Bidders sought for pounds 400m road schemes

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The Independent Online
THE FIRST four road schemes to be financed by the private sector were announced yesterday by John Watts, the minister for railways and roads.

The four, worth a total of pounds 400m, represent a wide variety of schemes as they are the prototypes for what might become a major part of the pounds 2bn a year national road programme, if private companies are prepared to take on this type of contract.

They are the 19-mile M1-A1 Yorkshire link road around Leeds estimated to cost pounds 190m; the pounds 145m A1 widening between Alconbury and Peterborough; bypasses and widening of the A419/A417 between Swindon and Gloucester ( pounds 35m) and the construction of the Haltwhistle by-pass and other improvements costing pounds 10m to a 53-mile section of the A69 between Carlisle and Newcastle. The contractors will also have to maintain the roads for between 15 and 25 years. All four schemes have successfully completed the public inquiry stage.

Mr Watts said: 'This is a way of bringing forward schemes that otherwise we might not have been able to start as soon.'

While the private sector has funded river crossings, such as the Dartford and Severn projects, where it is easy to recoup investment through conventional tolls, this is the first time that private finance will be brought in to pay for ordinary roads.

The Department of Transport wants the bidders, who it is expected will start work next summer, to design, build, finance and operate the roads. They will be financed partly through 'shadow tolls' paid by the Department for every car and lorry using the road and partly by rewards formeeting standards relating, for example, to the quality of maintenance and the number of road works.

Mr Watts was unable to say what the level of each 'shadow toll' is likely to be. Motorists will notice no difference since the toll will be paid by the Government to the contractor.

The contractors will be expected to take on a substantial burden of risk, particularly over traffic levels but also on unexpectedly high costs of construction and maintenance, and some City analysts doubt whether the Government will be able to find contractors ready to take on such high levels of uncertainty.

While the roads lobby broadly welcomed the new concept as it allows some road schemes to be brought forward, the British Road Federation warned: 'If shadow tolling is going to deliver long-term benefits, then it must be accompanied by an increase in resources available.'