State to pay toll operators €48m in ‘traffic guarantees’

The State will pay the private operators of two road tolls nearly €48 million over the next five years to compensate for a shortfall in predicted traffic.

So-called "traffic guarantees" attached to the Clonee- Kells M3 motorway and Limerick tunnel have cost the taxpayer €6.9 million in 2015 alone.

In the cases of both the Limerick tunnel and the M3 route, the State pays subsidies if revenue from tolls fall below certain levels.

The clauses were contained in the public-private partnership (PPP) contracts entered into by a previous government*.

The Direct Route consortium was awarded a 35-year concession to operate the Limerick tunnel in 2006 and the M3 contract signed with Eurolink in 2007 runs for 45 years.

They were signed by the National Roads Authority (NRA) on behalf of the Fianna Fáil government, when Martin Cullen was minister for transport.

Guarantee payments

Department of Transport figures show the guarantees in respect of the two roads cost more than €7.5 million last year.

The guarantee payments will be an estimated €7.7 million in 2016. This rises to €8.6 million in 2017 and €9.6 million in 2018.

In 2019 and 2020, the traffic guarantees for the two facilities will cost the State about €10.6 million and €11.3 million respectively.

This will bring the total traffic guarantee payments to the operators to more than €62 million between 2014 and 2020.

In August 2013, then minister for transport Leo Varadkar said the money spent on the traffic guarantees payments "would go a long way in terms of road maintenance and upkeep".

Mr Varadkar also said the money could have been used to build a medium-sized new roads project and he said he was committed to ensuring that no similar contracts would be signed in the future.

* This article was edited on Tuesday, December 22nd, 2015 to correct an error.