Limerick Tunnel Profits Surge to €11.96 Million Amid Toll Increases

Operating profits for the consortium managing the €800 million Limerick tolled tunnel rose by 10 percent, reaching €11.96 million last year. This increase was largely driven by a series of toll hikes implemented in recent months. New accounts from DirectRoute (Limerick) Ltd reveal that revenues climbed from €27.19 million to €29.84 million, reflecting a robust financial performance.

The toll for cars saw a significant increase of 20 percent at the beginning of 2024, bringing the charge to €2.30. This adjustment, which was linked to inflationary pressures, followed a prior increase of 10 cents to €2.10 that took effect on July 1, 2023. The toll revenue for the tunnel specifically rose by 13 percent, from €21.2 million to €23.9 million, illustrating the effectiveness of the pricing strategy.

Revenue Breakdown and Financial Challenges

In addition to toll income, the Limerick tunnel’s revenue streams included traffic guarantee payments from Transport Infrastructure Ireland (TII). These payments, designed to stabilize income when traffic volumes fall below certain thresholds, decreased slightly from €5.2 million to €5.02 million last year. The directors noted that this traffic guarantee mechanism mitigates revenue risks, ensuring a baseline income for the consortium.

Despite the increase in operating profits, the company faced substantial financial challenges. DirectRoute reported a pre-tax loss of €11.45 million, primarily due to loan interest payments totaling €23.54 million. The directors highlighted that interest repayments on project funding, mainly sourced from bank loans and bonds, remain the largest expense. Currently, the contract is in its 18th year and is set to expire in 2041.

The directors also addressed the company’s going concern status, clarifying that, per the common terms agreement governing the project’s funding, they are not currently making repayments on mezzanine and shareholder loans. They acknowledged that while forecasts suggest all third-party funding will be repaid, there might not be enough resources to fully repay shareholder loans by the project’s conclusion. The directors confirmed that shareholders are aware of this potential outcome.

Management Compensation and Future Outlook

The financial report also indicated that total compensation for key management increased from €98,185 to €101,306 last year. Since the Limerick tunnel was opened to traffic in July 2010, it has been an essential transport route. The concession period will conclude in 2041, at which point control of the road will revert to TII.

As of the end of last year, the company reported accumulated losses of €127.74 million, and its cash reserves had significantly declined from €30 million to €5.5 million. This financial landscape presents a complex scenario for DirectRoute as it navigates both operational successes and ongoing fiscal challenges.