Severn Crossing Toll

Written evidence from the Welsh Assembly Government

Introduction

1. The Welsh Assembly Government welcomes the opportunity to provide evidence to the Welsh Affairs Committee inquiry into the Severn Crossings Toll.

2. The Severn Crossings provide a key link in Wales’ transport and economic infrastructure. As part of the strategic M4 corridor, they provide Wales’ businesses with access to markets in southern England and, beyond that, mainland Europe.

3. The Welsh Assembly Government has no responsibility for the crossings or the levying of tolls. The management of the bridges and collection of tolls is a matter for the UK Government. However, given their strategic significance to Wales, the Welsh Assembly Government works closely with the UK Government on matters relating to the Severn Crossings and will continue to do so.

Level of tolls

4. The tolling regime for the Severn Crossings is set out in the Severn Bridges Act 1992. Under the Act the tolls increase annually in line with the Retail Prices Index.

5. The concessionaire, Severn River Crossing plc, manages the Crossings and collects the tolls. This funding is to repay the construction and financing costs of the Second Severn Crossing, as well as the remaining debt from the original Severn Bridge and the costs of operating and maintaining both crossings.

Methods of payment

6. Progress is being made to allow users to pay the tolls by credit or debit cards. The UK Government has made the necessary legislation and is in discussions with River Severn Crossings plc to resolve outstanding financial issues. The Welsh Assembly Government welcomes the work undertaken so far towards enabling the use of credit and debit cards, and has urged the UK Government to ensure that the changes are made in time for the start of the Ryder Cup in September.

Condition of bridges and associated maintenance costs

7. Under the terms of the concession agreement, the concessionaire is legally required to maintain the Crossings to an acceptable standard. When the concession ends, the concessionaire is required to carry out any necessary maintenance and repair works on the Crossings prior to the handover to the UK Government.

Future of the bridges

8. The current concession agreement will end when the concessionaire, Severn River Crossing plc, has collected a fixed sum of money from tolls, which is £996 million at 1989 prices or £1.8 billion at today’s prices.

9. The current forecast is that this funding requirement will be met in the first half of 2017, at which time the operation of the two Crossings will revert to the UK Government. Under the 1992 Act, the Secretary of State for Transport has the power to continue tolling for a further five years in order to build up a maintenance fund.

Impact of tolls

10. The Welsh Assembly Government is taking forward a study to consider the economic impact of the tolls. The study will explore the magnitude of the impact of the tolls in depth, as well as assessing the overall balance of effects on the Welsh economy. It will be an independent study, overseen by the Economic Research Advisory Panel, which will look at all the issues in an impartial and objective way.

11. The study is expected to get underway in the autumn. The timetable for completion will depend on the final scale of the project, particularly if it is necessary to undertake original research, but hopefully some initial results will be available next spring.

12. The Welsh Assembly Government will continue to work closely with the UK Government on the future of the bridges. The study commissioned by the Welsh Assembly Government on the economic impact of the tolls will help to inform these discussions.

September 2010