Catherine Murphy (Kildare North, Social Democrats) | Oireachtas source

It is difficult to see any justification for the increase in tolls, whether they come into effect in six months or in January as originally planned. With private motorists and haulage companies struggling with increasing fuel costs, any rise in toll prices will come as a further blow amid the cost-of-living crisis. The level of the increase is difficult to justify in the current climate and I do not foresee that changing in the next six months.

We all appreciate the need to reduce the use of cars in daily travel, but many people use these motorways daily because the current level of public transport is not sufficient. In the case of the State-owned M50, one of the country's most notorious bottlenecks, it is intended to heap even further misery on road users, with an increase in the toll of more than 9%. For people living in, for example, Blanchardstown who have to travel to Lucan, that will amount to €500 a year before these increases kick in. That is assuming they go back and forth every day. The tolls are not applied equally on roads throughout the country. They apply most commonly where there is a daily commuter element.

The M50 has never been busier and is about as busy it can get while still functioning. In its most recent annual report, TII predicts that any drop in traffic volumes on the M50 will be in reaction to the rising level of congestion. The road is often like a car park and is already expensive to use. We in the Committee of Public Accounts examined this issue earlier in the year and found that, internationally, the M50 was the only free-flow toll road that escalated instances of non-payment to a fine on day two. It is easy for people to forget to pay the toll online, especially for those who are not familiar with the road.

All the PPP motorways were set up to bring in the maximum tolls allowed under their agreements with the State, excluding the port tunnel. It was stated in the House last week that this was to be the first increase in nine years, but there was an increase earlier this year, as the Minister of State acknowledged. I thought I was hearing things last week when the Tánaiste said otherwise, and I thought perhaps he does not realise because he probably does not tend to stop at toll bridges and that, therefore, increases do not have the same impact on him. The maximum toll allowable in PPP contracts is linked to inflation. Operators have the option of charging less than the maximum, yet all of them charge as much as they can. I do not believe there is any record of an operator dropping a toll price when the rate of inflation has decreased. The rises, linked to an inflation rate of 8.6% between August 2021 and August 2022, are in most cases higher than the 9% increase. They are rounding up the cost, which is shaking down people for as much as possible.

While it is welcome the increases will be delayed for six months, it is expected to cost the State at least €12.5 million to cover the lost revenue for TII and the toll operators. As was noted earlier, representatives of TII are appearing before the transport committee as we speak. If the freezing of toll charges were agreed, the contractual entitlement to the index linking of toll charges would still exist. If inflation continues to rise, this will result in the rebalancing of, and consequentially larger increases to, toll charges in January 2024. We are not resolving the problem but just pushing it down the road.

Why did the announcement from TII come as a surprise last week? When did TII flag this? Surely as a State body, it has to keep the Department of Transport apprised. It has been reported TII and that Department have been discussing the matter since the beginning of September, so why did it seem to come as a surprise to both the Taoiseach and the Tánaiste? There is a reason the PPP schemes were so attractive to private contractors, namely, the fact that, by and large, they are very lucrative. Profits in 2021 for the Eurolink Motorway Operations, which operates the M3, the M4 and the M6 were €10.8 million; for Celtic Roads Group in Dundalk, €8.14 million; for Directroute Holdings, operating the M17 and the M18, €15.3 million; for Directroute Limited, operating the M8, €6.2 million; and for M50 Concession Limited, €2.4 million.

Included in these profit margins is the overpayment of tolls, an issue I have raised repeatedly. Every toll operator receives an overpayment, which is retained as income. The average yearly income from overpayment ranges from about €18,000 for the N6 to €78,000 for the M7 and the M8. Where people overpay a toll, this is included in the revenue as though it is the legitimate revenue of the toll operator, but I do not believe it is legitimate. The toll operators say they use it on road maintenance, which is the excuse for everything. Dublin Bus, for example, has a community initiative to which its overpayments go, yet according to a reply I received during a discussion at a meeting of the Committee of Public Accounts, this was never considered by any of the toll operators as an option. They are taking money over and above the stated sum whereby if the toll is, say, €1.90 and someone pays €2, they retain that 10 cent and that can be very lucrative.

All this raises a question as to why road users are facing an increase in tolls and why we are subsidising the loss of excess profits for these operators. The answer can be found in PPP contracts, where the ghost of Fianna Fáil past is coming back to haunt us. The PPP scheme is a perfect example of the Fianna Fáil legacy of selling or leasing public assets to private companies with favourable conditions and cushy contracts. When the party was extolling the virtues of the PPP scheme, a key benefit was supposed to be the transfer of risk to the private contractor, which would limit costs and losses for the State. The PPP schemes were, supposedly, structured such that private toll operators would be responsible for demand risks, including traffic volumes and, therefore, toll revenue. The traffic risk was supposed to be transferred to the PPP company, yet we retain an obligation at least on some roads and tunnels to compensate for the shortfall in traffic volumes that has been forecast. I do not know how one aligns with the other.

TII must explain the rationale behind these toll increases. It is difficult to accept its contention that the toll rises are necessary for the maintenance of motorways and the wider public network. What is motor tax for, people will ask, if they pay a toll charge of which some goes towards the maintenance of roads while others do not pay that toll charge? There seems to be a terrible inequality in that. Moreover, we see toll avoidance all over the place, although it is not unique to Ireland and can be seen in other jurisdictions as well. Ordinary people will end up paying twice for these increases, in higher tolls through any cost passed on to consumers due to additional operational expenses incurred in logistics and distribution companies.

The Committee of Public Accounts asked TII earlier this year whether there were any concerns about transport projects becoming unviable due to inflationary concerns. We were told that was a very low risk because these projects were appraised for periods of 30 to 60 years, and while the rate of inflation was high, it was not expected fundamentally to disturb projects in the longer term. The contracts with the toll operators run to between 30 and 45 years.

Does the same logic not apply here where it evens out over a longer period? When a new road is built, there is normally not much maintenance on the road surface for approximately 20 years. A big overlay of approximately four inches then goes on, which means another ten years before maintenance is required. Very often, these toll roads can sweat the asset so that they do not have to do the maintenance at a time when inflation is high. Therefore, this idea that people are all rushing out now to resurface roads when inflation is high is nonsensical. I have not seen any evidence of it. Deferring the toll increases to a later date when the increases will become even higher than was forecast is not good enough. The Government needs to show a bit of backbone and fight the operators on this decision.

It should be noted that the toll bridges, which are entirely publicly owned and operated, will not be raising their prices. Dublin City Council has no plans in the next year to raise tolls on the Tom Clarke Bridge. Dublin City Council made an income of €7.18 million this year from bridge tolls. It is a lot of money but less than some private operators, which intend to raise tolls. Really, the difference is that it is a public entity as opposed to a private company.

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