Consortium takes directions for first private-finance road Link consortium wins first contract

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Transport Correspondent

The contract for Britain's first privately financed road was signed yesterday but details of the deal were kept secret by the Department of Transport because of "commercial confidentiality".

The contract, which is the first in a Government initiative under the Design, Build, Finance and Operate scheme - scheduled to cost pounds 1bn over three years - involves the construction of the two-mile Haltwhistle by-pass on the A69 and maintenance on the 50-mile road between Newcastle and Carlisle.

The contract has been won by Road Link, a consortium of six companies including two Italian firms, which will be responsible for both minor and major work on the road from the start of the contract on 1 April until 2026.

Motorists will in fact not notice any difference in the way the road is operated and will certainly not be charged for the use of the road. The contractor's income is obtained from "shadow tolls" paid by the Department of Transport, based on the amount of traffic on the road. At present there are between 8,000 and 38,000 vehicles using the road each day and this is estimated to increase to between 10,000 and 57,000 over the next 10 years.

The Highways Agency, the government agency responsible for the motorway and trunk- road network, has refused to release details of how much the contractors will receive over the 30-year period.

In briefing papers, the Agency says that the cost of the bypass alone would be pounds 9.4m but the Independent has learnt that it will in fact cost almost pounds 20m. Routine maintenance of the 50-mile road would normally cost around pounds 100,000 per year, and full-scale refurbishment around pounds 200,000 per mile. The contractor will be penalised if, for example, the road has to be closed for roadworks or the maintenance standard drops below the required level.

Environmentalists have criticised the scheme because they say that it is an incentive for contractors to encourage more traffic on to the road to obtain extra income.

Roger Higman, roads campaigner for Friends of the Earth criticised the cost, saying: "This is an expensive way of building roads because the contractor has to borrow money at a higher cost than the Government would be able to do." He also criticised the secrecy of the deal: "They are covering up the fact that it's a very expensive way of paying for roads which commits future governments to shelling out a lot of money to contractors for the next 30 years." The contractor, he said, faced little real risk and was set to make large profits.