€8m paid to toll firms over traffic shortfall

Wednesday 02 April 2014 15.55
The Government is now considering abolishing the Limerick Tunnel toll
The Government is now considering abolishing the Limerick Tunnel toll

Almost €8m of taxpayers' money was paid last year to the private toll companies that operate the Limerick Tunnel and M3 motorway to compensate for the fact that less vehicles than anticipated used the two roadways.

The Government is now considering abolishing the Limerick Tunnel toll in a bid to increase traffic. 

In response to a question from Independent TD Catherine Murphy, Minister for Transport Leo Varadkar outlined that the State is contractually obliged to continue paying a minimum traffic guarantee clause to the operators of the M3 and Limerick Tunnel. 

Mr Varadkar said that there is a contract in place between the State and the two PPP companies involved and the contracts cannot be changed unless both parties agree.

Ms Murphy has claimed that "basically the NRA withheld information about the minimum guarantee during the oral hearings."

She asked that given that the public were excluded from some information during the public hearings the minister consider looking at a renegotiation.

Minister Varadkar detailed that in 2013, €5.2m was paid to the Limerick Tunnel operator while €2.659m was paid to the M3 Motorway operator.

He said that the costs are increasing.

He said: "It was a bad deal" and said that not only was the economic downturn not predicted, it was also expected that there would be continued constant growth in traffic.

The minister said that he did consider renegotiation with the toll operations but the problem with this is 'I have nothing to offer in negotiations.' He said it is pointless to enter any negotiation unless you have something to offer.

Ms Murphy said that in 2010, traffic guarantee clauses were successfully ended and asked if the minister could do something similar here.

But the minister said that in Portugal the roads in question did not already have tolls and the government came to an arrangement whereby tolls could be introduced.

He said that he is not interested in introducing further tolls on the Irish roads in question.

Deputy Murphy said that the Government deal with the toll operators "was very flawed from the word go." 

Minister Varadkar agreed that the deal was a bad deal although most people did not predict the economic collapse.

He said that last November when there was a toll free month for Heavy Goods Vehicles (HGVs) on some roads there was a 20% increase in traffic, but in Limerick there was a 70% increase in traffic.

He said that one way of bringing down the traffic guarantee payments would be to take away the toll for HGVs as the level of traffic going through would increase and reduce the traffic guarantee payment.

The minister indicated that this is something that is being considered in relation to the Limerick Tunnel.