New Tyne Crossing seeks funding options

The Tyne and Wear Passenger Transport Authority (TWPTA) is considering alternative methods of funding for its 185m New Tyne Crossing.

Previous options for the 1.5km immersed tube tunnel were the PPP route or direct government funding, but the latter is not
available.

Now the authority may take advantage of the recently introduced Prudential Borrowing regulations, which will allow the TWPTA to raise half the capital cost on the open market at very favourable rates, with the remaining 50% coming from the private sector.

TWPTA chairman, Councillor David Wood, said: "One of the objectives of the scheme is to keep tolls as low as possible so
as not to create a financial barrier between people and job opportunities.

"Prudential borrowing would allow us to achieve this aim, while a 50-50 split would retain a private sector stake in the scheme, thus providing the necessary incentives to build the second tunnel on time and to budget."

A final decision on which method of borrowing will be undertaken will be made once detailed bids have been received from the four consortia: Bouygues; Connect North East - Balfour Beatty, Volker Stein Construction Europe; T4 - Nuttall, Mowlem and Vinci; and Tyneside Link - John Laing, Hochtief, Laing O'Rourke and Intertoll.

The transport secretary approved the scheme in July 2005, but the decision is currently the subject of a legal challenge.