Report: Tolls to fund new UK roads, but no leases

Philip Hammond, the UK’s new transport secretary, said in an interview with the Sunday Times that he is open to new toll roads funded by the private sector.

Hammond: impressed by Macquarie's M6

“We would be open to delivering new road infrastructure with private capital and some form of tolling system. New roads may not be funded by public capital because of the constraints likely to exist over the next few years at least,” Hammond said.

He added that he and his team were impressed by the M6 toll road near Birmingham, owned by Macquarie Atlas Roads, one of the two funds that emerged from the division of Macquarie Infrastructure Group.

The new transport secretary also pointed out that he may tap the private sector to help fund a greenfield high-speed rail line between London, Birmingham, Manchester and Leeds.

Showing that he has been keeping up with new trends in the infrastructure sector, Hammond said funding for the capital intensive high-speed rail project could come from “long-term funds, particularly pension funds, looking for secure, low-risk regulated utility-type investment opportunities.”

However, Hammond was adamant that he would not monetise existing toll road assets by leasing them to the private sector:

“We draw a very clear distinction between the existing road network, which is publicly owned, and future extensions. We have ruled out a national road pricing scheme, which makes the privatisation of the [existing] road network a non-starter,” he stated.