Payments to M3 and tunnel firms to triple to €5.5m

TRANSPORT:STATE PAYMENTS to the operators of the M3 motorway in Co Meath and the N18 Limerick tunnel are set to rise from €1.8 million in 2010 to between €5 million and €5.5 million this year, according to the report of the Comptroller and Auditor General, published yesterday.

The payments fall due because traffic volumes have fallen below levels agreed between the toll operators and the National Roads Authority.

The rise in the amount due this year compared to 2010 is attributable mainly to the fact that this year’s figures include the first full financial year of operation of both schemes, which opened for only a few months in 2010.

Payments to the operators are set to consume more than the National Road Authority’s entire share of toll revenue for 2011.

Under the complex public-private partnerships (PPPs) used to develop the State’s toll motorways, the NRA receives a share of the revenue from each PPP toll operation. Total revenue to the NRA from all such toll operations was just €1.28 million in 2010.

However, because traffic volumes were lower than expected, and because of “traffic-related guarantees” put in place, the State had to pay €1.79 million to the operators of the M3 and the Limerick tunnel in 2010.

According to the comptroller’s report, the roads authority expects receipts to increase in 2011 to between €1.5 million and €1.75 million. This, however, is still up to €3.75 million below the anticipated €5.5 million cost of the guarantees on the M3 and the Limerick tunnel in 2011.

The report says “the extent to which payments will arise in the long run” will depend on traffic volumes on the roads involved. The report also says the roads authority found it “difficult at this point to forecast future traffic levels given current economic uncertainties”.

The pattern on the State’s toll roads has been a mix of growth ahead of expectations on some routes “while on other routes, traffic volumes have reduced in the last 12 months”, the report adds.

The M50 is not included in the comptroller’s calculations because neither the PPP firm that built the motorway-widening upgrade nor the company that built the West-Link bridges actually collects the tolls.

At the end of last year, the roads authority had an outstanding commitment of €1.872 billion to PPP projects already in place. This was part of an overall State commitment to PPP projects amounting to €4.3 billion and covering roads, schools and medical projects.

Estimates, however, were unavailable for future commitments for transport – and other – projects for which contracts had not been signed by the end of 2010.

The comptroller also finds that a tracker database which was used to monitor PPP projects – for which contracts had either been signed or for which consultants had been appointed – had not been updated since March 2010.

Such projects include Metro North and Dart underground, which between them have already cost more than €200 million.

The report notes that given the complexities involved in PPP projects, “it is difficult to estimate potential future commitment”.

Commenting on the comptroller’s report, the roads authority has ruled out renegotiating the repayment schedule on PPP roads.

Spokesman Seán O’Neill said this could be counterproductive “for the taxpayer and those who pay tolls”.

He said the move might appear to have a short-term gain but the consequences could be “catastrophic”.

He said the contracts were generally long term and to renegotiate the deals would likely make them even longer.