Unification of Road Tolls

Beginning with the recently completed Beijing - Shanghai expressway, the Ministry of Communications (MOC) is considering instituting a unified toll pricing and management structure for toll road projects in the PRC. MOC officials expect that an ongoing pilot study of a less complex pricing regime and an electronic toll (E-toll) management system will lead to the replacement of current policies, under which individual provincial communications and price bureaux jointly ratify and govern rates charged by individual toll management companies. Along the Beijing - Shanghai expressway, there are 11 tollgates throughout Beijing, Tianjin, Hebei, Shandong, Jiangsu and Shanghai. The present toll rates vary so greatly that while a car owner pays .34 yuan per kilometre along the Beijing section of the expressway, the same car owner pays .71 yuan per kilometre along the adjacent Tianjin section of the expressway.

Existing Pricing and Management System

When structuring toll collection rights for a PRC toll road project, investors face a complex network of laws, regulations and precedents, split between national and provincial authorities. While the principal legal references for structuring toll collection rights are the PRC Highway Law (amended October 31 19991) and the Ministry of Communications, Administration of the Assignment of Highway Operating Rights For Compensation Procedures (1996), the national government has delineated responsibility for implementing these national laws to each province. For instance, while Chapter 6 of the PRC, Highway Law sets guidelines for matters such as the type of road on which toll collection is permitted and the minimum and maximum distance allowed between toll gates, important details regarding toll collection rights, including toll pricing and management practices, are found in provincial level regulations and precedents. The complexity of structuring toll collection rights is exacerbated because such precedents are not only found in provincial level project approval notices, but also in provincial level administrative measures governing a project, as well as in concession agreements executed by the governmental entity with authority to approve the project.2