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The Proposed Privatisation of Queensland Motorways

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  • Ross Guest

Abstract

This article evaluates the proposed sale of the tolling rights on Queensland Motorways from an economic welfare perspective. Weighing against the sale are arguments about optimal risk allocation and network externalities. In contrast, there is a productive efficiency case in favour of the sale. Privatisation also raises questions about private monopoly power and the delivery of community service obligations, although these could be handled through contract specifications. The sale price is essentially a distributional issue. The back‐of‐the‐envelope financial analysis here suggests that the mooted sale price of $3 billion would undervalue the asset and therefore transfer net worth from Queensland taxpayers to private investors.

Suggested Citation

  • Ross Guest, 2010. "The Proposed Privatisation of Queensland Motorways," Economic Papers, The Economic Society of Australia, vol. 29(1), pages 23-33, March.
    • Handle: RePEc:bla:econpa:v:29:y:2010:i:1:p:23-33
    DOI: 10.1111/j.1759-3441.2010.00055.x
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    References listed on IDEAS

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    1. Simon Grant & John Quiggin, 2003. "Public Investment and the Risk Premium for Equity," Economica, London School of Economics and Political Science, vol. 70(277), pages 1-18, February.
    2. Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
    3. Stephen King & Rohan Pitchford, 2008. "Private or Public? Towards a Taxonomy of Optimal Ownership and Management Regimes," The Economic Record, The Economic Society of Australia, vol. 84(266), pages 366-377, September.
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    Cited by:

    1. John Quiggin, 2010. "Bad Politics Makes Bad Policy: The Case of Queensland’s Asset Sales Programme," Economic Papers, The Economic Society of Australia, vol. 29(1), pages 13-22, March.

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