Unlock Editor’s Digest Lock for Free
Over £1.2 billion has been spent at the Lower Thames intersection, despite not even starting construction on the £10 billion road tunnel project, the latest indication of the costs of the UK’s hardening planning system.
The spending, which has risen from £800 million in 2023, is being spent on planning, consultation, environmental assessment, traffic modeling, legal costs, land purchases and forested areas in new communities, according to the National Highway Agency.
Briefing documents issued by the agency show that the total projected cost of the project is between £9.2 billion and £10.2 billion, depending on how it is funded during the construction phase.
The scheme to build a 14-mile road and tunnel to connect Kent and Essex became a totem of the UK’s nar planning system. In this plan, the venture is tied up with years of delays and a mountain of expensive compliance documents.
The project’s plan document – the first completely new River Thames to cross the east of London for the first time in 60 years – reaches 359,070 pages, with about 150 staff being employed on the project and eight strong management teams being employed.
The decision on planning consent is expected by May 23rd, with a ruling scheduled for how it will be funded later this year.
Prime Minister Rachel Reeves confirmed in January that the Treasury Department was considering private finances for the scheme. According to people with debate knowledge, the “regulated assets-based” (RAB) model, in which private investors gather victim income from the roads to repay the investments) is believed to be supported by the Ministry of Finance.
The option is £200 million in advance to the Treasury than if the government paid directly to the plan, National Highway documents show. The model, which is being used in London’s new Tideway sewerage, requires around £2 billion in taxpayer funds to increase the total cost of the project to at least £9.4 billion and attract £6.3 billion of private investment.
National Highways says there is likely a “market interest in regulated private company delivery options,” citing projects using the same structure, including the Sizewell C nuclear plant.
Under the RAB model, new companies are established by investors, collecting revenue from user fees and paying operating and financial expenses.
It also said that new economic regulators are needed to “protect road users and protect them from the interests of overly regulated private companies.” As it is the first road to be built under the RAB model, a new primary method may be needed.
The new project aims to alleviate some of the pressure on the existing Dartford intersection of the M25 ©Charlie Bibby/ft
England has discovered that the most expensive way to fund a crossroads includes a private finance initiative type scheme. This will cost taxpayers an additional £1 billion, bringing the total cost of capital to over £10 billion.
Under this option, taxpayers pay £4.7 billion for the tunnel, while special purpose vehicles established by investors will subtract £4.3 billion in private finance for the roads, and shareholders receive toll income over a 25-30-year license period.
The cost of the tunnel project has already risen when it was agreed in 2017 when it was first agreed to a forecast of between £5.5 billion and £6.8 billion and around £1 billion. If consent is given this year, construction will begin in 2026 ahead of the planned opening by 2032.
Christodo, director of Transport Action Network, said the project would require a “basic rethinking” and would need to be cancelled and replaced with a public transport alternative.
“Smaller, more affordable rail schemes could shift thousands of trucks off our roads, increasing connectivity and increasing economic and social opportunities,” he said.
The government said: “As announced by the Prime Minister in January, the government and the country’s highways are exploring options to personally fund the intersection of the Lower Thames, and no final decision has been made yet. We cannot comment further on this particular scheme.”
