New Brunswick Buying out Dragados Toll Concession in 2nd year

“Lord Halts Tolls” read the arresting headline. Premier Bernard Lord of the govt of New Brunswick announced Dec 17 they had reached an agreement in principle with Maritime Road Dev Corp (MRDC), the Dragados-led group, to end the toll element of its concession on the long Fredericton-Moncton toll road. There still had to be discussions with bondholders. The 183km (114mi) of new 2x2-lane motorway through rough terrain and including major bridging is about half built. Tolling started at the Moncton end early 1999 but in the summer a new ‘progressive conservative’ govt came to power committed to getting rid of tolls. The $900m project cost is financed about one-sixth toll revenue bonds, five-sixth govt lease-payment bonds. Traffic on the road was estimated to only support the $150m of revenue bonds funding, and it is these bonds the province is attempting to convert to tax funded bonds in order to eliminate tolls.

Just days before tolling was to begin at the second toll plaza on a new section of the road at the Fredericton end, Dec 10, MRDC said it had been asked by the province not to toll there. Since these two announcements nothing new has come out but it looks as though some $30m of toll plazas and equipment will be scrapped, a whole toll team disbanded, $15m/yr or so toll revenues lost, and provincial tax liabilities increased.

The concessionaire’s construction contract, and possibly maintenance, seem likely to remain intact. Completion of the road is scheduled for Nov 01.