From sunny Southern California, some gloomy news on highway tolls. Here’s the Orange County Register…
Orange County’s toll roads have slid farther and farther behind the confident projections of ridership and revenue on which they were built, prompting an unusual state review of their finances.
The roads were the first of their kind in California, a bet that drivers would be willing to pay to escape the grind of Southern California freeway traffic…but the bet has not paid off as well as operators expected.
The bonds backing both projects have sunk to junk status—a sign that investors are worried about whether they’ll actually be paid back.
To be fair, one of the two toll projects was performing as expected up until 2006—when traffic started falling below projections. Revenue stayed up with projections for another couple of years, before it started to trail off as well.
But traffic on the other route lagged behind forecasts from the get-go. The toll route is generally free-flowing, but drivers prefer parallel, toll-free alternatives, even if they’re clogged with traffic.
Toll road failures are nothing new; in fact, they’re surprisingly common. But I thought that this case deserved a special mention, for two reasons.
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