Highway pricing and capacity choice in a road network under a build–operate–transfer scheme

Highway pricing and capacity choice in a road network under a build–operate–transfer scheme

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Article ID: iaor2001378
Volume: 34A
Issue: 3
Start Page Number: 207
End Page Number: 222
Publication Date: Apr 2000
Journal: Transportation Research. Part A, Policy and Practice
Authors: ,
Keywords: engineering
Abstract:

It is often argued lately that the private sector should be allowed to build and operate roads in a transportation network at its own expense, in return it should receive the revenue from road toll charge within some years, and then these roads will be transferred to the government. This type of build–operate–transfer (B–O–T) projects is currently fashionable worldwide, especially for developing countries short of funds for road construction. One of the important issues concerning a highway B–O–T project is the selection of the capacity and toll charge of the new road and the evaluation of the relevant benefits to the private investor, the road users and the whole society under various market conditions. This paper deals with the selection and evaluation of a highway project under such a B–O–T scheme. For a given road network with elastic demand, mathematical models are proposed to investigate the feasibility of a candidate project and ascertain the optimal capacity and level of toll charge of the new highway. The response of road users to the new B–O–T project is explicitly considered. The characteristic of the problem is illustrated graphically with a numerical example.

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