Second Generation Road Funds: the Way Ahead



Second Generation Road Funds: the Way Ahead

Authors

HEGGIE I G, Visiting Professor, University of Birmingham, UK

Description

While reviewing the first generation road funds, three important insights emerged. First, it became clear that roads were big business. For example, the Japan Highway Public Corporation - one of several toll road companies in Japan - manages assets the sa

Abstract

While reviewing the first generation road funds, three important insights emerged. First, it became clear that roads were big business. For example, the Japan Highway Public Corporation - one of several toll road companies in Japan - manages assets the same size as General Motors, while the U.K. Highways Agency - a relatively small road agency with only 10,500 km of roads - manages assets the same size as IBM. Second, the financial needs of the road sector were typically growing faster than the government's tax revenues. Third, the size of the road business, combined with the growing financial needs of the road sector, meant it was becoming increasingly difficult to finance the road sector through general tax revenues. Government budgets were not designed to finance large global businesses. Instead, we needed to move roads off-budget, commercialize them and manage them like a business - bring roads into the market place, put them on a fee-for-service basis and manage them like a business.

Publisher

Association for European Transport