Is a Mixed Funding Model for the Highway Network Sustainable over Time? the Spanish Case

Tolls are a recurring but not continuous feature in major highway financing policy in Spain. User tolls were the model used to finance the first expansion of the highway network, in the 60’s and early 70’s. The second wave of the highway network expansion took place in the late 80’s and early 90’s. The public budget was the usual source of funds used to pay for the highways built in this period. Since the late nineties, public financing has continued being the main funding source for the new highways. Nonetheless, some of the new highways are financed through user tolls. As a result of such irregular pattern of funding sources, the Spanish highway network is quite singular in the fact that mixed funding sources is used to finance the building of new highways and to maintain the old as well as the new highways. Rounding up, 75 per cent of highways have been built and are maintained with public funds, whereas 25 per cent of them have been built and are maintained with user tolls (although it has to be noted that public subsidies of different kinds have been given to the privately operated highways). Now, there is a question that is increasingly difficult to avoid: is it possible to make progress towards achieving functional and financial uniformity in the currently dual Spanish highway system? This papers looks into this question. First we briefly review the theory of highway tolls and examine the models of financing applied in Spain. From this starting point we go on to discuss different policy choices that could lead to an uniform system of highway finance in Spain. Among them, the advisability and feasibility of eliminating tolls from highways, or extending them to the whole network of highways.