Guess Who Built the Roads?

Toll_Booth_-_geograph.org.uk_-_27250There’s a great story in the news this week about Mike Watts, a British entrepreneur who’s found a creative solution to one of economics’ most clichéd questions: “Who will build the roads?” Ever since a landslide in February, a section of the A431 roadway between Bath and Bristol has been closed to traffic. The closure has been making life very difficult for commuters—who face dramatically increased fuel costs, driving times, and pollution—and it will take until Christmas before local government will be able to repair the road.

Seeing the trouble caused by the closure, Watts stepped in to solve the problem by building his own toll road to provide a cheaper and more direct route for motorists. The Telegraph reports that “The route, which opened on Friday, is believed to be the first privately-run toll road built in more than 100 years.”

Watts and his wife have been truly entrepreneurial in their venture, which cost £150,000 to build and will require another £150,000 to maintain over the next five months (compared to an estimated £1.5 million to repair the damaged road). But they’re confident they’ve made the right decision both for themselves and local drivers. Unlike the “patrons” of public roads, Watts’ customers know up front how much they have to pay and what to expect for their money. He’s charging £2 per vehicle, and already has 1,250 customers daily. Shockingly, his road is somehow serviceable and drivers are using it even though it hasn’t received approval from local safety inspectors.

In addition to drivers, the new road is also helping other local entrepreneurs, whose revenue fell after the closure limited traffic flow to the area. Increased access is helping to get these businesses back on track, and Watts is even offering a deal where customers who spend £20 or more in the local shops have the cost of their tolls covered.

Of course, given the ease and efficiency of driving on his road, it’s no surprise that the Bath and North East Somerset Council (which is in charge of the local government roads), is trying to persuade motorists not to use it. But consumers are voting with their feet, so to speak, and taking the toll road anyway. Just another example of the market intervening to solve problems of government failure.

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