In a surprising turn of events, the financial health of UK Highways A55 Ltd, the company responsible for the Anglesey A55 extension and Menai Suspension Bridge, is under scrutiny. Despite earning millions from these key infrastructures, the recent repair bills for the Menai Suspension Bridge have left a substantial dent in the company’s bottom line.
Emergency works on the Menai Suspension Bridge required a staggering £7.19 million, with £5.073 million allocated for repairs conducted in autumn 2023. The bridge’s closure in October 2022, prompted by serious structural concerns, led to an annual loss after taxation of £1.31 million, as revealed in the accounts for UK Highways A55 Ltd for the year ending March 2023.
Although this setback marked the first annual loss since 2012 for the company, its overall financial picture remains robust. Since securing the contract for the Anglesey A55 extension in 1998, total profits after tax have amounted to an impressive £42.26 million. However, the recent downturn raises questions about the sustainability of the company’s profitability.
Traffic levels for both cars and heavy goods vehicles (HGVs) increased by 2.3% and 4.7%, respectively, in the year to March 2023. This resulted in a surge in “shadow toll” revenue paid by the Welsh Government, reaching £19.85 million. Since 1999, UK Highways A55 Ltd has accumulated £331.1 million in tolls, but the looming expiration of the 30-year deal in 2028 could burden taxpayers with a total bill exceeding £400 million, quadrupling the initial £101 million cost for constructing the Anglesey extension.
The Welsh Government consistently attributes this financial burden to the Private Finance Initiative (PFI) under Tony Blair’s UK Labour Government, a decision now deemed discredited. To finance the Anglesey A55 extension, UK Highways A55 Ltd borrowed £109 million from a consortium of banks. While the debt was scheduled for repayment in December 2023, uncertainties surrounding unexpected events, such as the COVID-19 pandemic and increased maintenance costs, could jeopardize the company’s financial stability.
The impact of unforeseen events was evident in 2011 when the company faced losses due to pavement defects in the Anglesey extension, amounting to a substantial £18.92 million over 11 years. Directors sought to recover these costs from the “designer” of the Anglesey A55, ultimately settling the dispute out of court in May 2014.
Looking ahead, £9.39 million has been set aside for “major maintenance” in the current financial year, a provision that surpasses the allocation for repairs to the Menai Suspension Bridge. Additionally, funds have been earmarked for improvements and repairs to Telford’s Grade I-listed bridge, expected to be completed by March 2025 in anticipation of the structure’s 200th anniversary in the following year.
Despite the financial strain, directors express satisfaction with the company’s performance in the 2022-23 fiscal year. They highlight the “satisfactory” safety on the network section managed by UK Highways A55 Ltd, asserting that road safety performance consistently exceeds that of the entire country of Wales. Moreover, penalty points, awarded for “poor or substandard” performance, are minimal, reflecting the project’s overall acceptable results.
It’s noteworthy that the parent company of UK Highways A55 Ltd is Equitix Fund V LP, based in London. As the company navigates financial challenges and balances its commitment to infrastructure maintenance, stakeholders will be closely watching to ensure the long-term sustainability of this critical road network.