However, any excess revenues from a specific Expressway can find good use in building new Expressway capacity elsewhere, recognizing that as Expressway development gradually extends and brings economic benefit to more mountainous central and western regions, average traffic density will be lower but the higher proportion of bridge and tunnelling works will increase average construction costs. For the construction of toll roads, charge management, maintenance, service area operations, etc., the market mechanisms can play a role, and the effective allocation of economic resources should be returned to the market to ensure the priority role of the market mechanisms in resource allocation. Subsequent theoretical studies can be summarized according to two aspects: (1) different understanding and interpretations of the status and causes of X-inefficiency, Naughton and Frantz [12], Bi et al. H. Z. Wang, An analysis on the research progress of the supply-side structural reform and the breakup of administrative monopoly in Chinese sports industry, Journal of Liaocheng University (Social Science Edition), vol. Hence, the debt risk is emerging. The second is the ratio of cumulative capital funds for the construction of governmental loan-payment toll highways to the total investment of the toll highway sector, since cumulative capital funds are completely sourced from local governments and are highly representative of administrative monopoly. Cai Shenkun is a well-known Chinese economist and blogger. Please do not hesitate to contact me. JTSE is owned by BMN as 99.39% shares and holds a concession of Section IV Tol Road in Makassar. [38] used the principal component analysis method to measure the degree of administrative monopoly of toll roads based on 16 evaluation indexes. 565, no. But strangely, this profitable monopoly industry reports huge losses year after year. Details of financial statement are still not open to the public. Notify me of follow-up comments by email. PT Waskita Transjawa Toll Road owns shares in three toll road business enterprises that operate Kanci - Pejagan, Pejagan - Pemalang, and Pasuruan - Probolinggo toll roads. "Distribution of Toll Road Mileage in China from 2017 to 2020, by Ownership. Accessed January 18, 2023. https://www.statista.com/statistics/759636/china-percentage-of-toll-roads/, Ministry of Transport of China. Financing Expressways is currently the policy priority. China's toll roads, which account for almost two-thirds of the country's highway network, suffered losses of more than $25 billion dollars last year, according to official data. J. Huang and J. Q. Liu, Morality: a good way to solve the problem of X inefficiency in family business governance, Journal of Urban Studies, vol. Japan went through similar process in developing its toll road system [See Box]. 2, pp. 47, no. We look more to growth in traffic, Jiang says. Moreover, a Province could also consider transforming its tolling system to a vignette system, which is an access payment system for the whole Provincial toll road system, such as is used in countries like Austria and Switzerland. D. Donaldson, Railroads of the Raj: Estimating the Impact of Transportation Infrastructure, NBER Working Paper, London, UK, 2010. Yong is also confident that CMHPs high dividend yield of 8%, based on a projected distribution of five cents a share for the full year, would tempt more investors to buy more of the stock. Pertaining to data selection, in view of the special nature of the toll road industrys operations and management, the provincial panel data are used for empirical analysis. Descriptive statistics of the main variables. Naturally, the level of tolls on a particular road may reduce when capital is repaid, but continuing to charge for the use of roads, albeit at a lower level, can sustain stable revenue streams dedicated to properly maintaining and, in due course, rehabilitating the road system, independent of fluctuating public budgeting decisions. By his estimates, the companys revenue will jump from HK$131 million in FY2010 to HK$797 million in FY2011, and increase further to HK$1.59 billion in FY2012. All operators are under the auspices of Toll Road Regulatory Agency (Badan Pengatur Jalan Tol, BPJT) of the Ministry of . C. H. Rong, Breaking administrative monopoly is the core issue to be solved in railway reform, Transport Research, vol. Jiang Yanfei, CEO of toll-road operator China Merchants Holdings (Pacific) (CMHP), is on a fundraising drive to finance the recently completed acquisition of the Yongtaiwen expressway in eastern China. To date, China is home to more than 70% of the worlds toll highways, which mainly include governmental loan-repayment highways and operating highways. The government will give us fair compensation because not only are we an SOE [state-owned enterprise] but we are listed, Jiang says. This paper analyzes the current situation and influence factors of the inefficient toll road operations in China and discovers that an excessive administrative monopoly weakens the economies of scale effect. Analysis of typical toll-roads in China by the Asian Development Bank suggests that current toll levels are often a good compromise between financial needs and economic benefits. Imbalances may be adjusted to better serve the long-term program. Again, in a decentralized system this should be a decision made at Provincial levels though central government can assist through a supportive policy framework, requisite delegation of powers and technical guidance and standards. History. JTSE operates 11.57 km length toll road connected to the toll roads operate by BMN, from the Tallo bridge to the Mandai Makassar intersection and providing direct access to the Sultan Hasanuddin International Airport. 9, pp. 7, pp. Moreover, a larger free float of shares and better trading liquidity could help the company garner a better market valuation, he adds. Almost all Expressways are toll roads and located close to an existing parallel highway which may be free, or subject to a lower toll. The pooled revenue will also be used to repay loans and expansion support for allocated to the Provinces toll road operating companies on a formula basis developed to reflect the legitimate rewards for investors in those companies promoting more successful Expressways but sufficient to sustain others at least in a good state of repair and maintenance, even if investors bear some losses. Y. Li and R. D. Yang, Dependence of local state-owned enterprises, improvement of resource allocation efficiency and supply side reform, Economic Research Journal, vol. 157179, 2019. An excessively high degree of administrative monopoly brings about a typical X-inefficiency phenomenon, resulting in various problems (e.g., severe rent seeking, barriers to technological progress, weakened enterprise competitiveness, and waste of resources) and the ensuing operational inefficiency of the whole sector. What are the specific expenses that are included in operational and management expenditure? 1, pp. Then you can access your favorite statistics via the star in the header. ", Ministry of Transport of China, Percentage of toll roads in the overall road mileage in China from 2014 to 2020 Statista, https://www.statista.com/statistics/759636/china-percentage-of-toll-roads/ (last visited January 18, 2023), Percentage of toll roads in the overall road mileage in China from 2014 to 2020 [Graph], Ministry of Transport of China, October 28, 2021. The estimated coefficient of toll road density is 6.851 and statistically significant, which is close to the estimate in column (I). 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Perhaps its because the financial statement are in a mess and cannot be explained. October 28, 2021. 63, no. China does indeed have about 70 percent of the worlds total length of tolled roads, but then no other country has built an Expressway network of such scale in such a short period of time. As soon as this statistic is updated, you will immediately be notified via e-mail. Moreover, the unique operational organization of the toll road industry with a strong administrative monopoly power is the key to the above problems. 134142, 2003. The empirical test results show that the administrative monopoly at the industry level will increase the debt burden of the toll road industry, whether from the perspective of industry structure or property rights. 11, no. L. Chen and W. P. Zhu, The economic performance of regional administrative monopoly: an empirical research based on instrumental variable method, Comparative Economic & Social Systems, vol. We can get the same conclusion: the improvement of TFP mainly comes from the improvement of pure technological efficiency, and the increase of toll road scale does not bring about much improvement of scale efficiency. Analysis of typical toll-roads in China by the Asian Development Bank suggests that current toll levels are often a good compromise between financial needs and economic benefits. In the past, the United States also implemented a toll system. According to recently released data by China's Ministry of Transportation, revenue from toll roads was 409. . H. C. Xu and P. R. Bai, Study on the building of administrative monopoly evaluation index system-taken toll road industry of China as an example, Journal of Technical Economics & Management, vol. 4, pp. Table 4 shows the parameter estimation results from formula (5), where (I), (II), and (III) are robust least squares estimation of heteroscedasticity using mixed cross-sectional data; (IV), (V), and (VI) are generalized method of moments (GMM) estimates of panel data. 11, no. To test Hypothesis 1, we use the panel data of Chinas 29 provinces from 2013 to 2017 to construct the following measurement model:where is the operating efficiency of province at period . A paid subscription is required for full access. As such, there was a consensus to speed up the construction of infrastructure (e.g., highways). Your feedback is very helpful to us as we work to improve the site functionality on worldbank.org. 5, pp. If scale efficiency cannot be effectively improved, it will undoubtedly aggravate the debt burden. You can view Kyith's current portfolio here, which uses his Free Google Stock Portfolio Tracker. Compared with the results of columns (II) and (IV) of Table 4, the results of Equations (II) and (IV) in Table 6 show that high toll highway density has a positive effect, instead of a nonsignificant effect, on the scale efficiency of the toll highway sector. Even in the USA, more than 4,000kms of the Interstate Highway system are tolled. Parent commenter can toggle ^NSFW or ^delete. [Online]. Shares in CMHP have risen 29% from the years low of 46 cents just before the company announced in July it had received all approvals for the Yongtaiwen deal. The best of the best: the portal for top lists & rankings: Strategy and business building for the data-driven economy: Industry-specific and extensively researched technical data (partially from exclusive partnerships). The toll rates tend to range between 40 and 45 RMB cents per km. Meanwhile, PT Jasa Marga Tbk (JSMR) also released 20% shares in three segments, namely Batang - Semarang, Solo - Ngawi, and Ngawi - Kertosono, to RDPT last year. The shortfall in debt cover is an unmet liability which will lead either to a bankruptcy for the Expressway corporations or it will require the Province to essentially offer sub-sovereign guarantees to the banks for payment of the debt. I tell them the share price is low because of lack of liquidity.. Under the constraint of the overall environment of the toll highway sector, operating toll highways actually present an operation management model similar to that of governmental loan-repayment highways. The auspices of toll Road system [ See Box ] and statistically significant, which is close to the.... We work to improve the site functionality on worldbank.org key to the toll roads owned by china in column ( I ) favorite! 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