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Successful toll-road ventures satisfy the interests of government, road users, and concessionaires. Government guarantees have proven costly for taxpayers, making other cost-sharing arrangements attractive. Users require acceptable tolls and service levels, while concessionaires operate under a competitive combination of expected return and risk. This article quantifies these interests and simulates break-even tolls for major projects. The high cost of private sector capital—the norm without government or multilateral guarantees— makes it difficult to fund major toll-road investments using only private sources. Turnpike commission projects and hybrid funding schemes have a better track record and prospects for commercial success. The commissions obtain low-interest, long-term funding; the hybrids permit governments to pay only known costs up front. Exclusively private funding can be obtained for niche markets on short "congestion relievers" in metropolitan areas that sustain high tolls, and on low-cost rehabilitation projects. Dedicated road funds are needed for full commercialization of roads. [ABSTRACT FROM AUTHOR]

The author evaluates the points made in the article by Damian Kulash on the economic importance of investments for the transportation sector published in the Summer 1997 issue of the periodical "Transportation Quarterly,". There are indications that Kulash is spinning an ex post story to rationalize the numbers that related economic studies on the topic are producing. In spite of the plausibility of the story that Kulash tells, there are many plausible stories to explain a single set of numbers, many of which are contradictory. In the end, policy decisions can only be enriched with a more multidimensional, inter-disciplinary and contextual approaches.

Public investments in transportation have always been seen as a spur to growth in the immediate localities where the new transportation facilities are located. What has not always been recognized is that these investments, taken as a whole produce a network that benefits all other parts of the system, including economic activities far removed from the location of the investment. Analysis of the past patterns can help target future transportation investments to achieve the greatest economic impact. Future investments can produce the greatest economic return if they are targeted to programs that will preserve or expand network capacity.

The author critiques an article by Damian Kulash on the economic importance of investments for the transportation sector published in the Summer 1997 issue of the periodical "Transportation Quarterly." The work relies heavily on the work of economists in claiming that certain transportation investments outperform private investments by a large margin in the 1950s and the 1960s. There is a strong inference in Kulash's article that major public investment in the transportation systems will produce substantial returns in the future only if the investment is focused. To conclude, the work contends that investment in a transportation network rather than isolated projects will contribute to growing economy is sound.

The author gave commendation to the points raised in the article by Damian Kulash on the economic importance of investments for the transportation sector published in the Summer 1997 issue of the periodical "Transportation Quarterly,". The study accurately pointed out the network effects of investments in the American highway system in the 1950s and 1960s which produced returns several times greater than other public and private investments by providing access to new markets and paving the way for enormous productivity gains. However, questions are raised about the availability of such returns in the 1990s. Consequently, the truths about the information-based and global nature of the national economy in the 21st century will significantly affect the direction of transportation investments.