Birmingham Friends of the Earth West Midlands Transport Campaign

PRESS RELEASE 20/09/2000

THREAT TO BIRMINGHAM TOLL MOTORWAY

The Birmingham Northern Relief Road, Britain's first toll motorway, which controversially would destroy 27 miles of the West Midland's green belt and damage two nationally important nature sites (SSSIs), could face further difficulties when the European Court rules on VAT on tolls for motorways.  A ruling is expected tomorrow, Tuesday 11 September, and is likely to support an early judge's ruling that VAT should be imposed on all motorway tolls in Europe.  The ruling would significantly reduce the road's profitability without any additional income, because the company would already be maximising its revenue by picking the price bringing in the largest overall toll revenue.  Promoters, Midland Expressway Limited, have already faced long and difficult negotiations to try and build the road.

After the Construction Contract lapsed in January (because the motorway contract originally assumed it would be built by 1996) and the preferred builders pulled out, claiming the road would cost £750 million to build, they had difficulty finding bidders at the price MEL wanted to pay, believed to be under £500m.  At the same time the banks who have been considering investing in the scheme have been concerned, both about their image if they're involved and about the threat of significant revenue shortfalls. Similar schemes such as the Dulles Greenway in America and the Sydney Eastern Distributor, both run by companies within MEL, have dramatically failed to achieve their targets, and an early report by Department of Transport Consultants on Midland Expressway's proposals suggested they would fail to meet their target by as much as a third.

The Birmingham Northern Relief Road would have to run parallel to the free A38/A5 route and increasingly telematic systems would allow drivers to choose the free roads when they were less congested.  At the same time key supporting infrastructure is dependent on the Government's multi-modal studies which will not report back for another year, and may not support road building anyway.

Hazel Barnes of the Alliance Against the BNRR said:

The BNRR project is dependent on getting toll money in and we don't think it's going to be popular.  As long as there are free roads next to it people will use those, and if there's VAT on top that's going to make MEL's job even harder.

Gerald Kells, an advisor to the Alliance and West Midlands FOE said:

Investors should be very careful.  It's no use hoping lots of traffic will leave the M6 to use the BNRR, most of that traffic is going into the West Midlands.  The A5/A38 route is going to offer a good local alternative and longer distance traffic is increasingly going to cut across further up from the M1.  It's not going to be easy making this thing work and VAT won't help.

Press Contacts:

There is still time to stop the Birmingham Northern Relief Road which would plough through the West Midlands' Green Belt from the M42 in Warwickshire to the M6 in Staffordshire.  In February the contract collapsed between the Concessionaires, Midland Expressway Limited, and their builders because the price was too high.  Two consortia of construction companies are bidding to build the controversial twenty seven mile toll motorway, but it is unclear how much they will shave off the price.  Midland Expressway also had difficulty getting banks to back them.  Banks are nervous about their names being associated with such high profile eco-destruction, and know that other toll motorways have lost banks large sums of money because of costs over-runs and traffic failure.  Independent experts for the Department of Transport warned all along that this might happen but their report was kept hidden during the Public Inquiry.

Now is the time to act.  Key decisions on this motorway are scheduled to be made by the end of September, so if you want to help us stop we need your help now.  So much for BNRR! The Birmingham Northern Relief Road was supposed to be open in 1996.  The Alliance Against the BNRR, a consortium of local residents supported by environmentalists, particularly Friends of the Earth, fought it tooth and nail on behalf of local communities and the environment.  We will continue until it's dropped.  It doesn't solve traffic problems, it just makes them worse.  Support us by writing to the banks and companies involved. Tell them to avoid this embarrassing and highly risky project.  You can help protect Middle England from needless road building.

Write to Benetton, major stakeholder in the newly privatised Autostrade, who own half of Midland Expressway.  Benetton will be concerned that their reputation for social responsibility may be tarnished by BNRR, and that Autostrade may lose money.

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Write to the four British Banks in the three competing consortia to fund the motorway.  The banks will be concerned that they will lose money if Midland Expressway fail to get the traffic. This is a common failure with toll roads.

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Write to the six British construction companies in the two competing consortia to build the motorway.  The Construction Companies will be concerned that they are being asked to build the BNRR for £400 million on a fixed price contract' to ensure the banks make a profit, when it may really cost double that.

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