M6 toll n trade

West Midlands Friends of the Earth Press Release: 30th April 2003

Midland Expressway Limited Announce BNRR Toll Rates

On Tuesday 6th May Midlands Expressway Limited (MEL) will be announcing the toll rates for the soon to be opened Birmingham Norther Relief Road or as it is now officialy known the M6 Toll [1]. West Midlands Friends of the Earth will be available for comment on the day but in the light of leaked information on the charges (Midlands Today report 28th April and Birmingham Post 29th April [2]) we have produced a briefing [3] on the Toll Road and wish to make the following comments inadvance of the announcement.

Whatever the charges announced on May 6th are the Government has no powers to intervene. This option was given up as part of the concession agreement between Government and MEL. So if truckers complain about being unfairly charged remember: they and their representatives missed their opportunity during the public inquiry and durinng legal action taken by local residents opposed to the scheme [4].

Recommendations from the Public Inquiry Inspector (resulting from one of Friends of the Earth'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 [5].

The M6 Toll is using the technology of the last millenium i.e. toll booths instead of advanced electronic technology which would enable variable rates to be charged at different times of the day without the need for extra land take for toll booths.

The charges will probably be fixed at one level irrespective of the length of journey.

Whatever charges MEL announce on May 6th this is a smokescreen above the real transportation problems of the West Midlands. These need to be solved within the conurbation not by destroying the region's precious green belt. The solutions would include massive investment in rail, bus and certain metro routes as well as improved facilities for pedestrians cyclists and the less able. This needs to be reinforced with an awareness raising about the damage our addiction to the private car is doing to the region's health, economy and environment.

"The BNRR or 'imaginatively rebadged' M6 Toll and Trade is out of date before it has opened. As the nation is moving onto a debate about area wide road charging, reduction in road tax and fuel duty to reflect a 'polluter pays' priciple, MEL announces crude toll levels. Not only will this project fail to reduce traffic on the M6; in the West Midlands it is even upsetting its vociferous supporters as they realise thay will have to pay for the privilege of using it."

"There is a real danger that MEL will try and price off the most damaging of vehicles to save on future maintenance bills and force the rest of us to pick up that bill from general taxes as they continue to damage the wider public road network. The Government could have intervened in this and choose not to. This is essentially handing over to the operators a licence to print money for there own gain at the expense of our countryside, our economy and our transport system." [6]

[1] Midland Expressway Limited (MEL) is a company formed between Macquarie Bank of Australia and Autostrada SpA of Italy to build and operate the Birmingham Northern Relief Road now called the M6 Toll. This road currently under construction will by pass the West Midlands conurbation from junction 4 of the M6 in Warwickshire to Junction 11 of the M6 in Staffordshire. It will be a pay as you go toll boothed motorway. www.bnrr.co.uk/

[5] Inspector's Report p413, 10.4.1.9-10.4.1.12 and Decision Letter (28 July 1997) paras 61-64 in response.

Nature of the Investment
In 1992, the UK Government signed a concession agreement with Midland Expressway Limited (MEL) to first obtain planning approval and then design, build, finance and operate the BNRR. Having progressed the scheme through the public inquiry and planning processes, including the preparation of an environmental impact statement, MEL arranged finance and tendering and negotiated the construction contract for the project. Financial close was reached on 29th September 2000.

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 which, on current financial modelling, is assumed to be in the order of £110 million (approximately $289 million). The 53 year Concession Agreement commenced 26 January 2001 and under the Concession Agreement, the concession company has the exclusive right to set tolls for the entire concession period. This makes Midland Expressway a very attractive investment opportunity.