£600m UK PFI bridge tendered

A new bridge across the river Mersey – widely seen as one of the last big contracts remaining in the UK PFI pipeline – has been tendered. Potential bidders should submit their expressions of interest for the 30-year contract by December 14.

One of the last big contracts that forms part of the UK's existing Project Finance Initiative (PFI) pipeline has just been tendered and calls on the private sector to design, build, finance, maintain and operate a new bridge over the river Mersey, in the Liverpool region. PFI is the UK's standardised procurement process for public-private partnerships.

The clincher for the tender launch came late last week, when the local procurement authority agreed to accept the £470 million (€539 million; $751 million) in funding – and attached conditions – being provided by the UK’s Department for Transport (DfT). The latter announced earlier this month that the money was contingent on local authority Halton Borough Council reducing the project’s cost by £30 million, or 5 percent of its value.

According to the tender documents, the new Mersey Gateway Bridge will cost about £510 million to build (excluding land acquisition costs) and will entail set-up costs of some £20 million. Lifecycle costs for the 30-year contract will total circa £40 million, with operations and maintenance costs estimated at roughly £12 million a year. The project is set to start construction towards late 2013 with a scheduled opening in 2016.

The vast majority of the DfT’s contribution – about £385 million – will be used to help fund some 26.5 years of availability payments. Even though the new bridge will be tolled – and the winning consortium will be responsible for managing toll collection of some £1.50 per car – the concessionaire will be remunerated via public contributions paid in exchange for making the bridge available in good condition. The rest of the grant will be used to fund land acquisition.

The Mersey Gateway Bridge will cross the river Mersey between Runcorn and Widnes. It is located 1.5 miles from an existing bridge – the Silver Jubilee Bridge, also tolled – which will now be restricted to certain types of traffic.

Potential bidders have until December 14 to submit their expressions of interest for the project. To view the full tender announcement, please click here