AWPR = Mortgaging Your Future

When the former Transport Minister Tavish Scott announced his preference for a significantly longer route choice, 46km compared with 30 km for the previous preferred option, for the AWPR in December 2005, he also announced his intention to fund the AWPR through a Public Private Partnership, or PPP.

The concept of a PPP or Private Finance Initiative (PFI) is fairly straightforward. Instead of buying a road and then operating it itself, the Scottish Executive, and Aberdeen City and Shire, enter into a long-term contract with the private sector to do so. Regular payments are then made for the services and assets over the life of the contract; in the case of the AWPR 30 years.

A 30 year PPP repayment schedule more than doubles the cost, compared to just paying the out right cost of the project.

Specific examples of costs and repayments are provided below.

	Mid Case Transport Scotland	Mid Case Transport Scotland	UK 2005 Average Cost at £15.3 million per mile	Cost at £20 million per mile
Total AWPR Cost Estimate [Pre VAT]	£345,000,000	£345,000,000	£437,000,000	£572,000,000
Fastlink Cost Estimate [Pre VAT]	£82,500,000	£82,500,000	£105,000,000	£137,000,000
Loan Number of Years	30	30	30	30
Loan Interest Rate [%]	7%	7%	7%	7%
Include VAT ?	No	Yes	Yes	Yes
Summary Loan Amounts	£345,000,000	£405,375,000	£513,475,000	£672,100,000
Scottish Executive Contribution	£295,125,000	£346,771,875	£439,356,000	£574,986,250
Aberdeen City Contribution	£24,937,500	£29,301,563	£37,059,500	£48,556,875
Aberdeenshire Contribution	£24,937,500	£29,301,563	£37,059,500	£48,556,875
Scottish Executive Repayment Details
Scheduled Annual Payment	£23,783,062	£27,945,098	£35,406,120	£46,336,074
Total Interest Payments	£418,366,870	£491,581,072	£622,827,597	£815,095,969
Total Principal Payments	£295,125,000	£346,771,875	£439,356,000	£574,986,250
Total Payments	£713,491,870	£838,352,947	£1,062,183,597	£1,390,082,219
Individual Councils Repayment Details
Scheduled Annual Payment	£2,009,623	£2,361,308	£2,986,492	£3,913,024
Total Interest Payments	£35,351,203	£41,537,664	£52,535,255	£68,833,843
Total Principal Payments	£24,937,500	£29,301,563	£37,059,500	£48,556,875
Total Payments	£60,288,703	£70,839,226	£89,594,755	£117,390,718
Download Payment Schedules	Case 1	Case 2	Case 3	Case 4

From the above, even the very optimistic cost estimates and VAT assumptions of the Scottish Executive result in Aberdeen City and Shire Council tax increases of £ 2 million per year for 30 years, and easily have the potential to rise to £ 4 million per year for 30 years assuming more realistic cost and VAT estimates.

This is effectively Mortgaging Your Future on a road development scheme that is unlikely to deliver any of the long term traffic benefits that the AWPR project team promise.

Should you be a concerned Transport Minister, MSP, MP, local Councillor or member of the Public you can download our free and easy to use AWPR Loan Calculator, using the link below.

AWPR Loan Calculator.xls