Transport Insights

The Times story on the Lower Thames Crossing raises further doubts that the £11bn project will be privately financed, even beyond the £3bn that the taxpayer is due to put in before anything happens.

The taxpayer is set to lose net income of at least £120 million a year as a result of the financial arrangements for a new road tunnel under the Thames, The Times can reveal.

Government plans for the Lower Thames Crossing are built on handing the revenues from the existing tolls on the Dartford Crossing to a new private operator, which will be allowed to keep them in perpetuity.

My take on this is that if you are diverting £120m of revenue annually and for ever to pay for a project, you are at least partially funding that project (again, beyond the £3bn) and no amount of smoke and mirrors can disguise that.

The Times reports that:

Under the Transport Act 2000, these revenues go directly to the DfT, not into the Treasury’s coffers, and must be used for improving transport. The DfT did not respond to TAN’s question as to whether this income would be “included in DfT’s future budgets as a loss” or if it had been factored into the cost-benefit analysis for the Lower Thames project. The DfT also declined to answer similar questions from The Times.

This is clear obfuscation from the DfT but, whether the money is a hit to the transport budget or will be refunded by the Treasury, it’s taxpayers’ money.

Elsewhere in the paper, the piece’s author, Alistair Osborne, comments

…you’d think that before ministers committed £3.1 billion of taxpayer’s money and started early construction works, they might have bothered to produce a full business case for the link, instead of opting to wait until 2028. Or explained why it’s still a zippy scheme, despite it seeming to fail the DfT’s own “value for money” test. Or actually come clean about the implications of its “preferred financing option”, which would see both the crossing and existing taxpayer income transfer to a private sector owner in perpetuity.

I made similar observations here last month.

Having said that, the current revelations on the funding represent great work by TAN (Transport Action Network) and the journalist.