Archived press release

Private roads cost more, but government gives go-ahead for three more projects

7 January 1997

Millions of pounds of taxpayers' money could be wasted on paying for "build now, pay later"DBFO road contracts because they "require additional funding in interest and VAT payments", according to a leaked Department of Transport memo, obtained by Friends of the Earth. Yet today the Government announced plans for a further three such projects [1].

Friends of the Earth has called on the Government to freeze its plans, in the light of the leaked memo, until a National Audit Office review of such "build now, pay later" roads has been published [2].

Simon Festing, Transport Campaigner at Friends of the Earth said:

"Ministers know that "build now, pay later" roads cost the public more in the long run. Yet they are desperately trying to tie future Governments into contracts with their road lobby supporters. This is completely irresponsible".

NOTES TO EDITORS:

[1] Roads Minister, Mr John Watts, today announced plans for tender competitions for three new private road-building projects in Kent, the south Midlands and between West Yorkshire and Cumbria (HA Press Notice 214/97).

Under these 'Design, Build Finance and Operate' (DBFO) contracts, private companies build the roads, and are payed back from Government expenditure through payments linked to traffic levels (shadow tolls) over a thirty year period. These contracts for "roads by higher purchase" have been dubbed "build now, pay later" contracts by environmentalists.

The full costs of DBFO contracts are shrouded in secrecy. No contracts have been made public. However, a memo leaked to environmentalists just before the budget,Ranking the Roads Programme, conceded that DBFO roads will prove more expensive to the taxpayer in the long run.

The memo, from a Senior DoT civil servant to Transport Secretary, Sir George Young outlines plans to scale down the National Roads Programme. It says that "if more schemes were taken forward as DBFOs [completion of the Programme] would take longer because DBFOs require additional funding in interest and VAT payments" [para 11]. It reinforces the point, by adding that "additional DBFOs would add to" the amount of money required to speed the Programme up [para 12].


[2] The National Audit Office is currently investigating the 'value for money' of the first five Government contracts for "build now, pay later" roads. Its report is expected to be published within three months.

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Published by Friends of the Earth Trust