toll roads

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Re: toll roads

Post by admin » Mon Aug 07, 2017 8:54 am

Toll roads are consessions with private companies. Among other things they include road side service if you break down, run out of gas ect. Did you see the call boxes along the road?

Once the consession is up, the road returns to the goverment. They typically then put it up for bidding or renegotiate the contract with the companies. They are international companies from spain, mexico, canada i believe; that i can think of off the top of my head.

After the 2010 earthquake, it was the companies that had to suck it up and repair the major roads and bridges, and fast, as they have quality of services clauses in their contracts. One company as i recall did not repair their segment in time, and lost their consession. The point is, rather than the goverment needing to put up millions of dollars to fix such critucal infrastructure, the companies did it. It took months, not years to fix a thousand km of highways and bridges. They did get authorization to bump their tolls to help pay for it, but for the most part the companies put up the cash.

In the meantime, do you see all those nice paved roads in the middle of nowhere in chile? Without the main toll roads, the goverment would not be able to afford all those other roads. Try the pan-american highway almost anywhere else in the americas, including much of the u.s. segments, and tell me they are in better condition.

Last time i drove in the states, the highways were pot holed pieces of shit, and bridges that looked like they had not been maintained since nixion was in office. Rural roads were at best dirt.

unless, guess what? It was a private toll road. Much of The u.s. has them too now (florida, chicago, etc).
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Re: toll roads

Post by admin » Mon Aug 07, 2017 9:06 am

Funny, a couple months ago i bought a 4x4 that needed to be properly tested. I thought, 'cool now i can go hit that list of remote roads that i have had to turn back over the years in southern chile'.

Guess what?

They were all paved or at least really nice maintained gravel roads now. I drove for two hours before i found something to even make it worth putting my truck in 4x4. I was mumbling to my wife, " dam developed country".
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41southchile
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Re: toll roads

Post by 41southchile » Mon Aug 07, 2017 9:15 am

nikotromus wrote:From my experience, toll roads NEVER go away. The prices will only increase even after the roads have been paid for 3 fold. And, again, if gas prices are as high as they are due to the tax, then where does the tax money go?

Sorry for the newb post. I guess these questions shouldn't be asked. "Pay the money, shadup and/or gyeeet out!"
Not a case of questions shouldn't be asked just a case of thinking about things a little bit before asking them and before blurting out about financial rape, and what a total pain in the ass it is.
When those concessions were put in and the end of the last century/ early millenium the average wage in Chile was probably only about 3000USD per year, there were a hell of a lot less cars, less than a an large size city in the states probably. Chile wanted to have good infrastructure but didn't have the means to do it, they maynot have been in a strong bargaining position but that was the case at the time, as contracts have come up additional clauses have been put in, I still think it works fine, I was recently in New Zealand I wish they had of had the vision of Lagos and Chile nearly 20 years ago, the roads and highways in New Zealand are abysmal, dangerous and in shocking conditions. As I said Chile is geography large will a small population base and other solutions are needed sometimes. As someone else mentioned if toll roads are your biggest gripe about corruption here, then you might want to have a bit more of a look at things, you could find yourself permanently outraged here in Chile.

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Re: toll roads

Post by tiagoabner » Mon Aug 07, 2017 10:46 am

nwdiver wrote:
nikotromus wrote:From my experience, toll roads NEVER go away. The prices will only increase even after the roads have been paid for 3 fold. And, again, if gas prices are as high as they are due to the tax, then where does the tax money go?

Sorry for the newb post. I guess these questions shouldn't be asked. "Pay the money, shadup and/or gyeeet out!"

Chile is not an oil producer, the cost of fuel is not all taxes but real cost for the product plus some tax, where do you come from that has cheap fuel?
The fuel prices aren't that high when compared to other non-producing, reasonably developed countries. The US are an exception regarding this, not the rule.

Source: http://www.globalpetrolprices.com/gasoline_prices/

Chilean gas costs an average $1.12 per liter, while in Argentina it is $1.30. Heck, even Brazil, who has the 15th highest oil reserves in the world, being behind only Venezuela in South America, has a gas price of $1.18.

The matter is less about Chile having expensive gas and more about the US having cheap gas.

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Re: toll roads

Post by passport » Mon Aug 07, 2017 11:19 am

Those who protest taxation sometimes concede that user fees, in this case road tolls, are "just taxes" in that they put the cost of construction and usage on the users. Besides the drivers, consumers of goods that have been moved over the toll roads have a consumption tax built into the price of the goods being consumed.

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Re: toll roads

Post by nikotromus » Mon Aug 07, 2017 11:32 am

nwdiver wrote: Chile is not an oil producer, the cost of fuel is not all taxes but real cost for the product plus some tax, where do you come from that has cheap fuel?
This is what I read. It's a little dated. Is it wrong?

"Taxes are another significant factor that drives up fuel costs in Chile. The government collects 6 UTM for every thousand liters of gasoline and 1.5 UTM for every thousand liters of diesel. (The UTM, like the UF, is an inflation-adjusted index that changes daily, used in fiscal calculations, which had a value of 39,649 pesos [US$81.75] on April 26, 2012.) That amount translates to roughly 238 pesos (US$0.49) per liter of gasoline and 60 pesos (US$0.12) per liter of diesel, or about 30% and 9% of each fuel’s respective pump price."

That was my quandary. If my math is correct I spent roughly 44 dollars in taxes/tolls (same thing) for what I consider to be a small trip. I said 'was' because you guys have explained it perfectly. I'm good now.

41southchile
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Re: toll roads

Post by 41southchile » Mon Aug 07, 2017 12:25 pm

nikotromus wrote:
nwdiver wrote: Chile is not an oil producer, the cost of fuel is not all taxes but real cost for the product plus some tax, where do you come from that has cheap fuel?
This is what I read. It's a little dated. Is it wrong?

"Taxes are another significant factor that drives up fuel costs in Chile. The government collects 6 UTM for every thousand liters of gasoline and 1.5 UTM for every thousand liters of diesel. (The UTM, like the UF, is an inflation-adjusted index that changes daily, used in fiscal calculations, which had a value of 39,649 pesos [US$81.75] on April 26, 2012.) That amount translates to roughly 238 pesos (US$0.49) per liter of gasoline and 60 pesos (US$0.12) per liter of diesel, or about 30% and 9% of each fuel’s respective pump price."

That was my quandary. If my math is correct I spent roughly 44 dollars in taxes/tolls (same thing) for what I consider to be a small trip. I said 'was' because you guys have explained it perfectly. I'm good now.
So if your math is correct, you are paying about 8cents a km between tolls and fuel tax, what's the issue again?
30 percent on gasoline and only 9 on diesel certainly doesn't seem a lot to be honest, which shows that motorists are not being charged excessively. Now if you want to talk about a rort look at what prices you will pay for other items such as toilet paper, washing powder, sliced bread, any decent chocolate, dairy products, nuts, kids toys, parking buildings, schools, etc etc etc, welcome to Chile by they way, where you'll suck it up(because you will feel violated everyday you are here if you don't) or moan untill it all becomes too much and you leave after the constant financial rapings. All the best.

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Re: toll roads

Post by nikotromus » Mon Aug 07, 2017 1:00 pm

Right. The latter.

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Re: toll roads

Post by frozen-north » Mon Aug 07, 2017 1:29 pm

passport wrote:
Those who protest taxation sometimes concede that user fees, in this case road tolls, are "just taxes" in that they put the cost of construction and usage on the users. Besides the drivers, consumers of goods that have been moved over the toll roads have a consumption tax built into the price of the goods being consumed.
Good point. It might lead to an interesting discussion of the distribution of the tax burden on the different economic segments of the population. An example was the discussion in Canada of whether to charge GST (IVA) on all food or not.

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Re: toll roads

Post by Space Cat » Mon Aug 07, 2017 1:32 pm

Yep, IVA hits the poorest most.

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Re: toll roads

Post by frozen-north » Mon Aug 07, 2017 1:46 pm

nikotromus wrote:
The government collects 6 UTM for every thousand liters of gasoline and 1.5 UTM for every thousand liters of diesel.
An argument in favour of reversing the taxes of gasoline and diesel, 6 UTM on diesel and 1.5 UTM on gasoline:
Sin embargo, es necesario reducir el uso del diésel, debido a su alto poder contaminante. En este sentido, gravar a todo aquel vehículo que circule o no por calles o carreteras que ocupe diésel con impuesto de 6 UTM por metro cúbico, subsidiando eso si por parte del Estado a aquellos vehículos que satisfagan necesidades básicas como el transporte público o traslado de alimentos, aplicando simultáneamente una reducción a 1.5 UTM a todos aquellos vehículos que ocupen gasolina.

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Re: toll roads

Post by admin » Mon Aug 07, 2017 2:10 pm

Well, when it was started, it was really a tax on the rich. Only the rich had private cars. It is only in say the last 20 years or so, that poor started getting cars too. Now, everyone has a car. There are still plenty of first generation drivers around Chile, and their driving reflects it.

That highway use to be a two lane mad max road. There is still a myth / view among many of poorer / new rich santiagans, that once you "make it" you buy property in Pucon. Why pucon? Because that is where the rich use to drive to in the summers, on the two lane road, to get away from the heat in Santiago. Now, Pucon has not been the place for the rich in many decades; but, the view of it as a status symbol of some sort has been maintained. It was all because that was the furthest, reasonable distance, south you could travel from Santiago back in the day, to reach some sort of resort town.

After the highways, it opened the entire south of Chile. Now people drive down to say Puerto Varas for summer vacation, and so on.

But it was always about moving commercial traffic, not passenger cars.

The highway even still today, is predominantly used by commercial traffic of some sort. Next time you drive it, count the number of private vehicles vs. some sort of commercial vehicle (don't forget fleet service pickups and cars). Probably for every private passenger vehicle, there is like 10 commercial vehicles on that road. Most people that needed to travel that road, as private citizens, took a bus. Still much cheaper.

Now, there is an even bigger transport revolution, to that revolution in Chile, especially the last couple of years. The price of airlines tickets have come down. 5 years ago, we were paying say 80,000 to 300,000+ for a tickets Puerto Montt to Santiago, round trip, on sky (the discount airline compared to LAN). Now you can grab tickets for 10,000-20,000 pesos with with advanced planning and shopping on Lan. We had an emergency flight a couple of weeks ago, 12 hours notice before buying to Santiago, and paid 80,000 pesos for it. Our regular flight up to Santiago (we fly about every two weeks or so for meetings), is running us around 30,000 pesos on average. In recent months they have been costing us nothing as we are burning miles / kilometers. It actually cost more to get to the airport, than to fly. I believe that explains the growth in the lakes region, and the low unemployment rates here vs. the rest of the country. People can actually live in the lakes region, and commute to Santiago once in a while, cheaper than they use to be able to drive to Santaigo from somewhere in the region (e.g. Talca, vina, etc).

Now the government has set out to build the bridge to nowhere (a.k.a. chiloe). The Patagonia is getting paved, slowly, but paved. No point in buying a gas car now. Time to trade in the horse for an electric car.

In terms of comparisons however, Chile does not fund the country through real estate taxes, like cities and counties do in the States. The real estate tax that was just introduced, does not even hold a candle to the crazy taxes in the states. So, you can pay to play on the highway you actually use, or everyone pays for a roads they never use. I don't find it that bad of trade-off.

FYI, some of the most expensive toll roads in the country, are the ones you were on. I typically pay about 600 pesos each direction, to say drive to Puerto Montt or to Osorno. I could totally get there, paying nothing, driving on the paved back roads. Just it saves me like 5-10 mins, perhaps. It is just nice to pull on to a well maintained highway, set the speed control, and not worrying about the farmers cow around the next corner that got out.

Last time I drove the 1200 km from Frutillar to Vina, it was just about equal cost between toll roads and diesel, in my diesel SUV. Think about 50,000 pesos each, one way. Last time I drove the 900 km from Santiago to Frutillar, in a gas SUV with crappy mileage, it was like 80,000 pesos in gas as I recall, and about 40,000 in tolls or so. If you are a long haul driver in Chile, diesel is the way to go.
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