1 Introduction
Background
1. The first road link across the River Severn and
Wye (the M48 Severn Bridge) was opened in 1966, with a toll in
place to pay for the cost of construction. As traffic levels increased,
the original crossing was deemed unable to cope efficiently with
the congestion, and in 1986 the Government announced the construction
of a second bridge.
2. The contract to construct the second Severn Crossing
(the M4 Severn Bridge) was awarded to Severn River Crossing Plc
(SRC)[1] in April 1990
under a DBFO (Design, Build, Finance and Operate) Private Finance
Initiative Scheme. Under the agreement, the company would also
take over the maintenance and operation of the existing Severn
Bridge. In October 1990, a concession agreement was signed between
the Government and Severn River Crossing Plc, and in February
1992 the Severn Bridges Bill received Royal Assent.
3. Under the terms of the concession agreement which
commenced in April 1992, Severn River Crossing Plc took over
responsibility for both the operation and maintenance of the original
bridge, and the financing of the outstanding debt of £122
million, and the organising of the construction of the new bridge.
The construction of the new bridge cost £330 million (excluding
VAT) and was opened on 5 June 1996.
4. In return, the concession agreement allowed Severn
River Crossing Plc to collect tolls from both crossings for an
agreed period. This is their only source of income.
5. The Severn Bridges Act 1992 established the conditions
under which the concession will end, and both bridges will revert
to public ownership.[2]
The Act notes that the concession agreement ends either at:
... the end of the period of 30 years beginning with
the appointed day; [or]
Where it appears to the Secretary of State that the
revenue requirement has been met on a day, the right of the concessionaire
to exercise the power to levy tolls shall end at such time after
that day as the Secretary of State may determine.[3]
UK CONTEXT
6. As well as the Severn Crossings toll between England
and Wales, there are three tolled road crossings within Wales
and fourteen in England. Many of these are small privately operated
tolls. The remainder are either: publicly operated; a concession
for a limited period; or a "charity". These are—Severn
(concession), Cleddau bridge at Milford Haven (local authority),
Dartford Crossing (formerly a concession, now in public ownership),
Humber bridge (local authority), Itchen bridge (local authority),
Mersey tunnels (local authority), Tamar bridge (local authority),
Tyne tunnel (local authority) and the Clifton bridge (charity).
7. There are no tolls in Northern Ireland or Scotland.
Our Inquiry
8. The Severn Crossings are a vital link between
South Wales and England. There has long been public interest in
the effects of the tolls on the economy of Wales and its impact
on users of the bridges. There has been uncertainty over the future
of the bridges once they revert to public ownership.
9. On 20 July 2010, we announced our inquiry which
would examine:
- The impact of the toll on the
Welsh economy including businesses, local residents and tourists;
- The current level of toll prices and the available
methods of payment;
- The current condition of the bridges and the
costs associated with ongoing maintenance; and
- The future of the crossings once they have reverted
to public ownership.
10. Among others, we took oral evidence from Mike
Penning MP, Parliamentary Under-Secretary of State, Department
for Transport; Ieuan Wyn Jones AM, Deputy First Minister for Wales
and Minister for the Economy and Transport, Welsh Assembly Government;
and Jim Clune, General Manager, Severn River Crossing Plc.[4]
We also undertook a visit to the Severn Crossings in September.
We are grateful to everyone who provided oral and written evidence
to our inquiry.
11. The Committee was assisted in this inquiry by
its Specialist Adviser, Professor Stuart Cole, Wales Transport
Research Centre, University of Glamorgan Business School.[5]
1 Severn River Crossing Plc is a single-purpose company.
Its shareholders are John Laing plc, Vinci (GTM-Entrepose), Bank
of America and Barclays Private Equity (Barclays de Zoete Wedd
(BZW)). Back
2
See paragraph 69. Back
3
Severn Bridges Act 1992, Part 2 Section 6 Back
4
For a full list of witnesses, please see page 36. Back
5
See Formal Minutes of 27 July 2010 at http://www.parliament.uk/documents/commons-committees/welsh-affairs/WelshACformalminutes1011.pdf Back
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