Guide to the Privatisation of Expressways and Highways

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Summary

TECH Report TC-1-web.pdf
Privatisation is a process of transferring ownership of a business from the public sector to the private sector. In a broader sense, privatisation refers to the transfer of any government function to the private sector, including functions such as revenue collection and law enforcement. One example of privatisation is the privatisation of tolled expressways and highways, which has become an important tool in the development of a nation's road transport infrastructure. 


This Guide describes key issues that all projects associated with the privatisation of expressways and highways should address. Stakeholders intending to embark on a project can use this Guide to assist them in the implementation and evaluation of projects, to ensure that key issues are addressed properly. It should be noted that, in Malaysia, all expressways and highways that incur tolls are privately owned and this is the case in all countries. However, many of the issues addressed in this Guide are also applicable to government-owned expressways and highways, even though users of these facilities do not pay a toll. 


Acknowledgement

The HORA Advisory Panel wishes to acknowledge the authors and editors for their invaluable contribution and comments in the preparation of the Guide.


Introduction

Privatisation is a process of transferring ownership of a business from the public sector to the private sector. In a broader sense, privatisation refers to the transfer of any government function to the private sector, including functions such as revenue collection and law enforcement. One example of privatisation is the privatisation of tolled expressways and highways, which has become an important tool in the development of a nation's road transport infrastructure.
The main benefits of road privatisation are:


  • stimulate growth in the private sector and promote overall economic efficiency
  • provide high quality roads which contribute to the reduction in the costs of transport and travel time
  • create a highway network constructed to international standards through the leveraging of available, but limited, Government resources
  • reduce the financial burden incurred by Government in the provision of road infrastructure
  • accelerate developments along the highway corridor through the provision of the required road infrastructure promptly with the least burden to the taxpayer
  • provide various services using private sector expertise.


Each privatisation project carried out throughout the world, including the Asia-Pacific region, is unique; some are very successful and some fail. However, whilst they are unique, most of the projects share common key issues. This Guide describes key issues that all projects associated with the privatisation of expressways and highways should address. Stakeholders intending to embark on a project can use this Guide to assist them in the implementation and evaluation of projects, to ensure that key issues are addressed properly.


It should be noted that, in Malaysia, all expressways and highways that incur tolls are privately owned and this is the case in all countries. However, many of the issues addressed in this Guide are also applicable to government-owned expressways and highways, even though users of these facilities do not pay a toll.


for full text, please download the full report Pdf icon2.png here