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To: BobL
First of all, tolls are not taxes, although your second observation is correct: they have the same effect on behavior. In any case, what happened in Ohio is the politicians decided to milk the truck-transportation cow, and failed to consider the policy ramifications same. It's rather tough to argue that Cintra will do the same, because Cintra (apart from being bound by the terms of the contract) will try to maximize the revenue from the trucks without losing them. That's the difference between public (governmental) operation of something and private operation.
43 posted on 10/08/2006 7:53:11 AM PDT by 1rudeboy
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To: 1rudeboy
...except that maximizing revenue will not necessarily lead to low tolls - the maximum revenue point depends on demand versus capacity. If demand versus capacity is high enough, tolls will have be set very high in order to keep traffic moving. That is the power this governor is handing over to Cintra. Heck, in California they have a toll road now charging 85 cents per mile for cars, at peak times.

The trucks are not a 'block' of vehicle in the sense that all of their drivers think alike. The big trucking companies may well cut a deal with Cintra, but for the independents, the decisions will be one load at a time.

If an independent knows that he will have 4 hours to spare when he arrives at his destination, for a particular load, then he will very likely stay off the toll road - particularly at the 50 cents per mile being discussed, as that money is right out of his pocket.

If there are no tolls, then he will DEFINITELY take the freeway for the same trip, as it is less stressful. I think that we both prefer that the trucker stay off of the side streets.

As to Cintra's pricing strategy - it will depend on how solid their non-compete clauses are. If people HAVE to use the toll road (or spend the day inching along), Cintra will make a killing by simply raising the tolls through the roof without expanding capacity - whereas here in Harris County, they are adding lanes to the tollway - since there is a political price to be paid if they simply raised tolls to cut down congestion. Cintra will not (and has not) cared about public opinion.
46 posted on 10/08/2006 8:07:54 AM PDT by BobL (http://www.brusselsjournal.com/blog/4556 (here is where the real Europe is going))
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