Rick Geddes and Dimitar Nentchev write Road pricing and asset publicization: A new approach to revitalizing US infrastructure – Economics – AEI:
“This study offers three key insights:
1. Pricing the use of transportation assets that are presently “free” liberates massive latent economic value currently trapped in those assets;
2. Latent value can be best realized through competitive bidding among a group of firms on the basis of the largest upfront lease payment to operate the asset; and
3. A portion of the realized value can be invested in perpetuity through a permanent fund that generates income for all citizen-owners of the asset. The investment income from the permanent fund helps encourage citizen-owners to accept the pricing necessary to release the asset’s latent economic value.”
Parts 1 and 3 are very similar to the idea I had in Enterprising Roads.
I am not convinced of the value of point 2 (i.e. competitive bidding for upfront leases) vs. just having a utility manage the stream of revenue and provide an annual road dividend to users. That’s mostly a risk transfer. I can see the advantage of getting government out of the road management business, but then I look at private monopolies, and I don’t see much better performance, and so many PPPs have gone bad.