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Oosterweel link financing raises questions

11:35 25/03/2014

The Flemish government’s plan for the completion of the Oosterweel link, which will connect Antwerp’s Ring Road, will offer a net savings of €128 million in comparison to the original plan, according to the Court of Auditors. However the court’s report expressed serious concern regarding the tolls to be charged and the difficulties faced  by a future concession-holder in raising some €2 billion in external financing.

Last month, the government voted in favour of the BAM plan, which involves scrapping the original idea of a two-tier viaduct in favour of a series of tunnels. The Oosterweel link will complete the circle of the Antwerp Ring and allow easier access from the port to roads leading to the Netherlands, Germany and the south, strengthening the position of the port of Antwerp and easing congestion in and around the city.

According to the Court of Auditors, which reports on the financial implications of government policies, the BAM plan will save a total of €313 million, including €150 million from the use of cut-and-cover tunnels instead of drilling. However the tunnel under the Albert canal, replacing a bridge in the original plan, will cost €185 million more.

The BAM plan eliminates a freight ban in the Kennedy tunnel and differential tolls in the Oosterweel, Kennedy and Liefkenshoek tunnels. But details on the tolls are not available, the court complained, which raises the question if they are in line with EU regulation. The tolls are intended to finance the project, with income figures cited at some €350 million a year.

In addition, the court expressed doubts that the future concession-holder for the project will be able to raise the estimated €2 billion required for their part in the financing. “Successfully attracting €2 billion in external financing without a regional guarantee would seem to be a difficult task and will depend on the market situation at the time of the signing of contracts,” read the court’s report.

 

photo courtesy Purka/Wikimedia Commons

Written by Alan Hope