Alliance against the BNRR Birmingham Friends of the Earth West Midlands Transport Campaign

West Midlands Friends of the Earth Briefing: April 2003

Stand and deliver: for whom the Road tolls

The Birmingham Northern Relief Road now renamed the M6 Toll and Trade has been a long time in gestation. This update briefing sets out some of the history of the scheme, the players involved in its journey from drawing board to tarmac on the ground and why it is the wrong solution to the transport problems of the West Midlands. This briefing should be read along side other comprehensive information available on the BNRR campaign web site.

The campaign against this road has had many highs and as many, if not more, lows. However, there will never be another toll boothed motorway built in the UK again. The secrecy of the concession agreement will not be repeated. The decision makers will not be able to say there were no alternatives and ignore advice as to why this scheme is ultimately flawed.

The M6 Toll and Trade, as it is now to be known, has been a controversial project within the region and nationally for over 20 years. In early 2004, this one and only toll boothed motorway is scheduled to open. This briefing aims to inform on current aspects of the scheme: who is behind it and why it is the wrong solution to the transport problems of the West Midlands. West Midlands Friends of the Earth has produced numerous briefings on the scheme which are available in print or on the web.

Background
The M6 Toll is a dual 3-lane toll boothed motorway running for approx. 27 miles through the West Midlands green belt. Its supposed purpose is to relieve the heavily congested M6 in the West Midlands conurbation. However, in reality not getting to grips with our addiction to the private car is the real reason for congestion in the conurbation. Overall, congestion will be worse not better for the M6 Toll. It will provide a pay as you go (at rates as yet not published) alternative to those people who do not want to visit the conurbation. Our current knowledge suggests less than 30% (20% at peak time) of traffic is using the M6 to pass right through the Midlands. Less than half would transfer to BNRR, and because there is so much potential or suppressed traffic even the promoters accept the levels of traffic on the M6 could remain just as high.

The north bound road will leave the current M6 at Junction 4 near Coleshill, Warwickshire and rejoin it just north of Junction 11 near Cannock, Staffordshire. The road has more or less been on the agenda since the M6 was completed in the early seventies. Indeed it was only furious lobbying from those within the conurbation which brought the original M6 right through its heart as opposed to bypassing it completely.

The highly controversial road is now under construction. This process is supposed to be running ahead of schedule and as such it could open early: sometime late in 2003, or on time early in 2004. During 2003 the London Congestion charging scheme will commence operation thus placing the whole issue of road charging at the heart of a national debate.

West Midlands Friends of the Earth (WM FoE) supports the principle of road user charging but on a more comprehensive basis covering all of the road network using technology such as global positioning satellites and a variable charging mechanism. This is the sort of technology referred to by the Commission for Integrated Transport and known as "pay as you go" in which all cars will be fitted with a satellite tracking meter and tariffs would vary according to the type of road used and time of day. These fairer charges would then be counter-balanced by a reduction in fuel duty and road tax. This would be far more equitable than the one-charge M6 toll. WM FoE does not support tolling to justify new roads such as the BNRR. Indeed, given the current crisis in the transport sector, charges from road usage should be ring fenced and spent on improvements to all forms of mass transit and on creating far better facilities for cyclists, pedestrians and a much improved streetscape for the less able.

What is involved?
The M6 Toll road has been financed is a unique way in terms of major infrastructure projects in the UK. It is not quite a franchise, not really a Private Finance Initiative, (PFI) nor indeed is it a Design, Build, Finance and Operate (DBFO). Midland Expressway Limited (MEL), more of whom later, have won a concession to build and operate the M6 Toll for 53 years. The concession agreement became a story in its own right with not even the public inquiry inspector being able to examine it. Indeed trying to gain access to this controversial document went as far as the High Court with campaigners trying to get the terms of the concession into the public domain.

The concession itself commenced at the same time as that of the construction project on 26th January 2001.The timescale should include 3 years of construction and a 50 year operation lifetime up to 2054, after which the road and land upon which it sits is returned to the state. MEL will set and collect the toll charges. They will be a fixed fee irrespective of the length of journey. There will in all likelihood be no specific discount for local people while frequent users may well receive discounts through pre-payment and electronic tolling. All of the money will be collected via toll booths either at entrances, exits or at two toll plazas on the main route.

The concession allows MEL to charge whatever rates it chooses. This was subject of much interest at the public inquiry BUT the Secretary of State, John Prescott, was not convinced that he should have the powers to intervene. Recommendations from the Public Inquiry Inspector (resulting from one of WM FoE's objections) that the relative toll rate between cars and lorries should be regulated in the public interest were rejected by the Government in 1997 because they did not accept that MEL might use toll rates to exclude lorries and because the issue had not been raised at the Inquiry by haulage interests.

Who is involved?
The history of this scheme is a litany of international wheeling and dealing.

Initially, MEL consisted of Trafalgar House and Italian based toll road operator Iretenta. The construction problems in the Far East saw Trafalgar House cease to be. In stepped Kavaerner of Norway. They quickly moved aside for Macquarie Investments of Australia. Meanwhile the Italians were horsetrading and in stepped Autostrada to take on the tolling aspects of the scheme. As it stands today Macquarie Investment Group (MIG) owns 75% of the equity in Midland Expressway Limited (MEL), with options to purchase the remaining 25% equity 18 months after the road opens to traffic. MIG will be required to provide 75% of future required equity. MEL have approached the international banking community to fund the scheme and the two main players in terms of putting up the finance were selected from a short list of four. The winners were Bank of America and Abbey National. This neatly links with the controversial Isle of Skye bridge which involved the same two backers. However, Abbey National's fortunes have suffered since taking on the BNRR and at their recent AGM that they well be exiting their interests in the project and trying to sell them on to other investors.

On the construction side, the road is being built by a consortium made up of Carillion, Alfred McAlpine, Balfour Beatty and Amec, (CAMBBA). Macquarie seem to be the major player now and it is interesting to note that they also have a 24.125% share in the nearby Birmingham International Airport.

The history and use of global capital in this scheme just shows how the issues of Corporate Globalisation are eating into the delivery of public services and infrastructure. Macquarie are massively involved in the West Midlands economy yet have no real presence or identity within the region.

Why it is a distraction to the real problems of the West Midlands?
This sorry saga has taken everyone's eyes off the real transport problems of the West Midlands. That is our addiction to the private car and the ability to use it wherever and however we like. This ignores the 30% of households in the conurbation who do not have access to a car and are dependant upon public transport. The West Midlands Area Multi Modal Study (WMAMMS) has come forward with a variety of imaginative ways of dealing with these issues. However, the BNRR plays no part in solving them; indeed it may make them worse. Suppressed demand from within the conurbation wanting to use the M6 would fill up any space created by traffic using the M6 Toll. We have all of this investment and yet it does nothing for the conurbation which it is supposed to benefit! The concession agreement is a charter for MEL to make money on its terms at the expense of the West Midlands.

The transport problems of the West Midlands have to be dealt with within the conurbation, not by encircling it with green field beltways. This will require imaginative use of road charging at the point of use along with investment in the alternatives including facilities for pedestrians, cyclists and the less able. It will also require awareness raising of the problems associated with our car dependence to encourage behavioural change thereby creating more space on the trunk road network through the region.

Contacts and web sites

FoE's BNRR campaign website www.birminghamfoe.org.uk/bnrr

For Midlands Expressway Ltd. motorway.rapidhost.co.uk/index.htm

For construction details www.m6toll.co.uk/home.htm

BNRR home www.bnrr.co.uk

Macquarie Bank www.macquarie.com.au/au/index.html

Macquarie Bank UK www.macquarie.com/uk/index.htm
CityPoint,
1 Ropemaker Street,
London
EC2Y 9HD
Tel: 020 7065 2016
Fax 020 7065 2041
Email: ISFeurope@macquarie.com

Macquarie Infrastructure Group
Macquarie Infrastructure Group (MIG) is one of the largest listed infrastructure investors in the world. MIG has a toll road dominated portfolio with assets in Australia, North America, UK, Germany, Spain and Portugal. Listed on the Australian Stock Exchange in 1996, MIG has returned in excess of 29% compound annual return* and ranks in Australia's top 30 companies by market capitalisation.

In 2000, MIG was the best performing stock on the ASX 100 and entered the MSCI in November 2001.

MIG holds an interest in the M6 Toll (Birmingham Northern Relief Road), and Highway 407 in Toronto, two of the most strategically attractive toll roads in the world.

MIG has a 75% interest with options to move to 100% concession runs to 2054 concession provides total toll setting discretion bypasses the M6, the most congested motorway in the UK expected to open early 2004.

Macquarie Airports Group
MAG's second investment was a 24.125% stake in Birmingham International Airport. This interest was purchased in December 2001 in an exclusively negotiated sale.

Birmingham Airport is the fifth largest airport in the UK and the largest airport in the Midlands region. Birmingham Airport is centrally located 16km from Birmingham, the UK's second largest city with a population of 1 million. It has a catchment area of over 7.5 million people within one hour's drive.

Chris Crean