Can shadow toll pricing be an alternative to investment grants?
) (LET – Laboratoire d’économie des transports – CNRS : UMR5593 – Université Lumière – Lyon II – Ecole Nationale des Travaux Publics de l’Etat) Abstract The development of Public Private Partnership for building new toll roads such as highways could be limited by the difficulties for raising public funding, as the new European rules impose the existence of a financial profitability for each new road trunk. Due to a higher expected rate of return for private funds, the need for public grants will drastically increase at a point that the state and the local communities will not be able to offer such amounts. Based on the results produced by the MEFISTO theoretical simulation model, the paper will discuss in which conditions shadow toll pricing could be a cheaper alternative to grants.Several parameters have to be taken into account : the expected rate of return for private funds, the length of operation, the level of interest and the length of loans, the expected first-year operation ben
