Toll Road Concession Agreement

c) The dealership receives revenue from tolls and related developments. Developers agree to pay Grantor the percentage of excess revenue by referring to IRR. Dealers receive revenue from tolls and related facilities and developments. Agrees to pay a concession fee on the basis of the surplus quota if a certain level of shareholder IRR has been achieved. The nine states studied would have significant net revenues from leasing their toll systems through long-term public-private partnerships, even after the repayment of exempt toll bonds. So far, only two TIFIA loans for toll concession projects have encountered difficulties. San Diego`s South Bay Expressway went bankrupt in 2010 because of insufficient traffic and toll revenue. A 2011 Congressional Budget Office report estimated TIFIA`s potential loss at $72 million. Subsequently, however, the lenders sold the expressway to the San Diego Government Association (which received an almost brand new toll road for 44% of its initial costs).

Under the revised financing agreement, TIFIA obtains a higher interest rate on its investment degree debt (paid on toll revenues), and the Federal Highway Administration now finds that “the TIFIA program is able to obtain 100% of its original credit balance.” In the case of Pocahontas Parkway in Virginia, lenders took over the toll road after revenues were lower than expected. Lenders, including TIFIA, could choose to stay in the project and attempt to recover all of the capital over the term of the concession or sell their shares in the project. After a lender sold its loan at a percentage of face value, TIFIA decided to do so and sold its loan at 41.5% of face value. This TIFIA loss alone represented only 1.1% of the total TIFIA funding (situation in 2014). Of this total, 39 loans are active and 9 have been repaid to date. Why did legislators not vote yes or no to any P3 agreement? Maintenance work is a bad idea because it will result in poor paving quality and an unsightly appearance that will both make the toll highway less attractive to paying customers. In addition, the bond alliances that the concessionary company must approve to sell the tax obligations require good routine maintenance, precisely to keep the road in better shape than other “free” highways. And the concession contract with the state DOT also provides for enforceable maintenance standards. NOTE: The Word version of the agreement contains comments that are not available in PDF format. Why leee an asset? Won`t toll rates go up? Isn`t this a terrible time to think about infrastructure leasing? Part of a series of existing and proposed concessions for roads.

Phase 2 (including two parts) will be subject to a separate concession agreement. In some legal systems, this approach could lead to procurement issues, as Phase 2 is more of an agreement to be agreed upon. Don`t these projects turn free roads into toll roads? No no. Like most other major infrastructure (railways, pipelines, electricity suppliers), toll dealers finance these projects with a mix of debt and equity. Equity is cash that they put directly into the project (such as the down payment for a house), usually about 20% of toll concessions. Debt can be a mixture of income bonds and bank loans (like a home mortgage). In some cases, subordinated loans from the Federal Highway Administration are also used under a program called TIFIA, which came into effect in 1998 by Congress to promote PPP infrastructure. Toll revenues are intended to pay off all debt providers and to obtain a return on the company`s equity investment. In some mega toll concession projects, the state DOT has imposed many costly requirements that make the total cost of the project as high as the projected toll revenues