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Free roads may cost 20b yuan

By Du Liya (Global Times)

09:34, September 18, 2012

Transportation researchers are challenging an expert's prediction that highway companies will lose 20 billion yuan ($3.16 billion) a year after the State Council ordered they eliminate toll fees on passenger cars during four major national holidays.

Hu Fangjun, an expert from the China Academy of Transportation Sciences under the Ministry of Transport, made his predictions based on the 30 to 50 million yuan collected each day by some provincial highway companies. The loss would amount to 20 billion yuan each year throughout the four extended holidays, the China Youth Daily reported over the weekend.

The State Council issued the toll-free road policy on August 3, allowing passenger cars with seven seats or less to travel free of charge on toll roads. The first toll-free holiday is the upcoming eight-day Mid-Autumn Festival and National Day holiday.

Some researchers believe Hu has overestimated the loss.

"Income loss is inevitable, but the situation is not as serious as the data shows," Shao Chunfu, professor of urban transportation research at Beijing Jiaotong University, told the Global Times.

According to the financial data provider Wind Information, 19 listed highway companies earned a net profit of 6.25 billion yuan in the first half of this year.

The move comes in response to public complaints about highway congestion during major holidays.

"Surely, it will also generate massive traffic pressure as more cars will pour onto highways, a trend that contradicts the intention of the policy," an official surnamed Zhang from the China Highway and Transportation Society, told the Global Times.

"This policy will obviously benefit people planning to get behind the wheel during the holidays," said Zhang. "We should pay more attention to the implementation and the losses shouldn't affect the price-setting mechanism of highways."

"Many companies are likely to resist the policy as they can see huge losses if it continues in the future. Follow-up policies are needed to regulate who will share the burden of the losses," said Shao.

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