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Bold plans for tolls to get road spending moving

Tolling of the A14 and A1 this week emerged as the most extreme in a series of proposals to get much needed cash flowing into the road construction industry.

Tolled road alternatives called for

Business lobby group the CBI called for construction of tolled alternatives to the congested A14 and A1 north of Newcastle. It also called for an assessment of whether private investment could help reinstate 14 schemes that were stalled in last year’s Comprehensive Spending Review.

They were delayed until after 2015 but could be brought forward to 2013-15.

Consultant Arup and the RAC Foundation also said that they had identified 96 road projects that have a high benefit to cost ratio (BCR) but no cash with which to proceed. Their report Providing and Funding Strategic Roads says that 10 projects in particular demonstrate a BCR of at least 6:1.

Highway projects to stimulate economy

Highway projects to stimulate economy

Road and rail ratios

The report says that this compares favourably with the BCR of 1.6 estimated by the Department for Transport for the High Speed 2 rail link between London and Birmingham.

“If there are scarce resources to be spent on transport then a fair share should be spent on the roads,” said RAC Foundation director Stephen Glaister.

“Where there isn’t a ready source of public funds then ministers should speed up the process of encouraging private investment in new capacity, something they have already promised to do.

High speed rail is stemming from a lack of capacity but it’s a big investment. They’re [the government] not willing to recognise the parallel problem with the road network”

RAC Foundation director Stephen Glaister

“The government hasn’t articulated the problem, whereas you can see a very clear problem in railways. High speed rail is stemming from a lack of capacity but it’s a big investment. They’re not willing to recognise the parallel problem with the road network. So we are trying to articulate that to the general public.”

Both proposals came ahead of chancellor George Osborne’s Autumn Statement on 29 November, and two weeks after roads minister Mike Penning told the construction industry to “think outside the box” to get more roads schemes off the ground (NCE 3 November).

Economy boost

Business lobby body the CBI in particular highlighted the fact that spending on roads could boost the economy at “little extra cost to the Exchequer” by stimulating private investment.

But it also echoed the Arup/RAC Foundation report’s calls for more public cash to be spent on road building.
“The government should introduce road tolling and bring forward 10 [publicly-funded] major road infrastructure projects, getting spades in the ground, improving congestion and creating new jobs,” said CBI director general John Cridland.

Business lobby group London First added its voice to the call for tolled roads in a letter to Osborne co-signed by executives from leading firms including consultant Atkins and contractors Skanska and Vinci.

“Projects with income associated, such as tolled roads and bridges should be particularly encouraged and we would welcome the Treasury developing new public-private finance models to replace and improve on the PFI,” said the letter.

Different types of private investment

Arup UK transport transaction advice leader and report co-author Dan Phillips told NCE that he saw a distinction between two types of private financing for roads projects.

“If it is a major new piece of capacity building, there’s a common sense case for putting a toll in, for example, with a new river crossing such as the [proposed] third Dartford Crossing,” he said.

“Where it’s a bit harder is when you look at other schemes that are needed − smaller roads, widening, junction improvements − those are hard politically to justify tolls. From our perspective, areas have got to start thinking on a network wide basis.”

“When you look at map [of unfunded highways projects], there are clusters particularly around the North East and the West Midlands”

Arup UK transport transaction advice leader and report co-author Dan Phillips

He said these network wide investments − where a private funder invests in a cluster of projects in a particular area − have worked well in France, Spain and Portugal.

“When you look at map [of unfunded highways projects], there are clusters particularly around the North East and the West Midlands,” he said (see map).

He said the revenue stream could come from tolls or from a regulated asset base company, which would work similarly to those in the rail, water and electricty sectors where users pay for access to its assets.

Readers' comments (2)

  • The industry should have suggested these mechanism at the start of recession. Anyway it's never too late. I visited France recently and roughly paid £75 going through toll roads inside and outside Paris. Using the tolls roads not only saved considerable ammount of time, but provided huge savings on fuel. If the goverment is struggling with cash, private investment should step up and invest. Why don't we toll M25?
    Thanks

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  • The French only pay road tax for cars emitting more than 160g/km (since 2009), so most of them don't pay any. That's why they tolerate road tolls.

    I believe the funding of transport infrastructure is the responsibility of the government. It is a false saving to depend on private finance since profit margins have, eventually, to be paid for. Take a look at the M6 toll, which has not turned out to be a success story. It only runs at one third capacity and is owned by an Australian firm. Where is the benefit to the UK?

    Tough spending decisions have to be made on the country's infrastructre, but it must be remembered, one way or another, the money always comes from the public's pockets.

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