Work on the Carlisle northern development route will go ahead, but is expected to be delayed by three months because of the credit crunch, according to Cumbria County Council.

The council has assured that the long-awaited PFI scheme is still on track, despite concerns arising from the near-collapse of Franc-Belgian bank Dexia, which was due to provide up to £142.8M for the project (Surveyor, 9 October 2008).

Even though the bank was bailed out by state support, the council is now in negotiations with a number of banks to seek alternative funding.

‘Interest in the project remains strong but most banks are not open for new business until the new year,’ the council said, in a statement.

Cllr Alan Clark, cabinet member for transport, said: ‘It looks highly unlikely that a deal will be struck this year, which means work will probably not start at the planned time of spring 2009, and we estimate the delay will be for three months.

‘The Treasury has been very supportive throughout this situation and it, together with Cumbria County Council, remains fully supportive of the project.’

The scheme is one of a number of PFI projects which has been subjected to speculation over its future because of the banking crisis. But Robert Devereux, permanent secretary for the Department for Transport, told MPs last week he was ‘not expecting PFI schemes to fall through’. There would be delays, but ‘the evidence, so far, has been that there is an appetite for investment in infrastructure’.

The CNDR was first proposed about 30 years ago, but has faced delays – most recently when the 2007 floods led to a redesign of the bridge over the River Eden.