Toll road firm’s losses soar to €16m

PRE-TAX losses at the company which operates the tolled Waterford city bypass increased more than four-fold last year to €16 million, figures show.

According to accounts just filed by Celtic Roads Group (Waterford), the directors admit “traffic is below that expected at contract close, however, the project is in ramp-up phase and traffic is anticipated to improve in the medium term”.

The figures for 2010 show revenues increased from €2.3m to €7.3m.

The Public Private Partnership (PPP) project includes a new river crossing of the River Suir and 23km of dual carriageway and 14km of single carriageway.

The scheme was officially opened in October 2009 after taking three years to construct.

Earlier this year, Mr Justice Peter Kelly in the Commercial Court found against the Celtic Roads Group in a test case with the National Roads Authority over tolling rates.

The authority had accused Celtic Roads Group in court of overcharging motorists by as much as €6,000 per week since January 1. The case had arisen over a dispute about the correct interpretation of the application of the consumer price index on toll inflation.

Separate companies in the Celtic Roads Group operate the tolled route on the M7/M8 at Portlaoise and the Dundalk Western bypass on the M1.

As a result of the Commercial Court decision in March, the Celtic Roads Group — co-owned by NTR, the Dutch-based Royal BAM Group and the Spanish-based ACS — reduced its toll charges. It now costs €1.80 per car to access the tolled Waterford route while trucks with four or more axles pay €5.70.

In a note relating to the outcome of the case and reducing the toll, the directors’ report states they “are confident that this measure will not have a material impact on the financial modem on which the company is based”.

The report states that the average daily traffic levels at the plaza amounted to 5,088 last year compared to 4,142 in 2009.

The directors do not recommend the payment of a dividend.

The figures show that the company’s pre-tax losses increased from €3.84m to €16m. However, a tax credit of €2m reduced the company’s loss to €14m.

The company’s biggest cost was bank interest payments of €10.6 million on bank loans of €164.3m. An additional €67m in shareholder loans financing the project are interest free.

The loss also includes the non-cash depreciation cost of €9.4m.

The PPP agreement with the NRA runs until 2036 on the route.

The company values the N25 route at €198.8m.