Non-toll revenue potential to increase funding sources for toll road maintenance

Abstract

The purpose of providing toll road infrastructure through Public-Private Partnerships (PPP) is to ensure that the private sector generates sufficient revenue to manage road operations and maintenance effectively. However, in many countries, various practices of PPP have led to budget shortfalls for road operations and maintenance. This situation is often due to escalating construction costs and lower-than-expected traffic volumes. To address these financial challenges, this study aimed to implement asset commercialization schemes within toll road management. A specific case study was conducted on a section of the Indonesian Trans Sumatra toll road that faced rising construction costs and low traffic volumes. A quantitative approach was applied to assess potential non-toll revenue that could be generated through asset commercialization along toll road corridors. The commercialization opportunities considered included leasing land for advertisements, installing solar power plants, erecting communication towers, and establishing rest area businesses. The identification and analysis of these opportunities were closely tied to the type, quantity, and location of asset. The results showed that asset commercialization schemes, particularly land leases for advertisements and rest area businesses, had potential to generate substantial revenue. It showed that by fully capitalizing on asset commercialization opportunities along toll road corridors, significant additional income could be generated to support road maintenance funding. The approach developed in this study could be applied to other toll road sections facing revenue deficits and budgetary challenges in maintaining their operations. This study could contribute to the growing body of knowledge on the commercialization of toll road asset.