Cameron: England's Roads 'To Be Privatised'

Alistair Bunkall, business correspondent

The Government is to look into the possibility of using private companies to invest in England's road network, the Prime Minister has announced.

David Cameron said he has asked the Department for Transport and the Treasury to carry out a feasibility study of new financing models.

In a speech to the Institution of Civil Engineers , he said: "We need to look at innovative approaches to the funding of our national roads - to increase investment to reduce congestion.

"Road tolling is one option - but we are only considering this for new, not existing, capacity. For example, we're looking at how improvements to the A14 could be part-funded through tolling."

However, Downing Street insists the initiative is not about road tolling.

Instead, the Government wants to explore the option of contracting out the maintenance and running of motorways and major A-roads to sovereign wealth funds, pension funds or other investors.

In return, vehicle excise duty could be reduced and a new charge introduced that would be paid to the private companies who would take control of the roads on long leases.

The new charge would be set by an independent regulator which would also monitor the companies.

The Prime Minister compared the potential scheme to the way water companies operate.

He said: "Why is it that other infrastructure - for example water - is funded by private sector capital through privately-owned, independently regulated, utilities... but roads in Britain call on the public finances for funding?"

Under the plans, smaller, rural roads would still be maintained by local authorities - while the road networks in Scotland, Wales and Northern Ireland are devolved.

The AA said drivers would see the changes as "the thin of the wedge" that would end with national road charging and further burdens on motorists.

President Edmund King said it was in favour of the Highways Agency , the body which at present looks after the motorways and major A-roads that make up 3% of roads.

"Longer term plans, procurement and five-year funding agreements would help improve efficiency," he said.

"However, there is a big leap between reform of the Highways Agency and new ownership and financing models.

"The privatisation of the railway network has hardly been a spectacular success and millions of drivers will be concerned if one of our most important and used national assets, the strategic road network, is sold off.

"The Government has indicated that tolls would only apply on new capacity but many drivers would suspect new ownership is the thin end of the wedge leading to national road pricing."

Labour's shadow transport secretary, Maria Eagle, also compared the plan to the rail privatisation.

"It was supposed to be less costly and more efficient - it now charges the highest fares in Europe," she told Sky News.

Ms Ealge said motorists were already being hit in the pocket by rising fuel prices and higher living costs.

"It might undermine jobs and growth by stopping people getting where they are going," she added.

By using Yahoo you agree that Yahoo and partners may use Cookies for personalisation and other purposes