China is considering regulations that would allow road operators to levy a toll on users beyond the current 15 to 30-year limit, according to Bloomberg. The plan would potentially boost an industry that has been plagued by losses as companies struggle to earn enough to cover their debt and operating costs.
“The extension of the tolling period can help to woo private investors into highway development,” said Zhu Haibin, chief China economist at JPMorgan Chase in Hong Kong. The plan shows the government’s desire to promote joint government and private-sector projects, he said.
China’s government is trying to avoid incurring massive debt to stimulate the economy, opting instead to inject money into lenders and free up more commercial-bank reserves for lending. Extending toll collection by 10 years would generate $640 billion more revenue, according to Bloomberg’s calculations based on last year’s fee revenue.
“The extension of the tolling period can help to woo private investors into highway development,” said Zhu Haibin, chief China economist at JPMorgan Chase in Hong Kong. The plan shows the government’s desire to promote joint government and private-sector projects, he said.
China’s government is trying to avoid incurring massive debt to stimulate the economy, opting instead to inject money into lenders and free up more commercial-bank reserves for lending. Extending toll collection by 10 years would generate $640 billion more revenue, according to Bloomberg’s calculations based on last year’s fee revenue.
