Tories gave pounds 30m 'can't lose' clause to motorway builders

Whitehall sources are baffled by the extraordinary generosity shown by the former Conservative government towards the builders of one new road scheme, writes Chris Blackhurst. In theory, the 27-mile Birmingham North Relief Road, intended to relieve congestion on the M6, should not cost the taxpayer anything. It was designed as Britain's first toll motorway, with revenue from tolls covering all costs. But a clause in the contract guarantees the builders an estimated pounds 30m if the road does not go ahead.

Labour ministers have had no choice but to approve the scheme. One Whitehall official said he had never known such a compensation requirement. Its effect, he said, was to nullify the normal planning process. As soon as the clause was inserted, when Malcolm Rifkind was transport secretary in 1992, the road was virtually bound to be given the green lightl.

According to the builders, Britain's Trafalgar House and an Italian company, Iritecna, they have run up huge bills on legal fees, surveyors and planners. "It is a mechanism for us to recover our costs," said Paul Emberley, a spokesman for Kvaerner, Trafalgar's parent company. "We have made a considerable expenditure over the years and we were prepared to take risks."