CA38050 - IBA: Highway undertakings: Background

CAA01/S341 - S344

Someone in the public sector, such as a local authority, operates most roads. But there are two areas where roads may be constructed and operated by someone in the private sector:

• where a privately operated toll road is constructed, normally under a concession agreement between the relevant Highway Authority, or the Secretary of State for Transport and the operator of the road, and
• where capital expenditure has been incurred on public highways under the Government's Design, Build, Finance and Operate (DBFO) initiative. This initiative encourages private investment in the road system. Private companies that take responsibility for the design, building, financing and operating of major public highways will be paid fees by the Government, based on the level of use of the road, and on such factors as safety and availability.

The term `highway undertaking' covers both of these activities.

A person who operates a highway undertaking will not normally have an interest in the road that is capable of being the relevant interest, occupy the road or be trading. This means that the normal conditions for claiming IBA are not satisfied CA30300. There is legislation that lets a person who operates a highway undertaking claim IBA.