Private Sector Involvement in European Road Network Financing: Changes and Pitfalls Oftransnational Road Pricing and Road Privatisation



Private Sector Involvement in European Road Network Financing: Changes and Pitfalls Oftransnational Road Pricing and Road Privatisation

Authors

SINDING A G, International Road Federation, Switzerland

Description

Traditionally, private sector involvement in road networks was limited to implementaion tasks (detailed studies, civil engineering, material and equipment supply) and went through short or medium term contracts. Road financing was~ entirely public, and ro

Abstract

Traditionally, private sector involvement in road networks was limited to implementaion tasks (detailed studies, civil engineering, material and equipment supply) and went through short or medium term contracts. Road financing was~ entirely public, and roads were seen and managed as "free", i.e. taxpayer supported, facilities. Now things are changing dramatically. Direct user charges, i.e. tolls - which technically are a price, not a tax - are quickly expanding as a substitute for, or more often a complement to, general traffic taxation. The process is known, especially in urban areas, as road pricing: Furthermore the private sector is being increasingly involved not primarily as road builder and supplier but as road developer and banker, through long term concessions, which give it the right to itself collect the price of the franchised road on its users. This process is generally called roadprivatisation, and is the logical end of the more general, and often controversial, trend to road pricing.

There are indeed two opposed approaches to road pricing. It can be designed either in a negative spirit as an anti-motoring weapon, or in a positive spirit as a way of financing improved highway systems. In fine with the lRF-Geneva stance, it seems that many European countries and big cities are starting to adopt or rediscover the second, constructive approach. It is precisely this approach, demonstrating a positive attitude to road development and to market economy which goes in par with road privatisation: I will now try to bring the subject closer to your attention in two times: first, by explaining how the political debate on road pricing goes along in Europe; secondly, by reviewing the practical experiences there; thirdly, by drawing some recommendations from these for interested governments and investors.

Publisher

Association for European Transport