The Private Finance Initiative : sixth report, together with the proceedings of the Committee, minutes of evidence and appendices / Treasury Committee.

  • Great Britain. Parliament. House of Commons. Treasury Committee
Date:
1996
Catalogue details

Licence: Open Government Licence

Credit: The Private Finance Initiative : sixth report, together with the proceedings of the Committee, minutes of evidence and appendices / Treasury Committee. Source: Wellcome Collection.

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    2 en ln cn i ll il tl il IE aa tigate Edn larly in England, there is no clear transport programme or strategy for delivery but just a list of piecemeal] projects which may, or probably will not be financed at sometime. We therefore: — do not have the right priority projects designed and ready to go at the right time; — have massive waste in preparing schemes that are never built; — have developed. a national culture where it is normal for projects not to be delivered at all, let alone to time and cost; — have no articulated strategy which, when combined with the randomness of finance, acts to feed feelings of unfairness about what is financed. A fresh approach is essential—one which looks at how we pay for roads and local transport overall, and how long term programmes of transport infrastructure can be properly financed. In this the PFI has a role. PROGRESS WITH THE PFI TO DATE 10. In the development boom period up to the late 1980s, there were many cases of commercial devel- opers contributing useful amounts towards road and transport schemes. While this form of finance can ensure development takes at least some account of costs imposed on the transport network, it is difficult to see how it can be developed as other than a localised and opportunistic form of finance. 11. Long term stable forms of transport finance must come from a blend of taxes, fares and charges. New income streams to repay privately financed roads with toll income have only been introduced at the Dartford, Severn and Skye crossings. Even at these crossings a substantial proportion, or even the majority of the project, has been financed through the normal public programme in the form of approach roads and other ancillary expenditure. 12. The Channel Tunnel has similarly required publicly financed road and rail connections in order that the whole network can make sense. As with the new bridges, public and private bodies (police, transport authorities, motoring organisations etc) have acted to plug the infrastructure into the wider transport network and travel support system. THE PROBLEM OF TOLLS AND DIVERSION 13. Unlike Dartford, the public at the Severn and Skye crossings have felt that the level of tolls has gone beyond a reasonable surcharge for a high cost facility. Otherwise these new privately funded bridges have overall been successful projects so far but, despite their near monopoly positioning, there have been issues of traffic diverting to avoid tolls at all of them particularly at the Severn. 14. The Severn Bridge illustrates the general problem with introducing real tolling on British motorways. Even a small percentage of traffic diverting from the motorway can mean substantial increases of traffic for local communities on unsuitable roads. An extra 3,000 vehicles a day on a motorway is difficult to perceive at all but that much additional traffic can be an environmental catastrophe for a village. 15. The British motorway network has been developed as an untolled network performing two tasks simultaneously—trade route and local bypass. Since the mid-1960s, planners have sought deliberately to route motorways to attract as much local traffic as possible. Most of the UK has a very developed sec- ondary network providing many alternative routes for most traffic. So even modest toll levels on parts of the British network are likely to send traffic back onto the local network. 16. The French toll road model cannot therefore be carried too far in British circumstances. Unlike France, Britain does not have many motorway sectors carrying mainly long distance traffic between major settlements (the M6 Preston to Glasgow sector is a rare exception). In France, tolling of French motorways starts away from the urban network, which reduces diversion. Some local councils also repay the tolls of truck operators to keep them away. BUNDLING 17. The PFI has proceeded in roads and transport on a project by project basis in which the design, build, finance and operation of projects has been bundled together. 18. As a short run way in which to experiment and develop new methods of working, this has been useful. Other than for massive one-off projects—such as the Channel Tunnel—this is not likely to be the most effective way to introduce private finance into roads and transport unless the projects might expand and develop into businesses (eg as seems likely for the City of Edinburgh Rapid Transit project). 19. Many in both the City and construction companies have questioned the general wisdom of bundling the construction, the financing, and operation of routine major road construction projects.