Gasgoo.com (Shanghai January 21) - Chinese expressway tolls may decrease, the Ministry of Transport announced recently. The news comes as a relief to logistics and transport companies, but industry insiders warn that many in the expressway industry may be negatively influenced.
Although the Ministry of Transport is considering extending the time period for expressway companies to collect tolls, it may decrease overall toll rates, said Cai Yuhe, Deputy Director General of the Ministry's Department of Comprehensive Planning, during the China logistics development report held earlier this week. The Ministry is also reportedly considering the possibility of implementing a toll-free expressway structure.
Expressway companies are urging the government to consider regional economic status before making any final decisions. "When compared with neighboring provinces, Jiangxi's expressway tolls are currently on the low side," said Jiangxi Ganyue Expressway Company (600269.SH) CEO Xiong Changshui. According to Mr. Xiong, Jiangxi province's average expressway tolls are 0.4 yuan ($0.06) per kilometer, plus a 0.08 yuan ($0.012) per kilometer fee for every ton transported, while tolls in neighboring Anhui province are 0.45 yuan per kilometer ($0.07) and transport fee of 0.09 yuan ($0.014) per kilometer for every ton.
Jilin Expressway Company (601518.SH) voiced similar concerns, saying that, "Currently expressway tolls in our province are based on weight. The aforementioned policy should be based on each province's economic condition."
According to transport laws, expressways in China can be built using government appropriated funds or private capital. Presently companies using government loans to build highways may collect fees for up to 15 years, while those built using private capital may continue to charge fees for up to 20 years.
"As the country considers how to reform, various industries' may feel short-term effects, especially when it comes to income and net profit," an analyst within the industry said. "However, the investment and adjustment costs pay off in the long-term. Currently the time period for companies to collect expressway tolls varies from 20 to 30 years [across the country]... By extending the time period for collecting tolls, this policy will be able to keep short-term risk at a minimum, while allowing gains to be divided more equally."
