[article] State gets close to buying West-Link toll bridge

Navan Junction · 15-11-2006 1:06pm #1

Arthur Beesley, Irish Times, Senior Business Correspondent

The Government's negotiations to buy the West-Link toll bridge in Dublin from the private company which operates it are believed to be close to conclusion for a price in the region of €600 million.

This is at the upper end of the price range mooted when the negotiations started with National Toll Roads (NTR), and it could rise still higher.

The talks are in their final stages, but sources say there are still significant areas of difference between the two sides on the transfer of a bridge used by 95,000 vehicles every day.

At issue in discussions held very recently is the tax treatment of the Government payments to NTR. While NTR pays the standard 12.5 per cent rate of corporation tax, the company is said to be seeking an indemnity against a higher effective tax rate should the payments to it trigger any capital gains tax liability.

The objective of the talks is to formulate a complex financial agreement for the transfer of the bridge in mid-2008.

With the Budget imminent and the general election approaching, the talks gathered pace recently when the Government instructed the National Roads Authority (NRA) to move into the final phase of negotiation.

"My understanding is that they are trying to bring it to end-game at the moment," said one informed source.

The Government hopes that introduction of barrier-free tolling at that time, when combined with the completion of two new lanes on the M50 motorway, will relieve congestion on the bridge.

An NTR spokesman said the company adopted a "constructive and co-operative approach" in the discussions and was seeking a resolution of the issues with the National Roads Authority "now rather than in 2008". He also said that "this has also been the approach of the National Roads Authority".

It is already agreed that the Government will make a series of annualised payments to NTR, which built the bridge and runs it under the terms of a 1987 agreement struck with the then minister for the environment, Pádraig Flynn.

This arrangement has been the subject of much criticism because NTR has taken the benefit from a huge increase in traffic using the State-funded M50 motorway.

The final price may yet rise to allow for the anticipated increase in NTR revenues due to higher traffic volumes. Also at issue is the duration of the payments period.

One option is for the Government to make payments until 2020, when NTR's concession runs out.

The company is said to be strongly opposed to that scenario. According to some accounts, payments over 10 years are under discussion.

NTR's spokesman said the company was pleased that good progress had been made in the discussions. "NTR confirms that discussions with the National Roads Authority have been ongoing since the announcement by Minister for Transport Martin Cullen earlier this year that the present method of tolling at West-Link was to be replaced by an open road freeflow electronic tolling system by mid-2008," he said.

"The objective is to seek consensus on the changes on the changes to the West-Link Agreement that are needed in order to facilitate the National Roads Authority in proceeding with their plans for the future of the M50. Regarding the West-Link section, this includes the construction upgrade, the subsequent road operations and maintenance, tolling flexibility and transition arrangement related to freeflow tolling."

He added: "However, the discussions are not yet completed and it is not appropriate to comment further at this stage."

mike65 · 15-11-2006 1:24pm

Just in time for the general election?

Mike.

markpb · 15-11-2006 1:37pm

mike65 wrote:

Just in time for the general election?

They pretty much admit that in the article

An NTR spokesman said the company [...] was seeking a resolution of the issues with the National Roads Authority "now rather than in 2008". He also said that "this has also been the approach of the National Roads Authority".

Could just be awfully co-incidental of course

D'Peoples Voice · 15-11-2006 2:53pm

Navan Junction wrote:

With the Budget imminent and the general election approaching, the talks gathered pace recently when the Government instructed the National Roads Authority (NRA) to move into the final phase of negotiation.

An NTR spokesman said the company adopted a "constructive and co-operative approach" in the discussions and was seeking a resolution of the issues with the National Roads Authority "now rather than in 2008". He also said that "this has also been the approach of the National Roads Authority".

Makes perfect sense for NTR to agree this before the rest of the M50 upgrade is started. Why lock themselves into construction contracts with the government where cost overruns are possible.
It's an indication of central government's failure to provide an adequate public transport system, an indication of the failure of local government to properly rezone residential land in an adeqate and optimal fashion, and an indication of the failure of Irish people to put across the point
to politicians that there are more pressing needs in the transport area where half a billion euro can be better targeted. I can't wait until the N3, N4 and N7 are backed up because of the increased flow of cars onto them from the M50, and then people ask if the half a billion euro was well spent.
To think that the both Luas lines were built for just over EUR 700 million, and look how many people it took off the road? Instead we are spending EUR 600 million to encourgae MORE people onto the road! It's hilarious!

m_stan · 15-11-2006 3:17pm

yeah BUT. The goverment are only going to toll us till 2035 anyway, so what does it matter ?

http://www.rte.ie/news/2006/1115/m50.html

markpb · 15-11-2006 3:55pm

It was my understanding that there was never a question of them not tolling the road after the buy-out. It's a political move to make people happy but it also solves the problem of letting them (more) easily change from barrier to free-flow tolling and bringing the bridge into the integrated tolling system they're currently working on. Since NTR's contract predates both of those things, there's nothing the government can do to make NTR make those changes.

murphaph · 15-11-2006 4:11pm

Indeed, the state needs to get NTR out of the pictureto enable the entire M50 to be tolled, which, if done properly is the way to go. They can obviously go barrier free with a sliding scale, decreasing in proportion to the increasing numbers of junctions one uses; thus 'punishing' junction hoppers and benefiting users who are bypassing the city. At the moment it's grossly unfair that users between J6 and J7 get nailed while users between all other junctions pay zero. I don't use the M50 at all myself as it's of no benefit to me but it needs varible tolling. Of course, it should be free at night and cheaper in off-peak times etc.

Navan Junction · 15-11-2006 8:12pm

M50 tolling to continue until 2035
Irish Times/ireland.com, Paul Anderson, 15.11.2006

Motorists on Dublin's M50 will be paying tolls until at least 2035, Taoiseach Bertie Ahern said today.

He also ruled out lifting the barriers at the Westlink toll bridge during ongoing upgrade works - which is due for completion by the third quarter of 2008 at a cost of around €1 billion.

Costs for phase one and two; upgrading the Westlink and the buy-out of National Toll Roads' (NTR) contract for managing the M50 - due to run to 2020 - would be met by a new barrier-free toll point on the route operating from 2008 until 2035.

Negotiations with NTR on the new regime had been ended because of concerns about breaking EU procurement rules and the contract had been put out to tender with interest shown from six companies.

Answering Dail questions from Labour Party leader Pat Rabbitte, Mr Ahern said the toll bridge would be acquired by the State for a cost based on the measured level of traffic in the 12 months preceding the transfer of ownership plus an estimated €45 million per year until 2020.

The State would assume ownership of the bridge in the third quarter of 2008 at which time tolling would be removed, he added.

The Taoiseach also rejected Mr Rabbitte's proposal to lift the barriers at the Westlink toll plaza during the upgrade of the route from three to four lanes. He said experts had advised him that it would be a "disaster" to lift the barriers because it would cause tailbacks at intersections making the "entire M50 unworkable".

Mr Rabbitte responded saying Mr Ahern was "sheltering behind the advice of engineers and others who have contributed their fair share to the mess in the first place".

"This is going to be an unmitigated disaster during the upgrading of the M50." Motorists are experiencing a "daily hell ... especially the blockage on the Westlink bridge," he added.

Green Party Transport spokeman, Eamon Ryan, said: "It is absolute madness for the Government to be considering spending €600 million on the buyout of the NTR concession and at the same time to be considering the introduction of a single new toll point on the exact same spot."

He said even after the widening programme on the M50 is finished "the National Roads Authority is projecting that the road will be gridlocked." Mr Ryan said the only way the M50 could be successful is with a"variable tolling system along the entire road, which would be designed to manage traffic demand rather than to raise revenue. Electronic tolling gantries should be placed on the outer approach roads to the motorway and the toll would be set at zero if traffic was freeflowing."

Mr Rabbitte also noted that a senior Government official said that when the Dublin Port Tunnel opens it will lead to 2,200 extra trucks on the M50 per day - the equivalent of 6,600 cars or "one year's additional traffic".

It was announced yesterday that the tunnel would open on December 20 th.

When it was built, the M50 was intended as an orbital route and Mr Ahrn noted that at the time of construction it was feared it would be a "white elephant". Mr Rabbitte noted that road was a distributor road and questioned whether it was now Government policy to place toll son such roads.

Mr Ahern also rejected Mr Rabitte's suggestion that the "negligent deal" which gave NTR the contract to run the toll bridge in 1987 should be investigated.

http://www.ireland.com/newspaper/breaking/2006/1115/breaking46.htm

DublinWriter · 15-11-2006 8:21pm

murphaph wrote:

At the moment it's grossly unfair that users between J6 and J7 get nailed while users between all other junctions pay zero.

Oh but we do pay, it's called annual car tax.

When Cowen officially announces the purchase of the M50 then expect a general election within 2 months.

I'm calling it for March when the amendment to the consitution on the rights of children vote is due to happen...they'll do a 2-for-1 job. Plus the SSIAs will be foremost on people's minds.

Capt'n Midnight · 15-11-2006 10:37pm

m_stan wrote:

yeah BUT. The goverment are only going to toll us till 2035 anyway, so what does it matter ?

http://www.rte.ie/news/2006/1115/m50.html

I like it, buying the electrate with their own money, yet again.

If they are going to continue to toll it, why buy it ??

If free flow tolling will work why do we pay for another 30 years ??

Our man in Havana · 16-11-2006 3:36am

Is Ahern on drugs saying that lifting the barriers on the west link will cause chaos? The barriers are the biggest problem on the M50.

Navan Junction · 16-11-2006 8:03am

Michael O'Regan, Irish Times, 16.11.2006

Taoiseach Bertie Ahern has ruled out lifting the toll barriers at the West-Link bridge on the M50 in the short term.

He said that he and other members of the Cabinet had a series of meetings with engineers in recent months.

"They are of the opinion that this would be a disaster. Their view is that it might help a limited amount of traffic, going straight, but that the tailbacks on all the intersections would make the entire M50 unworkable."

Mr Ahern was replying to Labour leader Pat Rabbitte, who referred to the "daily hell" experienced by motorists on the M50, specifically the blockage at the West-Link toll bridge. He added that the Government had been requested, on a number of occasions, to have the barrier lifted while the renovation of the M50 was ongoing.

Mr Rabbitte asked if it was the case that after spending €600 million to buy back the bridge, the Government proposed to install tolls at four different points on the M50.

Mr Ahern said that as he understood it, there would be one toll on the new road when completed.

In the intervening time, the cost of compensating National Toll Roads, the cost of phase two of the M50 upgrade, the cost of upgrading the West-Link section and the cost of barrier-free tolling would be met from the total revenue from barrier-free tolling on the M50 up to 2013.

Mr Rabbitte said the only point he was clear about, arising from the Taoiseach's reply, was that "motorists are staring into Dante's Inferno between now and mid-2008".

There was going to be an "unmitigated disaster" during the refurbishment of the M50, he claimed.

"The situation is intolerable for motorists and what the Taoiseach is now saying is that no remedial action of any kind will be taken. He is sheltering behind the advice of engineers and others who contributed their fair share to the mess in the first place."

Declaring that he had difficulty following the Taoiseach, Mr Rabbitte added: "The Taoiseach did not make any mention of the cost, nor of the tax treatment. He did not query the DKM figures of €900 million forgone in revenue. He did not query the figure of €600 million reported in The Irish Times this morning."

Mr Rabbitte said it would cost about one-tenth of the cost of the buy-back to build a new bridge.

Did the Government have any plans to investigate the original 1987 contract, "which so disadvantaged the State and which has left us with a situation that we cannot even build a bridge?"

He said that the State "cannot even build a new bridge adjacent to the present bridge because of the contract entered into by Pádraig Flynn, George Redmond and Tom Roche".

Mr Ahern said that the Government and the National Roads Authority were committed to improving the level of service provided to motorists on the M50.

http://www.ireland.com/newspaper/ireland/2006/1116/1163060685441.html

Seth Brundle · 16-11-2006 10:16am

Why is CPO not an option when it comes to the bridge?

murphaph · 16-11-2006 6:10pm

kbannon wrote:

Why is CPO not an option when it comes to the bridge?

The state would still have to pay what it's worth to NTR. This is essentially a CPO anyway I would say, at least, NTR know that if they refuse to sell then it will be a CPO. I'm sure there are folks on here who know more about this stuff though.

Victor · 16-11-2006 6:39pm

Bond-007 wrote:

Is Ahern on drugs saying that lifting the barriers on the west link will cause chaos? The barriers are the biggest problem on the M50.

Remove the toll and people will use the M50 more, even for journeys that do not need to be made - "lets compare what Liffey Valley has compared to Blanch".

Tenshot · 16-11-2006 7:00pm

While hardly a realistic option, does anyone know what it would cost to build a new 6-lane bridge beside the existing Westlink bridge and divert traffic to that?

As a starting point, what was the original construction cost for the current Westlink?

(If it turned out substantially cheaper than the ~EU600M price, would be a good argument for beating down NTR on price ... a tolled bridge only has value if people are using it.)

Capt'n Midnight · 16-11-2006 8:53pm

Tenshot wrote:

While hardly a realistic option, does anyone know what it would cost to build a new 6-lane bridge beside the existing Westlink bridge and divert traffic to that??

the contract covers the crossing, not just the bridge. if you build a bridge NTL still get to collect a toll.

How did they get away with the original contract ?

Nevyn · 16-11-2006 9:06pm

Victor wrote:

Remove the toll and people will use the M50 more, even for journeys that do not need to be made - "lets compare what Liffey Valley has compared to Blanch".

People do that anyway.

Removing or lifting the barriers will have a big effect and will stop the traffic snarl ups in D15 which can be backed up beyond the clonee overpass due to the slow moving traffic on to and off the m50 interchange at blanch as the traffice grinds through the toll bridge.

murphaph · 16-11-2006 11:33pm

I think some people blame the toll plaza for all the delays on the M50. I used to have to use it regular like and to be honest, heading northbound from the N7 to N4 the traffic would grind along all the way to the N4, then disappear off up the slip road and there'd be a free run to the bridge for say, 200m. That tells me that the delay was caused by insufficient capacity between J9 and J7 and/or insufficient capacity at J7 itself.

Seth Brundle · 17-11-2006 10:07am

A significant cause of traffic delays is te inability of people to merge with traffic properly

sinbadfury · 17-11-2006 5:00pm

I totally agree. Merging causing significant problems and the hold ups will filter back in waves through hundreds of cars.

That and the fact that people react rather than pre-empt while driving means tailbacks are created for no reason. Irish drivers are pig ignorant and self important and have no real understanding of the effects of their bad driving habits.

Simple education in traffic flow dynamics will show people that slower IS faster and space in front of you to the other car IS NOT there to be filled.

And as mentioned...for god sake use the full length of the filter lane, you will merge a hell of a lot easier without the aggrevation....

Capt'n Midnight · 17-11-2006 7:11pm

Mr AA (Conor Faulkner?) on the radio today said at peak times the port tunnel will mean at peak an extra 90 trucks per minute at the toll bridge. And yes he did take into account that some would be headding up the M1

Merging and lane discipline are brutal on the M50 and it's not just the L drivers causing it either. Such a difference when driving abroad and you can trust people to indicate and not do stupid/unpredictable stuff.

[article] State gets close to buying West-Link toll bridge

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