Taxpayers raked in a €8.5million bill from Limerick tunnel operator DirectRoute for Covid-era losses

The operator of the €800million vehicular tunnel that runs under the River Shannon in Limerick received €8.5million in taxpayers’ money last year as traffic on the line missed targets due to the impact of the pandemic.

The operator is guaranteed a minimum traffic volume.

If they are missed, Transport Infrastructure Ireland (TII) will be responsible for paying the bill for the shortfall.

The company behind the tunnel is DirectRoute Limerick, which signed a contract in 2006 to operate the tunnel for 35 years.

It opened in 2010.

The company is owned by funds controlled by the
international investment companies Meridiam, 3i and TIIC.

Transport Infrastructure Ireland has paid tens of millions of euros to toll road operators in the form of payments made under in recent years
traffic guarantees.

“The Covid-19 pandemic has reduced traffic on the Toll Road, but the project will not see a reduction in overall revenue due to the Traffic Guarantee – paid for by TII,” note newly filed accounts for DirectRoute Limerick.

The accounts show that DirectRoute Limerick had a turnover of 31 million euros last year.

This includes toll income of €13.8 million, operating cost statements of €8.8 million and traffic guarantee payments of €8.5 million.

In 2020, it reported a turnover of 22.5 million euros. This includes toll income of €12 million, operating services of almost €1 million and traffic guarantee payments from TII of €9.6 million.

Despite the revenue generated in 2021, the company still reported a loss of 4 million euros for the year. Compared to a loss of €10.1 million in 2020.

The losses were fueled by huge interest repayments on loans. They amounted to 20 million euros last year and 17.8 million euros in 2020.

“Travel restrictions related to Covid-19 continued into 2022, but on February 28, 2022 essentially all remaining restrictions were lifted,” the statement said.

“As a result, and as we have witnessed in the second half of 2021, traffic has increased,” the accounts read.

Cars pay €2 to use the Limerick Tunnel, buses and lorries cost between €3.50 and €6.30.

The company’s directors have also said that the company may not have sufficient resources to fully repay the shareholder loans at the end of the project.

The concession ends in 2041 when the tunnel is returned to TII.

“The Company is not making repayments on the mezzanine and shareholder loans provided to fund the overall project,” DirectRoute Limerick’s accounts read.

“Directors recognize that current projections indicate that due to the waterfall of payments over the life of the project, while all third party funds are projected to be repaid, there may not be sufficient resources to fully repay shareholder loans by the end of the project” , confirm the accounts.

“The directors are pleased that shareholders are aware of this opportunity,” they add.

The accounts show that at the beginning of 2021 the company had €120.4 million in deferred public grants, of which €5.8 million was written off during the year.

https://www.independent.ie/business/taxpayers-picked-up-85m-bill-run-up-by-limerick-tunnel-operators-directroute-in-covid-era-losses-41917070.html Taxpayers raked in a €8.5million bill from Limerick tunnel operator DirectRoute for Covid-era losses

Fry Electronics Team

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