State support makes banks clamber to back M25 widening scheme

The UK’s motorway widening project has been oversubscribed for bank financing, removing the need for government funding.

Up to 20 banks have sought to back a £5 billion (€6 billion; $7 billion) motorway widening project in the UK, leaving a proposed £900 million debt tranche oversubscribed and unlikely to need government help.

Reports suggest that between 17 and 19 banks have submitted credit approved bids for a 27-year £960 million loan facility.

The Highways Agency declined to disclose how many banks were involved but said “a significant number” were bidding for the project, which involves widening the London motorway from three lanes to four in places to ease congestion. Barclays, Lloyds TSB and HSBC are reportedly among the bidders.

“The Highways Agency is retaining the option to provide Government co-funding in case it is needed to meet the programme – i.e. in case one or more banks drop out before the Contract is awarded,” it said. It expects to award contracts in early May. The Treasury revealed earlier this year that it may step in to plug the shortfall if suitable debt could not be procured.

The start date for the contracted Connect Plus consortium of Balfour Beatty, Skanska, Atkins and Egis Projects was due in April but will be pushed back until the financing has closed.