Revenue down as drivers bypass M6 toll road

28 August 2008

Chris Tindall - Road Transport

The company running the M6 Toll is suffering from "weaker-than-expected revenues" because traffic on the pay-as-you-go motorway has been consistently lower than expectations. As a result Macquarie Motorways Group has had its credit profile downgraded by global analysts, including credit rating firm Standard & Poor's (S&P), which says the downgrade reflects the increased risks on its loans.

Hauliers have snubbed the 27-mile road due to the £9 cost and marginal benefits to delivery times. But S&P's primary credit analyst, Beata Sperling-Taylor, says overall traffic volumes have also fallen.

Sperling-Taylor adds: "Until 20 June, 2007, the lower traffic numbers were largely compensated for by higher-than-forecast toll rates. However, in the second half of 2007 and the first half of 2008, traffic performance continued to weaken and revenues accordingly were significantly below our expectations."

The latest figures show that around 42,000 vehicles use the road each day – 13.2% fewer than in the same period in 2007 and around 10% fewer than in 2006. S&P says problems at Macquarie's subsidiary, Midland Expressway (MEL), have been compounded by rising fuel prices and a downturn in the UK economy. However, its rating also reflects a low default risk and a strong management team.

MPs criticised the Government for "handing [over] such total control" of the road's operation after it opened in 2003, including an unfettered ability to set toll rates. Concerns are growing that this could be repeated if the Welsh Assembly agrees to a tolled relief road alongside the M4. Gerry Jones, boss of Gerry Jones Transport, says: "It will make it less attractive to businesses in Wales. It's another toll added to the expense of the [Severn] bridge. The correct answer is widening the motorway."

MEL insists the M6 Toll remains "excellent value for money" and adds that it is "pleased with the levels of HGVs using the M6 Toll and we are always looking at ways to encourage usage. The number of HGVs using the M6 Toll varies throughout the year due to seasonal effects and the extent of roadworks on the M6."