Severn bridges: Longer deal allows company to collect extra £33m

The Second Severn Crossing opened in 1996 to cope with the extra volume of traffic

Tolls on the Severn bridges are likely to continue at their current level for longer than expected after a new deal with the company which charges the fee.

Severn River Crossing plc has been told it can run both bridges until it has taken an extra £33m, up to £1.02bn.

The bridges are expected to pass into public ownership by 2017, and MPs have said tolls should then be cut heavily.

Newspaper reports claim that will mean a delay of five months before the company loses its right to the tolls.

The Highways Agency said the date the deal will end would depend on factors such as traffic levels.

<link> <caption>The Western Mail has reported</caption> <altText>Link to Western Mail</altText> <url href="http://www.walesonline.co.uk/business-in-wales/business-news/2012/04/14/company-s-deal-to-run-severn-crossings-for-longer-91466-30754791/" platform="highweb"/> </link> that current income levels would mean that the company would run the bridges between south Wales and England for five months longer than currently scheduled.

The newspaper also quoted the company as saying it had been in talks with the agency over issues which have affected profitability, such as a higher VAT element of the overall toll.

The agency confirmed that it had agreed a settlement in principle "which reflects recent tax changes and the costs of introducing card payments at the tolls".

A spokeswoman said: "The extension to the concession allows for a longer tolling period, as it is the additional toll revenue of £33m which finances the settlement".

She said while the company's concession was limited by law to a maximum of 30 years, the actual end date will be when it has collected a set sum of £1,028.9m.

"This will extend the end of the concession period but the actual date is dependent on a number of factors, including traffic levels," she said.

'Minimise impact'

The agency said it had considered a number of options for the company, including a cash payment, and a rise in tolls.

But it said it "opted for an extension to the concession so as to minimise the impact".

Severn River Crossing is responsible both for the original crossing, which opened in 1966, and the second bridge, built in 1996.

In 2010 the Welsh Affairs Select Committee recommended that drivers should pay as little as £1.50 to use the bridges from 2017.

At present, the fee for cars is £6. Larger vehicles pay £12.10 and £18.10 respectively.

The bridges are owned by the UK government, but the Welsh government is looking at the impact of tolls on Wales' economy, with a full report expected to be published later this spring.

The Welsh government wants to take control of the bridges when the contract ends. While it has said it would not scrap the tolls, it has indicated that it might be able to reduce them.

Tolls on the bridges go up every year, based on the Retail Price Index.