After World War II European economies grew rapidly and by the 1960s many European countries were developing plans for networks of motorways. Countries in Northern and Central Europe, as well as the United Kingdom chose to finance new motorways from their general funds. The Southern European countries opted for toll financing since funds from the general budget to finance motorways were scarcer (Bel, 1999), as well as in recognition of the fact that much of the new road infrastructure would be used by non-resident visitors , for example tourists (Gomez-Ibañez and Meyer, 1993). In the case of France and Italy in the 1950's and 1960's, concessions were given to state-owned companies and agencies which were responsible for building and operating the roads. In Spain, private firms were granted concessions to build and operate the toll motorways.1 This pattern of tax-financed motorways in Northern Europe and toll-financed motorways in Southern Europe persists to this day as shown in Table 2.
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As mentioned previously, Spain traditionally had been disposed to privately owned and managed toll concessions. Many of the other countries with toll roads have made a transition from publicly-owned to privately-owned toll concessions. For example, most of the Italian toll motorway network (Autostrade, now 2,118 miles) was privatized in 1999 through a public offering of shares that were subject to competitive bidding, and most of the French network was privatized in 2006. Only in Greece are the toll motorways managed by a public agency (the Greek National Road Fund).2
Financial motivations have been the primary reason for privatizing motorway concessions in Europe over the last decade.3 In France, the Prime Minister announced in June 2005 that, "I have decided to pursue the sale of the state-owned shares in the motorway companies as a means to finance the large public works. The revenues obtained from these sales will go mainly to the Agency for the Finance of Transport Infrastructures, so that it can speed up [its investment program]".4 In September 2005, the Government stressed that the main objective being pursued with the privatization of the state-owned concession companies was "to obtain financial revenues that will allow to pay a part of the National Debt and to finance new essential infrastructures."5
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1 In France, these concessions included strict contractual limits linked to a CPI index. Later, in the early 1970s, some concessions were awarded to private firms, as discussed belowe. In other Southern countries, such as Portugal and Greece, plans to develop the motorway network were not undertaken until much later. More recently, Ireland has begun to rely on private concessions to extend its tollway network.
2 Although the Greek toll roads are managed currently by public agencies, there is an expectation that there will be private concessions. Public management of tolls is also important in Norway (non-EU country), were almost 90 per cent of the motorways network is tolled, and all tolls are publicly managed.
3 In Italy, the government launched a wide privatization program in 1997 because of the financial restrictions imposed by the Maastricht Treaty conditions (Baldassarri, Macchiati and Piacentino, 1997). As a part of this program, Autostrade was transferred to the private sector in 1999. Autostrade's concession was scheduled to expire in 2003. In order to maximize privatization receipts the concession was extended until 2038 and the level of tolls was maintained (and further adjusted for inflation), although most of the investments had been amortized before 1999 (Greco and Ragazzi, 2005).
4 Portail du Government, Déclaration de politique générale: le programme du Gouvernment. 8 June 2005. By early 2005 it had been created the Agence de financement des infrastructures de transport de France (AFITF). One of the expected sources of revenues to fund this Agency was the benefits obtained by the French State and the public company Autoroutes de France as a result of their shareholding in the concessions of tolled motorways (Press release after de French Conseil des Ministres of 26 January 2005).
5 Portail du Government, La privatisation des sociétes concessionaries d'autoroutes. Questions & Réponses, n. 020, 7 September 2005.