Letter: Tunnel financing is risky business
The revelation that the Tyne & Wear Passenger Transport Authority (TWPTA) is so desperate to get the second Tyne road tunnel project into gear that it’s going to the markets for funding implies that all is not well. The claimed reason is that the move will “lessen private sector involvement”. In reality, the borrowing will increase public sector risk.
The project was meant to be a Public Private Partnership (PPP), in which a private consortium would finance the design and construction of the new road tunnel, and in return take the tolls. This means that the project would be self-financing. The decision by the Tunnel Inquiry Inspector and the Secretary of State was based upon a presumption that this would be the case.
This new move suggests that a private partner is unwilling to bear the full costs of the new tunnel, so it appears that the TWPTA has stepped in to ‘sweeten’ a possible deal. It has already cost the TWPTA millions (in public money) to try and get this project off the ground. Now the TWPTA has gone back on it’s promises and wants to lumber the people of Tyne & Wear with a debt of at least £90 million to help pay for this folly.
This is appalling. If the scheme cannot be funded privately on it’s own merits as intended then it must be dropped, and the TWPTA should concentrate on its job – providing Tyne & Wear with a 21st Century quality public transport system.