We've long warned that the private toll operators "out-lawyer" our transportation agencies and write these 1,000 page public private partnership contracts in such a way as to ensure they NEVER lose money on the deal whether it's through non-compete clauses that penalize or prohibit free road expansion or through taxpayer loans and subsidies, it virtually assures taxpayer bailouts, as we're seeing around the globe.
Taxpayers' bill for toll roads
Mon, Aug 01, 2011
Sir, – The National Roads Authority is paying almost €500,000 a month to the private operators of the M3 motorway and the N18 Limerick Tunnel because traffic has fallen short of anticipated levels (Home News, July 20th).
We have been landed in this mess by the inclusion of assumptions that traffic will grow by 5 per cent and 6 per cent a year in road-building contracts. The Limerick tunnel contract runs until 2035, and the M3 contract continues until an astonishing 2052.
Actual traffic on the M3 is 22 per cent – almost 5,000 vehicles a day – below the level at which penalty payments must be made. And traffic using the Limerick tunnel is 26 per cent (3,500 vehicles) below the penalty fee level.
In daily terms, taxpayers are paying a bill of around €16,000 every 24 hours for car and truck journeys that don’t exist. The outlay here could retain more than 250 education and healthcare trainees.
Catherine Ketch (July 25th) is quite correct in identifying the N22 Ballyvourney motorway as another example of excess scale and overspecification in road planning. The NRA continues to assume traffic will grow and grow and grow. It clings to this mythology in an attempt to justify four-lane roads not only in West Cork but also in Monaghan between Clontribret and Moybridge (N2), between Tuam and Letterkenny (N17), between Ashbourne and Ardee (N2) and across south Wexford (N25).
The contract for the proposed 600,000-tonne Poolbeg mass-burn incinerator is tied to a similar growth-based mentality, and a penalty clause which is set to cost more than €30,000 a day, threatening to put the toll road fiasco firmly in the shade.
Such penalty clauses are based on a perplexing notion held by some who act on behalf of taxpayers: if the investor wins, he wins, but if he loses, the State will see him right because somehow the State has decided it will put taxpayers’ money behind the mirage of infinite growth.
If those who do not learn from the mistakes of history are doomed to repeat them, must the people of Ireland forever pay for them?
© 2011 The Irish Times