Page:Progress and Feasibility of Toll Roads and Their Relation to the Federal Aid Program.pdf/27

Rh Items (a), (b), and (c) are based on the most recent experience or practice in financing toll roads through revenue bonds. Item (d), toll rate for passenger cars, is higher than the average collection on some roads and below that on others. The average on the New Jersey Turnpike, for example, was 1.94 cents in 1953 (with proper weight given the larger volumes on the northern end where the rate for some trips was as much as 3.0 cents per mile). It is believed that 1.75 cents per mile for passenger cars and corresponding rates for trucks can be collected if necessary. Item (f) is based on the experience of existing toll roads. Item (g) is consistent with current practices in estimating feasibility. While the first three factors could estimated from existing toll roads, the factor of replacement reserve cannot be estimated on the basis of experience to date.

For purposes of this analysis it was assumed that bonds would be sold in 1957, roads opened to traffic in 1959, and amortization started in 1960, interest from 1957 to 1960 being paid from bond receipts and accounted for in the 1.12 factor, item (a).

Feasibility ratios

Feasibility ratios were calculated by dividing the estimated net operating income for 1978 (the midyear of the period of bond amortization) by the annual cost of debt service. Net operating income was determined by deducting the amount needed for administrative, operational, and maintenance expenses and replacement reserves from total receipts from tolls and concessions. Experience in recent years shows that bonds offered to finance projects having a feasibility ratio of 1.5 or more, calculated in the manner described, would be marketable. Therefore, any section having a ratio of 1.5 or more was regarded as feasible of construction through toll financing.

As previously pointed out, these studies could not be made in such detail as to permit the determination of the feasibility of individual projects with assurance. However, since the factors used for such items as traffic diversion and generation were based on average conditions as determined from traffic studies of existing toll roads, it is believed that the national totals resulting from the study are reasonably reliable.

Mileage feasible of toll financing

The most significant finding of the study of toll feasibility is probably that, of the highways found to be feasible, all but about 200 miles lie along the lines of the Interstate System. This finding not only attests the importance of the Interstate System, but permits the consideration of toll roads to be related almost entirely to the completion of the Interstate System. Opportunity for revenue-bond financing of improvement of routes of the other systems is so rare as to be of no importance.

Calculations were made on the basis of the individual sections for which data were supplied by the States. These sections varied greatly in length, some being as short as 1 mile. The results reflect a feasibility based entirely on the traffic and cost, disregarding completely the desirability of integration and continuity.

On the assumption that each section showing a feasibility ratio of 1.5 or above is acceptable for toll financing, the total length of the Interstate System that could be thus financed would be about 6,700 miles, estimated to cost $4,260 million. This is mileage on the system,