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BITRE | Working paper 74

Not surprisingly, the development of Ringway 2 incorporating the expansion of the

South Circular did not proceed:

… it is difficult to see any prospect of major investment to substantially alter the South

Circular because of the cost, the wider environmental issues, the sheer unacceptability

of the extensive compulsory purchase and demolition of house involved, the severance

caused by a wide dual carriageway and the fact that the wider road would probably fill

up with traffic within a relatively short period of time (Lewisham Council 2003).

Thus, there are escalating geographical, financial and environmental impediments

that make it increasingly unpalatable for governments to exercise political fiat to

bring about the network expansion that could temper the growth in congestion.

Overcoming capacity limits through public–private partnerships

For many years, privately-provided tolled roads and bridges have been a part (albeit, a

small part) of road networks around the world. Public-private partnerships (PPPs) have

been an extension of that private involvement, with the public sector contracting with

the private sector to provide a facility

PPPs are attractive to budget-constrained

authorities. But they introduce rigidities

that inhibit congestion charging schemes.

that it, hitherto, might have undertaken.

In this context, PPP contracts have

been used as a mechanism to increase

private funding and expertise into

infrastructure provision. These PPPs

rely on formal agreements between the

entities, to allocate risk/responsibility and to protect the interests of the respective

parties. This section considers this specific form of innovative finance and provision.

The term ‘innovative finance’ for infrastructure often refers specifically to government

partnering with the private sector to expand capacity. In the case of the Dulles

Greenway toll road (discussed further at page 61), the private partnership option was

adopted because it appeared to be the only option: the Commonwealth of Virginia

elected not to construct the road and that ‘if a private toll road was not to be built,

there would be no road at all’ (Commonwealth of Virginia 2007, p. 3).

A further illustration of such an agreement is the Oregon Innovative Partnerships

Program, which:

… was created to develop transportation projects for solicitation of private sector

proposals for partnership and to respond to proposals initiated by private firms and

units of government.

There is no doubt that the PPP option has appeal to authorities. Funding individual

projects generally imposes no strain on the budget and the authority is absolved

from the responsibility for introducing higher charges during the heavily-trafficked

peak period.

However, PPPs introduce rigidities into tollway charging generally, and (in the context

of this report) specifically in the gamut of congestion control management systems.

In reviewing the Dulles Greenway operator’s claim for raising tolls and introducing

congestion charges, the State regulator acknowledged the inevitability of higher

charges with the PPP:

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