Shanghai Scraps Huangpu Tunnel Toll

Shanghai recently cancelled the toll to drivers crossing the Huangpu River, a move meant to encourage growth in the Pudong New Area, a special economic zone on the river's east bank.

"This is a great moment for Pudong, almost as important as the completion of the tunnels," said Kang Huijun, general manager of Pudong Lujiazui Group Co Ltd. The tunnels connect Pudong to Puxi, which includes the Bund and old downtown Shanghai.

Cars passing the city's two tunnels and five bridges were required to pay a toll of 15 yuan (US$1.81), and buses 9 yuan (US$1.08), since 1995.

But complaints have mounted, with some people calling the toll an obstacle to growth in the 522-square-kilometre Pudong. Pudong, once farmland, has been built up since 1990 to become Shanghai's financial and trading centre and a magnet for foreign business. The government has applied special policies in Pudong to encourage investment.

As toll collectors quit working at midnight on Monday, officials and analysts - as well as taxi drivers - are hailing the decision a wise one for the city.

"Pudong's property and job markets and its economic growth can all benefit from this decision," said a Pudong official who did not want to be named.

One benefit will be more sales of top-rated offices and residences, said Sam Crispin, research department director of FPDSavills International Property Consultant, in an earlier interview with reporters.

He expects Pudong's now empty Grade A offices to fill in less than five years.

Taxi drivers expect higher income as more customers take cabs across the river. They are not the only ones expecting more money.

"The toll was one of the factors for the high cost for companies operating in Pudong," said Pae-Kwon Park, who represents the South Korean company POSCO.

CITIC Hongkong, concessionaire of the the three tunnels and three bridges, said it understands the toll cancellation decision.

The company was happy with its revenue in recent months. But the company had a long way to go to recoup its investment. It estimated that operating the Yan'an Road Doublet Tunnels would turn profitable in 2003.

The company will be compensated for its lack of returns by government sources: 100 million yuan (US$12 million) from the municipal government and 200 million yuan (US$24 million) from the Pudong government each year.

For several years Shanghai congressional deputies have repeatedly appealed for abandoning the toll.

"To add convenience for common people to travel and to attract more investment to Pudong, the tolls should be cancelled," said Chen Yongsheng, who led 12 deputies in submitting a cancellation bill this March to Shanghai's 11th Congress.

Chen was a deputy general manager of the Sino-Japanese JVC Electronics Co Ltd, based in Shanghai. He personally experienced the toll's inconveniences whenever taking a car across the river.



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