May 8, 2003

BCAA opposes transferring Coquihalla highway operations to private company

Burnaby, B.C. – The British Columbia Automobile Association
(BCAA) said today that it strongly opposes the provincial government’s
decision to enter into a 55-year contract with a private company to operate,
maintain and upgrade the Coquihalla Highway.

When polled on this question last year, fully three-quarters of BCAA
members surveyed were opposed to the notion of selling existing transportation
facilities, such as the Coquihalla Highway, to private companies to be
operated as toll facilities. Over 60% of those surveyed were “strongly
opposed” to the idea.

“Although they’re not selling the Coquihalla outright, what the
government is essentially doing is leasing it out for 55 years, which is
tantamount to selling it,” says Bill Bullis, BCAA President and CEO. “There is
a strong feeling among BCAA members that drivers should not be asked to
continue paying for something they have already bought and paid for.”

The government is essentially turning over the Coquihalla along with the
toll revenue to a private operator in exchange for an undisclosed “upfront
fee” and commitments to maintain and upgrade the highway. The toll revenue
that is now collected by the government and presumably used to help pay off
the highway, will now be collected by a private company and used to maintain
and upgrade the highway, and generate a return for its shareholders. The toll
rate for infrequent, non-commercial drivers is also set to increase under the
new arrangement.

The government’s intent to invest the proceeds of the “upfront fee” from
the private operator back into other road infrastructure is characterized by
BCAA as “misplaced and unfair.”

“What the government is doing is asking drivers to continue paying a toll
on one highway to help build another road facility someplace else,” comments
Bullis. “That is not in keeping with the conditions under which BCAA members
have told us they would support paying tolls, and therefore we would not
support that approach to transportation financing.”

A majority of BCAA members surveyed in 2002 supported paying tolls on new
roads and bridges until construction costs are recovered. But most members
were opposed to paying tolls to finance road maintenance and upgrades.

“This government seems to be coming at us from all angles,” adds Bullis.
“First, they increased fuel taxes by 3.5 cents per litre. Next, they said they
would consider charging tolls under certain conditions. Now, they have
announced that Coquihalla tolls will be increased and remain in place

In recent years, the provincial government has received approximately
$540 million annually in fuel tax revenue, $42 million in Coquihalla toll
revenue and $340 million from vehicle license fees. The 3.5 cent per litre
fuel tax increase implemented on March 1 is estimated to generate an
additional $218 million per year.

“The taxes and fees government currently collects from motorists provide
ample funds for an aggressive program of road building and rehabilitation. The
decision to turn the Coquihalla and its toll revenue over to a private
operator in exchange for a short term injection of cash is, in our view, short
sighted and not in the long term best interests of BCAA members and motorists
generally,” concludes Bullis.

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