Scottish government approves £400m bypass

The Aberdeen bypass is set to be funded via a public-private partnership with a contractor to be selected in 2010-11. But the project may face an uphill political struggle before it starts procurement.

The Scottish government has given the go-ahead to the £400 million (€448 million; $640 million) Aberdeen bypass. A contractor is set to be selected in 2010-11.

Aberdeen bypass: 100%
 debt financed

The Aberdeen Western Peripheral Route (AWPR) will see the construction of a 28-mile bypass aimed at providing a fast link between towns to the north, south and west of Aberdeen, Scotland’s-third largest city, located in the north-west. A spokeswoman for the Scottish government said the project will be considered for procurement through the Non-Profit Distribution (NPD) model, a form of public-private partnership developed by the recently-created Scottish Futures Trust.
The NPD model is Scotland’s alternative to the UK government’s private finance initiative programme (PFI). Both are standardised procurement processes involving the private sector but the Scottish model is 100 percent debt financed. The absence of equity means that any surpluses that would be paid as dividends in a normal PFI project will be made available to the wider community. But the project will still be structured to take into account private sector profit.
AWPR will be paid for almost entirely by the Scottish government – 81 percent – with Aberdeen City Council and Aberdeenshire Council contributing 9.5 percent of its cost, the spokeswoman said. But the decision met with controversy with environmental groups threatening court action against the government. Opposition politicians also expressed concerns about the final cost of the project.
The Scottish Parliament, currently in recess, will have to give final approval to the project before more details are outlined and procurement can begin.