Analysis: The Severn Bridge pledge
Tim Richards looks at how abolishing the Severn Tolls could cause problems down the road…
When Theresa May announced her intention to abolish the Severn Bridges tolls if elected Prime Minister, it was probably the cheapest give-away ever because the tolls were due to end anyway when the crossings come back into public ownership next year.
The Bridges have been operated by the Severn River Crossing plc, a private company, in the first Private Finance Initiative (PFI) deal created by the Tory Government in 1992.
Considering that the original cost of construction was £450million and the final income will be over £1billion, it has been a very profitable Private Finance Initiative (PFI) deal for their owners, a consortium of 4 companies:
- John Laing (35% shareholder) a British developer infrastructure operator
- Vinci (35% shareholder), a French concessions and construction company
- Bank of America (15% shareholder)
- Barclays Capital (15% shareholder).
Handing the bridges over to a PFI concession was justified on the grounds that the private sector were taking on the risk of the construction, though what that risk might be has never been properly explained as the volume of traffic has steadily increased over the years and there has been absolutely no risk at all.
Even when corrosion was discovered a few years ago in the cables of the old M48 Severn Bridge, the problem was dealt with by the Department of Transport which spent about £20 million to fix them.
The PFI scheme will end in early 2018 and the Bridges will come back into public ownership once the concession has reached its target of £1.029 billion income (in July 1989 prices).
What would happen then was the subject of a consultation document issued in January this year which asked the no-brainer question, do you agree with the proposed reductions in tolls?
The consultation document considered the idea of getting rid of the toll booths and introducing two-way free-flow charging by use of cameras and pre-payment and one idea was to not charge anything at all at night.
So, ironically, Theresa May’s decision to abolish the tolls altogether if elected is yet another U-turn, but not really that surprising as all the parties in the Welsh Assembly have argued for it.
But there is a twist in the tail of this plan – and that is the knock-on-effect on the westbound M4 as the consultation document points out that reducing the tolls will lead to a traffic growth of 45%.
Abolishing the tolls would make volume of traffic grow even more but while the Severn Bridges will be handed over to Highways England, how to deal with the bottleneck at the Brynglas tunnels in Newport would be the Welsh Government’s headache.
It is likely to put even more pressure on them to build a bypass round Newport.