Delayed Tyne Tunnel contract sees costs soar to nearly £40m

Costs for building the new Tyne Tunnel have soared by nearly £40m and the project is months behind schedule, according to an engineer's report.

The tunnel contract's price, outlined in a report from engineer John Miller to members of the Tyne & Wear Passenger Transport Authority (PTA), has now risen from £100m to £139m because of the amount of dredging required.

Professional advice on engineering, legal, financial, land and property issues have also risen in costs to £5.8m.

In his report Miller added that the figure is likely to "increase significantly".

Other problems include protracted negotiations with landowners, changes in legislation and industry standards, the rising costs of the inquiry, more detailed environmental investigations and consideration of the impact on the Howdon Basin.

The project, which would see a crossing near to the present Tyne Tunnel between Jarrow and Howdon, is due to go to a public inquiry in March following 750 objections.

Work is expected to start in 2005 and should be completed towards the end of 2008. The earlier target was 2007.

A spokesman for the PTA said negotiations are under way over the proposed increase in fees and tolls will not be affected.