cost of state-owned enterprises, Economic Research Journal, vol. Therefore, rationally defining the governments functions in the industry and formulating a scientific reform path is the focus of this research. Toll roads now fell under the jurisdiction of public authorities financed by bonds. Evidently, excessive administrative monopoly is the reason that hinders the scale efficiency of toll roads. Tolls are justified even after loan is repaid. Over the past 12 months, covering much of 2018, revenue is up to 10.1 billion CNY. [16], Li et al. 315, no. H. C. Xu, Y. Wang, and R. N. Jia, Research on efficiency of toll road dual-track operation system based on three stage DEA and tobit regression model, China Journal of Highway and Transport, vol. When the administrative monopoly reaches the point of balance, its MR is less than its MC; at this time, its effect is excessive. Get full access to all features within our Corporate Solutions. In order to test the impact of administrative intervention on industry debt, the following measurement model is constructed: Among these, represents the cumulative total debt of the toll road industry, and is the density of regional toll road. Indeed its construction has been an impressive road-building initiative unmatched since the building of the U.S. Interstate Highway System, which, though of similar scale, was delivered without tolls only over a much longer time-frame. Some government funded roads in China have been transformed into toll roads before the 15-year loan period expired, with the loan repayment period intentionally extended. The forms of administrative monopoly in the toll highway industry mainly include the unity of government and enterprise, and the failure of regulation caused by it [4]; the government uses administrative power to exclude market competition in the concession stage [8]; and the hierarchical management system of toll highways. The institutionalized administrative monopoly is not only the critical factor in the institutional environment of the toll highway sector but also primarily accounts for the economic performance, enterprise behaviors, market structure, and property structure of the toll highway sector. TCA is comprised of two Joint Powers Authorities formed by the California legislature in 1986 to plan, finance, construct and operate the 73, 133, 241 and 261 Toll Roads in Orange County. Most of the existing results are concentrated on the qualitative aspect but lack qualitative measures, that is, by comparing the economic benefits before and after institutional changes (policy adjustments) and using industrial organization theory to explain the institutional level. Finally, Provinces that have a number of soundly-performing toll roads, but faced with demands for other new roads to meet growing traffic needs, might wish to consider concessioning existing roads for a period of time to private companies. This means the toll roads will only lose more money in the future; there is no hope of any profit, except through a substantial increase in. Moreover, a Province could also consider transforming its tolling system to a vignette system, which is an access payment system for the whole Provincial toll road system, such as is used in countries like Austria and Switzerland. The country built its first modern expressway 23 years ago a toll road that linked Shanghai to Jiading, a satellite town. Did MoneyOwl Continue to do Well? Oso Parkway Bridge opened to drivers, pedestrians and community on January 13, 2021. As soon as this statistic is updated, you will immediately be notified via e-mail. 2020, Article ID 8899782, 11 pages, 2020. High centralization of political power and personnel management power is closely combined with the high decentralization of administrative power and economic power. As a Premium user you get access to the detailed source references and background information about this statistic. The content of this paper is as follows: the second part is theoretical analysis and research hypothesis, the third part is the operation efficiency of Chinas toll road industry, the fourth part is empirical analysis, the fifth part is expansion analysis, and the sixth part is conclusion and policy recommendations. The Toll Roads are owned by the state of California and operated by The Transportation Corridor Agencies (TCA). Using the globally referenced data envelopment analysis- (DEA-) Malmquist Index, this study first measures the operational efficiency of Chinas toll highway sector from 2010 to 2017. First, what of the idea that Expressways and other high standard roads are a social good and should be provided free of charge, paid out of taxes? 1, pp. R. Z. Pang, B. L. Liu, and T. Wang, Location, enterprise scale, ownership structure and cost efficiency: an empirical study based on 19 listed expressway enterprises in China, Journal of Central University of Finance & Economics, vol. In, Ministry of Transport of China. IBM: Personal Computer Divison. The administrative monopoly in the toll highway sector, which manifests itself through one authority for one province or one group company in one province, has caused various problems. But he intends to fund these deals through placements of new shares. At that time, highways were built by private investment, but the policy was abolished by the U.S. government after two decades. T. Li, Study on the Expressway Management System of Jilin Province, Changchun University of Technology, Beijing, China, 2017. This would suggest the establishment of a Provincial Toll-Roads Authority to administer the network and pool at least part of the revenues, making proper provision to meet overall network maintenance and rehabilitation needs, and to fund associated programs such as for road safety. Mao et al. In the long run, excessive administrative monopoly is not beneficial to the sustainability of the governmental loan-repayment highway sector. For investors, the deal appears to have been well worth the wait. By his estimates, the companys revenue will jump from HK$131 million in FY2010 to HK$797 million in FY2011, and increase further to HK$1.59 billion in FY2012. Meanwhile, its earnings are set to nearly double to HK$502 million in FY2012 from HK$261 million in FY2010, according to Yongs forecasts. Parent commenter can toggle ^NSFW or ^delete. And, CMHP is trading at 5.9 times earnings compared with Jiangsu Expressways eight times and Zhejiang Expressways 7.8 times. Another problem thats specific to CMHP is that acquiring toll-road assets from its parent isnt a straightforward matter. Toll rates are set provincially by each Provincial Pricing Commission based on applications submitted by toll companies. Hence, this study examines the relationship between economic performance, administrative monopoly, and scale efficiency with respect to toll highways, and explores how the administrative monopoly with Chinese characteristics affects the transformation of toll highways from scale to efficiency. [33] conducted an empirical study and found that the impact of private hospital entry on the efficiency of the medical industry is not significant. For a country such as China, with annual transport demand growing in double digits, a rapidly growing fleet of road vehicles, but a road network that is far from being complete, the critical policy focus is finance. Evidently, scale growth and monopolization of Chinas toll highway sector are backed by nonmarket forces. 41, no. 9, pp. A paid subscription is required for full access. S. Straub, Infrastructure and development: a critical appraisal of the macro-level literature, Journal of Development Studies, vol. 605, pp. A number of levels and institutions have been set up, and the increase in economies of scale is first shackled by the operating system. 895947, 1997. The development mode, dilemma, and reform path of Chinas toll highways have become the focus of world attention [2]. D. W. Jia, Research on the Influence of Forestry Labor on Farmers Technical Efficiency of Forest Management-Based on the Survey of Zhejiang Province, Zhe Jiang Agricultural and Forestry University, Beijing, China, 2019. Many researchers analyzed the loss mechanism of the operational efficiency of toll highway enterprises from different perspectives, such as property rights structure [5], market structure [6], and administrative monopoly [4]. As in Figure 1, the average operating efficiency of western provinces and northeastern provinces is smaller than 1, which means there is a decline compared to those in 2010. On the other hand, the government is unable to function effectively in areas that require government regulations such as environmental protection and franchise regulations. To resolve the problem, the first step is to ascertain the cause of debt accumulation in the sector. JTSE is owned by BMN as 99.39% shares and holds a concession of Section IV Tol Road in Makassar. However, its role in transforming sector scale into TFP and scale efficiency is significantly weakened by the interaction between administrative monopoly in the sector and toll highway density. 4, pp. 5263, 2015. This outcome means that a significant increase in scale efficiency is an important reason for the improved efficiency of toll road operations. Z. Q. Yu, Expressway management system and innovation strategy selection, Modern SOE Research, vol. Some media did a hypothetical loan repayment calculation based on a 5 year or longer loan with an interest rate of 6 percent. 207235, 2010. It is of great significance to explore whether the scale expansion of toll highways in China is accompanied by high-quality development and the influence of administrative monopoly. PT Waskita Transjawa Toll Road owns shares in three toll road business enterprises that operate Kanci - Pejagan, Pejagan - Pemalang, and Pasuruan - Probolinggo toll roads. 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