SPECIAL REPORT: Fitch gives toll roads a ‘negative’ rating

| 8/22/2008

Friday, Aug. 22, 2008 – A firm specializing in financial statistics and economic outlooks has given toll roads and airports a failing grade just a few months after listing them as stable investments.

Fitch Ratings downgraded toll roads and airports from stable to negative in a report released Wednesday, Aug. 20, titled “U.S. Transportation Assets: Facing a Temporary Decline or a Permanent Change?”

Citing months of volatile fuel prices and other economic factors, Fitch analysts said reductions in airport and toll road traffic were widespread but varied around the country.

“Given continued economic weakness, coupled with an approximately 33 percent increase in gasoline prices and a 52 percent increase in jet fuel prices from 2007, U.S. airports and toll roads are now experiencing declines in enplaned passengers and toll-paying traffic of as much as 19 percent and 16 percent respectively, in certain instances,” Fitch analysts stated.

The analysts gave airports and toll roads a stable rating in March.

Officials with the Owner-Operator Independent Drivers Association said the report shows that a case can be made against tolling as a philosophy to fund transportation.

“This report certainly shows that toll roads are not a good value for the American highway user,” OOIDA Government Affairs Representative Mike Joyce said.

“We have government and politicians that want to move more towards toll roads and that’s bad policy.”

Joyce said relying on volume and toll rates to meet projected revenue needs will ultimately lead to toll increases regardless of whether a toll facility is public or privately operated.

“There’s just concern all around because you’re counting on volume of traffic and certain toll rates,” Joyce said.

“You can bet your bottom dollar that as the number of vehicles traveling on those toll roads continues to decline, in order to make up for that decline, these toll authorities are going to have to increase the rates that they charge for people to use that facility just to maintain the status quo.”

– By David Tanner, staff writer