N1/M1 Dundalk Western By-Pass

Concession Company at Contract Award

The PPP Contract was awarded to Celtic Roads Group (Dundalk) Ltd, (CRG). The consortium at tender award comprised Dragados Concesiones de Infraestructuras SA (a major Spanish firm), Edmund Nuttall Ltd (UK), HBG Ascon Ltd (Irl), and NTR plc (Irl).

Concession Company Ownership Updates

NTR plc Irel

Duties and obligations of the Concession Company

The terms of the contract provide that the consortium has responsibility for the design, construct, finance, operate and maintain, during a concession period of 30 years, for the following:

• a new 11 km section of motorway from Ballymascanlan to Haynestown, along with approximately 7 km of new link roads, 12 over/underbridges and a major railway overbridge;
• the operation and maintenance of 43km of existing motorway from Haynestown to Gormanstown (including the Boyne Bridge and adjacent toll facilities opened opened in (2003/4/5).
• upgrade of the plazas with electronic toll collection together with dedicated non-stop electronic lanes at the mainline plaza, and;
• ensure the full 54km of road meets handback conditions, in order to provide a satisfactory residual life after the end of the 30 year concession period.

• Design
  • Complete the full detailed design of all new build elements;
  • Carry out necessary structures assessments at various stages throughout the concession period.
• Build
  • Construct all the new works;
  • Upgrade aspects of the existing motorways;
  • Assume responsibility for ground conditions, archaeological monitoring and resolution, utility relocations and, landscaping.
• Maintain
  • Maintain the road pavement, structures, landscaping, signs, lining, lighting, safety barriers, fencing and all other aspects of the road;
  • Carry out comprehensive winter maintenance including patrols, precautionary salting, and snow clearance.
• Operate
  • Manage the road in terms of safety, traffic management, information to the road user, oil spillage, accidents;
  • Operate the tolling system to the required levels of service and upgrade it as necessary to match demand;
• Re-invest
  • Prior to handback to the public sector at the end of the concession, upgrade all the facilities as necessary (e.g. road re-sufacing, re-lining) in order to provide the required residual life for the road.
  • In regard to the road structure, the concessionaire is to hand it back with a further 10 year life before any structural strengthening would be required.
• Finance
  • Raise finances for the scheme and take the responsibility for all the repayments;
  • Carry the risk of cost over-runs.

Period of Concession

The contract was signed on the 9th February 2004 and will extend for 30 years from that date.

Cost of the project

It is estimated that if the public sector to undertake all the works in the contract that it would have cost approximately €340m, excluding land costs, with the construction element amounting to €160m.

The Authority estimates that the cost of land, preliminary studies/design necessary to identify the route, preparation of the statutory documents (Motorway scheme and Environmental Impact Statement), advance ground investigation, initial archaeological testing and resolution, and supervision of its construction will amount to approximately €40m. These costs apply irrespective of the contractual means that could be employed for the delivery of the scheme.

Celtic Roads Group’s Financing

CRG is investing substantial funding into this project by means of equity from the companies included in the consortium. The majority of the funding is debt funding and Direct Route has arranged funding from three sources:

• Societe Generale, KBC/IIB, Depfa Bank plc, AIB plc and Instituto de Credito Oficial (ICO – a Spanish Bank);
• European Investment Bank – a bank owned by the member states of the European Union which invests in necessary EU infrastructure;
• Funds from the consortium members.

Celtic Roads Group is the party responsible for the repayment of these debts.

Payments from the Authority to Celtic Roads Group

The contract provides that the NRA will make NO PAYMENTS to the consortium.

Payments from Celtic Roads Group to the Authority

The consortium will pay 95% of the toll revenue collected at Drogheda during the construction period to the NRA, which is estimated at €18 million, and furthermore will pay a share of the future toll revenues above specified traffic volumes to the NRA during the remainder of the concession period as a mechanism to prevent windfall profits in the event of exceptional traffic growth.

Payments from Celtic Roads Group to the State

In addition to the toll revenues payable to the Authority during the design and construct phase of the Dundalk Western Bypass and future revenue share that it will pay to the Authority, CRG will be obliged to make the following payments:

• Commercial rates: In accordance with the Valuation Act 2001, Celtic Roads Group will be the occupier of a rateable property due to its operation of the toll facilities. Celtic Roads Group will be required, dependent on the traffic volumes and calculated in accordance with a methodology set out by the Valuation Office, to pay rates to Waterford City Council, Waterford County Council and Kilkenny County Council, the local authorities through whose administrative area the road passes.
• Corporation Tax
• VAT on non-recoverable receipts.

Summary Overview

For infrastructure with an estimated cost of €340m (new build and ongoing upgrade and maintenance over 30 years of the M1 of approximately 54 km length) excluding land/planning/preparatory design costs, the State will make no payments (excluding land/preparatory costs) throughout the whole of concession period.

The State will recoup substantial monies by means of toll revenues payable to the Authority during the design and construct phase of the Dundalk Western Bypass, revenue share, rates and taxes.