Severn Crossings toll increases!…what economic and social impact does it have?

img_1375The Severn Crossings provide a key link in Wales’ transport and economic infrastructure and are essential to the Welsh economy.

UK Governments have failed to undertake a study of the economic and social impact of the Severn Crossings toll charge, so empirical evidence is scarce.

In particular, it is argued that the toll adversely affects small businesses looking to operate in the south-west of England, and those engaged in the tourism, transport and logistics sectors, which rely heavily on the Severn Crossings link for their businesses.

There is a perception that the high cost of the toll represents a barrier to business activity across the bridge, hampering the development of Welsh businesses and acting as a deterrent to inward investment in Wales.

Among the benefits are increased access to customers and suppliers, reduced journey times and a widening of the labour pool.


Ownership and operation of the bridge passed to Severn River Crossing plc on 26 April 1992 as part of the deal to build the Second Severn Crossing.

As of November 2010, Severn River Crossing plc was owned

  • 35% John Laing, British developer infrastructure operator
  • 35% Vinci, French concessions and construction company
  • 15% Bank of America, American multinational banking and financial services corporation
  • 15% Barclays Capital, British multinational investment bank

The company’s 2011 annual report showed the same companies still owned, through subsidiary companies, all the issued ordinary share capital of the Plc.


The first road link across the River Severn and Wye (the M48 Severn Bridge) was opened in 1966, with a toll in place to pay for the cost of construction. As traffic levels increased, the original crossing was deemed unable to cope efficiently with the congestion, and in 1986 the Government announced the construction of a second bridge.

The contract to construct the second Severn Crossing (the M4 Severn Bridge) was awarded to Severn River Crossing Plc (SRC) in April 1990 under a DBFO (Design, Build, Finance and Operate) Private Finance Initiative Scheme. Under the agreement, the company would also take over the maintenance and operation of the existing Severn Bridge. In October 1990, a concession agreement was signed between the Government and Severn River Crossing Plc, and in February 1992 the Severn Bridges Bill received Royal Assent.

Under the terms of the concession agreement which commenced in April 1992, Severn River Crossing Plc took over responsibility for both the operation and maintenance of the original bridge, and the financing of the outstanding debt of £122 million, and the organising of the construction of the new bridge. The construction of the new bridge cost £330 million (excluding VAT) and was opened on 5 June 1996.

In return, the concession agreement allowed Severn River Crossing Plc to collect tolls from both crossings for an agreed period. This is their only source of income. The Severn Bridges Act 1992 established the conditions under which the concession will end, and both bridges will revert to public ownership.

The Act notes that the concession agreement ends either at: … the end of the period of 30 years beginning with the appointed day; [or] Where it appears to the Secretary of State that the revenue requirement has been met on a day, the right of the concessionaire to exercise the power to levy tolls shall end at such time after that day as the Secretary of State may determine.



Source: Picture 02/01/17

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