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Government to guarantee 50% of Mersey Gateway finance

Contractors bidding to build the £600M Mersey Gateway crossing will be able to use the UK Guarantees Scheme to underwrite up to 50% of the construction cost NCE has learnt this week.

Client Halton Borough Council has limited the use of the scheme to ensure that the rigorous cost checks required when a project is privately financed are still carried out.

“It’s the best of both worlds,” said the council’s project director Steve Nicholson. “We wanted to capture the due diligence required [for private sector schemes] as well the confidence [UK Guarantees] brings.”

The UK Guarantees scheme was unveiled last year to underwrite up to £40bn of infrastructure projects, with the aim of kick starting projects which have stalled due to adverse credit conditions (NCE 26 July 2012).

But Nicholson told NCE in September that the Mersey Gateway project did not rely on being underwritten by the UK Guarantees Scheme to ensure it went ahead (NCE 27 September 2012).

His comments this week come after Halton received three “best and final” bids for the project.

Under the terms of the contract, the winning bidder is responsible for funding construction of the 1km cable- stayed crossing and the associated road improvements, and then operating it for 30 years.

The consortium will recoup the costs through a government grant and toll revenue worth an estimated £60M a year.

Halton has been in competitive dialogue with all three bidders since spring 2012. Nicholson said that because the winning bidder would be taking construction risk, Halton has tried to be as flexible as possible with the design.

Although the main components of the bridge are fixed - a three or four span cable-stayed crossing - the winning bidder has flexibility over the detailed design as well as construction methodology.

Bidders also have flexibility over the approach viaduct designs.

Halton hopes to select a winning bidder in June when the construction timetable, as well as the amount guaranteed by the government, will be revealed.


Shortlisted bidders for the Mersey Gateway are:

  • Balfour Beatty, Bouygues Travaux Publics, Egis Projects consortium
  • Contractors Balfour Beatty and Bouygues
  • Merseylink consortium
  • Samsung, FCC and Kier
  • MGL consortium (Dragados, Bam Nuttall and Hochtief ).

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