Chris Sutton says there is substantial risk involved in not building an M4 Relief Road.
The IWA and FSB have rightly highlighted alternatives to the Welsh Government’s M4 Corridor around Newport proposals. In considering a full range of alternatives we are afforded the opportunity to arrive at a more robust and sustainable decision.
Building infrastructure is complex. It delivers significant benefits but requires hefty planning and financing. It also brings the prospect of disruption and political headaches.
Politicians have got into the habit of putting off the big decisions until they are well overdue, but this does not mean that projects should be postponed indefinitely or simply filed under ‘too difficult’.
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This week on Click on Wales Today on Click on Wales, Chris Sutton responds to yesterday’s article which argued that the business case for the M4 Relief Road is flawed.
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In 1991, proposals for the new M4 Relief Road were included in the Welsh Trunk Road Forward Programme. Postponed in 1993 and cancelled again in 2009, the problem of increased congestion of the M4 around Newport has not gone away and indeed this is now having a corrosive impact on investment into Wales.
The hard choices need to be made and the reality is that if Wales does not build an M4 Relief Road we will miss out on hundreds of millions of pounds of future investment.
The Prime Minister described the Brynglas Tunnels as a “… foot on the windpipe of the Welsh economy”. The M4 is the primary route to market for the two City Regions of South Wales and their hinterland, including West Wales.
The M4 serves two thirds of the Welsh population and over two thirds of Welsh GDP. These proposals are therefore of importance to the whole Welsh economy as a stronger South Wales will lead to greater government revenue which can be spent across the whole of Wales.
The South Wales conurbation has a similar population to that of Birmingham, however, consider the 360 degree access and the numerous motorways that service Birmingham. Contrast this with the geography of South Wales, tucked against the sea and with the Valleys stopping swift communications northward. The bottleneck at Newport is the entry point to over two million people.
The CBI’s 2013 Infrastructure Survey revealed that 98% of firms reported that the quality of transport infrastructure had a significant impact on future investment decisions. It is easy to see the loss to the Welsh economy of a closed factory but it is much harder to measure the real consequences of missed opportunities and diverted investment.
Our economy is also increasingly ‘just in time’. We order goods on-line and expect prompt delivery – so do businesses who order components from suppliers and deliver goods to their customers. If we do not offer reliability of access then, not only do we not attract new investment, we will struggle to retain existing businesses.
The FSB suggests the focus should instead be upon the Metro.
The Metro is another major infrastructure project but it is not ‘either or’ as they provide two different services. The Metro is about travel within the region, providing access to new jobs created in both Cardiff and Newport and therefore is only successful if the economy is successful.
By contrast, the M4 proposals enhance our vital transport artery to external markets and would improve GDP. It is the essential prerequisite before investment in internal communications. The two schemes very much complement one another.
FSB has been supportive of the ‘Blue Route’ upgrade to the Southern Distributor Road (SDR) which it suggests could potentially deliver savings of £400-600 million compared to the chosen ‘Black Route’.
The IWA paper (December 2013) estimated the Blue Route at £380m, however, this has now been costed at £600-800m (WG Strategic Appraisal July 2014). Savings are therefore £200-400m.
The Blue Route does not provide what the economy of Wales needs – which is a modern, efficient, safe and resilient motorway. Indeed, the existing M4 north of Newport wasn’t built as a motorway; it was a local bypass with five junctions. Let us not repeat this error with a second sub-standard route mixing local and through traffic.
There are also practical issues. The Blue Route would cut Newport in two with employment areas to the south, including a college and other community features. The challenge from residents would undoubtedly be fierce.
There are new housing estates, food stores and business parks accessed from the existing SDR, together with 13 roundabouts or major junctions. It is simply not feasible to mix these users with ‘just in time’ traffic heading to Cardiff, Swansea or Ireland.
The M4 enhancement has been costed at around £1 billion with the UK Government having granted borrowing powers to Welsh Government for up to £500m. These borrowing powers were specifically granted for the M4 enhancement.
The Economic Assessment Report in July 2014 noted that the Black Route has an overall benefit to cost ratio (BCR) of 2.29 assuming central growth forecasts (or 3.09 if wider benefits are taken into account). From my reading, the Blue Route is between 0.4 – 0.6. This would be a poor economic return, reflecting a sticking plaster solution on an already over-loaded transport route.
There is a growing consensus that the new section of the M4 needs to be delivered. Backing comes from the UK Government, Welsh Government, four out of five leading business organisations (CBI, Chamber of Commerce, IoD & EEF) and also positive public backing in the Western Mail’s on-line survey in July 2014.
It is now over 21 years since this scheme was first consulted upon. During this time, the primary artery into Wales has become increasingly unreliable and cost us all in lost time and money.
The M4 enhancement is only a costly proposal if you assume doing nothing will cost us nothing; sadly this is not the case. High quality infrastructure is a critical component in economic development and the new section of motorway is the only viable, sustainable and long term solution to help the Welsh economy grow and prosper in the years ahead.
It’s worth probably worth Chris having a read of these articles:
http://www.clickonwales.org/2013/07/zombie-m4-relief-road-relies-on-phantom-cars/
http://www.clickonwales.org/2013/04/the-way-in-and-out-of-wales/
“And is there something else here? An idea that Cardiff and its hinterland could become a driver for prosperity internally within Wales, rather than being forever dependent on more and more people being able to enter and leave Wales at 70mph?”
I would have thought that this statement would have warranted more tags than it has been given – ‘black route’ being an omission imho
The M4 needs a relief road at this point? Yes. Is the most expensive and most expensive option the best one? No No-one is talking about doing nothing, but this is straight out of pre-devolution transport planning mentality. Within the construction industry, many are surprised and disappointed by this choice, as the main problem of peak hour traffic at this bottleneck can be solved far more cheaply.
“Borrowing powers were specifically granted for the M4 enhancement” – this is a part of the story that has had little scrutiny. Whatever the merits of the M4 scheme it is surely a matter for the Welsh Government and Assembly to decide its transport priorities, yet the Westminster Government have made borrowing powers conditional on one specific infrastructure scheme – a divisive and controversial one at that. Seems that the Treasury still has a foot on the windpipe of devolution?
My understanding is that the statement about borrowing powers is not correct. The UK government has agreed £500 million borrowing for Wales for any purpose whatever. But it becomes available only when the Wales Bill becomes law and Wales gets access to tax revenues from stamp duty and landfill waste disposal. That should be in 2016, I believe. HMG did say that Wales could anticipate the tax revenues and spend earlier but only for the M4. The M4 stipulation applied only to timing. Since construction on the M4 will not be under way before 2016 anyway, it makes no difference at all.
In my opinion if the Welsh government wanted to get on with both the M4 and the metro, as Chris Sutton suggests, it should have kept the £500 million for the metro, which is a complex project of unclear scope and funding and therefore more difficult to finance privately at cheap rates. The M4 by contrast is a bog-standard road construction project whose risks are well understood and could surely have been financed by a private-public partnership at no more than 4 per cent over 30 years. The outcome is likely to be that the M4 is built with the wrong inancing and the metro will suffer the fatethat the M4 has up to now. It will be put off for years and years as too big, too difficult and too expensive. I hope I’m wrong but I’m taking bets.
An interesting analysis and well done to the IWA for reporting on the other side of the debate. A debate that at times has seemed too one-sided.
The current M4 in South Wales like much of UKs strategic transport networks has suffered from a lack of planning for the future.
The debate about the future of the M4 and other transport has to learn from those failures, before its too late.
Gerald Holtham’s comments………..”should have kept the £500m for the Metro” …………..and delivered the M4 infrastructure via PPP are “spot-on”.