Lacking adequate internal funding to build and operate the bridge, the Government decided to enter into a PPP arrangement to provide private funding and expedite the completion of the project to ease the congestion in this vital corridor. This was the second major estuary crossing to be designed, built, financed and operated through the private sector, the first being the QE2 Dartford Bridge as described earlier.
For this project, the Government used a design-build- finance-operate (DBFO) PPP concession as the contract vehicle to deliver the bridge. Under this arrangement, the concessionaire retains ownership of the bridge (much like a build-operate-transfer or BOT contract) until such time as the concession ends and the bridges are turned over to the Highways Agency.
In 1989 four concession teams proposed on the project. The Government awarded the DBFO PPP contract to the successful concession team described below in October 1990. However, it took two more years for the Parliament to pass the necessary legislation called the "Severn Bridges Act 1992" set the starting date of the concession for late April 1992.
The members of the resulting PPP included the following:
• Public Sponsor: National Road Authority (Highways Agency), which funded the approach roads to the Severn Crossing. Maunsell& Partners served as the Government's Managing Agent for the concession project.
• Private Concessionaire Team: Severn River Crossing PLC, is a joint venture team in which each member holds a 50 percent interest in the project:
- John Laing Ltd.
- GTM Entrepose (a division of VINCI Concessions)
The JV designed, built, and financed the Severn River and Estuary Crossing Bridge project, and took over the operation and maintenance of the original Severn Crossing Bridge. The concessionaire performs both regular maintenance and makes any repairs needed to keep the facilities operating efficiently.
Supporting the concession team were the following firms, listed by function:
• Architect: Percy Thomas Partnership
• Structural Design:
- Halcrow & Partners Ltd.
- SEEE
- Gifford & Partners for design review
• Construction:
- VINCI Concessions
- Cimolai Costruzioni Metalliche (steel construction)
- Freyssinet Ltd. (stay cables, post tensioning, and component lifting
Financiers:
- Bank of America
- Barclays de Zoete Wedd
The financing arranged by the Severn River Crossing PLC through Bank of America and Barclays de Zoete Wedd covers the following costs:
• Designing and constructing the Second Severn Crossing Bridge;
• Paying the outstanding debt on the present original bridge; and
• Operating and maintaining the two bridges for the 30-year term of the concession.
By enabling statute and contract, the concession period is set at a maximum of 30 years. The actual end date of the concession will occur when Severn River Crossing PLC has collected a fixed sum of money from tolls valued in 1989 terms. Toll levels were set for three categories of vehicles by the promoters Laing-GTM at the time of the contract bid. The toll levels set in 1989 terms were written into the concession contract and are embodied in the Severn Bridges Act 1992. Toll levels are amended each year to account for inflation based upon the increase in the Retail Price Index since 1989. To meet its financial obligations, the concessionaire's only sources of income are the toll revenues from the two bridges. To meet its financial obligations, the concessionaire's only sources of income are the toll revenues from the two bridges.
The two bridges are tolled in the westerly direction only, with the tolls used to pay for the development, operations, and maintenance of the two facilities. There are 13 toll booths on the new bridge and eight toll booths on the original bridge. Current tolls for both bridges are as follows:
• $9.1 (£4.9) for vehicles with up to nine seats;
• $18.2 (£9.8) for small buses with up to 17 seats and vans; and
• $27.3 (£14.7) for large buses and trucks.
Motorcycles and disabled badge holders are exempt from the tolls on both bridges. There is no added charge for trailers or caravans towed behind the primary vehicle. Other users pay by cash, check, or via an electronic tolling system called Severn TAG.
The Severn TAG program enables bridge patrons to purchase an electronic transponder for a refundable $56 (£30) that permits users to access the bridges without stopping to pay the toll by cash or check. Two versions are offered. The first is called a Season TAG which enables patrons to use the bridges on an unlimited basis if they pay a fixed fee, either on a monthly or quarterly basis, for a modest discount. Severn TAG users can also pay funds into an account that approximates the number of trips they expect to make during the next month. This permits users with adequate balances in their accounts to pass through the toll plazas without stopping, or in certain Priority Green lanes dedicated solely to those with Severn TAGs at close to highway speeds. Users of these Fleet/Trip TAGs are responsible for refurbishing their accounts before they run out. The system automatically debits the proper amount by vehicle classification and toll amount, even when the tolls change.
From February 2005, all privately run toll roads and bridges in England became subject to a 17.5 percent value-added tax. In return, the Government has pledged that toll charges on the two bridges will not increase. The two Severn Crossing Bridges are the only major crossings to be affected in this way, because they are both privately run.