Professor Stuart Cole CBE, Emeritus Professor of Transport Economics and Policy, Prifysgol De Cymru / University of South Wales
Two major road projects are now being considered by Mark Hooper, the minister responsible for transport. These are, of course, only two of the many national highway improvement schemes and, following comparative evaluation, Mr Hooper may decide that the funding he has is better spent on other schemes with greater priority.
However, both have become among the most nationally discussed projects – relief for congestion and improved journey times on the M4 at Newport, and a third crossing of the Menai Strait.
It therefore seems timely to set out how Mr Hooper and his advisers will make the decision.
WelTAG / HM Treasury’s Green Book
The Welsh Government has an evaluation process to determine the priority for transport schemes. Called WelTAG (Welsh Transport Appraisal Guidance) and derived from HM Treasury’s Green Book, it examines each scheme through its Five Case Business Model – Strategic, Economic (Transport), Financial, Commercial and Management.
It was introduced by Ken Skates in 2017, when he was transport minister, ‘to ensure that investment in transport is targeted where it can have the greatest impact’.
The M4 at Newport has been assessed and reassessed over twenty-five years by government engineers and consultants (the latter at an estimated £100m in fees).
There is now to be an eighteen-month delay while costs and benefits are reassessed. Over-zealous, perhaps, but largely the consequence of the bureaucratic trap ministers face from officials.
Strategic Case
Is there a strategic transport basis for building the roads?
In 2023, the Welsh Government made the strategic case predominant over the economic case, which was a significant step forward. New criteria required schemes to minimise carbon emissions and reduce noise and pollution impacts on residents, provide better access to development sites and reduce road casualties, but not lead to higher speeds or increase capacity for cars.
Thomas Telford’s 1826 Menai Suspension Bridge can hardly be expected to remain operational over the long term, so the Welsh Government is looking at replacement infrastructure for a strategic route.
The new bridge would link Ynys Môn and the Irish Republic to the mainland. Holyhead is the second-busiest ferry port in the UK. Tourism, agriculture, Wylfa power station and associated employment add to a powerful strategic argument, and perhaps this scheme has the greater need.
At Newport, the Brynglas Tunnels present a peak-time travel problem, the result of a money-saving scheme in the mid-1960s when the M4 First Severn Crossing was built. The London-based Welsh Office (which was then responsible for trunk roads) chose the Newport Northern Distributor Road as a cheap alternative rather than building a new motorway. So the present scheme is addressing a poor strategic decision.
The M4 itself is a strategic route for industry in south Wales. However, this scheme is really a Brynglas Tunnels bypass, aimed at reducing congestion and referred to as a relief road providing more capacity for cars.
Economic (Transport) Case
A socio-economic appraisal of costs and benefits; demand forecasts
In making his decision, the minister will compare the costs of each scheme to the Welsh Government and assess the benefits in terms of factors such as employment, journey times, operating costs for vehicles (private and commercial) and safety.
This will produce the benefit-cost ratio (BCR). It was the primary case for evaluation and priority setting until the strategic view usurped that position.
Financial Case
Whole-life (capital and maintenance) costs of the scheme; affordability: does the government have the money, and for which schemes?
M4 at Newport
The minister has set out five options for the ‘relief’ road. However, he will, of course, also be considering the Burns Report railway stations, three of which he has ‘prioritised’. In addition, the previous government’s ‘Black Route’ would by now cost £4.8bn and be unaffordable.
This columnist’s preferred scheme would be the Southern Distributor Road (the A48 / A4810 Steelworks Road between M4 junction (J) 28 at Tredegar Park and J23A at Magor), with improved free-flowing traffic achieved by constructing overhead bridges at junctions.
Costing £1.8bn, with a 6% traffic reduction and possible completion in eight years, it is the 2013 ‘Blue Route’. The report was published by the Institute of Welsh Affairs and authored by this columnist. In minimising ecological impacts, it received support from Friends of the Earth Cymru.
If the road were to be built, evidence previously quoted in this column suggests that added road capacity attracts more traffic and, in the long run, has little effect on journey times.
There are two low-cost options for the Welsh Government. Variable journey-time message signs at M4 J43, directing traffic onto the A465 / A4 / M50, and at M5 J8 could divert some English Midlands traffic.
The other is to close junctions, for example J27 at High Cross, at a cost of £14m, reducing traffic by 3% by preventing local journeys. However, this would increase private vehicle operating costs and congestion on the local road network, reduce air quality elsewhere and attract opposition.
Menai crossing, Ynys Môn
This scheme, due to the Irish connectivity element, might previously have attracted EU funding. For Prime Minister Andy Burnham, it will be an opportunity to show how pro-EU and how pro-devolution he really is through an additional specific grant to the Welsh Government to fund this scheme. Not very, in the case of railway infrastructure.
Alternatively, he could allow the Welsh Government to borrow above its current limit at a low interest rate through the Public Works Loan Board / Debt Management Office.
What is not attractive is the form of Private Finance Initiative which funded the A55 across Ynys Môn. There, the government pays a ‘shadow toll’ for every vehicle travelling along the A55. That enabled HM Treasury to keep the borrowed sum off the public sector balance sheet.
While this may satisfy some bizarre bean-counters’ (sorry, finance officers’) objective, it has cost the Welsh Government considerably more than borrowing would have done.
Commercial Case
This examines the viability of the procurement process, using Welsh suppliers if possible; monitors payment of bonuses for delivery and performance; and considers whether the contractors can deliver. There have been cases of suppliers going bankrupt.
Management Case
This tells the minister whether an option is being delivered. It monitors contractors’ actions against project stages and ensures that environmental, health and well-being outcomes are achieved as planned.
In many transport projects, monitoring costs and delivery has shown that final costs will be higher than originally forecast, so adjustments have to be made, as with HS2, the Heads of the Valleys road and Valley Lines electrification.
This process will inform the minister before and during the project, including where it lies on the priority list.
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