Losses at toll road company rise 63%

Pre-tax losses at the firm that operates the tolled €810m Limerick tunnel last year rose 63% to €8.3m.

According to accounts just filed with the Companies Office, Directroute (Limerick) Ltd sustained the €8.3m pre-tax loss after revenues dropped by 10% from €23.1m to €20.6m.

The directors’ report says: “Revenue is generated by toll charges and payments from the NRA [National Roads Authority]. The largest expense remains the project funding mainly in the form of loans and bonds. Traffic guarantee payments have in increased in line with the contract and providing a necessary contribution to project funding.”

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Recently, Leo Varadkar, the transport minister, conceded over €30m could be spent in the next three years compensating toll operators on the Clonee-Kells M3 motorway and Limerick tunnel.

The NRA has estimated the cost in 2013, 2014, and 2015 of the “traffic guarantee” based on no traffic growth at €31.96m for both schemes. If traffic grew by 1% the figure would be reduced to €30.05m and down to €28.13m if growth was 2%. The system was put in place due to the high cost of the route and due to it being a challenging project to deliver.

At the end of December last, DirectRoute (Limerick) Ltd owed €251.9m in loans to group companies.

DirectRoute generated revenues of €20.6m from tolls and operational payments from the NRA. It added €5.8m to its revenues in “other operating income” — a similar figure to the €5.8m generated in 2011.

The decline in revenues resulted in operating profits dropping by 42% from €8.2m to €4.7m. Interest payments of €13.8m resulted in the firm recording a pre-tax loss of €8m. This followed a pre-tax loss of €5m in 2011. Operating costs of €21.7m include non-cash depreciation costs of €13.4m showing that the earnings excluding depreciation amounted to €5.4m.

The firm had a shareholders’ deficit of €16.5m. The toll road and tunnel had a book value of €386m.

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