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Colas offers to help with road maintenance funding

Contractor Colas this week said it would move to fill a gap in funding for highway maintenance left since the government abandoned the private finance initiative (PFI) in its original form.

The Treasury has begun looking for a more favourable successor to PFI to deliver better value to the taxpayer.

Proposals have been developed but are so far only being applied to the health sector, NCE understands.

A separate review of funding structures for roads is currently being conducted by the Department for Transport, but this concerns the governance and possible privatisation of the national Highways Agency network.

This leaves a lack of options for local authorities looking for private funding to help pay for road repairs.

Colas SA and Colas UK-owned Ensign Highways said there was still an appetite in the market to invest and fill the void in local authority private funding.

“What we are saying is why can’t we help clients borrow the money needed to get things moving?” asked managing director Brian Hicks.

“There is now no cap on the amount local authorities can borrow and we know they are interested in new funding ideas. What we are proposing is a mini PFI where we would work with the authority to fund and fix their roads with asset management tools.

“We have not done any deals with anybody and clearly there would be procurement rules to adhere to. But we know from experience that significant up front investment will generate sufficient savings through reduction of road defects and payouts from claims to repay funds borrowed.

“It’s in no way a simple problem, but we can build a good case for more private investment.”

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