Road networks play the leading role in European mobility landscape. Despite the effort spent by the European Union and by the Member States to stimulate the use of other mode of transport, road transport still represents the most used way of moving people and freight across Europe: 72% of passengers move by car and 45% of freight is moved by trucks.

However, road network still requires urgent and huge investments. The completion and maintenance of the European road network is of uttermost importance to support European integration and economic growth. In particular, bridging missing links would help to integrate remote territories and building a more resilient network. Road administration bodies should focus their transport policy on developing and optimizing road networks in urban areas to reduce congestion whilst enhancing sustainable mobility.

Motorways are the safest and less congested type of roads and they can ensure a smoother and speeder traffic flow compared to other road categories. However, compared to them, they are more expensive and imply a more complicated pperational model (e.g. collection of fee in case of tolled motorways, traffic flow control, make sure that maintenance and safety of equipment is adequate to speed, ecc).

How well are we familiar with concession model

In the typical and “pure” toll road concession scheme, a specialized operator (the concessionaire) is in charge of financing, building, maintaining and operating the motorway against the right of collecting tolls from road users. However, depending on national policies and aims, various other forms of financing have been tested and applied on European roads. Some of them proved to be successful, some were mostly abandoned due to inadequacies (e.g. shadow tolling).

Several cases analysed in this study showed that there is not a unique model of financing suitable for each situation, but specific conditions make viable certain forms of financing. In a context where EU Member States are struggling to find sources to finance their infrastructures, where the EU is planning to kick-off a large number of EU initiatives that might affect the tolled road concession schemes, and in light of the threats posed by the entrance in the market of non-EU companies that play the rules of unregulated markets, the aim of the study is:

Results and goals of the Study

Various experiences in different countries show that the use of toll roads and concessions thanks to the economy of scales generated by the management of a portfolio of assets and by the management and technical knowledge of concessionaires, is much more efficient and sustainable than any other road financing system. Nowadays the concession model represents the most flexible tool for constructing, maintaining and operating a motorway network, since it can be adapted to different local conditions in terms of regulation, traffic and operational conditions.

Concessions can provide concrete benefits on the road infrastructure sector

Conclusions and recommendations

The need for investments for the completion of the road network comes in a period when State finances are scarce. Maintenance and upgrades on the existing network becomes an increasing burden on State budgets and delayed maintenance works resulting from budget adjustments are leading to increased costs of repairs or worst, ailing infrastructure. As mentioned, public funds for new investments are scarce: sectors with self-financing capabilities should be tapped when possible, therefore schemes involving private investors, such as road toll concession models, should be favored.

Concession model represents an alternative powerful tool to help building and maintaining European roads without leveraging on State finances. Road administration bodies should focus on leveraging the investment capabilities of mature concessions in order to avoid passing costs to taxpayers. In particular, the possibility of backing new concessions to mature network represents a viable way to complete works without delays and at minimum costs both for public finances and road users. Further, European toll operators wish a more flexible approach on contract management (e.g. tariff increases, duration extensions, etc.) to finance new investments and upgrades of the network, in compliance with European regulations. In general, toll road concession sector in Europe needs further innovative contractual tools supporting the economic and financial balance of the Concessionaire to attract private investors.

Concession schemes should be optimized in order to attract private investors. In particular, the promotion of the legal certainty and predictability of the concession schemes is a prerequisite for private investments. Further, the development of high-tech solutions should enhance security through Intelligent Transportation System (ITS) and facilitate tolling with secure modern payment means. In order to alleviate the position of the Concessionaire, most of the European toll operators wish the introduction, within the concession agreement, of clauses authorizing the revision of general risk allocation schemes, authorizing modulation of risks over time due to the evolution of the network and possibility to rely on government subsidies in certain cases (e.g. major traffic decreases). New concession agreements and the revision of the existing ones should also be aimed at identifying clearly the cases that imply economic rebalance of the concession contract, at facilitating tariffs increases or period extension to make economic rebalances and at allowing introduction of minimum income guarantees. Toll Road operators are willing to share the findings and recommendations with the European institutions and European stakeholders in order to create a common and consolidated vision on this important instrument.