Friday, 5 June 2009

An investor's cunning plan?

I had an email from someone this week. Let’s call him Mr X. He said:

“I am one of those greedy, higher-rate tax payers that was searching for a cash-cow investment and [found out about] the Swinford Toll Bridge."

You have to admire such honesty!

He proposed a very sensible idea (regular readers will know how much I like ‘sensible’ even if it is unfashionable):

“One idea might be to try and bring in an external investor, remove the toll booths and get the council to pay an agreed toll each year, based on what the expected traffic flow is likely to be. They could install a meter (that cars trigger when they drive over it) to confirm how many cars actually travel across the bridge each year, and then there could be a balancing up at the end of the 12 months. That way the Council would not have to stump up the cash upfront, but could amortise it over a number of years."

If I've understood Mr X's idea correctly, the advantage for Oxfordshire County Council is that they wouldn’t have to find £1.5 million quid as capital expense all in one go. A private investor, say Mr X, would stump up the initial cash and effectively lease it back to OCC. OCC gets control of the bridge and relieves the appalling congestion and frustration west Oxfordshire currently suffers. And the private bridge owner gets a return on his investment.

Cunning, eh! What do you think?

The drawback of this plan is, of course, OCC's willingness - or not - to do anything at all about the bridge and find a creative solution. Only time will tell.

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