MINISTER FOR Transport Leo Varadkar has said he is willing to sell assets, over and beyond the stake in Aer Lingus, to raise money for capital projects.
He is also considering new tolls on the M50, and possibly the Jack Lynch tunnel, and securitising toll revenues in a bid to raise funds for a capital programme that includes a number of costly rail projects.
Mr Varadkar told The Irish Times he is in favour of adding multiple tolling points on the M50 and described the current system as inequitable. “It is quite unfair that people pay quite a high toll just to travel one bit of the M50 and nothing for the rest of it.”
“I think multipoint [tolling] on the M50 is a good idea. It makes sense to me and we figure there would be an extra €50 million a year in from that.”
The Minister is also examining the potential for other tolling points around Dublin, and on the Jack Lynch tunnel, although he said this would be “very politically controversial”.
The current M50 tolling system was designed to handle multiple tolling points and the Minister said the required planning permission is also in place.
Mr Varadkar said he was awaiting confirmation from the Department of Finance and Public Expenditure that additional toll revenues could be retained by the department, before proceeding.
“I am only interested in pursuing it if I knew the money was going to be used for new road projects and road maintenance. I will have to have a deep and meaningful [conversation] with Noonan and Howlin on that.”
However, he cautioned that installing additional tolling points was expensive and would take time. “So even if we did it [multipoint tolling on the M50] we wouldn’t be expecting any revenues until 2015.”
An alternative is to securitise toll revenues. “That is one of the things under consideration. You agree to get the toll revenues as one block upfront but then the downside is you don’t get toll revenues for the next nine years. It might give you the resources you need to fund a capital programme.”
This would effectively mean handing over ownership of certain tolled roads for a period of about 10 years. The Minister said any such contract would contain limits on the level of toll increase that could be imposed and that all of the tolled roads would be considered for such a scheme.
Mr Varadkar is considering additional asset sales because the weakness of the exchequer finances means no new road projects of any significance will commence before 2015 and “as things stand I would be lucky to get any of the rail projects through.
“The spending review is very difficult.”
Among the rail projects are the multibillion-euro Metro North, Dart Underground, a rail spur to Dublin airport from the Dart line at Clongriffin and a link-up for the two Luas lines, Line BXD.
It is highly unlikely the first three will proceed on cost grounds, leaving Line BXD as the only option.
A briefing document prepared for the Minister earlier this year noted that Ireland’s financial position was making it difficult to secure finance for major road and rail infrastructure projects.
Mr Varadkar said it would be a “big mistake” for the State to stop investing in infrastructure.
“My view is that you need to continue to invest in the economy to build new roads where they are needed and to invest in the public transport system, but we won’t be able to do that unless we are prepared to take tough decisions on current spending.
“I am willing to sell assets to help buttress the capital programme.”
He said the sale of all assets including airports, ports and roads, with the exception of the public transport companies, would be considered.
The Minister added that he has received a number of expressions of interest in Aer Lingus, from “airlines and investment firms” and said once the pension issue at the airline was resolved at the end of this year, the number of interested parties was likely to increase.
RISE IN PUBLIC TRANSPORT FARES: CIÉ SUBSIDY TO DROP BY 20%
Public transport fares will rise next year to compensate for a reduced subsidy from the State, according to Minister for Transport Leo Varadkar.
“The reduction in the subsidy to CIÉ over the next few years will be in the region of a 20 per cent cut so that will have to be met through a combination of fare increases, cost-cutting and cuts to services. Obviously I favour cost-cutting over higher fares or cutting services.”
He added that cash fares will increase “a good bit” to encourage people to switch to an integrated ticket, which the Minister expects to be available in 2012.
Mr Varadkar said he also supported a move towards “Ryanair-style” ticket pricing for Irish Rail where passengers are offered cheaper fares if they book far in advance.
“I think it is the right way go – it mightn’t be very popular with consumers – but from a financial point of view it is the right way to go.”