Sunday, 30 November 2014

Toll roads- the play of user charges and road taxes

Toll road - why do we give money to private operator even after giving petrol taxes and vehicle taxes to develop roads. Since government is charging the users for using the roads, should not the taxes reduce or be abolished. The common argument that profitable roads are only taken for Public Private Partnership (PPP) and the non economically feasible are not is not applicable here. Government funds the private companies for the shortage in profit to take up projects which are not viable through viability Gap Funding (VGF), but this is only from the funds government obtain through cross funding from profitable projects through the concept of negative funding. 
So this makes us curious, why is there road taxes and user charges? If taxes cant be completely abolished why not at least reduce it for the user charges obtained through this innovative concept of PPP.

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