Highway 407 Revenue

[Mike in TO]

2007 Highway 407 revenues have been reported at $518.9 million (increase of $62 million). Net income increases to $60.3 million in 2007, compared to $48.5 million the previous year. 49 additional km of lanes opened in 2007, the number of transponders in circulation reached 857,308 and the total number of trips made was 112 million.

 

[Le Gique]

Help with Economics 101: How does "net income" relate to "profit"?

 

[lordmandeep]

its the money left over after interest.


That amount is distributed among shareholders if there are any.

 

[JasonParis]

2007 Highway 407 revenues have been reported at $518.9 million (increase of $62 million).

That could have built us about a 3km of subway a year (or 10km if we were Madrid).

 

[lordmandeep]

um you know running a highway by the govt would have costs as well.

 

[JasonParis]

Of course, but what's your point?

 

[lordmandeep]

the actual question is what is your point?????

 

[RedRocket191]

Bottom line:

Highway 407 is turning a profit. That is profit that could be funding transit if circumstances were different...

 

[lordmandeep]

true...

However do you think the provincial govt would run a toll on the 407 that makes a profit???

If the 407 was own by the govt now, it would likely not have a toll now.

 

[JasonParis]

It was built and designed by the MTO to be a toll route.

 

[RedRocket191]

true...

However do you think the provincial govt would run a toll on the 407 that makes a profit???

If the 407 was own by the govt now, it would likely not have a toll now.

Governments make profits on tons of stuff every year. Its called a surplus.

If they did own the 407 now, I would support tolls because it means less tax elsewhere and / or more money for services.

 

[p5connex]

Making huge profits and yet they continually raise their tolls..

p5

 

[afransen]

That profit margin is far from massive. And you can't call it huge profits without contrasting it with the initial investment, which was well over a billion. $50 million-ish profit on an investment of a billion or more is pretty lacklustre performance.

 

[junctionist]

That might explain why they've lowered their design standards:

Since the lease of the highway's operation, there has been a noticeable decrease in design standards, including straight-sided overpass structures (rather than the sloped design common on most provincial highways), the conversion of dual exit lanes to an exit lane and an additional travel lane in Mississauga rather than paying to widen the carriageway and maintaining two exit lanes, the reduction of the central median and the use of temporary concrete barriers rather than maintaining the median width, and the use of asphalt paving rather than concrete on the Burlington to Mississauga and Markham to Pickering sections. The freeway still adheres to minimum provincial government highway safety standards, although the MTO themselves regularly exceed their own standards.

 

[p5connex]

Okay, I will rephrase that- not huge profits, but profits nonetheless. And as junctionist points out, they are making more money for doing less, while continually raising tolls on the highway. Eventually, people may stop using it due to the ever rising cost and the group of investors will probably try to sell it back to the government- naturally recouping their initial cost and probably making a nifty profit. Not to mention, it is no longer as fast as it once was- their are traffic jams which snarl the 407 now too.

Also, wasn't it to be like 20 years of tolls and then the highway would become just another 400 series highway - no tolls etc.?

p5