Cameron calls for private cash for roads
Johnstone | 19 March 2012
including pension funds, should be used to upgrade and maintain major roads in
England, David Cameron said today.
In a speech to
the Institution of Civil Engineers, the prime minister announced a study into
how private cash could help tackle what he called ‘decades-long degradation’ in
the nation’s infrastructure.
This will include
examining the possibility of companies taking over operation of parts of the
main trunk road network, with payment based on improvements and usage.
investment could be used to ‘widen pinch points, add lanes to motorways by
using the hard shoulder to increase capacity’ and turn overcrowded A-roads into
dual carriageways, Cameron said.
approach to raising cash is needed when government funding is constrained, he
‘Why is it that
other infrastructure – for example, water – is funded by private sector capital
through privately owned, independently regulated utilities... but roads in
Britain call on the public finances for funding?
‘We need to look
urgently at the options for getting large-scale private investment into the
national roads network – from sovereign wealth funds, pension funds, and other
A feasibility study
will now be undertaken by the Department for Transport and Treasury, reporting
in the autumn.
A DfT spokesman told
Public Finance this would look at a
number of options, including turning the Highways Agency into regional units,
which could then be taken over by firms that would maintain them and invest in
They would then
be paid part of the taxes taken from motorists, most likely Vehicle Excise Duty,
based on the number of cars that use the roads.
This is a system
known as shadow tolling.
motorists through road tolls is not being considered for existing roads, but Cameron
today reitereated that they could be introduced for new roads.
the CBI welcomed the move, saying it backed its calls for the government to attract investment into ageing
John Cridland said: ‘Congestion on our roads costs the UK economy up to £8bn a
year, so the prime minister’s ambition to get much-needed private investment
into the strategic network could not have come at a better time. Every £1 spent
on infrastructure adds £3 to the economy as a whole.
‘In the short term,
we need contracts to be agreed with companies to maintain our roads and repair
the potholes. In the longer-term, investor confidence will be critical to
injecting new money into removing bottlenecks, reducing commuting times and
helping firms to transport their goods.’
pressure group Campaign for Better Transport said that new toll roads would not
lead to better infrastructure for motorists.
Stephen Joseph said: ‘New roads just fill up with traffic no matter whether
they're financed by the Chinese, a pension fund or from public spending.
‘What we really
need to tackle congestion is investment in better public transport, rail
freight and helping employers with initiatives like car sharing.
‘These plans make
no sense whether you're a motorist facing the prospect of tolls, or an
environmentalist concerned about the impact of new road building on carbon [emissions]
or the countryside.’