So much for privatising the road network or encouraging private sector investment in it, now there are those who are calling for those small parts of the network not in public hands to be nationalised.
Today’s FT (page 2) reports a plea for the M6 Toll road to be returned to us and run on our behalf by the government or its agents, presumably the Highways Agency.
According to the paper, Geoff Inskip, chief executive of CENTRO, the West Midlands transport authority, is rightly warning that even with the utilisation of the hard shoulder, the existing M6 route through Birmingham will be even more heavily congested in the future as traffic is forecast to rise by a quarter in the next decade and a half.
He says this rise should be seen against a steady decline in the numbers of vehicles using the toll route, down from a peak of 55,000 a day in 2006 to around 30,000 now.
The operator of the M6 Toll, Macquarie, apportions much of the fall to the downturn in the economy and the associated general decrease in traffic. But this is not the whole story. Much is down to pricing.
To understand why, you only need look at this table from the M6T Research Study Modelling Report by AECOM which is dated 2009 but for some reason was published on the DfT website – along with several other related documents – today:
The figures seem to say it all. Even as you increase prices and traffic violume falls the revenue continues to go up, all the way to a toll of somewhere between £4.50 and £5.00. In the absence of a reason not to, why would an operator have any incentive in doing anything other than maximising revnue especially when – so one would suspect – your costs actually fall: fewer cars = lower running costs in terms of wear and tear, and staffing levels?
Things would be different in a regulated industry where there are limitations on price rises and an arbitrator (regulator) balances the needs of the consumers with the requirement of the companies to make a return. As and when we have more private sector investment in the road network ministers would do well to remember the importance of this role.
As for the M6 toll, don’t expect anything to change soon. While Macquarie apparently discusses with its lenders how to restructure its debt, the DfT says it has no plans to change the ownership status of the route; at least not until 2054 when the current concession ends.