Taxpayer hit for M3 toll shortfalls

A MAG Ireland member in Navan has sent us a copy of the front page of the local free newspaper, the Meath Echo, which highlights the idiotic situation whereby the Irish taxpayer will have to subsidise the private company behind the M3 project to the tune of almost fifty million Euro because so few people are paying the toll.

We think the article speaks for itself. Here’s a copy of the text as it appeared on the front page of the Meath Echo, Issue 127, 18 Oct – 8 Nov 2010.

It’s has just recenly [sic] been opened to great fanfare, but already the new M3 Motorway is mired in controversy after it emerged that it will cost the taxpayer almost €50m in fines and penalties because not enough drivers are using it.

In a clause agreed with the contractors, the NRA has to compensate them if the envisaged usage level is below expectations. That’s because not enough commuters are paying the toll charges and the Ferrovial consortium, who built the road,would be out of pocket.

The dramatic slowing of commuter traffic from Meath, one of the hardest hit counties of the recession, has meant that not enough drivers are paying the toll, or are opting for the old N3 road instead, which is toll free.

Ferrovial were told that 5,000 fewer cars than expected are using the motorway on a daily basis. The penalty for the low usage has been calculated at €47.76m by the ‘Plan Better’ environmental group, which measures traffic volumes.

Overly optimistic traffic forecasts are said to be to blame and Plan Better is calling for an urgent revision to the country’s road building programme. The NRA, faced with the massive bill, said that revenue-guarantee contracts are a common features of all Public Private Partnerships in Europe and as yet, no penalty payments have been made.

MAG Ireland has long maintained that tolls are a tax on road safety because they encourage regular road users like commuters and hauliers to avoid the comparative safety motorway in favour of the local roads.

For example, a Kells commuter would have to pay two tolls each way on the M3, paying over ten euro every day (over 2,000 Euro per annum for a typical worker – after tax!) for the privilege of using a road their taxes helped to build. Small wonder almost nobody is using it.

Even if the NRA were to reduce the tolls, the taxpayer would still have to make up any shortfall in revenue to the toll operators. All of this before the Dublin to Navan railway – scheduled for completion in 2015 – reduces traffic volumes still further.

Will those who fleeced the Irish taxpayer with this contract now be held accountable? We think not.

MAG Ireland has always maintained that the roads should be free at the point of use. The present farcical situation surrounding the M3 toll simply reinforces our view that tolls benefit nobody, and motorcyclists least of all.