The cost to the taxpayer of meeting the shortfall in revenue generated by Limerick Tunnel’s operator – Direct Route – has been widely covered in the media. Under a ‘Revenue Guarantee Arrangement’ contract agreed by the previous government, the taxpayer has been paying in excess of €6 million per year to the operating company since the tunnel opened in 2010 as traffic numbers have failed to meet expected targets of 19,000 vehicles per day – instead averaging below 14,000 per day according to Direct Route and the National Roads Authority (NRA).
In 2012 traffic numbers stood at 13,500, 26% below target and since then have been falling steadily. Even if traffic numbers stop declining the cost to the taxpayer of meeting their obligations over the 30-year contract could amount to well over €150 million. The taxpayer had compensated Direct Route to the tune of €19.5 million up to mid-2014. Strategies put forward by local councillors to increase traffic numbers using the tunnel, the most notable of which was a proposed 50% reduction in toll charges, have been spurned by the general manager of Direct Route. He went on further by pointing out that a 70% increase in heavy goods vehicles (HGVs) using the tunnel would not provide sufficient revenue to allow the taxpayer be unshackled from the Revenue Guarantee Arrangement with Direct Route.
Then to further exacerbate the cost to the taxpayer, we get the proposed Northern Distributor Road (NDR). The NDR is to serve as a circular route around the northside of the city and will complement the southern city bypass, where the tunnel is located. It is envisaged to be of regional importance by local councils and will have a link road connecting it to the University of Limerick. Vociferous criticism of the road and its route has addressed issues such as environmental sensitivity, splitting up of communities (the road is set to ride roughshod through the village of Parteen splitting the community in two), and flooding with the road set to cross numerous flood plains. The planned route corridor passes through Limerick and Clare; recent votes by the respective councils on the route resulted in Clare councillors voting in favour with a majority of 17 to nine, while Limerick councillors voted overwhelming against the route by 26 to three. As such, the next phase of planning for the road is up in the air with dire warnings by transport officials that the project may lose funding and be shelved altogether if necessary action is not taken.
Is the shelving of this project really such a bad thing for the taxpayer or region though? The economic implications of proceeding with the development of the NDR are stark. All indications are that the NDR will not be tolled. The ever dwindling numbers of vehicles using the tunnel to bypass Limerick City will high-tail it across to the NDR and avail of a free pass.
If travelling south to Kerry or Cork using the NDR instead of the tunnel will only cost the intrepid motorist about five minutes. It defies belief that the government sanctioned the planning process for the NDR, and if it ultimately does get developed it will need to toll vehicles to the hilt if the tunnel is to remain viable. What’s the point then? On one hand, the taxpayer is coughing up millions per year to a private company due to scarce traffic, and on the other, €100-€150 million of the same taxpayer’s money is being earmarked to construct the NDR which will rob the tunnel of its scarce traffic. In fact, why didn’t the government consider constructing the NDR before splashing out on the €660 million tunnel? That’s a saving of up to €560 million or less than one sixth the cost of the tunnel.
My assumption is that a cost-benefit analysis must never have taken place. The government, NRA and councils dug themselves a fine hole with the tunnel both literally and metaphorically, and whether due to a protracted spell of madness or a bowing down to interest groups they seem intent on an irrational endeavour.
In the interests of the taxpayer and the region, the government should reconsider this great folly and cancel the proposed Northern Distributor Road. It will have a devastating impact on local communities, the taxpayers’ pocket and behave like a parasite, sucking away the traffic and revenue from an already ailing tunnel
THE MOORINGS, WESTBURY,
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