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UK's new road to recovery

Monday, March 19, 2012 - 02:14

March 19 - Britain's cash-strapped government could lease chunks of its road network to the private sector as Prime Minister David Cameron seeks to improve the country's infrastructure to stop it falling further behind its competitors. Ciara Sutton reports.

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TV AND WEB RESTRICTIONS~**NO ACCESS UK, ABC(Australia), TVNZ,.co.uk websites** Toll roads are few and far between in the UK. But the government's latest cost cutting plan involves leasing chunks of its road network to the private sector. Prime Minister David Cameron wants to improve the country's infrastructure to stop it falling further behind its competitors. (SOUNDBITE) (English) UK PRIME MINISTER, DAVID CAMERON, SAYING: "We should be asking ourselves, why is it that other infrastructure, for example water, is funded by private sector capital, through privately owned, independently regulated utilities, but roads in Britain still call on the public finances for funding. The move to seek help from sovereign wealth funds and private investors comes after news Cameron only managed to secure two billion pounds from pension funds for new projects. The government which is due to publish its 2012 budget, is suggesting more tolls on new roads. Analysts say this could prove attractive for investors. Dominic Johnson is from Somerset Capital Management. (SOUNDBITE) (English) SOMERSET CAPITAL MANAGEMENT, PARTNER AND CHIEF EXECUTIVE, DOMINIC JOHNSON, SAYING: "People talk about privatisation, and when they say it they have a furrowed brow and the tone goes down and you think of it as the end of the work. In my mind this is wonderful. It allows for growth injection from inward investment. It hopefully allows for new high quality roads. And I think the emerging wealth funds, certainly from China, Middle East and maybe from other Asian countries like Singapore are going to be extremely important in engaging the UK economy." Changes to how Britain's roads are managed could mimic those made to water supply, where the private sector funds companies. But President of the AA, Edmund King, says this would not be a good path to follow. (SOUNDBITE) (English) PRESIDENT OF THE AUTOMOBILE ASSOCIATION, EDMUND KING, SAYING: "Once you get private companies involved, they will be looking at more ways of making money out of the drivers. And that will lead to more costs. Yet drivers in Britain have paid for the road network many times over. They continue to contribute 46 billion pounds a year and they are not really getting value for money." A report into the idea will be released in the autumn after examining several options. The government is currently pushing through austerity measures to reduce a record public deficit. Ciara Sutton, Reuters

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UK's new road to recovery

Monday, March 19, 2012 - 02:14