The State contributed just over €2 million last year to a privately operated tolled motorway that earned almost €20 million in operating profits in 2014, it has emerged.
Eurolink Motorway Operations M3 Ltd, which operates the tolled stretch of road that runs from Clonee in Co Dublin to just past Kells in Co Meath is due to publish results for 2015.
The Spanish-controlled toll road generated operating profits of €19.8 million in 2014. After debt repayments and tax, its profit for the year was €8.1 million.
Ahead of publishing figures for last year, State body Transport Infrastructure Ireland confirmed it paid just over €2 million to the company under a traffic guarantee agreement struck ahead of the road's construction in 2007.
Loan repayments
The payment guarantees the toll collector against shortfalls in expected traffic and is tied to its loan repayments. According to Transport Infrastructure Ireland, the money goes towards paying off debt and is intended to bridge any gap between this liability and what the company earns from tolls.
Eurolink Motorway’s bank debt stood at close to €198 million at the end of 2014 and at €210 million a year previous to that. The figure should have fallen again in 2015 and so far through 2016. Transport Infrastructure Ireland pointed out that traffic is on the increase, indicating that the payments should fall.
The road is one of two that benefit from such deals with the State, the other is the Direct Route-owned Limerick tunnel.
The government at the time decided to offer the guarantees while tendering for companies to build and operate both routes, as an added incentive because both involved extra risks and expense.
In the case of Eurolink, builders were expected to take into account the fact it ran through an area of specific environmental and archeological interest, as the route ran close to the Hill of Tara. The original plan met strong opposition as a result.
Ferrovial and Siac
A consortium of Spanish roadbuilding, engineering and infrastructure group Ferrovial – which is a shareholder in Heathrow Airport – and local construction specialist Siac built the motorway. It held shares in the company that operates the road and collects the tolls.
However, Siac subsequently sold its interest to Dutch Infrastructure Fund, a Netherlands-based specialist investor, for a total of €19 million in 2013, when it was facing increasing financial pressure resulting from losses on a road building venture in Poland that ended in a legal dispute. The deal earned the Irish builder a profit of €1.1 million.
