5/9/2008Toll Hikes Used to Boost Foreign Company Profits
North American motorists pay extra to cover the losses at a Spanish toll road giant.
Drivers in North America are paying higher fees to cover the red ink of a Spanish infrastructure firm. Global toll road giant Cintra announced yesterday that its first quarter revenue had jumped 15.3 percent thanks in part to toll hikes on roads in the US, Canada, Chile, Ireland and Spain. Despite collecting 881 million Euros (US $1.4 billion) from drivers last year, the company failed to make a profit. The company lost 16 million Euros (US $25 million) in the first quarter of this year.
During this time, traffic dipped 8.9 percent on the Chicago Skyway and 6.1 percent on the Indiana Toll Road. In an earnings statement, Cintra blamed bad weather and the "betterment" of free alternative routes such as the Dan Ryan Expressway in Chicago for reducing profit. The weakening dollar also cut into the Spanish company's revenue from US motorists.
Those American motorists are now paying significantly more as a result. In 2005, Governor Mitch Daniels (R) leased the Chicago Skyway to Cintra and the Australian tolling firm Macquarie for the next 99 years. The consortium hiked tolls 20 percent earlier this year, charging motorists $3 each to drive the 7.8 mile route.
In April, Cintra raised toll rates for drivers on the Indiana Toll Road by 21 percent. In another hike, the company nearly doubled the toll for motorists who do not use an electronic toll transponder. The cash price for driving the length of the route jumped to $8, up from $4.65.
In Canada, Cintra won the right to set whatever rates it chooses on the 407 ETR toll road in a 2005 Ontario court decision. Since then, Cintra has raised the toll by nearly 30 percent. Cintra also owns the newly opened SH-130 toll road in Texas.