China's first expressway hikes tolls to raise funds for expansion

SHENYANG, April 18 (Xinhua) -- Ma Yinghong got a surprise on his way to a
friend's wedding this week, when he found that the toll for his trip on the
Shenyang-Dalian Expressway had risen to 155 yuan (22.50 U.S. dollars) from 120
yuan.

Staff at the toll booth showed Ma a notice on the wall, which said that
tolls on all 15 expressways in Liaoning Province had risen about 20 percent on
April 10.

"Why did they raise the tolls?" asked the bank clerk, who lives in the
provincial capital of Shenyang. He was headed to the coastal city of Dalian for
the wedding.

Liu Mingzhu, deputy transport chief of Liaoning, told Xinhua Friday that
the tolls were raised because the transport administration needed more money for
debt service.

The 348-kilometer expressway, China's first, was built starting in 1984.
But that expressway, and the 14 others built since then, are no longer adequate
for the traffic in Liaoning.

Building more roads meant the province would have to borrow about 90.6
billion yuan, which would mean annual debt service of 7billion yuan. But the
provincial expressways' annual revenues are only about that much, so almost
nothing would be left over for maintenance and other expenditures, the official
said.

The province had 2,700 km of expressways as of the end of 2008.Another
1,300 km are either under construction or planned, at a total cost of 16 billion
yuan.

"When tolls fail to cover costs, the authorities will raise tolls to ease
the burden," said Xiao Xingzhi, a professor at the Research Academy of Economic
and Social Development, Dongbei University of Finance and Economics.

Xiao said he was concerned that higher tolls might keep drivers off
expressways, reducing revenue and worsening the debt situation. He also
expressed concern that other parts of China would follow Liaoning in raising
tolls.

The Shenyang Jingwei Passenger Transport Company, which operates more than
100 routes, faces a deficit because of the higher tolls in Liaoning. A manager
surnamed Sun said it would cost the company an extra 3 million yuan a year to
pay the higher tolls.

Ma, who owns a car and often travels between Shenyang and Dalian, said he
would avoid travel on expressways in the future.

In 2004, China drew up a regulation on highway tolls that stipulates a maximum
of 15 years of toll collection after a highway opens. When the 15 years is
up, the highway is supposed to be free for all.

The Shenyang-Dalian Expressway cost 2.2 billion yuan and fully opened to
traffic in 1990. It underwent a 7.2 billion-yuan renovation from 2002 to 2004,
expanding from four lanes to eight.

Cao Wenbin, head of the provincial expressways administration, said the
province had no individual debt service schedule for each expressway, and it had
not set a date to abolish tolls on the Shenyang-Dalian Expressway.

All expressways in Liaoning are publicly owned. Public-private partnerships
are common in other parts of China.

At the end of 2008, there were 60,300 km of expressways in China, the
second-largest amount in the world after the United States, which has nearly
100,000 km.