An interesting experiment in the sensitivity of motorists to increases in toll charges is taking place in the Dulles Greenway. For the first three quarters of 2006, traffic is down 6.6 percent, despite soaring population growth in Loudoun County, in the aftermath of a $.30 toll increase. “The 2006 traffic drop is likely a real indicator of elasticity as the average toll has increased by 30 percent between December of 2004 and September of 2006, well above an inflationary increase,” reports Fitch, the bond-rating service, in giving the Greenway a BBB rating.
October results suggest, however, that demand may be on the upswing again. Meanwhile, toll revenue for the first three quarters of 2006 is up 20.8 percent over the same period in 2005. Revenue has been maximized by the toll increase, application of the peak toll to all hours of weekday traffic, and also aggressive enforcement action, including a $25 administrative fee.
According to Fitch, the TRIP II partnership that owns the toll road has submitted a rate increase application to the State Corporation that would jack up the maximum toll from the current cap of $3.00 to $4.00 by 2012. The application also requests the ability to use variable pricing that would raise the peak hour toll in 2012 to $4.80.
The Macquarie Infrastructure Group, of Australia, is the managing partner of TRIP II, and has agreements to acquire 100 percent ownership by 2020. Details can be found in the Fitch press release.