THE proposed A3 tunnel at Hindhead will cost the government a massive £320 million – with discussions being held this week over how to pay for it.

Different options and start dates for the project are under consideration with the government's decision over whether the scheme gets the go-ahead imminent.

However, there have been warnings that a delay of even a year could send the costs souring higher still.

As previously reported by The Herald, the government has said that it will not pay for the tunnel, should it get the go-ahead, from its national pot of money and instead, cash from the South East's regional pot must be used.

This means that the South East's regional organisations will have a huge influence as it will decide if and when the funding will be released.

Last month the South East Regional Transport Board (RTB), which is a partnership of organisations chaired by the South East England Regional Assembly, met with representatives of the Department for Transport and the Highways Agency to look for alternative sources of funding.

This included looking at the possible use of private finances.

However, funding rules have prevented this. Unless the government changes its mind and funds it from national cash, the tunnel will have to be funded from regional allocation.

A meeting of the RTB today (Friday) is due to look at the South East's transport spending plans up until 2011.

In a report going to the board, it stated that the RTB considers the A3 Hindhead project of strategic and regional significance. It is treating it as a commitment and recommending to government that it will be included in the funding programme.

However, two versions of the programme were to be considered by the board, proposing two options for the Hindhead project.

The huge £320 million cost of the project leaves significantly less money for other projects in the south east for the next five years.

One proposal is for the main works on the tunnel to get under way in 2008, although preparation works can begin before hand, to keep the costs of the tunnel project down as low as possible.

A second proposal is also being considered by the board for work to be delayed for a year to free up extra cash over five years for other transport projects in the South East.

By delaying the project, it means that more of the money for the project will be needed after 2011 and would be included in the region's next works programme.

This will allow funding to be found for three other much-needed projects in the region which would otherwise be delayed, but could add to the bill for the tunnel project.

"At present the Highways Agency anticipates that the earliest the proposal will be ready to start on site is 2008/9," the board's report explained.

"The implication for the new cost profile is that there would be little opportunity to start any other new proposal before 2010/11.

"Slipping the start of works at Hindhead to the following year would reduce the impact and enable three new proposals, over and above existing commitments to begin before 2010/11.

"However the Highways Agency has warned that delaying the proposal by a year is likely to lead to an increase in the overall cost of the works."

The board was also told that the delay could reduce the number of projects next work programme beyond 2011.

Any significant changes to the Highways Agency's proposal for the tunnel could also have an implication on the cost.

After today's meeting, the board's recommendation will be submitted to the government at the end of this month.

South West Surrey MP Jeremy Hunt appealed to the board to push ahead with the tunnel project and not delay it.

"The bottleneck on the A3 at the Hindhead traffic lights causes significant economic and environmental damage, the effects of which are felt by all those living and working along its length of the A3.

"For example, the Devil's Punch Bowl, an area of outstanding national beauty, is scarred by traffic, and families living near Hindhead often find that it is quicker to visit towns miles away than cross the A3.

"Hindhead is the only area on the route between Portsmouth and Scotland that has traffic lights and no dual carriageway.

"It is therefore vital that funding is secured urgently for the work on the tunnel to start as soon as possible.

"I urge the South East of England Regional Transport Board to find the funds the project needs and give it the green light."