The State's first toll motorway opens on Monday, but will taxpayers be thebig losers in public-private partnership, asks Tim O'Brien
The State's first toll motorway, a 21.5 kilometre-section of the M1 by-passing Drogheda, is to be opened next week by the Minister for Transport, Seamus Brennan. This toll motorway was not built by public-private partnership, having been constructed entirely with taxpayers' money, but it will operate as one.
Tolls, beginning at 80 cent for a motorbike and rising to €1.50 for a car and €4.90 for a large lorry, are to be charged for the use of the road from Monday. Motorists who pay the toll will be able to leave the motorway for up to three hours and rejoin it without paying a further toll, if they retain their ticket. For the National Roads Authority (NRA) and the Minister the issue is simple: the toll will fund the State's share of the amount required to finish the M1 with a bypass of Dundalk. This will provide motorway access from Santry in north Co Dublin to the Border. For those opposed to tolls, however (already enforced on the Eastlink and Westlink bridges), the issue is that motorists are being asked to pay for the road twice.
Brennan accepts that it would be cheaper for the State to borrow the money to build its roads, than to acquire them under "hire purchase" from the private sector with its necessary built-in element of profit. But he points out that European Monetary Union policy won't allow the State to take on the large sums involved. Moving the cost to the private sector is a good way of financing the roads without the burden of debt, or so the argument goes.
There is also the, softly spoken, acceptance that the private sector can achieve considerable savings over the public sector. Why is this accepted, when the €300 million sewage-treatment Dublin Bay Project clearly proved that major projects can be brought in on time and on budget by the public sector, with the right kind of "design and build" contract?
Brennan, who has a reputation for innovation, has questioned the need for contracts of variable prices and duration. But he has also confirmed he is contemplating selling the Dublin Port Tunnel to the National Pensions Reserve Fund, to fund further road building.
Attractive as the sale of the Port Tunnel may sound - to both the Government which gets a cash injection, and the National Pensions Reserve Fund which gets a good long-term earner, it hardly stands up to scrutiny. For a start, it is hard to escape the fact that this represents the State selling something to itself. These deals do not come without considerable finance costs, as the Railway Procurement Agency (RPA) illustrated when it priced "set up" costs for a possible public-private partnership for the Dublin Airport metro at €313 million. Undoubtedly toll money would go towards bankers' arrangement fees and set-up costs for a long time to come.
Second, there is the practical difficulty that the State is required by the EU to provide a toll-free alternative to every tolled route. Therefore if a new tunnel owner, such as the National Pensions Reserve Fund, was to charge the 9,000 lorries a day a toll, the State would have to allow them to use the city as a toll-free alternative.
The only current public-private partnership road construction project, the Kilcock to Kinnegad motorway, is also shrouded in uncertainty. The State is to put up about 65 per cent of the cost of the project as a subsidy to the operators, but motorists will then pay back the remaining 35 per cent many times over. Here there were assumptions made by the NRA that the private sector could build the road far cheaper than the public sector.
According to NRA chairman, Peter Malone, savings made by the State are savings made by all of us. "Don't forget we are the State, we the taxpayers," he said at a recent launch.
But again this does not stand up to scrutiny. The State "savings" referred to are involved in the costs being transferred to the private sector. But these costs are recouped with profit - as a bone fide reward for the risk involved - from the motorist who is also the taxpayer and, as Malone says, the "State".
The public-private partnerships clearly work for the Government, in that they move borrowing off the balance sheet, but in terms of working for the State, the Irish taxpayer is saddled with effectively a 30-year debt.
The National Road Haulage Association says tolls are acceptable if they result in a better business environment and increased savings. But our experience of is not inspiring - at least for the motorist.
Drivers of lorries and cars which queue at the West Link bridge in Dublin are losing money through delays which are bad for business and paying tolls. The Government currently makes about €20 million a year from this bridge; while the operators are - justly - also making a similar profit.
The West Link operator, National Toll Roads, is currently building a second bridge, although the company points out that the motorway junctions are as much a cause of congestion as the current narrow bridge. The new bridge will help, but new junctions and a third lane on the motorway are required, the company says. Such improvements would cost about €700 million at today's prices, according to the NRA. In the meantime, those who pay punitive road taxes will continue to queue to pay a second time, while the volume of traffic ensures a dividend for the Government and a profit for the builder/operator.
The only loser here is the motorist. And there is no guarantee that after 30 years the tolls will be dismantled and motorists, having paid for the infrastructure, would not have to go on paying tolls to government.
The suggestion that tolls are fair on the basis that the "user pays" does not hold up in relation to road building any more than it holds up to the provision of education. Both are crucial to economic prosperity.
The Government has a responsibility to provide a motorway network. And the cheapest way to do that is for the State to borrow the money and cut out the middle man.