Dáil debates
Thursday, 22 June 2023
Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
Road Tolls
9:00 am
Martin Kenny (Sligo-Leitrim, Sinn Fein)
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1. To ask the Minister for Transport, Tourism and Sport to provide an update on public private partnerships which facilitate tolls on eight of our motorways. [30139/23]
Martin Kenny (Sligo-Leitrim, Sinn Fein)
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My question is on the public private partnerships, PPPs, that facilitate the toll roads across the country. There have been recent increases in tolls and these have been very difficult for many motorists, especially those with large vehicles, trucks, buses, etc. The cost of living is bearing down hard on people. It is my view and that of many others that these toll roads were from the first a very bad deal for the public and for the Government, but we are where we are on that. What has the Government done in the six months since the toll increases were deferred to ensure we can get a resolution to this problem?
Jack Chambers (Dublin West, Fianna Fail)
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As the Deputy will be aware, the National Development Plan 2000–2006 first identified PPPs as a mechanism to facilitate the delivery of an extensive roads programme. There are now eight PPP toll roads in the State. These eight roads were constructed and are now operated and maintained under long-term contracts with Transport Infrastructure Ireland, TII. Revenue generated by these roads is collected by the PPP company and is used to repay loans arising from the construction of the road and to fund ongoing operations and maintenance activities. These contracts will begin to expire in the coming decades. In addition, there are also two other tolled national roads, namely, the M50 and the Dublin Port tunnel. These two roads are different in that they essentially function as public tolls. Revenue from these tolls is collected directly for TII by operating companies under contract to it.
PPPs involve the sharing of project risks and funding for the various stages of the asset life cycle. Toll concession contracts entered into between TII and PPP companies on the eight concession schemes each contain revenue share mechanisms as part of the contractual payment mechanism. This allows for a portion of toll revenue to be shared with TII should traffic exceed a certain level. It is important to note that under the Roads Acts of 1993, 2007 and 2015, the setting of tolls is a statutory function of TII. As such, there is no formal consultative role for the Minister in relation to tolls.
Toll price increases are as a result of consumer price index, CPI, calculations carried out each year. The CPI increased by 8.6% between August 2021 and August 2022 and this resulted in increased tolls on all eight PPP schemes and on the M50. The by-laws for each individual toll scheme set out the basis for calculating the maximum toll for each year. Last year, the Government announced that the planned toll increases which were due to come into effect on 1 January would be paused for six months and that six-month period will end on 1 July. The six-month cost of deferring the toll price increases was estimated at €12.5 million.
Martin Kenny (Sligo-Leitrim, Sinn Fein)
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I take the point that the direction of travel of everything in the country is going up and it is related to the CPI. However, as inflation is going up in the country, the reality is that some things are pushing it up further than it needs to go and this issue with the toll roads is an example. To link the tolls to inflation does not make sense. I doubt the staff working in the toll companies have got huge pay increases in recent times. I doubt the people contracted to cut the grass and repair the toll roads have got big increases in their salaries. I doubt the cost of providing the service has increased. I imagine it has increased very little because it is a standard service. It is not like something that requires a lot of material like oil in order to provide the service. I do not understand why we have to have it connected in that way. Surely these things should be examined such that we look at the costs incurred and then reflect those costs in the costs charged to the motorists.
Jack Chambers (Dublin West, Fianna Fail)
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As I have said, the setting of tolls is a statutory function for TII and in those contracts there was a connection between toll increases and the CPI. The Deputy mentioned a few services that relate to the maintenance of our national roads and motorways, but asset renewal is a key part of that and probably one of the biggest cost implications for both public roads and roads that have a toll, so we maintain the asset for the long term. Anyone who has any knowledge of construction knows inflation is having an impact on the inputs when it comes to protection and renewal. Notwithstanding that, it is set out in the original toll contracts that there is a relationship to the CPI. That is set out clearly from a contractual perspective and that is why the increases must go ahead on 1 July. The Government took a decision to defer that increase for six months so it would not impact motorists for the whole of 2023.
Martin Kenny (Sligo-Leitrim, Sinn Fein)
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I understand that, but while there are contracts there the Minister of State must accept these were bad contracts. They did not work well for the public or the taxpayer. These contracts were win-win all the way for the toll companies and that continues to be the case. The Minister of State mentioned there will be a profit share if the volumes of traffic increase. There was also a situation where if the volumes of traffic were below estimations the taxpayer would compensate the toll companies, so there was no losing for the companies that built these toll roads and it has been all losing for motorists. A person gave me an example of a woman with three children who goes to work using a toll road. As one of the children has autism she travels a lot on the M50 to bring the child up and down to services they use. Her husband also works using the M50. The bill for that family has increased hugely because of the toll increases, so it has an impact.
The Minister of State mentioned the increases were deferred for six months. The Government had an opportunity there to go back to these companies to renegotiate aspects of these contracts to try to push down the charges unfortunate members of the public are subject to.
Jack Chambers (Dublin West, Fianna Fail)
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I acknowledge the impact of the increased tolls on motorists and families. That is why we deferred the increase for six months. We have a vast motorway network that was developed through PPPs. People can be critical of them. Neither I or the Deputy were in the House at the time. To be fair, at the time they delivered an infrastructural outcome that has helped connect Ireland and built regional connectivity across the board and supported that development.
The contracts are clear. Some of them go for between 30 and 40 years and have a clear contractual basis around the CPI. As there was very low inflation for a period, tolls were not increased for motorists. We deferred the increase for six months. Inflation has continued through this year. There will be a wider budgetary consideration for any impact on motorists if the conclusion of the CPI impact over the last 12 months is similar to last year. That will obviously be of concern, so we will have to consider that through the budgetary discussions in advance of January next year.