Tyne Tunnel operator TT2 sees profits and turnover soar in wake of new open road tolling system

Tyne Tunnel operators TT2 Ltd saw profits and turnover rocket in the first full year for its new open road tolling system, accounts show.

The Wallsend based business is responsible for the operation of the two-lane vehicular tunnel beneath the River Tyne, as well as the pedestrian and cycle tunnels, with payments to use the crossing now collected in new ways, such as online or through pre-paid accounts, following the scrapping of toll booths and barriers in 2021.

Now accounts for the year ended March 31 2023 have been published – the first full year since the new system was introduced – and show turnover rose from £19.7m to £33.8m and operating profit more than doubled from £9.6m to £19.9m. Pre-tax profit also soared from £2.9m to £11.2m, while profit for the year was £8.7m, a considerable increase on the previous year’s £2.1m.

Total comprehensive income jumped from £5.9m to £35.2m, predominantly on the back of £27.9m in income in relation to “effective portion of changes in fair value of cash flow hedges”. The year also saw the firm’s headcount increase from 79 to 113, increasing the wages, social security and pension bill from from £4.9m to £6.9m.

In the accounts, director Andrew Deacon says: “Total receipts in respect of toll usage for the year was £24.579m (2022: £20.011m) which represents an increase of 22.8% on the previous year. The increase was driven principally by the full year of operation of Tyne Pass (open road tolling) on 8 November 2021, with traffic seeing a general uplift in both business and leisure travel use, supported by our numerous campaigns to help the company achieve its vision of becoming the number one choice of crossing the Tyne by road.

“This year has seen another historic high. Turnover and other income was £33.848m (2022: £19.748m) and is presented as a mark-up on operating costs based on an overall estimated outcome for the concession plus other income.”

During the period a £3m claim for Business Interruption was also received, covering insured losses throughout the period of March 2020 to March 2021 during the pandemic.

The new free flowing traffic system was introduced in November 2021, tapping into number plate recognition cameras, in moves to increase traffic flow, and reduce journey times and emissions. The system came in for criticism when it was initially launched, with 13,000 people backing a petition claiming there were “unacceptable” errors with the system as well as a surge in motorists being hit with heavy fines.

tyne tunnel operator tt2 sees profits and turnover soar in wake of new open road tolling system

CEO at TT2, Adrian Wallace

In separate figures issued by the company it said the percentage of people not paying their toll reduced from 5.39% in the first month of open road tolling, to 2.84% in November 2022 – falling further to 2.20% in November 2023.

The river crossing was used by over 19 million vehicles in the 12 months from November 2022 to November 2023, compared to just over 17 million the previous year, an increase of 11.7%. TT2 Ltd said new data shows journey times have improved since the switch to open road tolling in 2021, with the average journey time in October 2023 being 35 seconds faster southbound, and 46 seconds faster northbound.

The number of people and businesses pre-paying for their journeys has also risen, with almost 83,000 new TT2 pre-paid accounts opened in the last year. In November 2023, 82.94% of payments were made via pre-paid accounts. This comes following improvements to the user-experience through changes to the TT2 website, upgrades to the payment system including introducing Apple and Google Pay, and the launch of the Tyne Tunnels’ customer focus group.

CEO at TT2, Adrian Wallace, added: “We’re really pleased to see that more people than ever are choosing the tunnels to cross the river and that journey times have reduced since we switched to open-road-tolling.

“The Tyne Tunnels were brought to the region to support regional growth by offering a safe, reliable, and efficient, alternative way to cross the Tyne. We help over 62,000 vehicles cross the river every day and we are proud to be supporting greater social mobility and regional success, as well as helping our local communities and the environment through extensive CSR initiatives and funding.”

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