The Fermoy bypass in Co Cork, an 18 km stretch of motorway, will cost #124 million to build. The contractor will receive up to 60 per cent of that cost, or #74.4 million, as a subsidy payable on construction of the road. The contractor will also receive tolls of about #625 million over the following 30 years in addition to an annual subsidy to be negotiated from the Exchequer.
According to the National Roads Authority (NRA), however, the figures represent something less than a bonanza for the contractors. Claiming commercial sensitivity, the authority won't go into the details of the annual subsidy, but the overall package to the contractor works out at a return of #700 million on the full construction cost.
The authority is quick to point out that most of the money is spread over 30 years. Quoting from a report commissioned from consultants KPMG, the NRA man in charge of public-private partnerships, Mr Gerry Murphy, says the bottom line is that #700 million over 30 years converts to #155 million at today's prices.
"That is a return of #155 million for the #124 million investment," insists Mr Murphy. "You must take into account one euro is worth just 32 cents after 15 years and only 10 cents after the full 30 years. Out of that, the contractor must maintain the road and, in the decade before hand-back, must refurbish the road."
But if the State is to pay more than half the capital cost of the road upfront and then an annual subsidy, would it not be better to pay the full cost of the road and own it outright?
The problem, according to Mr Murphy, is age-old: the State doesn't have the money. The Exchequer will fund almost #4 billion, the EU will add just #0.76 billion, but the remainder, more than #1 billion, will come from the private sector.
Borrowing the billion-plus is more expensive and damaging to the State's economic prospects than "front-loading" a large payment on the construction and making up the difference between tolls and subsidies.
A number of delicate balancing acts are then required, according to Mr Murphy. If the tolls were high enough the State would not need to pay a subsidy. But people in Fermoy - as is the case with the new Waterford crossing of the Suir and the Enfield bypass in Co Meath - have claimed that high tolls, or any toll at all, will deter people from using the new roads.
After years of suffering traffic congestion, they are angry at what they see as a deterrent to use of the new roads. They are also upset by what some see as an attempt to make money for the private sector out of their congestion.
Many have a problem with the fact that tolls are not distance-related. Drivers travelling from Fermoy to Cork will pay the same as those travelling from Portlaoise to Cork.
In complete opposition to the motorways themselves, as well as tolls, is the Campaign for Sensible Transport which points out that the State has suggested the use of "road-pricing" (effectively tolling) in Dublin city centre to deter traffic while at the same time arguing that traffic will not be deterred by the same process on motorways.
The campaign questions the need for new roads and points out that the NRA study of "National Roads Needs" of 1998 assessed the projected road requirements for 21 years and did not mention motorways. The current motorway programme, it argues, will deliver unnecessary capacity.
The campaign position has, not surprisingly, been rejected by Mr Murphy. First, he argues that roads don't operate best at capacity, when they will be essentially a car-park. The threshold for a dual carriageway is between 7,250 and 9,000 vehicles, he points out.
He also maintains the tolls are cheap. On the parity of cost between Fermoy and Cork and Portlaoise and Cork, he says the Fermoy people get good value and those in Portlaoise get even better value. The charges will stay cheap because the State will pay a subsidy and because the authority to fix charges will remain with the State, not the operator.
What it boils down to, according to Mr Murphy, is that if you require an inter-urban speed in excess of 80 kph, you have to have dual carriageway or motorway-type roads. And that, he says, takes a lot of money.