Private firm to reap €1.15bn bonanza from M50 toll deal
Published 01/02/2010 | 05:00
A PRIVATE company is set to reap a massive €1.15bn windfall from the M50 West-Link toll bridges it built for just €58m, the Irish Independent has learned.
National Toll Roads (NTR) almost recouped the entire construction costs in 2007 alone, when it took in €46m in tolls from motorists.
And it is going to get up to €50m per year for the next decade in compensation from the State, which bought out the notorious tolled link in 2008.
NTR made €2.3m from the toll bridge during the first year of its operation in 1990.
But as traffic volumes on the M50 increased, this figure rapidly rose to €4m the next year, €8.2m in 1995, €17m in 1997 and peaked at €46m in 2007.
According to the National Roads Authority (NRA), NTR's total earnings from the link, from 1990 to 2020, will be a staggering €1,155,786,122.
Labour transport spokesman Tommy Broughan said the deal signed with NTR in 1987 was a "grotesque rip-off of the State".
He added: "I really think it should be investigated again how that contract came about."
At the Public Accounts committee in December, Mr Broughan questioned whether the contract, which was signed by former Fianna Fail Environment Minister Padraig Flynn and former Dublin assistant city and county manager George Redmond, was a result of a "grotesquely incompetent or corrupt agreement".
The Flood Tribunal has heard evidence that Mr Flynn was given a political donation of £8,000 in 1992 by NTR.
It also heard evidence that former NTR head Tom Roche Snr gave a IR£10,000 donation to Mr Redmond for his help in acquiring land to build the toll bridge on.
There was no termination clause in the West-Link contract, which left the State in a weak position when it wanted to buy out NTR to introduce barrier-free tolling on the M50.
National Roads Authority (NRA) chief executive Fred Barry said he was not provided with any evidence of corruption in the awarding of the contract. But he agreed it had led to a "windfall situation" for NTR, while the Department of Transport said it was like "winning the lotto".
According to a consultants' report commissioned by NTR, the cost of building the original West-Link bridge in 1990 was IR£27.6m (€35m). The building of a second span in 2003 to expand the number of lanes cost €23m -- bringing the total cost of the West-Link to €58m.
The NRA has confirmed that NTR will earn €1.15bn from the link. But this does not include the toll income it had to pay to the State until 2008 under a revenue-sharing agreement.
In that year, the State agreed to buy out NTR's contract to operate the tolls, which was due to run until 2020. Barrier-free tolling was introduced and the State is now making annual payments to compensate NTR for lost toll revenue.
A spokesman for NTR defended the deal it signed with the Government to buy out its interest in the West-Link.
"While the company might have liked to continue operating the West-Link, fair agreement was reached and since the agreement was reached, there appear not to have been any complaints by the NRA, the Government or the Comptroller and Auditor General," he said.
The spokesman was asked about the appropriateness of NTR's company slogan "securing a greener future" -- given that it is still earning up to €50m annually from cars using the West-Link toll bridge.
"What you're demonstrating is a misunderstanding of NTR as a company. Most of their business is now in North America investing in solar, wind and ethanol production, and waste management," he said.