Magazine Issue 1 - Winter 1996
DBFO - DESIGN, BUILD, FINANCE, OPERATE

Faced with falling budgets and a less forgiving public, road building has become more and more difficult for our friends at EarthRape UK ( DoT - Ed.). However with their usual flair for cost-cuning, the powers that be have come up with an extraordinary new programme under the Private Finance Initiative. They can't afford to buy the roads outright, so now they are going to get them on hire purchase. It's cheaper (in the short term anyway), it's less accountable, and all the risks are taken by the poor fools who spread the asphalt.Yes, it's the DBFO roads scheme!

Simply take one desperate construction company, get them to Design, Build, Finance and Operate the road for you, and the Highways Agency only makes yearly payments over the thirty year contract. Pay no money now! And there's a fair chance that the company will go bust before all payment has been made. Low price, low risk, and lots of tarmac. Other exciting features include leaving long-term diffculties for future govemments! And only the public loses... The payment structure obliges the govemment to pay "shadow tolls" for every vehicle that uses the road..

At a time when government has committed itself to trafic reduction measures, it seems somewhat inconsistent to be giving incentives to road operators to increase trafic levels. Operators could encourage traffic on their roads in a number of ways, by
lobbying authorities and developers to build new developments on sites accessible by the road, and by convincing them not to upgrade or create competing public transport links.

As well as suffering increasing traffc levels and its concomitant environmental costs, the public also loses out financially. As anyone who has obtained a television in this way will know, hire purchase is more expensive in the long run. So far the Department of Transport has refused to make details of DBFO contracts public; so the exact costs to the taxpayer are unknown. However a study commissioned by Wiltshire Friends of the Earth and conducted by the Metropolitan Transport Research Unit has looked into the implications of DBFO for the A36 Salisbury Bypass. The report, "For Whom the Shadow Tolls: the effects of Design, Build, Finance and Operate on the A36 Salisbury Bypass" found that the costs of that road will be between 84% and 131 % higher as a DBFO scheme than it would be as a publicly funded project.

So irresistible have been the charms of this road privatisation plan that the government chose to run no less than four initial experiments, followed with-in the year by another four. Here they are:
* The M I -A I Link Road (bypassing Leeds). £214m. Lucky winners of contract: Yorkshire Link.
* Al(M) Alconbury Peterborough upgrade (Happy smiling motorists will soon be able to glide noiselessly (?) through the constituencies of both John Major and gorgeous pouting Brian Mawhinney!). £ 128m. Lucky winners: Road Management Group.
* A419/A417 Swindon - Gloucester road (enjoy and then destroy the glorious Cotswold countryside around Cirencester and Stratton!). £49m. Lucky winners: Road Link.
* A69 Haltwhistle Bypass. £10m (the Mega-meal-deal bargain of Round One. Build one little bypass, manage the entire Carlisle to Newcastle route). Lucky winners: Road Link.

Results of the Second Round not yet all in. However, here's what we do know:
* M40 widening, maintenance, and management (a gem for the property portfolio - one of Britain's best-loved roads) £40m
* A30 Honiton to Exeter "improvement and A35 Chideock-Morcombelake Bypass (see article this issue). £50m + £25m.
* A50/ A564 Stoke-Derby link. £21 m. Lucky winners: Connect. * Al 9/ A168 Norton to Parkway improvement. £29m. Maintenance and management of A 19/ A 168 between the Tyne Tunnel and Dishforth.
Chris Grimshaw.
BALFOUR BEATTY AND DBFO / PFI

Chief Executive Alan Jones writes in BlCC's 1995 Annua/ Report, The UK Govemment's Private Finance Initiative is important to Balfour Beatty". Of course, like most corporate bosses, he's just being modest. What he presumably means is that Balfour has been aggressively pushing to the front of the queue to get its teeth into as many of the projects as it can, to make sure no-one else gets a chance to take them first. In September 1996 BICC set out to raise £1 70m from shareholders, £35m of which will be used to finance the bidding for DBFOs.

YORKSHIRE LINK - Construction: Trafalgar House, Balfour Beatty Consulting engirleers: Babtie Group Finance: 3i, ABN Amro, Banque Indosuez, Dai-lchi Kangyo, Lloyds, Nat West, Royal Bank of Scotland, The European Investment Bank, The European Investment Fund and others Advice: Deutsche Morgan Grenfell (financial), Allen & Overy (legal)

Balfour Beatty has won the contracts for 3 DBFO schemes: the construction of the "improvements" to the A30 HonitonExeter and the maintenance of the A50 / A564 between Stokeon-Trent and Derby, both with the Connect consortium, and the £200m Al-MI link (the largest DBFO yet) between LoRhouse and Bramham, south of Leeds, with Yorkshire Link. It is also a member of the Consort consortium, bidding for privately financed health schemes, of which it is likely to win at least one.

CONNECT - Construction: Balfour Beatty, Holzmann Consulting engineers: WS Atkins Finance: Bank of America Advice: Halcrow Fox & Associates (traffic), Linklaters & Paines (legal)
A30 EXETER- HONITON

The new A30, which follows the route of the existing A30 linking Exeter and Honiton, will destroy 15 miles of green land, including an ancient battle site and the habitats of many threatened species. The dual carriageway will form part of the proposed TransEuropean Road Network. It is one of the first of the government's new privately operated roads schemes (DBFO). The people responsible for the planned destruction are the CONNECT consortium (see above).

The ecological impact follows the familiar depressing pattem. Air pollution emissions will be proportionate to traffc flows - as a DBFO scheme the operators will have an incentive to encourage traffic. Twelve hectares of woodland and 140 hectares of agricultural land will be destroyed. The habitats of bats, badgers, otters, great crested newts, hobbies, dippers, and deer, and the nesting sites of numerous bird species, will be affected. The route also runs straight through the 1549 Fenny Meadow battle site

The Environmental Statement presented to the public inquny fails to provide information on air pollution, vibration, night-time noise levels, and water pollution. Presumably fringe issues such as these were felt to be unworthy of discussion.

The road has sparked off one of the largest direct action campaigns of recent years and the camps, Fairmile, Trollheim and Allercombe, have become known as a "tree protectors' university". As we go to press evictions are imminent. By all accounts these should be spectacular, as the defences are extensive. However, MORE PEOPLE ARE DESPERATELYNEEDED!

Contact: A30 Action, PO Box 6, Ottery St. Mary, Devon. EX11 1YL tel. 01404 815 729. mobile 0385 278 156/7