The hijacking of our highways

OPEN areas like parks in our cities rightfully belong to the people.

They are maintained by local authorities, play an important role in society and are free. Of course we pay for their upkeep but it is through local taxes.

Imagine then if, one day, we were suddenly confronted with manned or automatic entrance gates, charged a fee to enter and learnt that the Government had granted concessions to private investors.

Clearly nobody would accept it. Yet this is precisely what has happened to much of Europe’s road network. As Europe has removed barriers at its frontiers it has been erecting them on highways across the continent.

Many of the original motorways have more than recouped their initial investment.

But when Governments handed over public energy, utilities, telecommunications and transport monopolies to the private sector, they included in this bargain disposal of national assets many of the motorways.

These were given new corporate status and shared out to companies, often run by businessmen with political connections, who obtained long term concessions to manage the network.

We were now in a different ball game. One which illustrates perfectly how and why capitalism has gone wrong, permitting a privileged elite with government backing to grab public assets for private gain.

The relationship between investors and constructors seems a natural partnership since motorways need to be financed, built and maintained.

But given the colossal sums involved it is a system that is open to corruption involving political parties, banks and building companies. The private concession holders are only interested in making money for their directors and shareholders.

By reducing the number of manned tolls and replacing them with automated machines for cash, credit cards and electronic telepasses, motorways have become a cash generating machine that has attracted investors from around the world. In Spain motorists have been voting with their feet, or wheels.

With a vast network of free autovias the Government embarked on plans to build new motorways around the major cities to ease congestion.

The major construction and privatised energy and telecommunications companies with links to the Government, queued up to get a piece of what they assumed would be lucrative concessions in car obsessed Spain. However the optimistic traffic projections have not turned out to be anywhere near accurate.

‘Peaje’ is not a popular word and the Spaniards prefer their journeys to take a little longer rather than pay. Around Madrid there are five magnificent new motorways, ‘Las Radiales’, with spanking new modern toll gates, all virtually empty while the almost parallel autovias are congested.

Giorgio Ragazzi, an economist at Bergamo University in Italy has written a book called I Signore della Autostrade (the Lords of the Highways). He argues that the motorways built during the 1960s and 70s have been paid for twice over and therefore as public property should be free.

Or, if they should be taxed, then the money should go to the State not to private investors. Nearly two thirds of Italy’s motorway network was handed over by Berlusconi to Benetton who through a corporation called Atlantia, has a concession to manage 3000 kilometres of roads until 2038.

In 2010 Atlantia had a turnover of almost four billion euro and posted profits of €700million. Ragazzi said.” There has been virtually no new road building so how can it be to right to allow a private company to make 60 per cent profit margins from what is publicly owned property?”

In 2006 there was a projected merger between Atlantia and Spanish conglomerate, Abertis, but it was blocked by the Government. The aborted deal raised the issue of foreign ownership of national roads and showed the close links between multinational building groups and investors.

One of the biggest shareholders in Abertis with a 26% stake, is ACS, Spain’s largest construction group, whose chief executive is Florentino Perez, president of Real Madrid football club. Abertis is one of Europe’s largest operators managing more than 6700kms of motorways in Greece, Austria, Germany and France. Considering the national debts imagine how much tax revenue Governments and taxpayers have lost and are losing while a privileged group of investors make fortunes out of the motorists travelling on public roads.

The City of London would probably love the idea but in Britain’s small highly urbanised island it would bring an already saturated road network to permanent gridlock.

There is also criticism from environmental groups who have been advocating a switch from road use to rail for both people and goods.

They claim that the frequent queues at tolls cause pollution and increase fuel consumption, especially with heavy vehicles as they brake, crawl towards the booths and then accelerate away.

Nowhere is this more evident than around Barcelona where motorists are faced with a multitude of toll gates that appear every few kilometres creating hold ups.

Without unsightly toll gates and extending the number of exits and access points, congestion could be eased and traffic flow improved.

Why not impose an annual road tax for all drivers on a European wide basis which would make up for removal of tolls?

It would be a much fairer system than allowing private investors to continue to fill their pockets by making motorists hostages in their own land.