Prime Minister David Cameron will call for plans to accelerate private investment in Britain’s roads as he seeks ways of eliminating supply constraints in the economy without using public money.
Cameron will ask the Treasury and the Department of Transport to explore ways of attracting “large-scale private investment” from sovereign wealth funds, pension funds and other private investors. He will call for “new ownership and financing” plans to be in place by the third quarter.
“The truth is we are falling behind,” Cameron will say in a speech in London today, according to extracts released by his office. “There is now an urgent need to repair the decades-long degradation of our national infrastructure.”
While companies such as Carillion Plc (CLLN) already operate some U.K. roads, Cameron is looking at ways to pay for building programs that are being delayed because of his austerity plans.
Cameron will say the he is considering several ways of running the road system. One option would be to establish a regulator that oversees private operators as already exists in the water industry. Another would be to make greater use of toll charges on existing roads or to create an additional road tax that is spent solely on roads.
“How do we do more when, frankly, there isn’t the money?” Cameron will say. “We need to look an innovative approaches.”
The plans come two days before Chancellor of the Exchequer George Osborne presents his annual budget. In November, Osborne announced a 30 billion-pound ($47 billion) program to finance the construction of roads, railways and infrastructure projects.
The decade-long plan is already seeking to attract 20 billion pounds of investment from pension funds and by savings from existing budgets.