Silvertown Tunnel: When You Can’t Afford It, Just Get Someone Else to Pay

As of Monday, East London got itself a shiny new tunnel. Not because TfL stumbled across a suitcase of cash on a Jubilee line train, but because someone else – namely, a group of investors and lenders with a taste for long term toll forecasts – agreed to foot the bill.

The Silvertown Tunnel is a textbook example of a Public–Private Partnership, or PPP. For the uninitiated, that’s the financial equivalent of saying, “We’ll take the infrastructure now, and worry about the bill for the next 25 years.”

And so, in rolled the RiverLinx group, armed with hi-vis, hard hats, and a collection of spreadsheets – contracted to design, build, finance, and maintain the tunnel. In return, they get paid via a nice, predictable stream of availability payments from TfL, provided the tunnel remains open and doesn’t misbehave.

Those payments? Funded by tolls. Yes, both the Silvertown and Blackwall Tunnels will now cost you, confirming what most Londoners already knew: not even congestion is free anymore.

So, How Was It Paid For?

With no juicy government grant on offer, RiverLinx scraped together around £1.2 billion in private finance – from equity investors and a syndicate of banks who presumably saw “urban toll road” and thought: “Great – free flowing traffic, steady tolls, and all with less controversy than building a new runway”.

The structure was simple: RiverLinx built the tunnel, TfL pays over time (using toll income), and drivers chip in a little more each year to avoid the honour of queuing at the Blackwall tunnel until 2049.

And just like that, TfL avoided a hefty capital outlay, politicians got a ribbon to cut, and the private sector gets the joy of trying to keep a massive urban tunnel functioning without flooding, collapsing, or becoming a new five-star hotel for rodents.

Everyone wins – except, perhaps, the commuters.

PPP: Procurement Plus Paperwork

A PPP means the private sector does the work and takes the risk, while the public sector agrees to pay – eventually, if everything functions as promised. It’s a bit like hiring a builder for your loft conversion and saying, “Lovely job on the windows, mate. I’ll pay you monthly for the next 25 years, assuming they don’t leak.”

Silvertown is what’s known as a Design-Build-Finance-Maintain PPP. Which means if something goes wrong during construction or over the next two decades of operation, RiverLinx doesn’t get to pass the invoice back to TfL. Plague tunnels, sinkholes, traffic wardens in revolt. Their problem.

Want In? Form a Consortium and Bring a Big Calculator

If you’re a business thinking, “I’d quite like to build a toll tunnel and be paid for it every year until retirement,” you’re already too late for this one. The good news? There’ll be another one soon.

PPP opportunities pop up in government procurement portals (if you know where to look and enjoy websites last updated in the early 2000s). To compete, you’ll need a team: a builder, a financier, an operator, and someone who looks like they’ve read the small print – and probably has.

Once your crack team wins a bid, you’ll set up a Special Purpose Vehicle (or SPV – because everything in PPP world has an acronym) to hold the debt, the equity, and the collective anxiety.

Government Grants: Because Sometimes, Free Money Still Exists

Of course, not all infrastructure projects take the PPP route. Some are just paid for the old-fashioned way – with public money, council budgets, or, when all else fails, blind optimism.

Crossrail (sorry, the Elizabeth Line), HS2, or your local pothole repair scheme – all tend to be the ones with broad public benefit but little hope of making money – so the state steps in, squints at a forecast, and writes a big cheque.

Silvertown didn’t bother with all that. Apart from a bit of TfL budget support, the tunnel was delivered using private finance – with future toll revenue earmarked to cover costs over time. It’s the Klarna model of infrastructure: take it home today, pay for it in manageable instalments, and try not to think too hard about the interest.

Loans, Bonds and the Magic of Making Other People Pay Upfront

RiverLinx didn’t just pass the hat around Canary Wharf – their £1.2bn in funding came from a syndicate of banks and institutional lenders. The big selling point? Predictable toll revenue from a captive audience of drivers heading into the capital.

Elsewhere, public authorities like TfL and the GLA tap into funding from the European Investment Bank – or more recently, the UK Infrastructure Bank (UKIB), a sort of state-sponsored sugar daddy for transport, energy and net zero projects.

Private firms can do the same – provided they’ve got a watertight revenue model – and don’t mind being scrutinised more thoroughly than a Hollywood A-lister’s outfit choices during awards season.

Bonds, Equity and Other Exciting Words for ‘Please Give Me Money’

Not keen on banks? Issue a bond. Mersey Gateway raised £257million this way – with a comforting safety net guaranteed by HM Treasury, no less. That’s the infrastructure finance version of “Don’t worry, Mum and Dad will cover it if we mess up.”

Or find an equity partner. Plenty of infrastructure funds love long-term, stable returns – particularly if there’s a green angle or a whiff of regeneration. Unlike loans, equity doesn’t come with fixed repayments. But it does come with a partner who now owns part of your brand spanking new bridge, and who might assume they’ve earned naming rights while they’re at it.

Lessons from Silvertown: Toll Roads and Tunnel Vision

So, what can we learn from this charming tale of tolls and tunnels?

1. If you can’t afford it, don’t worry – someone else will. Just promise them steady returns and limited drama.
2. PPP works, if done right. You get your infrastructure now, pay for it later, and someone else handles the financial hangover.
3. There’s a plethora of funding out there. Grants, loans, equity, guarantees, bonds – pick your poison, build your team, and start drafting that 500-page business plan.

The Last Word

Silvertown Tunnel shows how creative structuring and private capital can deliver infrastructure without blowing a hole in the budget. The result? A brand-new tunnel beneath East London, a fresh stream of toll-backed repayments, and, one imagines, a modest toast at RiverLinx HQ. London gets the infrastructure – and the rest of us get to queue slightly less.