Toll roads first came to Ireland in 1984 when the Eastlink bridge opened for business. The Westlink opened six years later.

Both of Ireland's existing toll routes are operated by the same company, National Toll Roads (NTR)

It was the brainchild of Tom Roche, the founder of Roadstone and later CRH, Irelands largest industrial company.

Tom Roche, one of the outstanding businessmen of his generation, made a fortune from Roadstone and CRH.  He then  proceeded to lose most of it on the Bula ore deposit.  

By the late 1970's, after a lifetime's work, he was as good as broke.

Such a setback would have broken a lesser man.  Not Tom Roche.  Rather that slink away and lick his wounds, Roche quickly came up with a new scheme.

He spotted that, with no bridge to the east of Matt Talbot Bridge, there was an opportunity to build a toll bridge close to the mouth of the Liffey.

The result was the EastLink.  It cost approximately £8m to build in the early 1980's.  However Tom Roche stumped up only about £500,000 of this. 

Most of the rest of the money came from bank loans, mainly from ICC and AIB.

NTR followed this up with the WestLink toll bridge in 1990.  Its funding of WestLink was clever.

COMPANY

In 1988 a group of financial institutions invested £8m in NTR in return for a 52pc shareholding.

This £8m allowed NTR to put £7.5m of its own money into the WestLink, with the rest of the £27m cost being provided by bank loans from the European Investment Bank, Bank of Ireland and AIB.

This meant that Tom Roche only had to pay £500,000 for his family's NTR stake, which now stands at about 38pc.

With NTR shares currently trading around the £6.80 mark, that values the Roche shareholding at £50m.

In less than 20 years the value of its investment has grown more than one hundred-fold.

And that isn't the half of it.  Over the years NTR has been a prodigious cash cow for its shareholders.

Last year NTR shareholders were paid £9.3m in dividends.  In fact over the past five years they have received a massive £37.5 million in cash out of the company.

Approximately £14.25m of this went to the Roche family.

EastLink runs until 2015 while

When combined with the increase in the value of NTR's  shares, the returns achieved by the company's shareholders haven't been good, more like 

off the scale. 

All of this is good news for NTR shareholders.  It's not such good news for the rest of

What you can expect to pay, and where...

Under the National Development Plan (NDP) £4.7bn will be spent on upgrading the national road network in Ireland.

It is hoped the plan will operate between now and 2005.

The government has decreed that £1bn of this will come from the private sector.

As a result, a further 11 roads and bridges will be tolled.

These are:

Dundalk Western Bypass

Clonee Kells

Kinnegad Kilcock

Oranmore N6 East

Portlaoise Castletown

Nenagh Limerick

Portlaoise Cullahill

Fermoy Bypass

Waterford Bypass

Limerick South Ring

Second West Link Bridge

According to the NRA, the new toll roads will knock almost an hour off the Cork-Dublin journey, and over half an hour off the journeys from the capital to Galway, Limerick and Waterford.

All the proposed new routes will be either motorways or high-standard dual carriageways.

ISSUE

However, with someone making a return trip to Cork or Galway having to pay four sets of tolls (travellers to Kerry will be stung for six sets of tolls), expect to hear a lot more about this issue.

At the suggested £2 toll, travellers could soon find themselves forking out a further £8-£12 every time they make a round trip.

Ouch!

us however.

NTR's franchise on the

EastLink runs until 2015 while the WestLink franchise expires in 2020.

It has also been granted the franchise to build a second bridge over the Liffey.

It will run parallel with the existing WestLink Bridge and is scheduled for completion for next year.  NTR's franchise on this new bridge will run until 2032.

If NTR had achieved its

very high returns from investing in a high-risk business, most people wouldn't begrudge the company its good fortune.

However, there is no way that building and operating toll roads and bridges can be categorised as high-risk.

In most countries private operators of toll concessions are restricted to a return of a few percentage points above the interest rate on long-term government bonds. 

Not in Ireland it would seem.  It is hard to resist the conclusion that returns achieved by NTR bear no relation to the risks it has taken.

With 11 more bridges and roads due to be tolled over the next few years, NTR has been busy pitching for new

tolls. It has already been granted one of these, the second WestLink Bridge.  It is also known to be interested in the tolling franchises for the Waterford bypass and the

Kinnegad-Kilcock motorway.

Hang on a minute.  There has always been a fatal flaw in the arguments used to justify tolling roads and bridges.

While a private sector till franchise may bring some expertise to the construction and operation of an infrastructure project, the fact remains that a government can borrow much more cheaply than even the most highly-rated private company.

Over the 30 year life of a tolling franchise any efficiency benefits will be more than offset by these higher interest costs.

Most of the time granting such tolling franchises, or Public Private Partnerships (PPPs), are a device by which financially strapped governments can get a chunk of debt off their books.

With the Irish national debt already one of the lowest in Europe and still falling, we have no need for such fiscal sleight of hand.

However, even if an economic case could be made for tolling, it is clear that the franchises already negotiated have been far, far too sweet for NTR.

Not to put too fine a point on it, the East and West Link Bridges have been a gold mine for NTR.

Meanwhile Dublin motorists have been forced to pay for this bonanza. •