Fitch: Toll road traffic declines as Americans drive less

By David Tanner, Land Line associate editor | Friday, August 09, 2013

Traffic on U.S. toll roads continues to decline as Americans drive fewer miles, and a major ratings agency says fuel prices and the recent recession of a few years ago only partially explain the trend. Fitch Ratings also counts technology, jobs that allow people to work from home, and fewer young people getting drivers’ licenses among the factors.

A recent study by the U.S. Public Interest Research Group shows that Americans are driving about the same number of miles today as they did in 2004. The lack of growth in recent years followed nearly 50 years of steady, predictable increases in miles traveled on American highways since World War II.

The PIRG study shows people in the age group of 16 to 34 are driving 23 percent fewer miles in recent years than they did in the early 2000s.

Fitch Ratings applied the trend to toll roads in a recent outlook for investors.

“Certainly, traffic has declined over recent years, partly caused by the economic situation, high gas prices, and a number of other contributing factors,” Fitch Director Savaan Gatfield told “Land Line Now” on Friday, Aug. 9.

Gatfield says toll increases have helped some toll road agencies survive the traffic decline. He adds that Fitch does not believe toll roads will be going broke any time soon on any kind of scale.

“The outlook for toll roads remains stable,” he said. “This reflects the fact that despite declining traffic generally, projects have several protections. One is that they have been able to increase revenues despite falling traffic. This is a result of their ability to increase toll rates. Secondly, they generally have the flexibility to manage their operating costs and their maintenance schedules in the case of lower traffic.”

Another Fitch director, Cherian George, stated in the company’s report that toll roads with “meaningful un-tolled competition” would be the most vulnerable to reductions in traffic.

“Land Line Now” Staff Reporter Reed Black contributed to this story.

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