Business Model

A very rough guide to potential Fixed Link income.

(Experts will need to assess this more accurately)

Tolls...assisted by incorporating automatic number plate recognition (ANPR) technology.

Commuters.
12 month permit to travel at will with a vehicle that is nominated, with passengers, any time of the year, any time of the day, for up to 3 return journeys per day. £1,000 p/a .....

Taxis will have a different permit with unlimited crossings £1,500 p/a
(Straight to any airport from home)

Cars not registered on the Island can not have permits (in order to limit traffic on the island). £40 return journey sold only (4 week limit). No one way ticket. Any car not registered on the Island but is on the Island without a return ticket to get back to mainland. £40.

Individual crossings for Island Residents with a nominated Island registered vehicle and passengers. (Without a permit) £10 each way.  This also applies to Mainland registered disabled drivers, with their Blue Badge and photo ID.

Horse boxes £40 return
Motorhomes £40 return
Motorbikes £5 return.

Lorries

Up to 7 tons. 1yr permit £2000 or £40 each way
Up to 10 tons. £2,400 and £45
Up to 15 tons. £3,000 and £50
15 tons and above £4,000 and £65
Permits only allow one return journey per day.
All above lorries...plus vat.

Any HGV that are not registered as Island vehicles will have 30% added to the fare.

Train journey transfer for foot passengers £3 each way to Fareham Station. Over 60 year olds half price.

To us these rates sound fair. Cheaper than the ferries and no restricted freedom of movement which should build our economy and improved lifestyle. Multiply the above rates with the expected annual vehicular traffic to get an approximate income from the tunnel. Any investor would want a 5% yield and that probably includes the government as well. Multiply our annual income figure by 20 and you'll see how much we have to spend on a tunnel on those terms.

A share of a £6billion Government Ministry of Transport fund is accessible also.

General running costs of an automated toll Tunnel are small once build is completed.

We believe Government favour these types of projects (HS2).....Many people employed to design and build the link who pay tax, many materials used (vat), tolls with minimal overheads and a booming Island economy with private investment, waterparks, etc, that has less unemployment, more businesses and tourists spending money. A portion of the tolls could be used to improve Island infrastructure, roads, clean beaches, cut grass verges, etc.

Wightlink employ 600 people (£10-£12million per annum in wages alone). Add fuel, depreciation, maintenance, pensions, regulatory coding, etc....very inefficient.  A Fixed Link has very few overheads as registration plate recognition technology is used and automated toll booths. This allows far cheaper tolls in comparison to ferry fares while still making a good attractive yield for private investors and Government

These estimations are averaged over the year (Bestival, festival, winter). Last year roughly 2.1 million vehicles travelled on the ferries of which 275,000 were HGVs. We anticipate an uplift in vehicular traffic as people get used to their freedom to travel to and from the mainland at any hour of the day.  The Yarmouth-Lymington ferry stays so that may offset the uplift.

IoW permits
Cars-     £1000 x10,000=£10m
Taxis-     £1,500 x 500=£75,000
Motorbike-£500 x 200=£200,000
Horse boxes-£1,500 x 200=£30,000
Add 10% for individual tickets. =£1m
Total.   £11.3m
Vans/lorries
>7tons £2,000 x 8000=£21m
>10tons £2,400 x 5000=£12m
>15tons £3,000 x 2,500=£7.5m
16tons> £4,000 x 1000=£4m
Add 5% for individual tickets. =£1.9m
Total £46.4

Mainland traffic in/out. (No permit)
P/day.    P/yr.        price     Total
Cars.   2500.   912,000.    £40.     36.5m
Vans
>7t.     1000.   365,000.    £60.     22m
>10t.    500.    182,500.    £80.     14m
>15t.    500.    182,000.    £120.    9m
15>.      150.    54,750.     £180.   10m
Total      £96.5m

Train passengers per year.
1 million x £6 return to Fareham.
Total.    £6m

Grand total £160.2 million per annum.

This is a "best guess" income solely from the tunnel. Experts will need to assess more accurately the figures.

The totals add up theoretically to £160.2 million p/yr.
(Plus buses, coaches, trailers, etc. That could pay for maintenance, staffing).

Ok, so we have potential massive amounts of income. What happens next?
In theory we don't need government help, although it would be nice and it would be offered more than likely. We as an Island, can own our own fixed Link.

Here's one scenario: (there are loads!)

Private equity bonds issue....once the planning and design is completed, we need the funds to build the fixed Link. At that stage a company say... "IoW Fixed Link limited" issues promissory bonds to private equity funds. In contract we promise them either a set interest rate or rate set above BOE interest rate on their money. For these figures we have used 5% interest to them. They can lend 20 times the projected income on that amount to us. (£3.2 billion) It turns out (in theory) we'll only need one third or so of that amount to build the fixed link so the two thirds of income which is £107million p/a comes back to the "Isle of Wight Fixed Link Limited" company. We can then have provisions drawn up to see how we use that money. Perhaps we buy the whole fixed link back off from the equity fund to start off with? Anyway the Isle of Wight could become the richest county in Britain and the area could be funded for excellent schools, roads, healthcare, sports facilities, beach cleaning, etc. Islanders could be given an opportunity to buy shares.

That's one scenario....We're sure that won't happen but it would be good eh? Those in high places will have different ideas. The Isle of Wight fixed link referendum debate" forum can keep everyone up to speed on those sorts of decisions. At that stage it could be called the "Isle of Wight fixed link finance and build update forum".