The Mayor was today challenged to come clean over the full costs of the Silvertown Road Tunnel after repeatedly dodging questions from Sian Berry AM.
Sian Berry revealed today data from a new auditor review, which shows Londoners will have to cover £100 million in revenue costs because Silvertown isn’t due to break even, even with income from tolls, until 2040. [1]
TfL is also already budgeting £200 million for direct capital costs not included in the contract, [2] and has already signed off on two variations to the original contract that appear to add around £10 million to the costs to Londoners. [3]
The Silvertown Road Tunnel contract was signed in November 2019, but despite claiming a commitment to transparency the Mayor has only published it in redacted form without any real detail on the costs, and will not reveal the cost of cancellation, [4] despite this being a key argument he makes against stopping the project now.
Sian Berry says:
It was disappointing to find the Mayor unable to tell Londoners the full cost of the Silvertown Road Tunnel, even after a full audit by Ernst and Young. That report raises further questions about the contract the Mayor signed – and he was clearly uncomfortable when I questioned him today.
If he can’t answer these questions and explain the liability to Londoners, why did he sign off on the contract, even after I warned him of the risks?
This Mayor came into office saying he’d review the Silvertown Road Tunnel but all he has done is sign off a plan he inherited for a major new road that will damage a large area of south and east London. It has taken campaigners and pressure from the Assembly to get even partial information on the real costs in public.
At a time when the Mayor says we must avoid a car-led recovery, why is he building a huge new car-led road tunnel under the Thames? Even the Government are cancelling roads and moving investment to rail.
Last year it was revealed that a note in the TfL accounts showed that the cost of the tunnel contract looked set to hit £2bn over 30 years.
Notes to editors
Campaigners against the Silvertown Road Tunnel asked the London Assembly Oversight Committee to intervene last year and as a result a report has now been produced by Ernst and Young. The report is limited in scope and does not consider if TfL’s base assumptions, including increasing traffic from increasing population, were right.
The Mayor’s contract for Silvertown Road Tunnel forces a commitment to continued heavy traffic in an area of high pollution, and tolling isn’t even going to cover the annual contract cost until 2040. [4] Prior to 2040 TfL will need to subsidise the tunnel contract with £100 million from other budgets, over years where there is now no money available for much needed public transport.
Today the Secretary of State for Transport has cancelled a new motorway that was to have been built between Cambridge and Oxford and instead redirected investment into rail.
Extensions to the Bakerloo Line, new trains for the Central line or even a DLR or Overground extension to Thamesmead are all now unfunded aspirations.
[1] Ernst & Young Report on Silvertown Tunnel, TfL Audit and Assurance Committee, 17 March 2021, page 13 onwards https://content.tfl.gov.uk/aac-20210317-agenda-papers-public.pdf
Within the Ernst & Young report it is stated that the toll will not cover the availability or contract payments for the Silvertown Road Tunnel until 2040:
“Under the March 2019 projections, in the base case, there is an annual deficit of between £6m in 2026, growing to £10m in 2034 and then reducing until the project reaches a breakeven point (i.e. where the toll revenue equals the AP) in 2040, plus the net cost of providing the new bus services. Beyond that point the Scheme will generate surplus revenue. This assumes the proposed charging regime remains in place.”
A linear calculation between these numbers reveals a total cost of £100m in subsidy up to 2040 is likely.
[2] £199m budget (EFC) for direct capital costs to TfL beyond the Silvertown contract, TfL Programmes & Investment Committee, 3 March 2021, page 36 – Silvertown Tunnel https://content.tfl.gov.uk/pic-20210303-agenda-and-documents-public-updated.pdf
[3] TfL Contracts greater than £5000, https://content.tfl.gov.uk/contracts-awarded-tfl.pdf
TfL is already listing two variations to the contract as extra costs in their contract listing, which raises questions as to what further variations may be necessary on the signed contract in future and what costs they will be.
[4] Silvertown Tunnel project agreement, published March 2020
https://tfl.gov.uk/corporate/publications-and-reports/silvertown-tunnel-project-agreement
No figure for the cost of the Silvertown Tunnel is published in the redacted contract.