Brennan now ponders just how many tolls Ireland's roads can take

Tolls on the Lee Tunnel and other "sensitive" roads have been proposed by two State agencies the Minister for Transport, told…

Tolls on the Lee Tunnel and other "sensitive" roads have been proposed by two State agencies the Minister for Transport, told Mark Hennessy.

Since he took up office, Seamus Brennan has been one of the most high-profile members of the Cabinet, releasing a seemingly endless list of promises and changes from the Department of Transport.

Now the Minister is taking his biggest gamble yet with his promise to have motorways in place on every mile of the journeys from Dublin to Cork, Galway and Belfast by the end of 2007.

The new timetable was delivered to the National Roads Authority (NRA) just days before Christmas.

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"They had not planned to finish those projects until 2008-2010. They were up to 2010, in fact." Acknowledging that this is "politically tricky enough", the Minister said: "They are saying to me that this means that they mightn't do other ones. I have said, 'OK, you work that out'."

The decision to concentrate spending from the €8 billion roads programme on the major routes follows the lessons learned from the opening of a stretch of motorway from Dublin to outside Dundalk.

"I want these ones done because, when I saw the Belfast road, I saw people's reaction to it. When the little bits were being done it didn't impact on them. When they saw one going a good stretch between two cities they saw what could be done."

The job of bringing roads in the Republic up to international standards has been eased by the Government's Budget 2004 decision to lay out Mr Brennan's spending for the next five years.

Until now the National Development Plan roads programme has periodically ground to a halt as the NRA waited to know its budget for the following year.

"You remember with capital projects that you had to start from zero the whole time. You had to put in a new list of projects for the following year," the Minister told The Irish Times in his Kildare Street, Dublin, office.

"It is just exciting. I am here 18 months. I feel that is the biggest breakthrough we have got in terms of funding the thing. It is a whole new concept. In fairness, it has been knocking around the system for years."

The old rules infuriated him last year, he declared. "We had three or four months here last year where there was a stop-go approach. I said, 'This is ridiculous'.

"In September, October, November, people were saying, 'Don't appoint this consultant, don't bring in these engineers, don't build those roads, don't do those CPOs because we are not sure next year whether we will get €1 billion, or €1.2 billion, or whether we might go back to €900million.'

"You couldn't get a fix on it. Then come January, after the Budget was done in December, you had to sign up everything all over again. You were losing three months a year here. Now it is going to flow."

The five-year investment plan followed months of negotiations with the Department of Finance. "We finally convinced Charlie that we couldn't be here every September sitting around saying, 'We better not sign any new contracts'."

The money is as guaranteed as anything can be in the world of politics. "It is an official letter from the Department of Finance authorising us to commit. You can't obviously commit the whole €8 billion because it comes in annual jumps.

"But it allows us to plan for that amount. And it is a letter from Finance saying that we have this amount of money. If a new government or a new minister came in and started changing all of it, I suppose that could happen.

"It is not in law, but it is a deal with the Department of Finance, and they have never been known to break them. If they started reneging on that all of the fundamentals of the Department of Finance would be in bits," he said.

For now, money is not a problem. "We are catching up. That is going to give us a fair old boost. If I had twice that tomorrow I could not actually spend it. You couldn't gear up in time."

In recent years the Government received poor value from the National Development Plan as builders reaped sharply increased profits on the back of a boom in State and private construction.

In an attempt to bring the matter back under control, the NRA was told earlier this year to agree fixed-price contracts with road-builders, rather than risking further cost overruns.

"It has cooled a lot. Things are getting better. We wrote to the NRA. I have to say that we are watching it very closely. Since they did that all projects are on time, and on schedule."

Asked if controls were too lax up to now, the Minister avoided laying blame. "It means that for a couple of years the State threw a fortune at projects and they did. We would acknowledge that," he said.

"If you go down to the NRA they will tell you that in the three or four years leading up to this instruction they had an awful lot of money coming at them and they were throwing it at projects to get the jobs done.

"They were told by the Government to get the stuff done.

"The money came so fast and so furious and the demands came so fast and so furious that the prices went way up.

"They went up 25 per cent in just two years, which means not just that prices went up but that we got 25 per cent less road than we would otherwise have got," Mr Brennan said.

"The NRA literally woke up one morning and had a billion quid on their door and they were out there saying to builders, 'Any chance of starting in a week?'.

"The builders said, 'We can start Tuesday week, but we're afraid that it will cost 10 per cent more'."

The change means that the NRA includes a percentage to cover risk, or building problems in each new contract, along with a bonus for those who complete projects in time.

"What they are now doing is looking to pay more up front but, ironically, it turns out cheaper in the end.

"We told them, 'No more of the old variation clauses'. Because we ended up paying for the variations."

Despite the Government's funding, the roads programme will also need a minimum of €1 billion of private-sector cash, which in turn means the imposition of politically sensitive tolls.

Left to their own devices, the NRA and the Government's new vehicle for raising infrastructure capital, the National Development Finance Agency (NDFA), would spread tolls around like confetti.

Following months of meetings the NRA and the NDFA submitted a report to the Minister in mid-December urging him to toll existing roads, such as the Lee Tunnel in Cork, and to put a second toll on the M50, among other places.

"Bertie, myself and Charlie have been sitting on the NDFA and, I think, bitching at them a bit.

"A year ago I wanted to take the NRA and give them power to raise money with bond issues. But Charlie convinced me not to do so.

"He said to leave that alone on the basis that he would do the NDFA and they would raise the money and leave the NRA at what they do best, build roads," the Minister said.

However, the initial hopes that the NDFA, run out of the National Treasury Management Agency, could raise capital without affecting the Government's borrowing figures have disappeared.

The NDFA's and the NRA's new toll plan would cost motorists up to €300 million a year in tolls, although the Minister said the agencies had promised that this could fund several billion more worth of roads.

"They are talking about very sensitive places like the Lee Tunnel. The other four or five places are equally sensitive. If they had their way they would put a second one on the M50, wouldn't they?

"That kind of stuff. They would be tackling the Naas Road, anywhere you can think of. They would be up for it," said the Minister, adding that he was still studying the joint submission.

Asked about the prospect of a dozen tolling booths, and more, on Irish roads, Mr Brennan is less than enthusiastic. "I don't like it. It is a small island. We are trying to build a network of motorways," he said.

The issue wasnot how many tolls could be created, but rather how many the country could bear.

"If you arrived from Mars and you were asked to put down tolls that were acceptable, you would keep that in single figures.

"How many can Ireland hold? That is the issue. I can't have someone driving from Dublin to Cork city paying four or five tolls. That is daft. You are going to clog up the thing for a start.

"You are going to get huge resistance. People will go on the old roads, and your revenue will decline. It is going to be totally counterproductive, and you will get it in the neck politically. You get no financial investment gain for it.

"So you look at the big picture and say, maybe two to Cork, two to Galway, one to Belfast, one on the M50. That's six. Maybe another two or three.

"The NDFA and the NRA are saying, 'Yes, but we could do so much more'. But the country can't take any more tolls than that. You can't just sweat the country in terms of tolls.

"The country, in my view, won't take three to Cork. That is a step too far. I don't have any problem defending that. Agencies, if they had their way, would take just a financial view of it.

"But I have to take a political view as well as a financial view. I have to take a Government view, a taxation view, and an economic development view. They are all broader viewpoints than construction, but they are equally important."

Tolls will be placed on the Cork-Dublin road once the Monasterevin motorway bpass is completed by the end of next year, although the timing and the location of one of the tolling booths have still to be decided. "One at Fermoy, definitely," the Minister declared. The second could go on the Monasterevin bypass near Cullahill, Co Laois, although new powers allow the Minister to introduce tolls anywhere on a motorway and not just on the newest bit of it.

The revenues raised from the leg already completed to Drogheda will pay for work on the motorway being constructed around Dundalk, Co Louth.

"If you put a toll on the Cork-Dublin road at Cullahill, you won't get as much money as you would if you put it in Naas.

"You will get more if you pull it back closer to Dublin. That is what the NRA thinks.

"If you put it too close to Dublin you affect Dublin commuters. That is the balance that we want to find. The NRA wants to catch the Waterford traffic and the Limerick traffic.

"If you put it too far down the road, you will miss Limerick and Waterford. You certainly miss Waterford. Say you put it back before Newbridge, you will certainly catch the Waterford traffic there and you are going to catch the Limerick traffic."

The National Pension Reserve Fund, which now commands €10 billion of taxpayers' savings, has been "finally interested" in funding Irish infrastructure following long-drawn-out negotiations with the NRA and the NDFA.

In return for funding the €500 million cost of widening the M50 and getting rid of existing roundabouts, the pension fund is being coaxed with an offer of control of tolls from the road between 2015 and 2035. At the moment tolls on the road are controlled by National Toll Roads.

"At the moment it [control of the tolls on the M50] is committed until 2015. Beyond 2015 up to 2035 we can actually now sell that 20-year slot in advance. They would have to bid for it, obviously, because there will be 10-12 others interested," said Mr Brennan.

The fledgling system is already in use on the Drogheda bypass, since the toll operator must hand over any revenues raised after daily traffic on the popular road exceeds 18,000 cars per day.

"We are now able to capitalise on that. In other words, securitise it. We can get a check for €100 million on that. We can just capitalise it and reinvest it into other projects," he said.

The National Pension Reserve Fund's involvement could make tolls more palatable. "If you are annoyed at a toll but you are paying it to the pension fund then you feel, OK, that is Irish pension money invested in Irish projects.

"Technically and legally you could get the money on Wall Street, but I don't know if I would like the Wall Street guys sitting around a table in charge of the Cork toll," Mr Brennan said.

"The pension fund invests in shares all over the world. If you went through it they probably own roads in Japan. They probably own roads in America through whatever they have their money in. But they don't own roads in Ireland."

Although he does not want a plethora of tolls, the Minister defends their careful use.

"There was a school of thought in here at one stage that said, 'Let's forget about bloody tolls. If we can raise €8 billion, we can raise €10 billion'.

"But a whole lot of other arguments came in, and we said that it is not just about collecting money. It is about bringing the discipline of the marketplace, which is what is going on in Kilcock/Kinnegad.

"That is three or four months ahead of schedule. Monasterevin is ahead of schedule. The roads are maintained by the private sector for 25 years. They fully maintain them. The county councils don't have to go near them."

In the eyes of some, the Government is bidding that the irritated electorate will have mellowed by 2007 once they have seen dozens of new roads, railway services etc up and running. Seamus Brennan is less sure.

"2007 is a political eternity away, a political life. There are a hundred imponderables out there. There isn't a 2007 election plan around. In my view, the political benefit disappears very fast.

"A very good example, in my view, was what happened to me in Kildare a couple of weeks ago.

"I went down to open a €158 million motorway. I turned on the airwaves and I heard a reporter saying, 'I am standing here in Monasterevin with an historic traffic jam'.

"There were interviews with locals saying, 'This is dreadful'. So I sat watching that for 10 minutes, and the postscript was that the Minister was down opening a road that caused all this trouble.

"Basically it is his fault. That is a good example of what happened and what will happen. You won't get a lot of political thanks for it," said Mr Brennan.