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Dartford crossing could be sold off (From Echo)
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Dartford crossing could be sold off
8:22am Friday 24th April 2009
THE Government is considering selling off the Dartford Crossing in a bid to raise £16billion for the Treasury.
The crossing is being looked at alongside other Government assets, including the Met Office and QEII conference building in Westminster.
The move comes off the back of Chancellor Alistair Darling’s budget in which he said the Government had set a goal of “realising up to £16billion of property and other asset sales in the three years from 2011-12, with proceeds raised being used for new capital investment”.
But concerns have been raised on the future toll prices of the crossing if it were to be sold.
David Miles, secretary of the Essex Federation of Small Businesses, said prices would have to be controlled.
He said: “When the QEII Bridge was first proposed, a promise was made by Government that when it was paid for tolls would be axed, but instead we have seen tolls steadily increase.
“It seems the Chancellor is now considering selling the Dartford Crossing to the private sector as part of its sale of assets to make good the massive budget deficit facing the Government.
“If that does happen, then Essex Federation of Small Businesses believes it is vital the sale contract includes strict controls on the level of tolls that can be applied.”
The crossing is used by approximately 145,000 cars each day and the annual profit from tolls is estimated in excess of £52million.
Under the original agreement when the bridge was built, tolling was supposed to stop once it had paid for itself, which was in 2002.
A spokesperson for the Treasury confirmed the Dartford Crossing was one asset the Government was looking at but added: “We haven’t made any commitments as to how we would move forward in that particular arena.”
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Your Say YourEcho
Nebs, Westcliff-on-Sea says...
8:43am Fri 24 Apr 09
1. A company agress the purchase at 16bn.
2. They approach their bank for a loan of £16bn.
3. The bank hasn't got that kind of money, so it borrows it off the government at 2% interest with the govt guaranteeing the loan.
4. The bank lends the money to the firm at 5% interest.
5. Firm buys bridge, paying 16bn to govt, and immediately stops all mainteance so as the toll money can be used to pay shareholders and directors.
6.Contracts are made providing the directors huge pensions.
7. Several years down the line, when the directors and banks have lined their pockets, company goes skint and gives bridge back to govt.
8. Govt writes off £16bn loan to bank, and sets about a massive refurbishment programme to make up for the lack of private mainteance.
Net result. Govt ends up exactly where it was except that it hasn't had the tolls for X number of years and now has a huge maintenance bill.
I wonder if they will let me buy it, on the drip. Or sell it to Essex & Kent councils.
You just know that a foreign firm will buy it and leech the money out of the country.
shallotman, Basildon says...
8:45am Fri 24 Apr 09
shallotman, Basildon says...
8:45am Fri 24 Apr 09
Soozie, Southend on sea says...
9:29am Fri 24 Apr 09
thelonewhinger, benfleet says...
10:01am Fri 24 Apr 09
Nebs wrote:Absolutely brilliant cynical but accurate summing-up of what is very likely to happen here.
Here is a brief summary of the sell-off plan: 1. A company agress the purchase at 16bn. 2. They approach their bank for a loan of £16bn. 3. The bank hasn't got that kind of money, so it borrows it off the government at 2% interest with the govt guaranteeing the loan. 4. The bank lends the money to the firm at 5% interest. 5. Firm buys bridge, paying 16bn to govt, and immediately stops all mainteance so as the toll money can be used to pay shareholders and directors. 6.Contracts are made providing the directors huge pensions. 7. Several years down the line, when the directors and banks have lined their pockets, company goes skint and gives bridge back to govt. 8. Govt writes off £16bn loan to bank, and sets about a massive refurbishment programme to make up for the lack of private mainteance. Net result. Govt ends up exactly where it was except that it hasn't had the tolls for X number of years and now has a huge maintenance bill. I wonder if they will let me buy it, on the drip. Or sell it to Essex & Kent councils. You just know that a foreign firm will buy it and leech the money out of the country.
No doubt we will all roll over and accept it too - as usual!
fishandchips, Leigh says...
10:29am Fri 24 Apr 09
RJD_Wiz, Basildon says...
10:52am Fri 24 Apr 09
fishandchips wrote:You know....you may have something there!!
Why don't they put a Cafe with a Flower opening roof right on the middle of the Bridge. That would bring Revenue.
Seriously though...we all do just accept it, don't we....'They' never listen anyway..The ammount of petitions that get signed and sent to #10, and does anything ever change???
APR, Thundersley says...
11:08am Fri 24 Apr 09
This was (as far as I know) paid for by the tax payers.
Nebs, Westcliff-on-Sea says...
11:31am Fri 24 Apr 09
Ian P, Benfleet says...
12:20pm Fri 24 Apr 09
richomack360, Wickford says...
1:24pm Fri 24 Apr 09
SA, Rochford says...
3:49pm Fri 24 Apr 09
evilc, essex says...
3:55pm Fri 24 Apr 09
I tried to think of a nice word about them but I couldn't.
This is a failing mob selling off the family silver to pay for all the benefits scroungers that we the tax payers are paying for.
Only one question needs to be asked 'are they now on a couldn't care a less run down to the election'
purple rain, Canvey Island says...
4:23pm Fri 24 Apr 09
well at least not without using words that would not be printed !!!!!!!
purple rain, Canvey Island says...
4:24pm Fri 24 Apr 09
well at least not without using words that would not be printed !!!!!!!
purple rain, Canvey Island says...
4:25pm Fri 24 Apr 09
well at least not without using words that would not be printed !!!!!!!
RJD_Wiz, Basildon says...
4:57pm Fri 24 Apr 09
richomack360 wrote:Nice !! LOL :)
Awesome news ! Another reason not to visit Kent!
fishandchips, Leigh says...
5:43pm Fri 24 Apr 09
fishandchips, Leigh says...
5:47pm Fri 24 Apr 09
Nebs, Westcliff-on-Sea says...
10:52pm Fri 24 Apr 09
Nebs, Westcliff-on-Sea says...
8:59am Mon 27 Apr 09
Paul Clark: The 2007-08 accounts were published on 29 January 2009 and show gross income of £67.3 million, managing agent costs of £15.8 million, which includes charge collection and general running costs, and other expenditure of £8.6 million which includes capital works. A copy of the Dartford-Thurrock Crossing Charging Scheme Account for 2007-08 has been placed in the House Library.
So, give or take, £40m a year for the govt. A private owner would pay tax leaving them, say, £26m. I wonder how much they want for it? At a 4% dividend yield it's worth about £600m, assuming the costs are average. Worth more if the new owner can charge what they like. But worth much less due to the new crossing at some time in the future, coupled with the high fixed costs.
Discounted cash flow for £26m at 2.5% inflation over the likely 23 years required to pay off the current govt debt is abount £450m, so if they sell it for less than that then they would have been better off keeping it.
thelonewhinger, benfleet says...
3:22pm Mon 27 Apr 09
Nebs wrote:Oh my head!!!
Found this in Hansard: Paul Clark: The 2007-08 accounts were published on 29 January 2009 and show gross income of £67.3 million, managing agent costs of £15.8 million, which includes charge collection and general running costs, and other expenditure of £8.6 million which includes capital works. A copy of the Dartford-Thurrock Crossing Charging Scheme Account for 2007-08 has been placed in the House Library. So, give or take, £40m a year for the govt. A private owner would pay tax leaving them, say, £26m. I wonder how much they want for it? At a 4% dividend yield it's worth about £600m, assuming the costs are average. Worth more if the new owner can charge what they like. But worth much less due to the new crossing at some time in the future, coupled with the high fixed costs. Discounted cash flow for £26m at 2.5% inflation over the likely 23 years required to pay off the current govt debt is abount £450m, so if they sell it for less than that then they would have been better off keeping it.
Liked your original (cynical)comment best Nebs.
Good research though!!
RJD_Wiz, Basildon says...
3:30pm Mon 27 Apr 09
Nebs wrote:Jesus Nebs !! Are you a Investment Manager?....If not, you should be !!
Found this in Hansard: Paul Clark: The 2007-08 accounts were published on 29 January 2009 and show gross income of £67.3 million, managing agent costs of £15.8 million, which includes charge collection and general running costs, and other expenditure of £8.6 million which includes capital works. A copy of the Dartford-Thurrock Crossing Charging Scheme Account for 2007-08 has been placed in the House Library. So, give or take, £40m a year for the govt. A private owner would pay tax leaving them, say, £26m. I wonder how much they want for it? At a 4% dividend yield it's worth about £600m, assuming the costs are average. Worth more if the new owner can charge what they like. But worth much less due to the new crossing at some time in the future, coupled with the high fixed costs. Discounted cash flow for £26m at 2.5% inflation over the likely 23 years required to pay off the current govt debt is abount £450m, so if they sell it for less than that then they would have been better off keeping it.
cheddar george, gillingham says...
9:59pm Mon 27 Apr 09
Nebs, Westcliff-on-Sea says...
5:30pm Tue 28 Apr 09
RJD_Wiz, Basildon says...
9:20am Wed 29 Apr 09
Nebs wrote:Nebs....You're a genius !! Just wish I had a spare 2k !!!
All we need is £2,000 from every man, woman and child in Southend and, with a decent cash discount, we could buy it between us. Free pass for shareholders, £3 to use the fast-lane, £3 for single occupant cars, no discounts for anyone. Let's go for it Rodney, this time next year we'll be millionaires.
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RJD_Wiz, Basildon says...
8:26am Fri 24 Apr 09
On a spearate note; News that there are plans to build another bridge to ease the congestion at Dartford the other day...Scrapping the toll would easy it, wouldn't it ??