Does Europe need a new model for private roads?

Private investment in European roads is under fire once more. The typical charge against the ubiquitous motorway concessions crossing France, Italy or Spain is that, as quasi-monopolies, they have a nasty tendency to under-invest and over-charge. This assertion is taking on new meaning as road infrastructure ages, and lack of sufficient maintenance and investment could lead to new catastrophes like the Morandi bridge collapse. Populists, not only in Italy but also in the rest of Europe, have even concluded that the deaths are a direct consequence of the concessionaire’s search for the highest profits. Even though one should not overreact after the Genoa tragedy, one may ask whether the European model of private road concessions is fit for purpose. And all the more so in that the Juncker plan and other grand designs for European transport corridors envisage much more private investment in infrastructure. Is Autostrade per l’Italia a bad egg or do we need a different model to invest Europe’s long-term savings in its road network without facing the charge of low quality and excess profits? It is easy to imagine Autostrade allowing the Morandi bridge to suffer under increasing heavy vehicle traffic without taking sufficient action to maintain it, until it was too late. This bridge certainly needed to be closed and re-built, but under-investment in this kind of infrastructure asset is a more pervasive problem, driven by the regulatory framework of the European road sector. Looking at …