Saturday 19 January 2019

Toll firms paid €28m to compensate for lack of traffic

New Transport Minister Paschal Donohoe
New Transport Minister Paschal Donohoe
Shane Phelan

Shane Phelan

Private toll companies have been paid €28m by the State to compensate them for less-than-anticipated traffic on two motorways.

The sum is a result of so-called "traffic guarantee" clauses inserted in the contracts for building the stretch of the M3 from Clonee to Kells and the N7 Limerick Tunnel.

The clauses mean the State pays more to the motorway operators when fewer cars or trucks use the roads.

According to an internal Department of Transport briefing document, the guarantees were introduced to address the worst case scenario of "what if no cars drive on the road" and were needed to attract bidders for the public private partnerships.

The document states €9.4m in payments have been made under the clause in respect of the M3 toll road, operated by Eurolink Motorway Operation (M3) Ltd, since 2011. This includes just over €3m for this year.

A further €19.5m has been paid out in connection with the N7 Limerick Tunnel, operated by Directroute (Limerick) Ltd, of which €5.9m relates to 2014.

The traffic guarantees are set to remain in place until 2041.

Earlier this year, former transport minister Leo Varadkar admitted the agreements had been "a bad deal".

The economic downturn was not foreseen when the deals were negotiated and it was anticipated traffic volumes would grow.

The department is now examining whether removing tolls would increase traffic and reduce the amount that must be paid under the clauses. The Limerick Tunnel has been particularly disappointing in terms of traffic, with an analysis by the National Roads Authority (NRA) showing a large number of heavy goods vehicles were avoiding the toll.

When the toll was lifted for HGVs for a month last November as part of pilot study, traffic through the tunnel increased by 70pc.

However, HGV levels returned to normal the following month when the toll was reinstated.

Around 37,000 trucks went through the Limerick Tunnel during the month when the tolls were waived compared to just 22,000 trucks in the same month the previous year.

As a result of the findings, the NRA was directed to explore options to reduce HGV volumes in Limerick city and encourage use of the tunnel.

It is expected to report to new Transport Minister Paschal Donohoe next month.

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