Ill-advised plans will take their toll

3 Jul 09
The cover story ‘Capital punishment’ included the assertion: ‘It is widely believed that the capital schemes most likely to go ahead are transport programmes, such as toll roads'

The cover story ‘Capital punishment’ (June 5–11) included the assertion: ‘It is widely believed that the capital schemes most likely to go ahead are transport programmes, such as toll roads.’

Schemes such as schools and hospitals have a guaranteed income, whereas toll road franchises that might spread over 30 years or more have a high demand risk. This obvious fact has been belatedly recognised by the banks.

In March, Canada’s public-private partnership scheme for a new toll bridge at Port Mann collapsed, with the government of British Columbia having to take over responsibility for the finance and the demand risk. At the end of May in the US, Florida’s Department of Transportation announced that its plan to lease the Alligator Alley toll road had collapsed as it had received no bids. In the UK, the risks can be seen with the M6 Toll. The last published accounts (to June 30 2008) for the M6 Toll showed a loss of £27m on a turnover of £60m.

Maybe the plan is to try to reduce the demand risk. A clue of what might be in store was revealed by a proposal currently being considered at a public inquiry for a new privately financed toll bridge near Liverpool. Part of the idea is that the existing free bridge – built with taxpayers’ money – would be handed over to the toll operator.
If this is the direction that the government is taking then it might be the one receiving the capital punishment – from the electorate.

Did you enjoy this article?

AddToAny

Top