Government confirms guarantees for Mersey Gateway

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Government confirms guarantees for Mersey Gateway

The government has confirmed its backing for the £600m Mersey Gateway Bridge project by funding contingent liability.

As part of the National Infrastructure Plan, the project was already in line for funding subject to completion of procurement and government approval. The government has now confirmed that it will stand behind the local authority project should it fail to generate the expected level of toll revenue.

This is a requirement of the parliamentary process and moves the project a further step closer to achieving financial close.

Halton Borough Council’s Mersey Gateway Bridge project involves the construction of a 1km-long cable-stayed, dual-three lane bridge over the River Mersey between Widnes and Runcorn plus associated changes to approach roads. It is expected to relieve congestion around the existing Silver Jubilee Bridge and promote local and regional economic growth.

The Merseylink consortium, comprising Kier, FCC and Samsung C&T, has been selected to build the bridge under a design, build, finance, operate (DBFO) contract, which is on a fixed price basis and under which payments do not start to flow until it opens. The initial development costs, land purchase, decontamination and other project costs will be funded through a grant from the Department for Transport, Halton BC contributions and other third party contributions.

On completion of construction, most of the money will come from user tolls on both the new bridge and existing Silver Jubilee Bridge over the 26.5 year DBFO contract. In addition the department is providing a graduated, decreasing resource Availability Support Grant funding over 12 years starting in 2017/18 (following the opening of the bridge) to 2028/29.

In the unlikely worst case scenario of no vehicle ever using either bridge, central government will pick up the whole bill, which over the 26.5 years would come to about £1,7bn.

Subject to successful completion of all remaining approvals and completion of financial close, construction of the scheme is scheduled to start in April 2014 with completion in 2017.

Cllr Rob Polhill, leader of Halton Borough Council, said: “We welcome this re-confirmation as it reaffirms the UK government’s support for the project, and it is good to see the government continues to recognise the important contribution that Mersey Gateway can make to economic regeneration and growth.”

He added: “Prior to government being able to confirm final approval for the project and determine when work can start, it is required to consult parliament. This is a procedural matter that raises no new issues in relation to the project, but is a sign that things are progressing well.”




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