Taxpayers face multi-billion euro motorway bill
Saturday September 12 2009
TAXPAYERS are facing a multi-billion euro bill to fund the State's new motorway network.
The Comptroller and Auditor General's report showed that the tolled M3 Clonee to Kells motorway, which is due to open next year, will cost taxpayers €727.4m in total over the next 42 years.
The upgrade of the M50 ring road in Dublin from a two-lane to three-lane motorway by the ICON consortium will cost €1bn up to 2042.
But while the State is paying private contractors for building and maintaining the roads in annual instalments, drivers will also have to pay billions of euro in tolls to use the motorways.
The Comptroller's report said these public private partnership (PPP) contracts were signed for periods ranging from 30 to 45 years.
However, the National Roads Authority (NRA) will share in some of the toll revenue if traffic exceeds certain targets. It earned €500,000 in toll revenue from the Kilcock/Kinnegad section of the Dublin-Galway motorway last year.
The Comptroller's report said the NRA believed it would earn €1.7bn in tolls from the motorways built under PPP contracts. The NRA also estimates it will earn a further €1bn in tolls by 2020 from the West Link toll bridge on the M50.
But the report detailed the costs to the State of its buyout of the West Link toll bridge, which is now barrier free.
Responsibility
It now has to pay €50m per year to National Toll Roads (NTR) from August 2008 to March 2020 and assume responsibility for VAT of the order of €140m.
The overall cost will be €600m. NTR originally invested £6m in the West Link toll bridge in 1987 -- about €14m in today's money
While there was provision for the reduction of tolls to zero in the agreements, subject to compensation of NTR for lost revenue, there was no provision for outright termination. "The absence of a termination clause hampered the State in its negotiations," the report said.
Meanwhile, the Comptroller and Auditor General John Buckley also found that the State was unlikely to require any further carbon credits to meet its carbon emissions targets under the Kyoto Protocol by 2012.
The drop in the level of economic activity has led to a similar drop in carbon dioxide emissions.
Although the State is still contracted to buy 8.3 million Kyoto units, it will be able to carry forward any excess credits to the post-2012 period.
- Michael Brennan and Aine Kerr
