Over the past 12 months, covering much of 2018, revenue is up to 10.1 billion CNY. Jiang says the government was only cracking down on illegally constructed toll-collection plazas and the awarding of concessions that exceeded the maximum 30 years allowed. Across different parameter estimation and statistical inference methods, the estimated values and significance levels of the main parameters are approximated to each other. Get full access to all features within our Corporate Solutions. Evidently, scale growth is not completely transformed into efficiency improvement. 5, pp. 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 . Paul Yong, an analyst at DBS Vickers, calls the acquisition of the Yongtaiwen expressway a transformational deal, because of the significant boost it will give to CMHPs top and bottom lines. Therefore, rationally defining the governments functions in the industry and formulating a scientific reform path is the focus of this research. Social costs incurred by the administrative monopoly include external efficiency loss (Harberger Triangle), internal efficiency loss (Leibenstein Quadrilateral), and rent dissipation (Tullock Rectangle) [46]. There would be at least $1.1 billion worth of new and refurbished toll roads: two connected segments in the Katanga region and another from Kinshasa to the country's main port of Matadi.. 34, no. 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. Most of the existing results are concentrated on the qualitative aspect but lack qualitative measures, that is, by comparing the economic benefits before and after institutional changes (policy adjustments) and using industrial organization theory to explain the institutional level. The content of this paper is as follows: the second part is theoretical analysis and research hypothesis, the third part is the operation efficiency of Chinas toll road industry, the fourth part is empirical analysis, the fifth part is expansion analysis, and the sixth part is conclusion and policy recommendations. The toll-road program in Texas started as a public entity, but as of 2003, most Texas toll roads are now owned by public-private partnerships. This has been partly offset by higher than forecast traffic growth rates. Because of lack of transparency in China, this problem is often not within the publics range of supervision. They stressed that it is necessary to further break administrative monopoly so as to foster a competitive market environment. Notwithstanding a slightly better economic performance, operating highways are also faced with an income deficit of about 200 billion yuan; in other words, their operating performance is not favorable. Data are available upon request to the corresponding author. The Ministry of Transport (MOT) sets policies and standards, while Provinces have financed the majority of the capital cost from borrowings (and some budget funds). The vignette revenues would be consolidated into a pooled revenue at the province level and to support network-wide maintenance and rehabilitation, as well as use the excess funds to cross-subsidies network expansion. 37583769, 2019. CMHPs dividend yield of 6.9% is, however, as high as Zhejiang Expressways and higher than that of Sichuan Expressway. 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. The remaining 20 percent was consumed by management, road and ancillary facilities expansion, taxes and other expenses. Are the hundreds of millions of yuan in loans really used for new toll road construction? Therefore, the premise of the role of the market mechanism is for the government to restructure its functions and role in the toll road industry. The current operation management system of Chinas toll highways is characterized by one highway by one company and one highway by one management office. Specifically, for each newly built toll highway, an extra branch office or management office is set up under a group company or highway authority; then, toll management stations are set up under the management office, and toll stations are set up under the management stations. Another problem thats specific to CMHP is that acquiring toll-road assets from its parent isnt a straightforward matter. Do follow my Dividend Stock Tracker which is updated nightly here. 683708, 2011. 49, no. L. Yu and C. Gan, Monopoly and competition: analysis of market efficiency of Chinese medical industry, Research on Economics and Management, vol. 218, 2019. Hypothesis 2 is further verified from the perspective of industrial property structure. In particular, with the extension of neoclassical growth theory, infrastructure analysis has entered the stage of normative analysis, and the studies of acting paths continue to be optimized [4245]. However, beginning with the Jingshen Expressway, tolls are gradually being networked. K. R. Shen and G. Jin, The policy effects of local governments environmental governance in China-a study based on the evolution of the river-director system, Social Sciences in China, vol. Unlike most other state-owned toll-road operators, however, CMHPs assets arent confined to a specific province. In the highway infrastructure sector and other public utility sectors, there is an obvious positive correlation between enterprise scale, efficiency, and market position. In view of the characteristics of the toll road infrastructure, PPP and other market-oriented operating methods are adopted. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Use. So what is really behind these huge stated losses? 9, pp. Moreover, the unique operational organization of the toll road industry with a strong administrative monopoly power is the key to the above problems. Industry-level control variables: toll road management expense , toll road maintenance expense , and toll road toll station number .The proxy variable for administrative monopoly is the ratio of the scale of governmental loan-repayment toll highways to the total scale of toll highways, and the ratio of cumulative capital funds for the construction of governmental loan-payment toll highways to the total investment of the toll highway sector; thus, the intersection terms are recorded as and, respectively, in Table 9. The Harris County Toll Road Authority ( HCTRA, pronounced "Hectra") maintains and operates a 103-mile (165.8 km) toll road system in the Houston / Harris County area. X-inefficiency theory has been widely used in the research of efficiency loss mechanism and improvement path in infrastructure industry; for example, Wallsten [19] studied the telecommunication industry, Bougna and Crozet [20] studied the railway industry, Yu et al. Published by Statista Research Department , Oct 7, 2022 In 2020, about 43.2 percent of overall toll road mileage in China were state-owned and 56.8 percent were privately owned. 60, no. Cai Shenkun is a well-known Chinese economist and blogger. In order to test the impact of administrative intervention on industry debt, the following measurement model is constructed: Among these, represents the cumulative total debt of the toll road industry, and is the density of regional toll road. If maintenance is inadequate it can deteriorate quite rapidly, particularly in adverse climates or with high axle loads. Use of tolling to help pay for Expressways is being increasingly adopted in countries whose highway capital and operating expenditure requirements outstrip public resources to pay for them. Whatever the case, toll-road operators like CMHP are careful not to base their investment decisions on the prospect of high toll rates. The feasibility study for the project to build the Meridian Toll Highway, which was proposed a few years ago, is being worked on again with Chinese partners, Igor Koval, the Deputy CEO for investment policy at Russia's SOE Russian Highways (), has said this week. Guihuang expressway is a good asset. Therefore, to dynamically compare DMUs, the Malmquist index has been widely used in the measurement of total factor productivity in various industries [6467]. The annual compound growth rates of toll roads in the western and northeastern provinces are 0.24% and 7.34%, respectively (the corresponding mileage indices are 1.0024 and 1.0734, respectively), while the annual compound growth rates of the scale efficiency index are 0.99% and 1.62% (corresponding to the SEC index of 0.9901 and 0.9838, respectively). However, its role in transforming sector scale into TFP and scale efficiency is significantly weakened by the interaction between administrative monopoly in the sector and toll highway density. With this year's Chinese New Year celebrations, families all over the country are planning trips back to their hometowns and braving the traffic that comes with it. We look more to growth in traffic, Jiang says. 6572, 2019. But he intends to fund these deals through placements of new shares. Thus, we can use the ratio of cumulative capital funds for the construction of governmental loan-payment toll highways to the total investment of the toll highway sector as the proxy of administrative monopoly, to test Hypothesis 2. A vignette system may offer other advantages: it may be economical to administer; it would help overcome the criticism of toll variability by automatically equalizing the cost of accessing Expressways across a Province; it would provide an incentive to users to maximize utilization of the Expressways rather than use less safe and more congested parallel roads . A political backlash is rising in Texas, one of the states that most aggressively encouraged toll-road construction, as residents realize that many major urban freeways are increasingly no longer . Toll roads, especially near the East Coast, are often called turnpikes; the term turnpike originated from pikes, which were long sticks that blocked passage until the fare was paid and the pike turned at a toll house (or toll booth in current terminology). G. Zhou, An inevitable topic-accumulation and solution of highway construction debt, China Highway, 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. And, CMHP is trading at 5.9 times earnings compared with Jiangsu Expressways eight times and Zhejiang Expressways 7.8 times. If we can do a placement, we reduce our gearing by half.. [18]; (3)The mainstream studies concentrated on the theoretical exploration and empirical measurement of the mechanism of X-inefficiency and degree of efficiency loss. 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