According to Fitch Ratings, based on its experience with a variety of toll roads around the world, it is their "best judgment that in most developed countries with high motorization rates, regularly scheduled toll increases that are pegged at or close to inflationary levels will likely have minimal adverse traffic effect." For toll roads with toll rates that have historically not kept pace with inflation, rates can be raised steeply to catch up to inflation without materially affecting demand.142 Fitch's experience confirms that toll rate increases that are pegged to inflation or some other reasonable indicator, and which are reasonably well phased in to avoid sharp increases, should not cause adverse traffic effects. Nevertheless, it is important to recognize that each facility presents unique circumstances and the problem of traffic diversion needs to be evaluated. To the extent traffic diversion is expected to pose a serious problem, then alternative PPP structures, such as shadow tolls or availability payments, could be considered.
The risk of diversion also highlights the benefits of congestion pricing. Appropriately structured congestion pricing may encourage drivers to drive at off-peak hours, when the toll rates are less expensive, rather than to drive on other roads. In urban areas, congestion pricing also provides a congestion-free alternative which actually encourages drivers using alternative routes to use the priced facility instead in order to get the benefits of faster and more predictable travel times. Various studies conducted by FHWA and others have shown that vehicle throughput on freeways drops by 10 percent to 25 percent when traffic flow breaks down, in addition to causing delays to motorists that do get through. This lost throughput can be regained when traffic flow on freeways is managed with pricing so that flow breakdown is prevented. Thus, managing demand on freeways with pricing during peak periods can actually increase freeway vehicle throughput and thereby increase the total volume of traffic that can be served in a priced freeway corridor, with the freeway attracting some traffic from other facilities in the corridor. Additionally, congestion pricing can divert traffic to transit, which provides a net benefit in congestion reduction.
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142 See Fitch Report, pg. 7