The State spent millions of taxpayers' money compensating toll firms after traffic dived during the pandemic - but it did not have do so, the spending watchdog has said.

Under a public-private partnership, both the M3 and the Limerick Tunnel have provisions in their contracts that allow for compensation if the number of vehicles using tolls falls below a certain level.

Since the start of the pandemic in 2020, Limerick Tunnel's operators were compensated by €23m by the State, while the M3 received €5.4m.

However, the Comptroller and Auditor General, who oversees State spending, said the terms of these contracts did not cover 'medical emergencies', with the taxpayer ultimately having to pay close to €30m between the two companies.

Séamus McCarthy, the Comptroller and Auditor General (C&AG) told the Public Accounts Committee: "There is nothing wrong with the company asking not to have to meet this deduction. It is perfectly entitled to ask, but it seems to me that the State is perfectly entitled to say 'no'."

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But a spokeswoman for the Department of Transport said "from our perspective in the department those contracts are watertight" and it is not seeking to recoup the monies paid. While both DirectRoute Limerick, which runs the Limerick Tunnel, and Eurolink Motorway Operations (M3) Ltd, which operates the M3 toll, were paid sums to compensate falling traffic levels in the years prior to the pandemic, they are significantly less than the sums paid in the past three years.

Members of the Opposition have labelled it a 'gold-plated' PPP contract, while further answers will be sought at the next meeting of the Public Accounts Committee (PAC).

Sinn Féin's transport spokesman, Darren O'Rourke, who secured the latest figures paid to these toll companies for 2022, said the contracts were a "huge financial burden" on the taxpayer.

Adding to concerns is that the M3 contract with the State is in place until 2052, while the Limerick Tunnel contract runs until 2041.

If the State is to achieve its climate targets by 2023 - including taking more cars off the road - the taxpayer could again be liable to cover the losses at the tolls. Deputy O'Rourke said: "It seems like a contract design that flies in the face of current transport policy thinking. For these projects to be viable they need to maximise the amount of vehicles on the roads. At a time when we are trying to incentivise people out of cars into public transport, these contracts will add to the financial burden on the taxpayers or alternatively on individual motorists."

Social Democrats co-leader Catherine Murphy, a member of the PAC, said the terms and conditions of the contracts "are not robust enough" to protect the State. She said: "Time and time again, whenever there's a financial implication for the partner, it is the State that seems to be left to pick up the tab."

The two roads are both run under public-private partnership (PPP) contracts and provide for variable operation payments, also known as "traffic guarantee clauses". The deals between the State and the private sector operators that build and maintain tolled infrastructure can also involve the State getting a proportion of the income stream if the level of traffic exceeds a certain threshold.

However, if it goes under a certain level, the State is contracted to pay compensation to the operator.

Speaking at the PAC, in the context of other PPPs, Mr McCarthy said the State was entitled to have told the two companies behind the roads that it would not pay out the larger sums because 'medical emergencies' were not covered in their contract.

He said there was an 'analogy' where traffic 'collapsed' as a result of Covid-19, remarking: "At that time, additional payments had to be made by the State because tolls coming into the companies were not at the threshold level."

He added: "Therefore, there are these risks. In risk-sharing in PPPs and so on, a distinction is made between general risks, such as those associated with tax going up across the board, and a specific policy change or Government change directed at a specific project.

"This is a general risk and there is force majeure clause in the contract, but it does not refer to medical emergencies. It does not make an exclusion in relation to something like a pandemic. It was a general risk that was being carried by the company."

Mr McCarthy told Sinn Féin's Matt Carthy: "It is incumbent on me in a situation like this, where there are companies that can fight well, to do as I do. There is nothing wrong with the company asking not to have to meet this deduction. It is perfectly entitled to ask but it seems to me that the State is perfectly entitled to say 'no'."

Mr Carthy said that he would be asking the PAC to look at the matter when it meets again. He said the committee would be writing to the Transport Department for additional information.

The Limerick Tunnel has received €23million between 2020 and 2022. By comparison, between 2017 and 2019 it received €12million. The M3 received €5.4million between 2020 and 2022. By comparison, in the years 2017 to 2019 it received only €390,000.

Neither toll operator responded to specific queries.