Birmingham Friends of the Earth West Midlands Transport Campaign

Eight banks have been shortlisted to fund the UK's first modern toll road, in the Midlands, as its operator admitted the cost could rise as high as £700m.

Three groups of banks are competing to finance the Birmingham Northern Relief Road:

• Dai Ichi Kangyo Bank, Royal Bank of Scotland and Halifax;
• Abbey National and Bank of America;
• and West LB, ABN-Amro and Lloyds-TSB.

Midland Expressway Limited, the operating company jointly owned by Macquarie Bank of Australia and Autostrada of Italy, is seeking to raise £650m-£700m.   The final figure depends on renegotiation of the construction contract, which expired last year because of a three-year delay during a legal challenge by environmental protesters.   It compares to an original budget of £350m, and to more recent estimates of £500m.

Up to 25 per cent of the cost is expected to be borne by Macquarie and Autostrada.   Banks have until March to prepare bids for their share.   This is set to be done entirely through debt because of the need to start compulsory purchases of land to meet the new October construction start date.

MEL is also believed to be hoping to refinance the project on more generous terms when usership is established and income more stable, which would be more complicated after a bond issue.

The 26-mile toll motorway around the north of the West Midlands conurbation was delayed for three years by protest camps, a public inquiry and a High Court legal challenge.   The Alliance Against the BNRR said it planned further protests.   Financial analysts however believe the threat of this and further cost runs has reduced.   Moreover, the 50-year lease and uncapped tolls - offered by the government in the early 1990s to attract operators - were attractive to funders.

They also believe forecast use is also high, although the figure is more uncertain since the M6 is still toll-free.   It may well prove there's resistance to start but once people realise they could get from Manchester to London in the required three hours, rather than pick a number between three and seven, it would increase use considerably, predicted one analyst.   Gerald Kells of FOE's West Midlands Transport Campaign warned

what they are forgetting is that after jaunting along on the toll road they will have to rejoin the M6.   This will be where the NEW congestion hits.   The BNRR concentrates traffic onto the motorway network adding to motorway jams elsewhere.   Long tailbacks will take away all the time saved and drivers will begin to wonder whether it was worth the £3 or whatever toll MEL decides to charge.   This is a very risky financial venture and the impact of the toll on traffic levels is unknown as Tom Smith managing director of MEL admitted in the High Court.

The addresses for all of the banks mentioned above are detailed below, so please write to them.   Also if you are a customer of any of the English or Scottish based banks please include details of you accounts or shares.   Please send your letters to the Chief Executive unless you have other details due to your connections with any of the organisations mentioned.

Please do write to these banks indicating your disappointment that they may want to be involved in such economic and environmental folly.   Please send any copies of the replies you receive to West Midlands Transport Campaign Friends of the Earth, 54 Allison Street, Digbeth, B5 5TH, or ring 01922 636601 or 0121 643 9117