Criteria for Setting Tariffs on Toll Highways in Mexico

A methodology for determining the tariffs that should be charged for different types of vehicles driven on new toll roads in Mexico is presented. The methodology is based on two criteria: maximize the income of the toll collector (whether this collector is a government agency or a private concessionaire) and minimize national transport costs. The first criterion requires the development of binary logit models for predicting the traffic demand fraction choosing the toll alternative. The second criterion requires the minimization of road users' transport cost, which is composed of vehicle operating costs plus the tariff charged. This tariff should include road deterioration costs, construction and financial costs, the administrative costs of operating the toll road, taxes, and other expenditures. Principles for computing reference tariffs are recommended along with ways to use these tariffs to analyze the economic feasibility of toll highways.