Highways Agency - Safe roads, Reliable journeys, Informed travellers

2002

Question 22/4/02 - John Bercow (Conservative, Buckingham): To ask the Secretary of State for Transport, Local Government and the Regions what estimate he has made of the total savings of the private finance initiative contract for the (a) M1/A1 Link Road, (b) A1(M), (c) A30/35, (d)M40, (e) A417/419, (f) A19, (g) A50, (h) A69 and (i) second Severn Crossing by comparison with a non-private finance initiative alternative.

Answer - David Jamieson (Labour, Plymouth, Devonport): The following figures show the savings estimated at the time of contract award.

Note: Figures are net present values calculated at an 8 per cent real discount rate. This was the rate used for assessing road projects at the time of contract award.

I understand that the publicly and privately financed options for the second Severn Crossing were evenly matched.

Question 7/11/02 - Matthew Taylor (Liberal democrat, Truro and St Austell): To ask the Chancellor of the Exchequer when he will publish the full results of the retrospective application of the revised Treasury technical note, How to Account for PFI Transactions; and if he will make a statement.

Answer - Paul Boateng (Labour, Brent South): The results to date of the retrospective application of the revised Treasury Taskforce Technical Note are set out in the table below. The table shows, for all PFI contracts that were operational by the end of the 2001-02 financial year, the accounting treatment that has been adopted. [DBFO roads projects only shown below.]

Question 21/11/02 - Derek Wyatt (Labour, Sittingbourne and Sheppey): To ask the Secretary of State for Transport if he will make a statement about progress with the A249 Iwade to Queenborough improvement, with special reference to the (a) start date, (b) finish date and (c) compulsory purchase orders required.

Answer - David Jamieson (Labour, Plymouth, Devonport): I have asked the chief executive of the Highways Agency, Tim Matthews, to write to my honourable friend.

Letter from Tim Matthews to Derek Wyatt, dated November 2002:

I have been asked by David Jamieson to reply to your recent question about progress on the A249 Iwade Bypass to Queenborough Improvement scheme.

This scheme is incorporated within the A249 Stockbury (M2) to Sheerness DBFO project, which is currently out to tender, with a tender return date of 6 December. We expect to award the contract in November next year.

The actual delivery programme for the improvement scheme will be determined by the successful DBFO company. At this stage of the procurement process our assumed programme is as follows:

• Works commencement date - 1 March 2004
• Road open to traffic - 31 March 2006
• Completion of Works - 1 July 2006

It should be noted that whilst tenders are due to be submitted by 6 December, a significant period of negotiation is required between return of tenders and award of contract. The period between the date of award and the start date for the works allows for completion of detailed scheme design.

With regard to the compulsory purchase orders for the scheme, these were made in June 2001 and will remain valid until June 2004. This period can be extended beyond 2004 provided that notices to treat are served prior to this date.

Question 10/12/02 - Don Foster (Liberal Democrat, Bath): To ask the Secretary of State for Transport how many road building schemes using the design, build, finance and operate contracting method are (a) completed and (b) under construction; what the estimated cost to public funds is for each project over the lifetime of the DBFO contract; and if he will make a statement.

Answer - David Jamieson (Labour, Plymouth, Devonport): There are nine design build finance and operate schemes of which one is under construction (A130) and eight have been completed. The cost to the public funds over the life (30 years) of the eight completed projects is:

The above figures are net present values calculated at an 8 per cent real discount rate.

The government is also prepared to consider providing assistance to local authorities to provide roads through a design build finance and operate contract. To date only the A130 road has been procured in this way. That road was constructed in two stages. The first stage has been completed and the second stage is expected to open shortly. The estimated cost to public funds over the life of the project is £105 million at 1997 prices.