Borrowing to cover extra costs of Norwich Northern Distributor Road could take up to 50 years to pay off
- Credit: Archant
Borrowing money to plug the overspend on Norwich's Northern Distributor Road could mean Norfolk County Council is still counting the cost of the road 50 years from now.
The bill for the road, which will stretch from the A1067 Fakenham Road to the A47 at Postwick once it is complete, is now estimated to be at least £205m - which works out a £16.5m a mile.
The county council had budgeted for it to cost £178.9m, but extra costs accrued by contractor Balfour Beatty in building the road added at least £25.6m to the bill.
In February last year, the council agreed to add an extra £6.8m to the budget and, in November, they agreed to take a further £7.3m out of the budget for capital projects to pay for the road.
They also agreed to take £12m from cash balances - an amount which is being drawn from £20m the Conservatives had pledged in their manifesto for highways repairs, which effectively means the council is borrowing its own money.
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But at a meeting of the council's policy and resources committee today, County Hall officers said they were likely to have to borrow money to cover that in the longer term.
Opposition Labour leader Steve Morphew said: 'I think there's, understandably, smoke and mirrors here, but we are taking about an overspend of £25m. How is that going to be funded and what will the additional borrowing cost us and over what period of time?'
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Simon George, the council's finance director, said: 'In terms of the additional sums of money to pay for the additional costs of the NDR, all of this will ultimately be borrowed.
'We will borrow that in the first instance from our cash balances.
'But if we do need to borrow in the next two to three years, which is quite likely, we will look at our debt maturity profile and plug any gaps at the best available rates.
'It's quite likely that we would borrow for between 10 years to 50 years. I am loath to put a revenue cost on that off the top of my head, but an additional £12m is likely to come with a figure of just under half a million a year.'
Mr Morphew said after the meeting: 'This is becoming less and less transparent the more people ask questions about it.'
Two sections of the 12.5 mile road have opened, with the council hoping to get the final section open in March.