Exclusive: Toll road operators to pursue compensation

23/04/2020
Rhodri Clark

Public and private sector operators of toll roads will seek additional government funding when COVID-19 restrictions begin to ease, Highways can reveal.

The organisations are now keeping their infrastructure open despite revenue nosediving or, in some places, disappearing completely.

‘Force majeure’ clauses in private finance initiative (PFI) contracts may come into play on ‘shadow toll’ roads - where the government pay operators based on traffic use.

Operators have chosen not to cut costs by closing their infrastructure, at night or weekends for example. M6 Toll chief executive Andy Cliffe told Highways: ‘As with nearly all organisations in the world, our business has been significantly impacted by COVID-19 as non-essential business and leisure journeys have ceased.’

He said the road was a vital part of UK infrastructure, particularly for freight.

‘For that reason, the road remains fully open.However, to ensure that we can maintain safe operations for both our colleagues and customers, we have changed the way that we operate to remove payment by cash.’

Cash payment is also suspended on the Humber Bridge and Clifton Suspension Bridge, Bristol.

Tolls and charges have been suspended by some authorities, including Southampton City Council at the Itchen Bridge.

A Plymouth City Council spokeswoman said: ‘The tolls on the Tamar Bridge and Torpoint Ferry were suspended from 25 March to help reduce the spread of the coronavirus by protecting customers and bridge and ferry staff, while still keeping these vital transport links open for key workers, emergency services and those travelling for essential reasons.

‘Cornwall Council and Plymouth City Council will discuss with the government how this necessary and important action to protect public health will affect the long-term funding of the two crossings when we are in a position to review future operations once government restrictions have been relaxed.’

Contrasting approaches are evident within some city regions.

Transport for London has suspended ‘all road user charging schemes in the capital’ but Highways England continues to collect the Dart Charge (a congestion charge rather than a toll).

Highways England was unable to tell Highways the scale of the Dartford Crossing revenue reduction.

Liverpool city region mayor Steve Rotheram announced on 26 March that Mersey Tunnels tolls were suspended because only key workers were using them.

However, users continue to pay tolls on the new Mersey Gateway Bridge because the Government has refused Halton Borough Council’s request to suspend the tolls.

The bridge’s funding package was agreed on the basis that tolls will cover most of the £1.86bn cost, up to 2044.

A council spokesman said: ‘Project revenues are currently at 50% –and falling – of year-on-year values.

‘There is no additional assistance being provided by Government during this period beyond that which is already within the funding model for the project. Halton council will seek financial support from the Government to recompense the council for any costs associated with COVID-19.’

Highways England pays shadow tolls – linked to traffic volumes – for eight roads procured through Design Build Finance Operate (DBFO) contracts. They include the M40 Denham-Warwick, the A1(M) Alconbury-Peterborough and the M1-A1 link east of Leeds.

Highways England was unable to say how much traffic on those roads has reduced.

‘Payments to DBFO operators who are paid on the basis of shadow tolls are set annually, based on the prior year’s traffic volumes. Current payments to DBFO operators are unaffected,’ said a spokeswoman.

‘Our DBFO contracts contain “force majeure” clauses. We are constantly in dialogue with our DBFO providers regarding the operation of the strategic road network including the financial impact of coronavirus.’

Shadow tolls also cover the A55 across Anglesey to Holyhead ferry port, where activity reduced when the UK and Irish governments prohibited leisure travel. Data from the A55 further east reveals reductions of 30% in heavy goods vehicles and over 70% in other traffic.

A Welsh Government spokesman said shadow tolls were paid annually. Traffic reductions in late March and early April would feature in the annual reconciliation of figures in June. Those from early April onwards would not be known until June 2021.

Following the June 2020 reconciliation, ‘monthly payments will be adjusted accordingly from July 2020,’ he said.

‘In line with typical PFIs of the era, there is a definition of “force majeure”.We are not yet in a position to determine what effects this will have on the contract.’

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