In a significant transportation development, London is set to unveil its first new toll road in nearly three decades on Monday. The £2.2 billion Silvertown Tunnel aims to connect the Royal Docks with the Greenwich Peninsula in the city’s eastern Docklands. This ambitious project is being closely monitored by investors who view it as a potential model for a series of private finance initiatives across the United Kingdom.

The Silvertown Tunnel is primarily designed to alleviate the persistent congestion experienced at the nearby Blackwall Tunnel, an essential route for both local and regional traffic. However, the introduction of tolls for this new crossing has sparked a considerable backlash from local motorists and businesses.

As per the new toll structure, using the Silvertown and Blackwall tunnels will cost motorists £4 during peak hours and £1.50 during off-peak times. Heavy goods vehicles will incur a £10 fee, reduced to £5 during off-peak periods. Previously, drivers enjoyed free passage through the Blackwall Tunnel, making the new tolls particularly contentious. Notably, the tunnels will remain toll-free between the hours of 10 PM and 6 AM, and there are discounts available for small businesses and individuals on low incomes.

Dave Tucker, fleet director for Westminster Waste, a prominent waste management company, expressed his concerns, stating that the tolls could impose an annual cost of up to £300,000 on his fleet of 50 vehicles, especially if they continue to make multiple crossings throughout the working day. “This is going to have a huge impact, not just on my company but on lots of local businesses,” Tucker lamented. “They are only just starting to wake up to the true cost that this is going to have on them. TfL is hell-bent on destruction.”

Furthermore, the Federation of Small Businesses is advocating for additional concessions for small enterprises affected by the tolls. Matt Jaffa from the organization pointed out that this new toll structure creates a “two-tier London driving system,” where motorists in eastern London must pay to cross while those in the west can do so for free.

The Silvertown Tunnel is being hailed as paving the way for a broader rollout of privately financed infrastructure projects across the UK. Recently, Transport Secretary Heidi Alexander announced that the government would be utilizing private finance for the Lower Thames Crossing, a new road and tunnel initiative located east of London. Transport for London (TfL) indicated that the public-private partnership model used for the Silvertown Tunnel might be considered for future projects.

Nonetheless, the private finance initiative (PFI) model remains controversial in the UK. In 2018, the Conservative government banned the use of PFI for central government projects after a damning report from the National Audit Office labeled them as poor value for taxpayers. Nevertheless, despite the ban, 14 road and rail projects initiated by local authorities and regional transport bodies have emerged in collaboration with private sector partners, as reported by Partnerships Bulletin.

According to Paul Jarvis, managing editor of Partnerships Bulletin, while most of the recent public-private partnerships have been on a smaller scale—primarily focusing on infrastructure for electric vehicle charging—he anticipates an uptick in such partnerships as regional authorities are given more responsibility and the new government emphasizes collaboration with the private sector.

The Silvertown Tunnel's financing primarily comes from the Riverlinx consortium, which includes several notable investors, such as Aberdeen, Invesis, Cintra—part of Spain’s Ferrovial—and SK ecoplant, a South Korean firm. The estimated total cost of the project, which stands at £2.2 billion, includes £1 billion allocated specifically for construction, along with investor payments and maintenance obligations spanning the 25-year life of the design, construction, and operational contract.

TfL projects that tolls from both the Silvertown and Blackwall tunnels will generate approximately £103.8 million in the first year, even as TfL anticipates operating at a loss until 2028 when it expects to start making a surplus. This surplus could potentially be reinvested into enhancements for London’s broader transport network.

Rosie Eden, the director of concession infrastructure at Aberdeen Investments, asserted that the Silvertown Tunnel’s opening is proof that the PFI model can work effectively, stating, “We are confident [it] can be replicated successfully.” She noted that the project was made more appealing to investors through the mitigation of specific financial risks, including the responsibility of TfL to manage any unexploded ordnance found in the vicinity—a legacy of the area's heavy bombing during World War II.

However, criticisms abound. Dominic Leggett from the Campaign Against the Silvertown Tunnel argues that TfL is using the toll on the Blackwall Tunnel to obscure the significant costs associated with repaying the debt incurred for the Silvertown Tunnel. “Essentially, you’re taking money away from the poorest people and businesses in London and giving it to banks and investors,” Leggett contended.

This campaign group is also wary that instead of alleviating congestion, the tunnel may exacerbate pollution and carbon emissions in the area. Cyclists will face additional challenges as they are required to use a dedicated bus service through the tunnel.

In response to the rising discontent, TfL justified the tolls by stating the close proximity of the two tunnels necessitated charges to prevent increased traffic levels at Blackwall, where drivers would otherwise flock to avoid tolls. They have also committed to closely monitoring pollution levels.

Gareth Bacon, the shadow transport secretary, criticized the tolls as “cripplingly high,” arguing that they will severely impact local businesses. He highlighted that this financial burden comes on top of increasing employers’ national insurance and a slew of new regulatory requirements that businesses must navigate.