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Roads: Reaction and funding models

Roads are one of the hot topics leading into the Autumn Statement, with announcements expected on more work and hopes for some more clarity over future financing.

Graham Shennan, managing director, Morgan Sindall: “I think that there will be a move towards privatisation and tolling of the roads, and, again, that gives us a great opportunity as a group because we have got the investment capability”

Bill Hocking, vice-president and head of infrastructure, Skanska UK: “If more roads private finance initiatives were to come to pass, we certainly would be very interested in competing for them.”

Mike Llywelyn-Jones, Chairman, Roads sector interest group, Association for Consultancy and Engineering: “The most important thing of all is certainty of work and a ringfenced budget. The problem at the moment is that companies have short-term budgets to hit and have to make the decision to either lay people off or look at projects overseas.”

David Cameron, Prime minister: “In the 1950s it took us eight years to design and build the first 50 miles of the M1. Today, it can take that long just to widen one section of a motorway, so we are looking to speed things up. 

“It is our ambition to cut the time it takes to upgrade our roads in half.”

Financing models in the mix:

Regulated asset base The CBI has called for a regulated asset-based model of financing whereby a portion of motoring taxes are converted to a charge on road users.

The charge to access the strategic road network would be controlled by a central, independent regulator that would replace the Highways Agency.

The resulting funding stream would allow licensed private operators to run regional sections of the network.

Public-private partnership The Highways Agency already has a series of long-term design, build, finance and operation contracts for some strategic roads. 

A new form of private finance initiative could potentially be used for major roads projects, replacing other forms such as ‘shadow tolls’ where the government pays private companies per user for roads.

Government-owned, contractor-operated model
Akin to a model proposed for use in the Ministry of Defence, whereby the roads would remain government-owned but run by the private sector.

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