Telecoms companies worried by hole tax

The proposed lane rental scheme would require any utility company digging up a road to pay a daily fee of between £500 and £600 for the work.

This could replace legislation introduced in April 2001 which fines any company overstaying a pre-agreed work period, but does not impose costs for scheduled activities.

Lane rental is currently being trialled in the London Borough of Camden and Middlesborough. A spokesperson for the Department of Transport, Local Government and Regions said there were no firm plans to roll it out nationally.

The pilots will run between March 2002 and March 2004.

Utility companies, including telecoms firms, could be hit by the new arrangement. Local authorities will be exempt, although National Joint Utilities Group estimates that local authorities are responsible for as much as 50% of roadworks.

Both Thus and NJUG, which represents the views of utilities companies including BT, are opposed to the new pilot schemes. ‘Lane rental is a blunderbuss approach,’ said Domhnall Dods, Regulatory Solicitor for Thus. ‘Regardless of whether you’re a good or inefficient operator you’re still charged the same amount.’

Thus has estimated that, if the new scheme had been in place last year, it would have raised the cost of equipment installations by 37%. Much of that cost would have been passed on to customers. ‘In difficult economic times, the wisdom of adding 37% to the cost of installing business lines is questionable,’ said Dods. He said the existing procedure of imposing fines for late completions is more effective.

‘Companies like Thus have a commercial imperative to get installations done quickly. It’s not in our interests to delay work. The DTLR have been breathtaking in their lack of analysis,’ he said.

Irene Elsom, Head of NJUG agreed. ‘There has been some consultation between DTLR and NJUG, but we have not been happy with aspects of this. We’re very concerned about the pilots,’ she said.

But the DTLRs spokesman maintained ‘although we recognise the importance of putting in infrastructure, we still need to minimise disruption. This means encouraging companies to carry out work as quickly as possible.’

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