€600m buyout of West-Link

Rabies

http://www.ireland.com/newspaper/breaking/2007/0220/breaking76.htm

The Government has agreed to buy out the tolled West-Link bridge on the M50 motorway at an estimated cost of €600 million, Minister for Transport Martin Cullen has confirmed.
Mr Cullen confirmed the proposal had been agreed at this morning's Cabinet meeting.
Following a year of discussions with the toll bridge operator National Toll Roads (NTR), the Government agreed to pay the company €50 million a year, plus inflation, for each of the years 2008-2020.
There will be no "golden handshake" for the toll operator, which signed the contract for the West-Link in 1987, Mr Cullen insisted.
Mr Cullen said that by buying out the West-Link bridge - which is used by 100,000 vehicles a day - the State and the travelling public, rather than NTR, would be the direct beneficiary of the tolls. The bridge will revert to the State from mid-2008.
"This is being done in order to develop and manage the M50 and to provide the best possible service to motorists," Mr Cullen said.
"The buyout will allow the removal of the toll plaza on the West-Link and its replacement by a barrier free tolling arrangement along the same stretch of motorway in 2008. This will coincide with the completion of the M50 upgrade on the section between the Ballymount and N4 interchanges."
Mr Cullen said all of these measures, along with improvements in Luas, bus and Dart services, would help resolve the issue of congestion on the M50.
"The NRA will be enabled to introduce other measures at the toll point to encourage better use of the M50 at off peak times, which will help address the problems of congestion on the M50," he said.
"These developments together with the recent award by the NRA of a contract for the development of the new barrier free tolling system, represents significant progress towards the upgrading of the M50."
"Clearly the interchanges are a very significant issue," he said.
He had always made clear that the full upgrade of the M50, currently underway, in conjunction with barrier-free tolling, was the "key element" in reducing congestion.
The Minister will shortly outline how the barrier-free toll will work, including penalties for motorists who seek to evade the charges.
Revenue from the tolls will be used to fund the annual payments to NTR.
A number of issues remain outstanding in relation to the contract, Mr Cullen said. However, he said these did not include the question of giving NTR tax indemnity on the annual payments and he did not expect they would delay the conclusion of the agreement.
Mr Cullen said indications are that the introduction of restrictions on HGVs entering Dublin city since yesterday was going well, despite some difficulties and increased delays on the M50 yesterday. He attributed some of the delays to crashes and incidents on the motorway.

Hagar

I suppose one of us could move this to Humour except it's not funny.

Seth Brundle

Vote...

Rabies

It won't be long before a congestion charge is applied to Dublin similar to London.
From the public's point of view by buying out the toll bridge you would expect them to stop the tolls on the M50.
Of course they need to make their money back, so now they will charge the public. Make back their money as traffic numbers increase over the years and the barrier free toll charge will definitly rise.
A toll is fine if the infastructure is there, but it isn't.

Diaspora

An obscene waste of public funds.

The profit per vehicle earned by NTR is 35c

90000 vehicles per day use it

This is a daily return of €31,500

This gives an annual return of €11,497,500

Yet NTR are to receive €50,000,000 p.a. plus a reasonable allowance for inflation.

The congestion charge is an interesting example as it relates to the centre of a city where there is a decent public transport network to get people in or out. For equality of treatment you will be waiting for 100 years at the rate of public transport improvement before a congestion charge could justly be applied to Dublin.

eoineen

Rabies wrote:

Of course they need to make their money back, so now they will charge the public.

Their money?? That's your money. So the State buys out the contract, charges the people who use it until at least 2020 and then NTR can go and invest the money they receive from the State into projects like waste incinerators that they'll charge the State to use. This is madness itself.

notjim

Diaspora wrote:

An obscene waste of public funds.

The profit per vehicle earned by NTR is 35c

How come their profit is so low: where is their overhead?

MLM

eoineen wrote:

Their money?? That's your money. So the State buys out the contract, charges the people who use it until at least 2020 and then NTR can go and invest the money they receive from the State into projects like waste incinerators that they'll charge the State to use. This is madness itself.

Agreed. Toll roads can be beneficial. But only if built and operated by the government. That way any money made will be reinvested in infrastructure. The toll roads we have in this country do not benefit motorists, the community, or the state; only the shareholder.

Diaspora

There have been a number of estimates of the cost of the buy out in the press from €100m to €1b, so here is the first public offer from the owner, €600m. As the concession has 15 years to run, that's equivalent to €40m per year.

NTR has said that is is making about 35 cent operating profit on the 1.80 toll with 1 euro going to the state and the other 45 cent spent on costs. 35 cent on 100,000 cars a day for a year gives just 12.8 million profit. So something doesn't add up.

In future years, the extra capacity on the M50 could deliver a 50% increase in traffic to 150,000 cars a day, but even then, NTR should be happy with about €250-300m

The concession requires NTR to maintain the N3-N4 section of motorway in return for collecting tolls but that's just a cost so NTR is hardly going to demand that they be allowed to continue running that section of road. I guess I am missing something here.

The Flood tribunal suggested Liam Lawlor had been paid 74,000 for a consultancy report for NTR in the early 1990s. This seems such a small amount of money compared to the cost to the state of an over-generous contract. Maybe future major contracts could be amended to allow for termination in the case where undeclared payments were found to have been made to officials by the winning bidder.

http://www.archiseek.com/content/showthread.php?t=4014&page=5

This figure is based upon the income split based on page 13 of the report below

http://www.ntr.ie/downloads/presentations/Economic-Issues-Related-to-Toll-Rates-on-the-West-Link.pdf

There are of course costs associated with staffing and cash collection not to mention the admin and occupancy costs behind the operation of the head office operation etc.

eoineen

MLM wrote:

The toll roads we have in this country do not benefit motorists, the community, or the state; only the shareholder.

I hope all readers and posters here will be asking their government politicians when they come knocking for their money back?

I know this M50 toll thing is a Dublin-based affair for the most part although that now seems to extend to Mullingar and Drogheda but the way Cullen was talking about this yesterday, you would swear he was trying to dampen expectations of a quick resolution to the traffic chaos on the M50.

murphaph

Erm, HGVs cost a lot more than €1.80 (€1.90 now) so they must be making a good bit more from them. Given the Port Tunnel will force a lot more HGVs the way of West Link, they probably expect to make even more there.

Seth Brundle

eoineen wrote:

I know this M50 toll thing is a Dublin-based affair for the most part although that now seems to extend to Mullingar and Drogheda

For toll plazas? There is one now in Cork and more to appear around the country in the coming years

eoineen wrote:

the way Cullen was talking about this yesterday, you would swear he was trying to dampen expectations of a quick resolution to the traffic chaos on the M50.

There will be absolutely no quick resolution to the M50 problem.
It is the only 'proper' road around Dublin, linking several of the major industrial areas and linking all the main routes into the city. The tolls will stay for the forseeable future (unless there is a major political U-turn election stunt, which I don't believe will happen).
Furthermore, with the thought of congestion charging becoming more likely, they will have the Dublin motorist either way as the public transport structures are realistically not there to support a significant change in commuter habits.

SeanW

They should lift the toll barriers now until they have the electronic system in place.

After all, it was the Fianna Fail geniuses who decided to build a port tunnel that took port traffic (most of it bound for the N4 and N7, hence their use of the quays) out of its way and dump thousands of trucks all the way around a Motorway/Suburban Main Street that was already choked to well beyond crisis levels.

Idiots. A blind elephant on crack could have planned this better.

blucey

One can only wonder why FG/Lab havent come out and said "no tolls - you pay your taxes to build roads so no tolls". Id imagine its a surefire vote winner. And who can accuse them of auction politics....not Michael McDowell, whos sounding more and more like Daft Dave from the tiles ads every day
" a free mud massage for everybody .... and 18% tax... and give the monkey a hat.... and no stamp duty... and a free ice cream sundae for hte monkey..Monkey? Monkeeee? Where are you, I want to spank you".....

Mucco

While other countries are trying to reduce vehicle use to meet emissions targets.......

Victor

SeanW wrote:

They should lift the toll barriers now until they have the electronic system in place.

And then people will abuse it even more. If you have a tailback at Ballymun northbound, how is removing the toll going to help that?