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Penalty clause throws doubt on BNRR legality

THE £400M BIRMINGHAM northern relief road could face the axe if a High Court action succeeds in ending secrecy surrounding the scheme.

Local opposition groups and residents are taking action against the government after it refused to publish details of the concession contract for Britain's first directly-tolled motorway.

The protesters believe that there are punitive charges built into the contract which would have entitled concession company Midland Expressway to up to £100M if the contract had been cancelled. It has received legal advice that these charges may be unlawful, throwing the legitimacy of the project into doubt.

The campaigners also claim to have strong evidence that the cost of cancellation was a significant factor in Deputy Prime Minister John Prescott's decision to approve the road.

Chair of the Alliance Against BNRR Charles Bradshaw-Smith claims to have a copy of a letter written by Prescott to Midlands MPs Mike O'Brien and Brian Jenkins. In it Prescott says: 'We have taken our decision against the background of a binding concession entered into by the previous administration. If we had breached the terms of agreement it would have been open to the concessionaire to seek compensation, the scale of which might have been substantial.'

The Alliance has been trying to get hold of the contract since last September to confirm that it contains illegal clauses. So far it has been denied because of a confidentiality clause signed between the government and Midland Expressway.

Law firm Leigh Day, which has developed a strong track record in successfully championing environmental cases, is acting as advisor to the Alliance. Solicitor Richard Stein claims that the government is acting unlawfully in withholding the contract. He also claims that the inclusion of penalty clauses in the concession agreement is illegal and would render it void.

A source close to the project confirmed that penalty clauses are included in the contract. 'There are a whole range of situations foreseen in which there are different remedies available to either side. The compensation depends on who is involved, who has put money up and whose interests are affected,' he said.

But the source said cancellation costs would have been around £30M when the decision was made last July. However, he did not deny that this figure would rise as the project proceeded.

A High Court judge is now deciding whether the action should proceed. Should the Alliance be successful, further action would have to wait until compulsory purchase and line orders are published in March.

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