The Anonymous Widower

Silvertown Tunnel Works – 24th September 2023

I took these pictures of the Silvertown Tunnel works on the North Bank of the Thames today.

I was on a train going to Woolwich Arsenal.

What Is The Silvertown Tunnel?

The title of this section, is the same as that of this article on the Londonist, which is an excellent description of the Silvertown Tunnel.

The article says this about tolls.

The new tunnel will require you to part with some pounds if you want to use it. Despite the consultation on this taking place a decade ago, the final details have yet to be publicised. We can expect something similar to the Dartford Crossing (currently £2.50 for cars etc, free for motorbikes/mopeds).

As there is a mayoral election next year, I doubt that Sadiq Khan will announce the charge on the Silvertown and Blackwall Tunnels before the election.

Let’s Play Accountants

This is a paragraph in the Londonist Article.

Construction of the tunnel is eating up something like £1.2 billion (2020 estimate). It’ll then cost another estimated £1 billion over 25 years to pay for maintenance, financing and operation. Riverlinx paid up-front costs and will be paid back by TfL through money collected from tolls.

The running costs would appear to be a billion over 25 years, which is £ 40,000,000 in a year.

This is said on this page on the Greater London Assembly web site.

Blackwall tunnels (northbound and southbound) each carry approximately 50,000 vehicles per day in only two lanes of traffic.

That means that each tunnel handles approximately 18,250,000 vehicles per year.

Dartford Crossing charges are according to the Wikipedia entry are as follows.

• Cars, motorhomes, small minibuses – £ 2.50
• 2-axle buses, coaches, vans, goods – £ 3.00
• Multi-axle goods, coaches – £ 6.00

The Wikipedia entry also says this about the capacity and traffic through and over the Dartford Crossing.

The design capacity is 135,000 vehicles per day, but in practice the crossing carries around 160,000.

My good friend; Bob from the 1970s had an impeccable cv.

• Chief Accountant of Vickers.
• Chief Management Accountant of Lloyds Bank.

He was also one of two outstanding practical accountants I have known.

Several of his practical tips on how to handle money in computers, ended up in Artemis; the project management computer system, I wrote in the 1970.

Bob and I would solve problems in Mother Bunches Wine Bar and I suspect, we’d come to the conclusion, that an average charge of £3 per vehicle will be charged in the Blackwall and Silvertown Tunnels.

I also believe from my fluid flow experience, that a proportion of the excess traffic through and over the Dartford Crossing will divert to the new Silvertown Tunnel.

• Together the Blackwall and Silvertown Tunnels will have four lanes in both directions.
• The Silvertown Tunnel will hopefully designed to modern standards and be more free-flowing, than the Blackwall.
• Sat-navs will direct drivers to the quickest routes.

Just as water finds its own level, an equilibrium will develop between the flows.

• I suspect that during the day, the flow over the Dartford Crossing will drop to the design capacity of 135,000
• At night, will vehicles divert through the free-flowing Blackwall and Silvertown Tunnels?
• Will those living in North Central London inside the North Circular Road drive through the Blackwall and Silvertown Tunnels?
• Will the free-flowing Blackwall and Silvertown Tunnels encourage people crossing the Thames to use their car, rather than the train, as the car is more convenient  and the toll will be less than the train fare?
• We should also beware that new roads, railways and tunnels generate new traffic, that no-one predicts.

My feeling is that combined traffic through the four lanes of the Blackwall and Silvertown Tunnels will be upwards of seventy thousand per day.

I can now calculate revenue for different levels of combined traffic through the Blackwall and Silvertown Tunnels.

• 40,000 vehicles in each direction per day is a total of 29,200,000 vehicles per year, which would raise £ 87.6 million per year in toll charges.
• 50,000 vehicles in each direction per day is a total of 36,500,000 vehicles per year, which would raise £ 109.5 million per year in toll charges.
• 60,000 vehicles in each direction per day is a total of 43,800,000 vehicles per year, which would raise £ 131.4 million per year in toll charges.
• 70,000 vehicles in each direction per day is a total of 51,100,000 vehicles per year, which would raise £ 153.3 million per year in toll charges.
• 80,000 vehicles in each direction per day is a total of 58.400,000 vehicles per year, which would raise £ 175.2 million per year in toll charges.

I am assuming the following.

•  All days of a 365-day year have similar traffic.
• Everybody pays without fuss, by technology like number-plate recognition.
• The average toll chare paid is £ 3.

I am drawn to the conclusion, that the contract signed between Transport for London and Riverlinx, is a licence to print money.

Even, if the tunnels only attract 40-50,000 vehicles per day, the revenue is way in excess of the £40 million needed for maintenance, financing and operation of the Silvertown Tunnel.

I have a few further thoughts and questions.

Who Are Riverlinx?

This is said on the About Roverlinx page of the Riverlinx web site.

TfL awarded  Riverlinx SPV (Special Purpose Vehicle) the contract for financing and overseeing the design, build and maintenance of the Silvertown Tunnel in 2019.

The Riverlinx CJV (Construction Joint Venture) is contracted by TfL and Riverlinx SPV to complete the design and construction works, delivering the Silvertown Tunnel on time and on budget.

Riverlinx CJV is a joint venture, a partnership bringing together international, market leading expertise from three civil engineering and construction companies: BAM Nuttall, Ferrovial Construction and SK ecoplant.

In collaboration with TfL, our supply chain and other key stakeholders in the project, Riverlinx CJV will complete construction of the Silvertown Tunnel in Spring 2025.

Note.

1. BAM Nuttall is a construction and civil engineering company, that is a subsidiary of the Dutch Royal BAM Group.
2. Ferrovial Construction is the construction subsidiary of Spanish company; Ferrovial.
3. SK ecoplant is a subsidiary of the South Korean conglomorate; SK Group.

These companies should be capable of building the Silvertown Tunnel.

Where Will The Money To Build The Tunnel Come From?

In World’s Largest Wind Farm Attracts Huge Backing From Insurance Giant, using an article in The Times, I explain how Aviva invest our pensions and insurance money in wind farms.

Strangely, a tolled tunnel is a bit like a wind farm financially, in that if it’s working and the wind is blowing or the traffic is coming, it will continue to generate an income.

Built by quality construction companies, as most tunnels are, they will be the sort of investment, that would satisfy the Avivas of this world.

Will Riverlinx Get All The Tolls From The Tunnel?

Nothing is said about how the excess of income over expenditure will go.

I suspect, as the project is being designed, financed and built by Riverlinx, that they will not go unrewarded.

Will The Mayor Set The Toll Charges?

I suspect that the Mayor and TfL will set the charges.

These are some figures with different charges for 70,000 vehicles in each direction per day or a total of 51,100,000 vehicles per year.

• £3 in each direction would raise £ 153.3 million per year in toll charges.
• £4 in each direction would raise £ 204.4 million per year in toll charges.
• £5 in each direction would raise £ 255.5 million per year in toll charges.
• £6 in each direction would raise £ 306.6 million per year in toll charges.

Note.

1. Some of the papers are talking of a four pound charge.
2. A pound increase may not be much to the average driver, but they will certainly mount up.

Higher toll charges could be used by an unscrupulous Mayor to deter vehicles entering Central London or nudge people towards public transport.

What Happens If The Tunnel Springs A Leak?

I can remember the following tunnels being built under the Thames in my lifetime.

• Blackwall Tunnel – second bore
• Dartford Tunnel
• DLR to Greenwich and Lewisham
• DLR to Woolwich
• Elizabeth Line to Woolwich
• Jubilee Line – four crossings
• Victoria Line to Vauxhall

None of these seven seems to have sprung a leak recently. And neither have the older Victorian tunnels.

Tunnels with an income stream, appear to be a good risk, if they don’t spring a leak.

But London tunnels don’t seem to have a high likelihood of leaking.

Fines

Fines could be a problem, but this article on Kent Online, which is entitled Dartford Crossing Continues To Generate more Than One-Third Of Income From Fines As Profits Total More Than £100m, says otherwise.

Conclusion

This would appear to be a low risk venture and I suspect it will make Riverlinx and TfL a lot of money.

September 24, 2023 Posted by AnonW | Finance, Transport/Travel | Artemis, Aviva, Blackwall Tunnel, Dartford Crossing, London Mayor Election 2024, Riverlinx, Sadiq Khan, Silvertown Tunnel, Transport for London, Woolwich Arsenal Station | 1 Comment