Road Financing
There is wide consensus over the fact that a well developed and maintained transport network is key in every economy. Nevertheless there is a permanent debate on what is the best way to finance road construction and maintenance. A balanced approach that will take into consideration the needs of all (users, builders and operators) and does not place burdens on any particular category is of paramount importance.
Historically there has been a relative under-usage throughout a large portion of the world of Public Private Partnerships (PPP’s) to finance the road sector. However, there is ample evidence that allowing private enterprises to share the cost of building new infrastructure and then providing them with concessions to raise toll-based revenue has led to an improvement in the maintenance level of the road infrastructure itself and generated better services to motorists. Similarly research has shown that motorists themselves are willing to pay a charge in order to obtain a better service. Future policy ought to reflect the fact that the private sector wants and needs to be involved to a higher degree in all phases, from design to implementation, of road infrastructure.
In addition it is important that governments invest a greater share of what they collect back into the road sector. Today motorists are generating a steady cash flow for government coffers, a very small percentage of which is used to improve the road transport infrastructure.
Governments and road agencies need to devote more attention to the fact that road users are already providing sufficient financing for the infrastructural needs of the network and that there needs to be better revenue hypothecation in order to foster a “New Deal” for road transport.