Operating profits up 23% to €10.86m at Limerick tunnel after toll hike

Gordon Deegan

Operating profits at the consortium which operates the €800 million Limerick tolled tunnel last year increased by 23 per cent to €10.86 million after a hike in toll charges.

New accounts show that DirectRoute (Limerick) Ltd last year enjoyed the operating profit surge as revenues went up by 10 per cent from €24.67 million to €27.19 million.

Toll charges for cars increased by 10 per cent to €2.10 in inflation linked toll increases on July 1st 2023, and they have since increased by another 20 per cent at the start of 2024 to €2.30 - again linked to inflation - which will lead to even higher toll revenues for this year.

In 2023, the hike in toll charges at DirectRoute (Limerick) Ltd contributed to toll income rising by 19 per cent from €17.86 million to €21.2 million.

TII initially announced that the toll increase for the Limerick tunnel and other tolled routes would come into effect from January 1st 2023.

However, this was deferred by six months by Government in late 2022 against the background of cost of living increases.

In their joint accompanying statement to the TII annual report, TII chairman Gareth Llewellyn and chief executive, Peter Walsh stated that the 2023 cost of deferral concerning all tolled routes was €14.6 million and “was met from general taxation”.

The revenues for the Limerick tunnel firm also included traffic guarantee payments from Transport Infrastructure Ireland (TII) which declined from €5.98 million to €5.2 million last year.

The traffic guarantee payments are made when daily traffic volumes don’t exceed a particular threshold, and they were put in place at the outset of the project in order to attract consortia to bid to build the scheme.

The directors state that “revenue risk is reduced by the Traffic Guarantee mechanism which guarantees revenue to a certain threshold”.

The company recorded a pre-tax loss of €13.3 million after paying out €23.8 million in loan interest payments.

The directors state that “the largest expense remains to be interest repayments on the project funding mainly in the form of bank loans and bonds. The contract is currently in year 17 of its term and will expire in 2041”.

The loss also takes account of non-cash depreciation of €13.48 million.

Total key management compensation last year increased from €412,130 to €440,151.

The Limerick tunnel route was first opened to traffic in July 2010.

At the end of the concession period in 2041, the firm will hand back the road to the TII.

The firm had accumulated losses of €116 million at the end of last year. The company’s cash funds increased from €24.28 million to €30 million.