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    Toll roads in Colombia are overexploited

The greatest burden to finance the infrastructure of Colombia has been left to toll roads, a model which has been overexploited due to the obsolescence of other two other mechanisms to obtain income for highway projects, which is appreciation collection and added value.

According to Article 338 of the Political Constitution of Colombia and Law 105 of 1993 on the fiscal contributions, tolls are an infrastructure funding instrument applicable both for provinces and municipalities –through bylaws and agreements– based on Law 787 of 2002. This regulation establishes that the government can assign a fee and that the funds collected by using this method should be destined exclusively for land transportation investment. It also says that the toll fees assigned should be differential according to the distances covered, the features of the vehicles and the operational costs.

Despite being a good tool, the model is loaded with inefficient management in collecting appreciation and added value, which may be destined along with the toll monies collected to finance highway infrastructure. The former is asymmetric as it is only charged in areas with enough income to pay these fees; therefore new highway infrastructure is only carried out in said areas, leaving the sectors without the income capacity to pay, without road investment.

In regards to urban added value, it is a mechanism which is new and has not been used much in Colombia, it is only used in large cities such as Bogotá, Medellín, Cali, and Pereira, and is produced by the greater value of the ground when the land is valued more due to the effects of changes in use and investment in nearby projects, funded by public resources, not by the owners. In this case, the government can recover between 30% and 50% of the surplus value when the owner sells land near these projects. Although it can also be perceived in another manner saying the government is giving away between 50% and 70% of the surplus value to the landowners of an asset which belongs to society.

Therefore if appreciation and surplus value are charged, the tolls could be cheaper and thus would avoid conflicts such as a recent issue with a toll both in the Urabá area (Province Antioquia), where the neighbors protested for the installation of two new and expensive toll booths.

Charging by categories

The cost of a toll in Colombia has low dispersion. The value depends on the vehicle type:

  • Category I: automobiles, pickups, and SUVs.
  • Category II: buses, small buses, and trucks with double wheels on the rear axle and truck with two axles.
  • Category III: Three and four axle trucks
  • Category IV: Five axle trucks
  • Category V: Six axle trucks

The cases of extreme toll payments are few, including Col $ 15,100; $12,900 down to $3,400 and 2,500 in different toll roads around the country.

For instance a trip from Bogotá to the Pacific coast (Buenaventura) in a Category I vehicle could cost between $80,600 and $312,200 pesos for a Category V vehicle (9 toll booths- and a distance of 517 km.) while a trip to the Atlantic coast from Bogotá could cost between $111,000 for a Category I vehicles and $437,200 for a Category V vehicle (11 toll booths and 1050 km.)

For most toll roads near cities, the distances are between 40 to 80 km. for distances under 20 km. there needs to be a special treatment and use appropriate planning mechanisms. Therefore the convenience of using other methods such as urban appreciation and surplus value and strategies to become cognizant of the convenience or not of toll roads, prevent excessive toll fees and avoid a number of inadequate toll booths.

Advantages and disadvantages of using toll roads

Although tolls as tax rates are expensive for users and raise prices for cargo, appropriately managed they could be justified for the following reasons:

  • In urban settings, they favor the use of mass transportation by raising the cost of using a vehicle. This is the reason why in 2017 the mayor suggested placing urban toll booths to reduce traffic and increase funds to build more roads and enlarge avenues.
  • In connection roads which link ports and production and consumption centers, they are an infrastructure financing tool which will help modernize the road system. With fourth-generation (4G) roadways the environmental impact will be minimized (CO2 emissions and noise) and land cargo costs will be reduced in 30% by shortening distances, achieving higher travel speeds and improving road safety.
  • Greater mobility added to territorial connectivity as an economic growth factor is also recognized.

One of the challenges is that investment in projects funded by toll road fund collection is timely and not repeat what happened in a toll road between Armenia and Pereira, where they built a double-lane two-way road where vehicle flow was insufficient. Therefore bad toll road management is where people pay for an investment which will only be used in the future.

On the other hand, the government needs to make road management in a participative manner as to turn projects into an instrument of peace and not of conflict as has occurred in several toll roads around the country. Furthermore, it should also provide legal inspection, supervision and control mechanisms and also foresee and mitigate the impact in the case of rural communities impacted by such projects.

Therefore in order to translate this into an economic growth development mechanism linked to roadways, the government should not only maximize toll road fund collection in long roadways and minimize them in short roadways, even if they turn out to be high traffic highways, as specified in a “Research to determine the methodology for installing toll booths in Colombian national roadways” written by Germán Ospina for the National Roadway Institute (INVIAS, for its Spanish acronym). Also, balance the loads and benefits system by updating the land valuation system and implementing charging for added value produced by building public projects.


Consejo Editorial