IT COULD be Britain’s biggest “mortgage”. The government is to pay a consortium of road builders more than £5 billion to widen the M25, even though the work will cost only £1.6 billion.

The Highways Agency has said that about 63 miles of the 118-mile road will be expanded from six to eight lanes at a cost of £79m a mile.

The scheme will become Britain’s biggest-ever private finance initiative (PFI), the controversial system under which private firms fund and build infrastructure projects such as roads and hospitals then “rent” them back to the government.

Such schemes have been widely criticised as poor value because contractors can generate huge profits by charging the government interest payments and capital repayments, all at the taxpayers’ expense.

The widening of the M25 could, however, be the most controversial, especially when the price is compared with the £29m a mile it costs to build a brand new motorway. When chosen, the winning consortium of the three shortlisted for the M25 scheme will have the extra job of maintaining the widened road from 2008 until 2039, but critics say the price is still far too high.

Chris Grayling, Conservative transport spokesman, said the government had “lost control” of spending on roads. “This project will suck up money that could have been spent on alternative forms of transport like the tram networks that have been cancelled in Manchester and Liverpool,” he said.

Under the scheme the M25 will have at least eight lanes for all its length except in the western sections around Heathrow where it already has up to 12 lanes. The 200,000 vehicles a day flowing through the busiest sections will rise to an estimated 250,000 once work is completed in 2016.

The Highways Agency and the Department for Transport say that the project is vital for Britain’s economy.

Others warn that it will simply encourage more car use. Stephen Joseph of Transport 2000, which campaigns for environmentally friendly forms of transport, said: “Turning the M25 into an American-style superhighway will not solve congestion but it will push the southeast in the direction of becoming the Los Angeles of England.”

PFI schemes were introduced by the last Conservative government to shift the risk of cost overruns and delays on to private companies and to enable big infrastructure investments without government borrowing.

In reality, however, private companies only proved willing to take on such risks if offered the chance of huge profits at the taxpayers’ expense.

Treasury figures show that taxpayers will be paying out around £7 billion a year for the next decade to meet repayments on the 700-plus existing PFI schemes, a sum which could rise as more contracts are signed.

Explore UK News

• Crime News

• Education News

• Health News

• Science News

• Scotland News

Times Recommends

• Donor organ allowed child’s own heart to heal
• Michael Jackson: Not the final chapter
• Sacha Baron Cohen forced to tone down Brüno