Highways set to access private cash
Osborne's reforms could see agency that runs key British roads follow Network Rail model
The £4bn budget Highways Agency is to be allowed to raise money from the City in the Government's first big step towards privatising Britain's roads.
The Chancellor, George Osborne, floated the idea of privatising the agency, which runs 4,300 miles of the country's most important motorways and trunk roads – routes that carry one-third of all the country's traffic, by mileage – last summer. Battles within the coalition, however, mean that this is not an option before the next general election in 2015.
Some ministers and officials are sceptical that private companies can be trusted to run the roads, while others think their greater commercial nous could lead to more investment in the network. There will be a "roads review Green Paper" this summer, which will include the option of modelling the Highways Agency on Network Rail, the body that runs Britain's railway infrastructure. It is a Department for Transport-backed organisation, but has commercial freedom.
One industry source described this as a compromise option for the Highways Agency that would "move it gradually" to full privatisation in the future.
This model would mean that the Highways Agency would be able to raise money for road investment in the bond markets at cheap rates, because it would be underwritten by the state's credit rating. It would also allow the agency to undertake lucrative consultancy work: Network Rail advises countries with creaking railways, such as the US and India.
Network Rail also has what are known as "members", who are nearly all drawn from the public and act like shareholders – they just don't receive a dividend pay-out. This structure, which is used to hold directors to account over issues ranging from safety to finances, could be copied at the Highways Agency.
A transport industry source said: "As pressure increases on the departmental budget with the next round of the spending review, it's certain that the Government will be looking at better value and delivery models from its executive agencies such as the Highway Agency. It is understood that Network Rail is held up as a model which could be applied in this area as it has brought a more commercial approach to delivery."
A DfT spokeswoman said: "We need to think boldly about how we ensure investment continues over the long term. This is why we have been working hard to assess the feasibility of a range of new financing and ownership models for the strategic road network."
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...