Based on the demand elasticity implied in the Traffic Study, increasing the initial toll on the Bridge from $2.00 to $3.00 will have the net effect of increasing total revenue collected from the Project, and therefore the concession value. This is because, based on the projected traffic volumes in the Study, this toll increase does not decrease demand for the new Bridge sufficiently so as to more than offset the higher per-vehicle revenue. The results of a valuation assuming a $3.00 initial toll are below.
Assumptions
■ Average $3.00 each way toll beginning in 2013 growing at 2.5% each year to adjust for inflation.
■ 2013 average daily traffic of 28,000 vehicles, growing to 36,000 vehicles by 2030, in keeping with the most conservative estimates provided in the "New Mississippi River Bridge Funding Analysis."
■ Volume growth after 2030 of 1.5% per year.
■ 70% operating margin.
A preliminary valuation of a Mississippi River Bridge Project concession in this scenario results in an estimated value range of approximately $405-510 million.