‘Bad deal’ sees State pay toll operators €8m

Almost €8m has been paid to compensate the private toll companies operating the Limerick Tunnel and M3 motorway for lower- than-expected traffic volumes.

Transport Minister Leo Varadkar confirmed that the State is contractually obliged to pay a minimum traffic guarantee clause to the operators of both routes and the contract cannot be altered unless both parties agree.

However, independent TD Catherine Murphy claimed the National Roads Authority “withheld information about the minimum guaranteed amounts” during oral hearings with the public. She demanded the minister should examine the possibility of renegotiating the contracts.

Mr Varadkar conceded that it “was a bad deal” before outlining to Ms Murphy, in the Dáil, that €5.2m was paid to the operators of the Limerick Tunnel and €2.659m to the operators of the M3 last year and costs were increasing.

“The deputy is right in that this was a bad deal. Not only did the deal not take account of the possibility of a downturn but it assumed the economy and therefore traffic would continue to grow forever.

“Much capital development in Ireland was done on that basis and there has been much cost for infrastructure we possibly did not need,” he said.

The minister said that he did consider re-negotiation with the toll operators but decided against it as he had “nothing to offer” and therefore was unlikely to have any leverage in talks.

Ms Murphy pointed out that, in 2010, traffic guarantee clauses were successfully ended in Portugal and asked if the minister could do something similar here, arguing that the system here was “flawed from the outset”.

Mr Varadkar agreed that the original deal was a bad one, but stressed the Portuguese situation was “quite different”.

“The country had a system of shadow tolls with the Portuguese government paying the toll for the driver. As part of the re-negotiation, new tolling points were introduced but I have decided against that. I do not intend to introduce any new tolling points anywhere in the country during my term of office. It was the Portuguese solution but I do not favour it,” he said.

The minister said the Government was considering making the Limerick Tunnel toll-free for heavy goods vehicles in a bid to increase traffic volumes and reduce the traffic guarantee payment.