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."
