Rathcormac-Fermoy bypass operator records profits of €140,000 per week

The operators of the €295m Rathcormac-Fermoy bypass in Co Cork last year recorded operating profits of over €140,000 per week.

Newly filed accounts for Directroute (Fermoy) Ltd show the firm increased its operating profits by 8% to €7.43m last year, with revenues rising by 3% to €16m. Pre-tax profits improved by 47%, to €1.5m. Last year’s profit reduced the company’s accumulated losses to €9.6m.

According to the directors’ report, within the set of accounts, “revenues increased in 2013 due to an increase in traffic.

“It is expected that traffic levels will increase in the future as motorists continue to recognise the benefits of the motorway in terms of safety, convenience and road quality,” the report said.

The road was constructed by Directroute Fermoy as part of a public-private partnership and opened in October 2006, eliminating one of the country’s worst bottlenecks at Fermoy.

Last year’s operating profit was higher than expected as some of the planned road improvement programme was delayed due to weather and contractor scheduling issues. The programme will be continued and expanded upon in the remainder of this year and profits are expected to decrease as a result of this investment.

The bypass provides motorists with 33km of continuous motorway/high quality dual carriageway, and removed some 17,000 vehicles each day away from Fermoy town centre, taking 30 minutes off journeys at peak times.

Directroute (Fermoy) Ltd has been funded to a large extent by bank loans, which are managed in a non-speculative manner by appropriate hedging arrangements, and the report states that after operating expenses, “the interest and charges associated with these loans remain a significant expense for the project.” The company’s bank loans currently total almost €82m.

The firm’s revenues are made up of money generated by the tolls and operational payments received from the National Roads Authority (NRA) as reimbursements for the first 16 years of tolling operation.

Directroute, owned by a collection of Irish and international construction firms, is to operate the Rathcormac-Fermoy bypass to 2034 before handing it back to the NRA.