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NCT contract worth €650 million up for grabs for ten years to 2030

Applus, the company which currently operates the test, made €6.5 million in profit last year, down 20% from 2016.

ncts File photo Source: NCTS

THE NATIONAL CAR Test contract for the next ten years will be worth €650 million to the successful bidder.

The Road Safety Authority has put the test, first introduced in 2000 in an effort to bring Irish vehicular standards in line with EU best practice, out to tender for interested bidders.

The estimated total value of the contract is €650 million, excluding VAT.

In July, the RSA granted Applus, the company which currently operates the NCT on behalf of the state, a six-month extension to its contract (which was at the time due to expire in December of 2019) until June 2020.

That extension was granted with a view to avoiding a problematic transition at the most busy time of the year in the context of the test, with 45% of test demand occurring in the first quarter of each year. Adverse weather conditions, and the lack of availability of key specialist staff during the holiday period were also factors in the decision to extend, according to the RSA.

“Because of the challenges of changeover in January, it was decided that it would be beneficial to extend the current NCT contract by a period of 6 months, so that the changeover takes place at the end of June 2020. The extension was provided in line with procurement rules and the terms and conditions of the contract did not change,” a spokesperson for the RSA said.

The contract was last renewed in 2009 when three companies submitted bids. A maximum of five bidders is allowable this time around.

The tender covers both the NCT itself, applicable to all cars over four years old, and import and export conformance inspection services (related to the payment of Vehicle Registration Tax on individual vehicles) on behalf of the Revenue Commissioners.

Failure rate

Currently the NCT is conducted in 47 purpose-built centres nationwide. In 2017, 1,355,560 were tested in Ireland, with a further 447,000 undergoing paid retests.

Tests currently cost €55, with a re-test rate of €35 assuming the car has defects which affect its operability (frayed seatbelts, for example, as a visual defect lead to a part retest free of charge).

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51% of vehicles failed the test at the first time of asking last year.

The successful bidder is only expected, at first, to take over four of the 47 test centres which are currently held on a leasehold basis by Applus, with the option existing for the successful bidder to take over the remaining 43 centres at ‘an agreed market value’, per the tender.

Applus itself recorded a dip in operating profit last year, per its most recent company accounts, down 20% from €8,138,464 to €6,504,429. Revenue fell by 6% to €77.8 million, down from €83.2 million.

In 2017 it employed 814 people, the vast majority of which (747) were in the sales and operations side of the business.

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