Monday, 19 March 2012

Cameron to unveil lease plan for roads

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the 2 benefits of thatcher's utilities gimmick were: the same managers got much bigger wages, and they could slash jobs freely. 

remember: residential britain is paying much more per cubic meter of water than any other european country. britain's trains are the most crowded run the longest delays and are the most expensive per mile and minute.

what is amazing is mr cameron magic wand is "not-public". 

remember: britain is spending on roads as much as poland and 60% as france and germany, in absolute terms. think what you can do with £1 in poland or germany, and what in the uk. in ppp terms, britain spends as much as greece. and the results are there.

britain is a triple a country that lectures the world on public and private governance and morals, and wants to be an inspiration for others when it comes to democratic institutions. and does not accept to be told what, when or how to do things.

mr cameron, instead of looking at your sorry utilities, look south east for a model for road infrastructure. holland, germany and denmark may give you an idea or two.


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Cameron to unveil lease plan for roads

Britain’s trunk road and motorway network could be sold to the private sector on long leases, in a plan to improve the country’s clogged infrastructure to be announced on Monday by David Cameron.
The prime minister believes that by changing the ownership and financing models of Britain’s roads the coalition government can unlock “large-scale private investment” from sovereign wealth funds, pension funds and other investors.
“We need to look at innovative approaches to the funding of our national roads – to increase investment to reduce congestion,” Mr Cameron will say.





He will reaffirm the government’s promise not to introduce tolls on existing roads, acutely aware of the public outcry when Tony Blair flirted with the idea in 2007. But he will leave open the option of tolling on new capacity, including improvements to the heavily congested A14 to Felixstowe, the UK’s biggest container port.
Mr Cameron believes the water industry – privatised by Margaret Thatcher in the 1980s – could provide a template for Britain’s motorways and roads, which would effectively be turned into regulated utilities with reliable income streams.
“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?” he will say.
He has asked the Treasury and transport department to produce options by the autumn. George Osborne’s preference is for the road network to be handed over to private companies on long leases – a plan which would allow the government to avoid the word “privatisation”.
Private companies would bid for long leases to run regional networks, making their profits by operating them more efficiently than would the government. The roads concerned – representing 3 per cent of the UK’s total network – are managed by the Highways Agency, which has an annual operations and maintenance budget of £1bn.
Treasury officials played down the idea that if the government chose to offer long-term leases, there would be big windfalls from the sale of the concessions.
Companies would agree investment plans and performance targets with a regulator – jokingly dubbed Offroad in the Treasury – and would be given a guaranteed revenue stream, possibly by being paid a proportion of the annual vehicle excise duty (VED), which takes in £6bn a year.
“It would be a departure from Treasury orthodoxy,” admitted one government official, noting the finance ministry’s traditional opposition to the “hypothecation” of taxes for a specific purpose.
Motoring groups welcomed Mr Cameron’s focus on the “chronically underfunded” road network, but warned that attempts to attract the private sector could be fraught with difficulty.
Stephen Glaister, a transport economist and executive director of the RAC Foundation, said diverting some of the income from VED, which currently goes into the general taxation pot, would mean “more money for roads but less for other sectors”.
Other than continuing with the use of controversial private finance initiatives he argues that road tolling is the only practical way to attract private sector participation. “If you look at the way the water industry is funded it is by charging the consumer through their water bills.”
Mr Cameron hopes Chinese and other investors will be attracted by safe investments in British infrastructure and the prospect of better long-term returns than those offered by government bonds.

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