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Throughout the United States, traditional public-sector funding sources for transportation projects are becoming less able to meet the growing demand for highway infrastructure. The shortfall affects the construction of the highway, as well as its operation, maintenance, and expansion. As a result, state departments of transportation are increasingly seeking alterna- tive methods, such as toll facilities, of financing for new highway projects, with a greater reliance on private-sector sources. For toll facilities to be financially viable and/or attractive to potential investors (publicâ private partnerships, etc.) in the future, the facility must be seen to be able to generate suffi- cient revenue from operations to cover debt service cost, and potentially other project and maintenance costs over the lifetime of the facility. This requires a reliable and credible fore- cast of the expected revenues, which are functions of the estimated traffic demand and toll rates for the facility. However, in the past, industry experience in the toll demand forecasts upon which these are based have been quite varied, in that demand (and the accompanying revenues) has ranged from overestimated in many cases to occasionally underestimated. In addition, the accuracy of when specific levels of demand are projected to occur has been mixed, with problems being particularly acute in the short-term facility ramp-up period. The resultant variations have had significant impacts on both the actual revenue streams and on the facilityâs debt structuring and obligations. This has led to concerns among facility own- ers and the financial community (which rates and insures and/or invests the bonds that are issued for the facilityâs implementation) about the accuracy, reliability, and effectiveness of the demand forecasts upon which the revenue projections are based. The purpose of this synthesis is to report the state of the practice in demand forecasting models that are used as the basis of revenue forecasts for toll roads in the United States. The synthesis profiles the current state of the practice in toll road demand and revenue forecast- ing, through a literature review and a survey of practitioners. It identifies the technical modeling issues that affect the performance of the forecasts and how these have been treated in current and emerging practice. The synthesis also develops checklists and lists of ques- tions that practitioners (owners, proponents, and financial backers) can use to improve the state of the practice. Finally, recommendations for future areas of research are identified. The synthesis focuses on the state of the practice in the United States; however, it also references international practices where applicable. A total of 138 survey questionnaires were distributed to either state departments of trans- portation, toll authorities, bond rating agencies, and bond insurance agencies. Responses were received from 55 agencies (40%), of whom 25 completed the first two parts and 13 the entire questionnaire. SUMMARY ESTIMATING TOLL ROAD DEMAND AND REVENUE
