Comments on: Government investigating private finance options for £9bn Lower Thames Crossing https://www.newcivilengineer.com/latest/government-investigating-private-finance-options-for-9bn-lower-thames-crossing-13-08-2024/ Civil engineering and construction news and jobs from New Civil Engineer Fri, 16 Aug 2024 23:27:36 +0000 hourly 1 https://wordpress.org/?v=6.0 https://www.newcivilengineer.com/wp-content/themes/mbm-mops-2017/images/logo.gif New Civil Engineer https://www.newcivilengineer.com 125 75 Civil engineering and construction news and jobs from New Civil Engineer By: John Porter https://www.newcivilengineer.com/latest/government-investigating-private-finance-options-for-9bn-lower-thames-crossing-13-08-2024/#comment-4868 Wed, 14 Aug 2024 15:50:52 +0000 https://www.newcivilengineer.com/?p=282249#comment-4868 High Speed 1 Ltd, operates and maintains the track and stations along the route under a 30-year-concession until the end of 2040 – awarded by the coalition government. The deal was reviewed by the NAO (National Audit Office) in 2012, who showed a £2bn almost immediate cash flow to HMTreasury and a weighted average return for private investors of 5.1%pa real – compared with the Government’s standard appraisal discount rate of 3.5% real pa.

That and other series of ongoing payments could be renegotiated in a mutually beneficial way – if current concessionaires are approached soon enough. Perhaps seeking one year free of concession charges for 3 years contract extensions. Useful seed corn cash flow, justified by the Covid borrowing overhang and it being an unusually expensive time, when lots of labour is committed to Hinckley Point & HS2 works, for motorway concessions due to be handed back by 2030. Most will need to be upgraded to the latest specifications before handover – such as concrete central reservation barriers and quieter surfacing – which can be delayed if contracts are extended.

]]>