Drop in state support hits Limerick Tunnel profits

A sharp drop in payments by state agency Transport Infrastructure Ireland (TII) to the firm operating the €800m Limerick tunnel contributed to a 26% drop in the company’s operating profits to €6.36m last year. New accounts filed by Directroute (Limerick) Ltd show that payments from TII, made up of operating payments and traffic guarantee payments, decreased by 27% last year from €8.1m to €5.9m.

The tunnel saw increased traffic with toll income rising by 5% to €15.9m — or €43,651 per day — in 2018. The company’s total revenues — made up of toll income and TII payments — decreased by 5% from to €21.83m.

Its traffic guarantee payments from TII declined from €4.1m to €3.9m while there was a sharper drop off in operational payments from the TII — decreasing by 50% from €4m to €1.99m. The traffic guarantee payments are made when daily traffic volumes don’t exceed 23,000 and were put in place at the outset of the project in order to attract consortia to bid to build the scheme.

The company’s pre-tax losses jumped nearly 37% to €10.4m. Last year, the Dáil’s Public Accounts Committee was told that the State has paid the toll operator €34m under the terms of a public-private partnership (PPP) contract to compensate for the smaller numbers using it. A TII official told the committee “conservative estimates” projected further traffic payments of about €150m over the remainder of the contract.