20.3.2012 Govt proposes 'semi-privatising' roads

The Prime Minister has announced government plans to 'semi-privatise' sections of the country's major road network, with the aim to encourage investment and to improve the infrastructure.

Yesterdays proposals saw the Treasury seeking funds from private investors and pension funds to address 'urgent' improvements needed on England's roads, after decades of degradation on major routes.

David Cameron said in his speech: "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. If our infrastructure is second-rate, then our country will be too."

Long leases to roads currently owned and operated by the Highways Agency – which comprise 3% of the total length of the country's roads but carry a third of the traffic and two-thirds of road freight – would be handed over to private companies, who would then fund any improvements and maintenance, in return for a proportion of the Treasury's income from Vehicle Excise Duty (VED or 'road tax').

The Prime Minister emphasized three major points:
* The proposal is not technically 'privatising', because the state will remain the ultimate owner of the road;
* No existing roads in their current form would be tolled (this is a major worry for many people);
* The scheme would be modelled on the privatisation of the water and sewage systems.

Some of the more critical issues with the condition of our roads are related to driver's safety – potholes and poorly surfaced roads are a major contributing factor in road accidents. David Cameron also suggested that areas prone to grid-locking could be eased through widening 'pinch points' and allowing the use of hard shoulders.

There have been mixed views about these proposals – whilst many are in agreement that roads are in need of improvement, there is concern that the suggested solution will mean that motorists will bear the brunt of the costs, largely through additional road charging such as tolls – which would be a significant burden to private, business and freight road users.

Currently, a combination of Vehicle Excise Duty, fuel duty and VAT on new car sales total £46 billion that goes straight to the government annually, whilst it has been suggested that £10 billion would be able to fix our poorly maintained roads.

There is general public concern that, although 'semi-privatisation' of the road system could bring improvements, additional costs at a time when fuel prices and insurance premiums are steeply rising could prohibit significant numbers of people from being able to afford to run a car.

Newspress, The Guardian