Privatization of Finland’s road system: what the government could do

bernerOn Thursday Anne Berner, Minister of Transport and Communication, revealed her ministry’s proposal  to effectively privatize Finland’s road system by creating a private company owned as a first step by the state and by replacing the (around 20 %) car tax with fees based on road use. Immediately, there were reactions, generally negative, as 1) nobody sees how to practically implement such a system, in particular as the present cars’ owners have already paid the taxes 2) nobody sees how it will allow to pay to repair the roads without the state budget 3) the new agency looks like an attempt to create a new bureaucracy providing nice jobs to its administrators, who certainly will come mainly from the Center Party (Keskusta), Ms Berner’s party. One could also remark that it is a new tax which will in fact disadvantage people who are obliged to take a car because there is no public transportation in large parts of the country, for example because Ms Berner and her party have cut train services  in certain regions, and cut subsidies for municipalities, leading to restrictions in public transportation.

There would be a simpler solution, that Ms Berner and the government could consider if they are able to study what has been done outside Finland (in the US, France, Spain, Italy, etc.): a number of countries have given to private companies the management of some motorways, transformed in toll roads after a call for tender in order to get the best offer. The companies get the toll income, , and pay for the necessary repairs. The state get a predefined annual income from these companies and is not paying the repairs, which is good for the state budget. For Finland, this income would help to pay for the repairs necessary on the other roads. It could be done for some of the  main motorways, for example Helsinki-Lahti-Heinola, Helsinki- Tampere and Helsinki-Turku. The private sector could also be proposed to build new needed toll motorways to the north against a fee for some years, without any cost for the state, if it would be financially sustainable. The system could be developed with a toll system to drive into Helsinki, as it is done in Sweden for Stockholm, as the public transportation network is excellent in the capital region, and the income would allow for paying for faster development of Helsinki metro and tram network.

This would be quite fair, as it would not create inequalities between the people living around the main towns and benefiting from a good public transportation system, and people outside these regions obliged to daily drive to be able to work, to eat, to shop etc. In addition, there would be a choice, as Finnish motorways have generally a parallel road  in good condition that you can use if you don’t want to use the motorway. It would certainly be more acceptable, it would finance the modernization of the Finnish road system, it could accelerate its development, it would boost Finnish economy, but it would not provide nice jobs and administrator’ positions in the new agency…




Categories: Economy, Government

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