Saturday, 05 December 2020

Bridge toll rise plan 'unfair'

PLANS to increase the tolls on Whitchurch Bridge are being opposed by the parish council.

PLANS to increase the tolls on Whitchurch Bridge are being opposed by the parish council.

The authority is urging the Department for Transport to reject a rise, which it says would be “grossly inappropriate and unfair”.

The Whitchurch Bridge Company wants to increase the basic cash charge for cars and vans from 40p to 60p and the £3 fee for vehicles weighing over 3.5 tonnes to £4.

It says this is necessary to pay back the £1.4 million the company borrowed to replace the 102-year-old bridge. The work finished in September, five months behind schedule, after being delayed by flooding and unforeseen problems dismantling the old bridge.

As a result, the project cost £6.4 million, £2.3 million over budget.

Whitchurch Parish Council says the company should stop paying dividends to its shareholders until it has paid off the debt and should have budgeted for longer than the 15 years in which it planned to settle the loans.

A report prepared by four villagers on the council’s behalf also says the company should have saved up for the new bridge, adding that bridge users were “effectively financing the company to repay the loans it should not have needed”.

The council says that over the past decade the company made a net profit from toll collections every year and it paid a proportion of this to its shareholders in every year except 2014. The payout ranged from three per cent to 40 per cent in 2009. At the same time, the company saved less than half the expected cost of the refurbishment.

The council says: “It should have been quite clear that the rebuilding of the bridge was imminent. The company had been told that it needed to be replaced by 2015 at the latest.

“It is difficult to understand why, during the last 10 years, all available funds were not set aside. The directors of the company seem to place great emphasis on their obligation to pay a dividend to shareholders. This is understandable but there are occasions when dividends have to be suspended.”

The basic toll rose from 8p to 10p in 1998 then to 20p in 2005 and 40p in 2009.

The council says a further hike would represent a 600 per cent increase since 2004, adding that it was “incomprehensible” that such an increase would be acceptable or permissible if it involved a public utility company.

It also criticises the company for reducing the discount for local residents.

Between 2004 and 2009 villagers paid 9p per crossing on a pre-paid card, a 55 per cent reduction on the 20p rate. They now pay 29.4p, a 26.5 per cent discount on the 40p charge.

If the toll goes up again the concessionary rate would be 45p, or 25 per cent, which would be maintained for at least five years.

The council argues that the company should not only increase the discount but pledge to never cut it again. In its application to the Government, the company said its shareholders’ fund would stand at £7 million by 2023.

The council argues that £900,000 of this, or 10 per cent of the estimated cost of the next bridge replacement, should be put into savings.

This would leave just over £6 million, meaning the fund would still have almost doubled from £3.3 million.

The company says it must provide a “reasonable” return on shareholders’ investments and the rate of return has halved to 1.2 per cent since 2009.

It says it will not give returns of more than 1.5 per cent even though shareholders in similar industries usually receive six to 10 per cent.

If the toll increase is granted, the company has promised not to seek further rises for 10 years.

It says it must make a minimum of 51p per vehicle and raising the toll to 60p would allow it to continue offering the discount to residents.

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