Takeaways from the 2024 Global Tolling Summit
On September 16th and 17th I had the opportunity to attend the 2024 Global Summit of the International Toll Road Association ( IBTTA ) in Sevilla. As a first-time attendee, I am very glad with my decision to attend and definitely plan to do so next year. I recommend this annual gathering (the host country changes each year) to anyone involved in the policy-making, planning, financing or operation of high-capacity roads. My congratulations to the organisers, sponsors and hosts. IBTTA and SEOPAN, Construcción, Agua y Concesiones de Infraestructuras did a fantastic job in setting the right environment for networking and debating.
With a significant focus on road safety, road user charges (RUC), and the evolution of public-private partnerships (PPPs) in tolling operations, the summit provided a platform to analyze the future of toll roads. This was particularly relevant to my role as the Director of Infrastructure Advisory Services at TYPSA, where we are constantly seeking to integrate our technical excellence into sustainable infrastructure solutions for our clients and stakeholders.
In this article I want to share with you the key ideas that were presented and discussed during the two days at the Summit. I also want to add my own analysis and reflections, from the perspective of a PPP practicioner, on a highly strategic and complex problem: road management models that deliver safety, affordability, resilience and sustainability -both environmental and financial. Do contact me or provide your opinion below to engage in the debate.
Key topics discussed
The 2024 global summit of the International Toll Road Association (IBTTA) presented a range of key topics focused on the future of tolling, road user charging (RUC), and sustainable mobility. Here are the main themes discussed:
Overall, the summit emphasized the future of tolling as one driven by digital transformation, sustainability goals, and the need for more efficient and equitable road user charging systems.
Road Safety
Road safety deserves special attention: it was a major theme at the IBTTA Summit, with a clear emphasis on how smart infrastructure and real-time data could significantly enhance road safety outcomes. Discussions highlighted the role of connected vehicles, artificial intelligence, and predictive analytics in preventing accidents and mitigating risks on toll roads. For instance, the use of multi-lane free flow (MLFF) systems allows for safer, smoother traffic, reducing the risk of rear-end collisions common in traditional toll booths.
Smart Infrastructure: The role of connected and autonomous vehicles (CAVs) in reducing accidents by using sensor technologies and data analytics to monitor road conditions and driver behavior. This includes advancements in AI-powered systems to predict and prevent accidents by analyzing traffic patterns.
Real-time Data and Predictive Safety: Presentations highlighted the use of big data and IoT for real-time traffic monitoring, enabling road operators to respond quickly to incidents and prevent secondary accidents. This also includes predictive models to anticipate high-risk areas.
Sustainable and Safe Mobility: Several sessions linked safety with environmental sustainability, such as emissions-based road charging and the design of safer road environments as part of broader sustainability initiatives.
Global Best Practices: Lessons from international toll road operations, particularly in Europe and Asia, where multi-lane free flow (MLFF) tolling systems contribute to safer, smoother traffic by eliminating the need for vehicles to stop at toll booths, thus reducing rear-end collisions.
Road User Charging (RUC)
As governments face decreasing fuel tax revenues, road user charging (RUC) is becoming essential for funding infrastructure. Charging by kilometers traveled, RUC faces challenges like public acceptance, political sensitivity, and complex technology. Effective implementation will require balancing privacy concerns with economic efficiency to ensure sustainable road funding. Specific notes on this topics:
The Future of Concessions
Many traditional toll road concessions are due to expire in the next 10 years, but the policies of the different governments regarding by whom or how those roads will be operated and maintained are largely unclear. Ensuring smooth transitions requires innovative contractual and financial strategies and careful long-term planning.
Reflections on the future of road management and financing
Here are some reflections and considerations concerning road user charges (RUC) and private operation models like concessions and Public-Private Partnerships (PPPs), from the stimulating exchange of information and discussions at the 2024 IBTTA Global Summit, and my own experience as an infrastructure advisor.
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Balancing Commitment and Flexibility in Concession Models
One of the issues that generates more expectations, debate and controversy in the infrastructure arena is Concessions and PPPs. I have written extensively about the need for better private participation models that address past mistakes, the fiscal illusion trap or the fascinating matter of operational risk in the age of climate and technosocial complex.
The history of private participation in infrastructure since the development of railways in the US in the 19th century reveals that a primary challenge in infrastructure regulation, especially in PPPs and concession models, is the balance between commitment and flexibility. Governments need to provide sufficient certainty to private operators regarding tariff structures and operational parameters (such as toll rates), which enables long-term investment. However, the concession contracts must also have built-in flexibility to adjust to unexpected economic, technological, or political changes, protecting the parties -and, ultimately, users and taxpayers- from opportunistic behaviours. By the way, if you have not read Prof. Gómez Ibánez masterpiece on Infrastructure Regulation, you should.
In the context of sustainability and emissions-based tolling, this is critical. As countries adopt dynamic pricing models that account for environmental impact (like CO2 emissions), contracts will need mechanisms to adapt to new regulations and technologies. For instance, toll rates might need to be recalibrated periodically to reflect changes in vehicle technology, emissions standards, or traffic patterns. Contracts lacking flexibility could face renegotiations or disputes, which have historically undermined infrastructure partnerships.
The Importance of Regulatory Stability
Historically, one of the risks in long-term PPPs has been the potential for regulatory opportunism, where governments revise toll or tariff structures unilaterally or introduce unanticipated requirements, especially under political pressure from users (i.e., motorists) or in response to public outcry over rising tolls or technological progress.
The 2024 Summit discussed the growing reliance on road user charging (RUC) and technologically-driven tolling systems (such as MLFF and GNSS-based systems). In this context, maintaining regulatory stability becomes even more critical to ensure private investors, suppliers and contractors can recover their investments without facing undue political risk.
Governments should design regulatory frameworks that insulate private operators from drastic political changes, while still allowing for adjustments in line with sustainability goals (such as reducing carbon emissions).
This is no minor issue: it is a fact seen in many countries that over-regulation or sudden policy shifts can lead to aversion among investors, driving them away from public infrastructure projects.
Incentivising Efficient and Sustainable Operations
The success of contract models in infrastructure often depends on properly aligning incentives between the public and private sectors. The private operator must be incentivized not only to operate the toll roads efficiently but also to meet broader public goals such as reducing traffic congestion, enhancing safety, and promoting sustainability.
At the 2024 Summit, the emphasis on emissions-based tolling and road safety technology illustrates this principle. For these initiatives to succeed within a PPP framework, performance-based contracts are essential. These contracts could offer rewards or penalties based on achieving specific environmental or safety outcomes (e.g., lower emissions, reduced accident rates). This approach encourages private operators to invest in new technologies, such as AI-powered safety systems or electric vehicle incentives, which not only meet their financial goals but also align with public policy objectives.
Use Government Guarantees with Caution
Government guarantees in PPPs can lead to inefficient outcomes if they are too generous, not only in terms of unfairly high returns for the private partner but also worse performance, from a reduction of the operator's incentive to perform efficiently, knowing that losses will be covered by the government.
The 2024 Summit’s discussions on expanding road user charges and private sector involvement in a climate of mistrust about the benefits of PPP models highlight the need for carefully structured risk-sharing agreements.
New (or renewed) concessions should ensure that risks (e.g., fluctuating traffic volumes or changes in tolling technology) are fairly distributed between the public and private sectors. Over-reliance on minimum revenue guarantees can undermine the financial sustainability of the public sector, especially if traffic projections fail to materialize due to shifts towards greener transportation alternatives or teleworking, as was noted in post-pandemic traffic trends.
Unbundling, Coordination and Competition
As I have argued in previous articles, it is about time that we stop thinking of an infrastructure service as a monolythic thing. A major infrastructure includes many different types of assets, functions and services, some of which can potentially benefit from private sector competition, and some that will probably not. In the toll road sector, this could apply to differentiating between infrastructure maintenance (potentially monopolistic) and value-added services (such as smart tolling or safety technology), where competition could enhance efficiency and innovation.
The IBTTA Summit has highlighted that digital tolling and smart infrastructure require integration of various service providers, from tech companies to traditional road maintenance operators. A regulatory framework that encourages competition in these ancillary services, while ensuring proper coordination with the monopolistic infrastructure operator, can lead to more innovative and cost-effective solutions.
I believe these principles should guide future PPPs and concession models, ensuring that both public and private stakeholders benefit while advancing the broader goals of equity, sustainability and road safety.
Jose Cordovilla is Director of Infrastructure Advisory Services at TYPSA , a Madrid-based engineering consulting firm with six decades of experience helping clients around the world develop and manage infrastructure through excellence.
Visit our website for examples of successful PPP/concession projects where we have been advisors.
SENIOR GEOTECHNICAL AND GEOMECHANICAL ENGINEER
3moGracias por compartir
Founder at Foraim Management
3moIt´s been a surprise not to read anything of the German public concession model and their structural reform of the Trunk Roads Administration in 2018. An example to follow up and learning.
Transport Technology & Policy, Program & Association Management, Client Support & Business Development
3moJose, thank you for this post. I did not have the opportunity to attend this IBTTA event. While I missed the networking, the facility tours and the warm camaraderie one experiences at IBTTA venues, at least I got a great taste of the excellent content. I could comment on several aspects of your excellent post, but I will limit it to one question about the relationship between RUC and PPPs: What are your thoughts about the potential of national RUC programs posing significant threats to the viability of PPPs (which operate facilities and exact fees). This potential conflict arises from: 1) the potential redundancy in charging when both RUC and toll roads exist, 2) direct competition for revenue between national RUC and PPP toll roads, 3) the ability of RUC technology to replicate flexible pricing models used by PPPs, and 4) the reduced competitive advantage of PPP toll roads if RUC improves all roads. Again, thank you for your report! Regards, Tim
President - International Bridge Tunnel & Turnpike Association (IBTTA) and Immediate Past President & BoD Member at International Road Federation (IRF),
3moJose Cordovilla, many thanks for your kind words.