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Utility firms protest over road 'rent' proposals

PROPOSALS TO charge utilities 'rent' for road possessions could mean a dramatic rise in costs which will be passed on to customers, say industry groups.

Trials of the road lane rental scheme, aimed at cutting traffic jams caused by utility installation work, are due to begin this month in Middlesbrough and the London Borough of Camden.

The UK Government is proposing that local highways authorities would be able to charge £500 a day for lane possessions on main roads and £200 on side roads.

Since April 2001 authorities have been able to fine utilities firms an overstay charge of up to £2,000 a day for failing to complete work on time under Section 74A of the New Roads and Streetworks Act 1991. Under new proposals, firms would be made to pay for the entire possession period.

Three major utilities bodies, the National Joint Utilities Group (NJUG), energy regulator Ofgem and water regulator Ofwat warned the costs, estimated at up to £1.2bn in England alone, will be shunted straight on to customers.

NJUG chairman Bill Linskey claimed utilities firms and their shareholders would be unable to shoulder the new costs without increasing household bills.

'The cost is equivalent to an average 8.5% hike in council tax for every home in the country, ' he said.

Local authority highways engineers claim the charges are the best way of holding utilities firms accountable for the major disruptions they cause.

Camden council press officer Janine Mantle said: 'There have been 5147 road openings in our area, 63 of which levied overstay charges, with the worst offender overstaying the project for 10 days and accumulating a £20,000 fine.' Local authorities were often too short-staffed and under-funded to police the work properly, said Roger Khanna, London Borough of Hammersmith & Fulham assistant director of environment and transport.

Lane rental charges would help authorities claw back costs more effectively, he said.

But the NJUG claimed charging would not reduce the time taken to carry out work. Linskey said the scheme offered no financial incentive for firms to co-ordinate work and minimise disruption. He predicted reinstatement quality would be compromised as firms cut corners in the rush to complete work.

Khanna said the quality of reinstatement work had deteriorated since fines were introduced.

Well over a half of all reinstatement work was so poor it had to be re-done, he said.

Though utilities must, by law, re-do substandard work, it causes more disruption. And pursuing errant utilities firms put extra pressure on cash-strapped authorities, said Local Government Association head of environment and development Andy Elmer.

The NJUG claimed utilities companies were minute contributors to congestion problems and should not be made scapegoats. It said the proposals were a tax on utilities alone and would do little to address the main causes of congestion.

The group's Streetwise campaign aims to minimise disruption by encouraging the public to contact utilities to report sites failing to meet standards.

The campaign includes a commitment to new technology.

'Using trenchless technology techniques would mean less disruption to motorists and pedestrians and is a better solution all round, ' said Mantle.

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