The Department for Transport (DfT) has admitted giving the Lower Thames Crossing (LTC) another £174m of public money, despite claims that the allocation in the Autumn Budget was the last, bringing total public funding for the privately funded scheme to £3.1bn.
The £174m of extra cash will be used to fund public works on both sides of the tunnel and will be found from existing budgets, the Department for Transport (DfT) said.
The extra funding was spotted by Transport Action Network (TAN), which noted the gap between the £1.48bn announced up to and including the Autumn Budget and the £1.66bn in the (March) Road Investment Strategy.
The DfT also told the Guardian:
We have committed £3.1bn to the Lower Thames Crossing to date, including £891m to complete the publicly funded works needed to unlock private investment.
This is around £100m more than the previously estimated £3bn, which includes around £1.5bn already spent. It’s subject to rounding and was probably a bit under £3bn and is now a bit over £3.1bn.
Becca Lush of TAN told the Guardian:
At the autumn budget, the chancellor announced the ‘final tranche’ of public funds for the Lower Thames Crossing. Yet now we find out that the DfT have bunged another £174m towards this privatised road project, whilst refusing to publish the outline business case.
The Guardian also reports:
A licence to run the new tunnel and the existing Dartford tunnel about 7 miles to the west is expected to be handed to a private consortium in 2029, offered in perpetuity and overseen by a regulator. The completion date for works is now scheduled for 2034.
It’s worth noting here that the licence to run the existing Dartford tunnel (plus the QE2 bridge) means handing over the revenue in perpetuity. When you add this to the up front public funding, it runs into many billions and the idea that the scheme will be privately financed looks like a bit of a scam.
And, again feeding into the idea that the LTC will draw on a bottomless pit of public money, independent (previously Reform) MP James McMurdock asked what assessment the DfT has made of the extent of the contingent liabilities associated with the proposed Regulated Asset Base (RAB) private finance model.
Roads minister Simon Lightwood replied:
The details of this model are still under development, including through engagement with potential investors. No decisions have yet been taken that could result in contingent liabilities arising. The Department will undertake a full assessment of any contingent liabilities once the financial structure has been sufficiently developed.
This answer avoids admitting that the RAB model usually creates contingent liabilities. Such models almost always involve revenue guarantees; regulatory commitments; compensation mechanisms; and/or government support packages.
If the Government admitted contingent liabilities now, it would have to notify Parliament; quantify the potential exposure; justify the risk transfer; and explain why a private operator needs guarantees.
Did I mention that presenting the LTC as privately-funded is looking more and more like a scam?
One response to “Private LTC is a bottomless pit of public funding”
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Why oh why oh why is this absolutely daft scheme still even being considered. It won’t work to ease transport problems and it is a very large use of our taxes which could be much better spent almost on anything else.
The hearing to investigate it showed it hardly worked to provide any real relief at Dartford. It had a benefit of 48p per pound spent under the Department for Transport’s evaluation methods. That was when the estimate was £8bn not £11+bn.
Under the rules of ‘Schemes of National Importance’ there is very little scope for anybody to properly understand, investigate and challenge the way schemes are modelled and assessed; so even the 48p could have been doubtful. Much of the analysis is apparently a matter of DfT policy and is either secret or not based on facts and knowledge.
Any road generated traffic was largely ignored by National Highways despite there being so much undisputable evidence that any road built near London generates much extra traffic which causes chaos elsewhere.
Tolling can be used to suppress demand. However, as tolls are more than likely to be raised by any private operator, similar increases could equally be applied to the Dartford crossing – completely removing the need for this ridiculous scheme.
Just to make absolutely sure Dartford Crossing would continue to cope (without the Lower Thames Crossing) perhaps the hard shoulder on the M25 could be replaced and make it safer for all of us as well!
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