UK roads’ privatisation would attract bids from Spanish companies

LONDON/MADRID | Financial analysts in Madrid agreed in their notes to investors on Tuesday that the UK Coalition government’s intention of privatising part of the road network of the country is a subject of major interest for Spanish infrastructure and construction companies.

Banesto Bolsa experts described the decision as a clear ‘opportunity’ for Spanish firms, some of which already have a vast presence in the British transport services sector, namely Ferrovial.

At Sabadell Bolsa, analysts said

“The British government proposal would be to privatise UK roads within its plans of deficit reduction, for which it has asked the ministry of Transport for a feasibility study on a new model of ownership and financing of the national highway system.

“It is expected that this report will be published in 4T’12. It seems that the intention is to avoid the introduction of tolls and give the long-term concession of the roads in exchange for an annual payment by the State to the new owners, who will be responsible for improvements and maintenance.”

In a speech on Monday prime minister David Cameron pointed out that the existing infrastructure is insufficient and the UK faces the challenge of building completely new transport networks.

“We have not done anything like enough to help grow British expertise and jobs in building not only the infrastructure that we need here, but in the booming markets overseas as well,” Cameron said.

The leader of the Coalition government offered damning estimations about the consequences of a stalled infrastructure: the UK loses £7 billion a year because of congestion on roads, but the state has only built around 25 miles of new motorway in the last decade.

A Sabadell Bolsa analyst noted that Spanish firms are expectant of

“the final model to see the extent to which building and highway management companies could step in, because the privatisation process would favour pension and sovereign funds.”

About the Author

Victor Jimenez
London contributor at thecorner.eu, reporting about the City and the Eurozone economies. He regularly writes for Spanish newspaper group Prensa Ibérica--some of his features include shared work with journalists of The Daily Telegraph and the BBC.

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