Revenue and losses on rise at Limerick toll tunnel

Pre-tax losses at the firm that operates the tolled €810m Limerick tunnel last year continued to mount.

New figures show that consortium, Directroute (Limerick) Ltd recorded losses of €6.7m last year following losses of €8.33m in 2012.

The firm last year also saw revenues increased by 4% from €20.65m to €21.4m.

According to the directors report, traffic increased in 2013 as motorists recognise the benefits of the tunnel in terms of safety and improved journey times.

The consortium received €5.2m from a ‘revenue guarantee’ deal with the National Roads Authority in order for the route to get built.

The figures show that the firm’s operating profits increased by 41% from €4.7m to €6.6m. However, net interest payments totalling €13.36m resulted in a pre-tax loss of €6.7m.

The loss last year takes account of non-cash depreciation costs of €13.4m.

The largest expense remains the project funding mainly in the form of loans and bonds. At the end of December 2013, the firm owed €408.5m to its creditors, down from the €413.1m owed a year earlier.

The directors state: “Traffic guarantee payments have increased in line with the contract and provide a necessary contribution to the project funding.”

At the end of December last, the firm had a shareholders’ deficit of €23.22m

The Limerick tunnel route — which acts as a by-pass to Limerick city — was opened to traffic in July 2010 and motorists pay €1.90 to use the tunnel.

DirectRoute Limerick is made up of Lagan, Roadbridge, Sisk Contractors, Austrian-based Strabag AG, AIB, and Meridiam Infrastructure.

The figures show that the toll road and tunnel had a book value of €373m.

A note attached to the accounts states: “The directors have assessed the project’s cash requirements and prepared a forecast for the life of the concession. This forecast demonstrates, based on the underlying assumptions, that there will be sufficient cash for the project to meet its third-party liabilities as they fall due.”

The accounts disclose that the DirectRoute (Limerick) Ltd has received capital grant funding of €181m from the NRA.

The firm will hand the road back to the NRA in 2041.