The Project is being procured as a privately financed Public Private Partnership project. A ‘Project Company’ will design, build, finance, operate and maintain the new bridge and provide tolling operations on both the new bridge and the existing SJB.
The Project Company is expected to finance the construction of the Project through bank loans and equity investment from its constituent companies. The Project Company will be paid for providing the crossing and the tolling operations through ‘service payments’ paid over the operating phase of the contract.
Service payments to the Project Company will be funded by the Council through a combination of toll revenue from users and annual grant from the DfT; the Council will also make a capital contribution at full service commencement (ie opening to traffic).
DfT awarded Conditional Funding Approval to the Project in October 2011 and set out the terms of its funding. Halton’s Full Council unanimously agreed to the funding approval and the terms at its meeting on 19 October 2011.
Under the terms of the funding, DfT will provide a capped annual revenue grant of £14.55m for 26.5 years following full service commencement. This grant is subject to periodic review and may be adjusted downwards if toll revenue exceeds the business case forecasts. The funding is subject to a final review before contract award at ‘final business case’ stage. The grant is provided as part funding towards the service payments to the Project Company.
DfT has also confirmed the award of a grant of £86m to cover the costs of land assembly and advance works remediation.
In overall terms, toll revenue will fund around 70% of the cost of the Project.
The Council will also provide funding in the form of a capital payment to the Project Company on opening to traffic. The Council will utilise Public Works Loan Board borrowing to fund this payment.
Alongside the overall project funding, there is also a development budget for the project. This covers the costs of developing and implementing the scheme between 2006 and 2012.