Dáil Éireann debate -
Tuesday, 1 Jul 2003

Vol. 570 No. 2

Written Answers. - West-Link Bridge.

Róisín Shortall

Question:

460 Ms Shortall asked the Minister for Transport the details of the agreement with NTR regarding the proceeds from the West-Link bridge and the manner in which the State's share is calculated; the reason his Department's estimated revenue from this bridge for 2003 is lower than that for 2002, in view of the increased volumes of traffic on the M50; and if he will make a statement on the matter. [18530/03]

Minister for Transport (Mr. Brennan):

The statutory power to levy tolls on national roads, to make toll by-laws, and to enter into toll agreements with private investors in respect of national roads is vested in the National Roads Authority – NRA – under Part V of the Roads Act 1993, as amended by the Planning and Development Act 2000.

Under the tolling agreement for West-Link between National Toll Roads plc and the NRA, the Exchequer receives an annual fee, known as the gross toll revenue – GTR – share, related to traffic levels using the bridge.

The fee becomes payable once traffic volumes exceed 27,000 vehicles per day as follows:

Average Daily Traffic Volume Intervals	Percentage of Gross Toll Revenue Payable
First 8,000 over 27,000	30%
Next 10,000 over 35,000	40%
From 45,000 to the Band 4* figure for the relevant year	50%
Over the Band 4* figure for the relevant year	80%

* Band 4 figure is based on traffic volumes as set out in the agreement between the NRA and the NTR.

In 2001 the number of toll-paying vehicles using West-Link was 25,951,959. An amount of €9,219,706 in payment of the GTR share due to the Exchequer in respect of 2001 traffic volumes was received in April 2002.

In 2002 the number of toll-paying vehicles using the West-Link was 27,273,151. An amount of €7,584,901 in payment of the GTR share due to the Minister in respect of 2002 traffic volumes was received in May 2003.

The reason for the decrease in payment in 2003 is due to the following. In November 1999 the NRA, as the tolling authority for national roads, concluded a draft agreement with NTR, the West-Link toll bridge operator, to provide for the construction of the second West-Link toll bridge. The deal provided for NTR to meet the cost of providing the second bridge through an increase in the car toll rate. The draft agreement was concluded on the basis that VAT was not applicable to tolls. In July 2000 the European Court of Justice ruled that VAT must be applied to tolls and the Finance Act 2001 provided that this ruling be implemented as of September 2001. The effect of the application of VAT on the draft agreement would have been for the private car toll charge to rise from £0.80 – approximately €1 – , that is, the toll charge for the period 1 January 2001 to end of August 2001, to a car toll charge of €1.50 on the 1 January 2002. The NRA was concerned at a sharp rise in the toll charge of effectively 50% in the space of four months, September 2001 to January 2002, particularly as there would be no improvement in the level of service at West-Link until September 2003 when the second bridge opened. In order to protect the motorists from the immediate impact of the full increase, and pending the completion of the second bridge, it was agreed that NTR would retain part of the GTR share in respect of the years 2002 and 2003 and that the car toll be fixed at €1.30 for both years. This is based on an agreed supplementary payment per car being deducted from the licence fee, that is, a proportion of the fee would be retained by NTR, so as to address the toll revenue shortfall arising from the freezing of the motor car toll charge. The expanded West-Link bridge is due to be fully operational in September and will significantly alleviate congestion at this pressure point on the M50.

It should also be noted, as stated earlier, that the Exchequer now also receives VAT receipts from tolls estimated at €7.7 million in 2002 in respect of the West-Link bridge.