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Cameron sets out road privatisation

David Cameron has paved the way for semi-privatisation of the road network, as he announces plans to allow sovereign wealth funds to lease roads.

The move is intended to bolster development and maintenance of England’s road infrastructure, which is seen to be falling behind the quality of European competitors.

It could mean that companies will impose tolls on new pieces of road, but not existing parts of the network.

The Prime Minister highlighted that private sector capital is used to fund other utilities such as water, and suggests that roads can be steered away from dependence on public finances.

He said: “The truth is, we are falling behind … our competitors. And falling behind the great, world-beating, pioneering tradition set by those who came before us.

“There is now an urgent need to repair the decades-long degradation of our national infrastructure and to build for the future with as much confidence and ambition as the Victorians once did.”

He added: “Infrastructure matters because it is the magic ingredient in so much of modern life. It is not secondary to other, more high profile elements of economic strategy.

“It affects the competitiveness of every business in the country; it is the invisible thread that ties our prosperity together.

“It gets power to our lights, water to our taps, workers to their jobs, and food to our shops. It enables factories, offices, warehouses, workshops to function, to trade, to grow.”

John Cridland, CBI Director-General, welcomed the news as driver for economic growth.

He said: “As we’ve said, one of the best ways we can create activity and new jobs is by attracting investment into our ageing infrastructure.

“Congestion on our roads costs the UK economy up to £8 billion a year1, 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.”

Simon Walker, Director General of the Institute of Directors endorsed the pans, and said: “Congested roads place a huge burden on business, and we urgently need to ease long-standing bottlenecks.

“I welcome David Cameron’s plans to bring in private money to finance new road construction, but it’s vital to get the detail right. If tolls are only introduced on new road schemes that are not already funded, the Prime Minister will have the backing of 60% of IoD members.”

Maria Eagle MP, Labour’s Shadow Transport Secretary, said: “Motorists already suffering from record fuel prices now face a road charging free for all, adding to the cost of living crisis facing households up and down the country.

“Instead of easing the burden on drivers and boosting our stalled economy through a temporary cut in VAT, Ministers look set to let private companies take over the strategic road network and charge drivers for access.

“These proposals risk simply driving traffic onto local roads, increasing congestion and emissions while yet again setting back efforts to improve safety.

“Motorists now seem set to be in the firing line for the next phase of the Tories’ ideologically driven rip off culture.”

This was posted in Bdaily's Members' News section by Tom Keighley .