State Counting on Private Funds for Road Construction

Portoroz, 26 October

Projections until 2023 suggest Slovenia will need EUR 6.3bn for the modernisation of road infrastructure until 2023 on top of the existing earmarks. Since it is impossible to secure all this money from the budget, private funding will have to be brought in, a conference on road transport has been told.

The construction of three sets of expressways and additional motorway sections (which are envisaged in the strategy of national development projects until 2023) will require EUR 2.8bn.
This is more than the value of the entire programme of motorway construction since 1994, Gregor Ficko, state undersecretary at the Transport Ministry, told the conference on Thursday.
The expressways (dubbed the development axes) are estimated at EUR 1.45bn, of which 14% is to come from private sources.
The additional motorway sections meanwhile are worth EUR 1.36bn, with 35% of the funds expected to be provided by private entities.
The participants of the panel agreed that private funds were in ample supply with Vili Zavrlan, the head of the National Directorate for Roads, saying there was more foreign and domestic capital.
Since the only way the investors can earn a return on investment is through tolls, the participants agreed that roads which would be built with private capital would have to be toll roads.
"Only toll roads will be built with private capital," the managing director of the Slovenian Motorway Company (DARS) Lado Prah added.
Economist France Krizanic meanwhile said that even cities or municipalities may decide to finance road construction.
They could found a company which takes out loans on the capital market and builds a road, Krizanic told STA on the margins of the conference.
Abdon Peklaj, a member of the DARS board, meanwhile indicated that his company, which manages Slovenian motorways, might be interested in constructing roads on the development axes.
"Over the years DARS has gathered a lot of experience and know-how...When the time comes to make a decision, we will definitely be thinking about that," he said.

State Counting on Private Funds for Road Construction

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