Risk Factors in Toll Road Life Cycle Analysis

At present there is a very high level of interest in public-private-partnerships in the provision and timely maintenance of highway infrastructure. Although in the past a number of jurisdictions around the world developed toll ring roads and sometimes radial roads in major urban areas, the current heightened interest in toll facilities is unprecedented, given that it even extends to the level of toll lanes. The experience of a number of existing public-private partnership type of toll facilities suggests that risk variables are encountered in the development, operations and maintenance/rehabilitation phases. According to literature sources, although the financial and research community are aware of the need to address risk, only a small number of practitioners carry out a detailed risk assessment. There could be a number of reasons for inaction. One of these is lack of awareness of methodologies that address risk in key parts of the life cycle. This paper identifies risk factors in the lifecycle analysis of a toll road and suggests measures to address risks. A methodological framework and constituent components are described while highlighting risk factors in the revenue estimation and maintenance/rehabilitation phases. Risk analysis methods, namely sensitivity analysis, Monte Carlo simulation, and Bayesian statistical method are illustrated. The conclusions are drawn from the synthesis of information and analyses carried on the merits of treating risk factors in toll road life cycle analysis