Privatising the motorways – Lessons from rail

There has been a lot of talk today regarding David Cameron’s announcement of a feasibility study into privatising the motorway and trunk roads network. Privatising trunk roads is obviously a terrible idea. Privatising motorways however, which at present are paid for by all taxpayers but usable only by motorists, makes a lot of sense. Looking at the UK rail network, which was privatised in 1994, shows that privatisation of the motorway network might allow the coalition government to live up to its promise to be the “Greenest government ever.”

Structure

In order to minimise competition and maximise cost to the customer, the motorway needs to be privatised in a manner which has little or no vertical integration. For example, the basic infrastructure of motorway network could be owned by a single, ostensibly private company. This company will operate much as its publicly-owned predecessor, except its activities will naturally be less transparent and publicly accountable, and it will cost a bit more due to the need for a well-paid board of directors. If this proves not to be a feasible private company, it can be repeatedly subsidised with taxpayers’ money, the end destination of which the public will never know. Call it Network Road.

To create the illusion of competition, several companies will run ‘services,’ basically consisting of running toll collection along various routes. To minimise any meaningful competition, these franchises will be given out to single companies between particular pairs of population centres. This will maximise cost to the customer by preventing multiple operators running tolls along different routes between the same pairs of population centres, which would result in price wars and a lower cost to the customer.

Services

Toll operators should work together to produce an extremely complex pricing structure. Those booking their journeys significantly in advance will be able to save money, whilst impromptu travel can be discouraged through cripplingly high on-the-day tolls. These on-the-day tolls should also be around 100% higher at peak travel times.

There is plenty more which toll operators can learn from train operating companies.  Ideally, 50% of motorway capacity should be reserved for the use of first class toll payers. It is of the utmost importance that the first class capacity is not opened up to standard class users even if the toll operating companies have vastly oversold their standard class capacity, or a system failure has led to a spike in road capacity demand further down the line. Allowing advance toll holders to reserve motorway space at times when they may not actually travel will further help to discourage motorway trips, especially journeys made at short notice.

Customer Experience

In order to maximise the discouragement of driving, motorway network maintenance which cripples the basic functioning of the network should be planned on all bank holidays and a significant number of Sundays each year. Toll operators should also close certain routes at random for periods of between 30 minutes and two hours without warning.

By following the example set by the privatisation of British Rail, the government has a significant opportunity to discourage driving like never before. By making the motorway network significantly more expensive, more frustrating to use and less reliable for the end user, private car use can be significantly reduced, allowing the government to live up to its promise to be the “Greenest government ever.

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7 thoughts on “Privatising the motorways – Lessons from rail

  1. But how do you account for the fact that rail use has increased exponentially on the privatised rail network, while motor car use is declining on the nationalised road network?

    • Exponential might be pushing it a bit.

      Without any research to back it up at the moment, my best guess would be that as the road network has been around its peak (car) capacity at peak times for a fair few years, much of the growth in peak time travel has been displaced onto rail. Users are forced onto the trains by congestion rather than enticed onto them by their attractiveness as a means of travel.

  2. PPP – public, private partnership – as used to rebuild the London underground, shame they went bust and left the taxpayer to pick up the bill to finish off the work that we apparently could not afford in the first place!

    • Those sorts of arrangements always seem to give us a significantly poorer deal than if the government had just funded it directly. Someone must be getting a good deal out of it though.

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