Expressway operators face crackdown on exorbitant tolls

Five ministries have launched a joint crackdown on exorbitant highway tolls on the mainland after state media accused operators of earning staggering profits and adding to inflation by pushing up transport costs.

A notice issued yesterday by the ministries of transport, finance and supervision, the National Development and Reform Commission and the State Council Office for Rectifying Malpractice told regional authorities to cut the number of toll gates and unreasonable fees, including those charged by operators who had already repaid construction loans.

In Guangdong, the crackdown will have four phases: investigation, rectification by the end of December, re-examination, and improvement by the end of May.

Mainland authorities have launched various campaigns to reduce highway tolls since 2004 - including the introduction of a fuel tax from January 2009 to replace statutory road maintenance fees for every vehicle - but few have succeeded.

Many expressway companies are jointly owned by regional authorities, which have resisted Beijing's crackdowns as they consider the tolls to be an important revenue source.

The overcharging of highway tolls rakes in billions of yuan across the mainland each year. In many provinces where construction costs were footed by local governments, partially through bank loans, the authorities continue to charge drivers after the toll contract expires.

State media have reported that logistics costs on the mainland last year accounted for about 18 per cent of gross domestic product, twice the average for developed countries.

Last year, the average profit margin of 19 highway companies listed on the Shanghai stock exchange was 35.5 per cent, according to their annual reports. That ranks them alongside oil companies, securities firms and real estate developers.

Most of the big shareholders of listed highway companies are state-owned transportation companies.

According to the Southern Weekly, the average income of employees of the Ningbo-Shanghai expressway is about 8,000 yuan (HK$9,613) a month, several times the local average. Its gross profit margin on highway tolls last year was 74 per cent.

The newspaper said at least 15 senior managers from Sichuan's Chengdu-Chongqing expressway were former officials from the province's transport bureau.

Professor Zhao Jian of Beijing Jiaotong University was quoted by the New Century Weekly as saying: '[Beijing] should change the highway companies ... to special enterprises with little or no profit, as roads and transport infrastructure shouldn't be a private tool for money making.'