[Article] Luas in profit one year ahead of schedule

Brian21156

According to the following link http://www.breakingnews.ie/2006/06/21/story264316.html the Luas is already in profit.

Dublin’s Luas light rail system made a profit a full year ahead of schedule, making it the only transport network in the country not in need of Government subsidies, it was revealed today.

Carrying around 60,000 people every day during 2005, the Railway Procurement Agency said Luas achieved a financial surplus of €200,000, allowing them to get by without a €2.5m handout from the Department of Transport.

But its popularity has led to severely overcrowded trams at peak times with scores of passengers left stranded at platforms around the city.

In a bid to allay fears that demand from the public could not be matched, RPA chairman Padraic White said the agency would continue to improve the service.

“We have already introduced additional services at morning peak hours and from September next a four minute frequency on the Green Line will be introduced,” he said.

“We will also increase the frequency of service on the Red Line and from spring 2007 the overall capacity of the Red Line will be increased by 40% by increasing the length of trams from 30 metres to 40 metres.”

Figures for 2005 show Luas carries on average 60,900 passengers every day and in December last year Christmas shoppers helped boost numbers to 77,000 – a 40% rise on the previous year.

The pattern is continuing, with results for May showing a 30% rise on the same month in 2005.

Mr White said figures from 2006 showed Luas was consistently carrying more than 70,000 people every day.

The predicted traffic chaos and danger on the roads from trams has not materialised the RPA’s annual report found with only 36 accidents last year and only two people needing medical care.

Green Party transport spokesman Eamon Ryan said passenger numbers and profitability have consistently surpassed expectations and are testament to the popularity of frequent and efficient public transport.

“We now need to replicate that success by introducing additional Luas lines that are not currently being planned for,” he said.

The Dublin south-east TD suggested running tram lines to Rathfarnham, Coolock, Poolbeg and Lucan in addition to the Cherrywood and Docklands extension.

Mr Ryan also urged the RPA to consider a line north along O’Connell Street through Parnell Square and linking up with the old Broadstone Rail line which would connect up to the Maynooth rail line.

The RPA also revealed they had received 2,000 responses to public consultation initiatives for Metro North from St Stephen’s Green to Dublin Airport.

Following that it is now considering a combination of the East and Central route going underground from Drumcondra to DCU stopping at Griffith Avenue, replacing Trinity and Upper O’Connell Street stations with a single stop on O’Connell St near the Luas Red Line.

It is also looking at using surface or underground sections in place of elevated sections. The consultation period ends on June 30.

The public are also being asked for their views on a Luas city centre link with possible routes crossing the Liffey on O’Connell St Bridge or over a new bridge.

Four options are being tabled including a direct route up Westmoreland St and Dawson St to the Green, a line along Pearse St to Merrion Sq and onto the Green, a route via Dame St, South Great George’s St to the Green and a one-way line around Kildare St and Dawson St.

Chris_533976

Just goes to show that people actually LIKE public transport if its done right. Connection issues aside, the LUAS is an excellent thing.

Now if only CIE and Iaranrod would get their fingers out :rolleyes:

Transport21 Fan

Chris_533976 wrote:

Just goes to show that people actually LIKE public transport if its done right. Connection issues aside, the LUAS is an excellent thing.

Now if only CIE and Iaranrod would get their fingers out :rolleyes:

Indeed. Luas is an incredible transport system considering the limitations it has to deal with. Can you only imagine how fantastic the Metro will be when it's up and running.

One more nail in the CIE coffin and they only have themselves to blame in the last few years as the investment has poured in. If CIE had any sense they would rise to the challenge and beat the RPA at their own game...

...oh dear look at me, I am "playing one railway off against another"...what a terrible thing for me to do...how dare I rate railways according to real results, popularity and public usage...they are all perfectly wonderful and all deserve to be loved and cherished (especially the less needed ones) like all of God's children..naughty, naughty...*SACTIMONIOUS TONE*

MarkoP11

Its all creative accounting since the Luas is not burdened with the construction costs, its running on new infrastructure and as such serious maintenance is at least a decade away. Its an operating surplus

Given the chronic overcrowding and the comparatively high fares compared to bus Luas is a licence to print money, the problem is here we are 2 years on and the system is over crowded more lines are being added on but little in the way of capacity is coming, it just reinforces the fact that Metro on the Green line from day one would have been the best option

The DART despite its flaws returned a operating profit for a number of years in the mid 1990's. It is still burdened with a €34 million /£27.1 million bank load taken out to pay for it since the EEC money given by Brussels was pocketed by the DoF and CIE left to get a loan from the World Bank that said the operating deficit has fallen steadily over the last 3 years

GreeBo

MarkoP11 wrote:

IGiven the chronic overcrowding and the comparatively high fares compared to bus Luas is a licence to print money

Well I disagree with this totally..
If you get a seat its, fine, the same as any Dublin Bus.
The LUAS is cheaper than the Bus for me (not to mention miles faster and dependable)

Diaspora

I thought that too so to balance it up what is the average lifespan of

1. track
2. rolling stock
3. ticket machines
4. siganlling

Before a major refurb is required in each case.

What percentage of build cost would need to be put into a reserve fund to cover such future expenditure?

If IE had their maintenance costs deducted what would their operational result be in the GDA?

Having said all that well done to Connex for delivering a result

MarkoP11

Dublin Bus fares
€0.95
€1.35
€1.55
€1.80
€1.90

Luas Red line

€1:40
€1:60
€1:90
€2:10

City to Tallaght by bus is €1:80
City to Tallaght by luas is €2:10

City Heuston by bus €1:10 (if you get the 90)
City Heuston by luas €1:40

QED

Public service comes before profit in public transport, Luas passengers are paying significantly more than Bus but also more than the train as well for similar distance. If public transport makes a profit thats great but there seems to be an assumption that it is only successful if it does, note Dublin Bus as being one of the least funded city bus companies in Europe. We all know that the social benefits are immense in value thus a loss is tolerable

Once the DTA take control it hopefully will be same fare regardless of bus/train/luas for a journey, should also cost less for trips requiring a change

Transport21 Fan

The success of the DART, and how the DART set the tone for rail transport revivial in Ireland is true. This can never be taken away from it - but that's history and the past is the past. You have to accept that the Irish public, media and business groups (with the exception of the IFSC muppets) adore the Luas and are demanding more - things have changed in the last few years. Look at the Rider Cup ads and how fantastc the Luas looks compared to the DART in that ad. Luas has already won the PR war.

Rail lobbying is as much about making rail look like a winner as much as any other factor (DART and Luas are both winners) and regardless of all the "if's, and's or but's" Luas has recently most caputured the imagination of the Irish people and is percieved as a winner and everybody loves a winner.

Some can sit there grumbling facts about the DART and how it does not get the recognition it deserves anymore, or we can all point to new developments such as the Luas and say, "there's a rail transport success, now can we apply the professionalism to all our rail services in Ireland". The thing is that most Dubliners now when they think of the DART they think about the strikes and poor performance. Putting down Luas won't change that, becuase Luas is very reliable and as there is no strike-junkie culture that you have at CIE.

Luas has proven to be a truimph for public transport and rail development in Ireland. There is no getting away from this - so let's celebrate it and try to spread it to other public transport sectors. Luas sets the benchmark for rail development in Ireland.

Red Alert

Agreed, but let's fix some of the snags like the Ticket Machines instead of pretending the problem doesn't exist. Then we'd have a super system.

Diaspora

I'd like to agree with you in total but unfortunately as Luas serves only a small area of Dublin it is unable to be the standard bearer for the state.

But I do agree that the quality of the rolling stock and the development it has generated along its route are both key to its popularity as property values and desireability have risen for at least 1kms each side of its route.

I do however have to wonder how far the Luas concept can be pushed; the green line is already close to breaking point which does display that whilst a slick product it certainly is not the end game.

dowlingm

indeed, a triumph. Now if people could understand what a red light meant and the RPA didn't insist on building dopey depot layouts how much better it would be

the question is - now that the government isn't paying LUAS the expected grant this year, where will that money go?

monument

Transport21 Fan wrote:

Luas sets the benchmark for rail development in Ireland.

Err...

MarkoP11 wrote:

Its all creative accounting since the Luas is not burdened with the construction costs, its running on new infrastructure and as such serious maintenance is at least a decade away. Its an operating surplus

Given the chronic overcrowding and the comparatively high fares compared to bus Luas is a licence to print money, the problem is here we are 2 years on and the system is over crowded more lines are being added on but little in the way of capacity is coming, it just reinforces the fact that Metro on the Green line from day one would have been the best option

The DART despite its flaws returned a operating profit for a number of years in the mid 1990's. It is still burdened with a €34 million /£27.1 million bank load taken out to pay for it since the EEC money given by Brussels was pocketed by the DoF and CIE left to get a loan from the World Bank that said the operating deficit has fallen steadily over the last 3 years

Yes 'Transport21', the Luas project was planned and implemented excellently, that is to the Irish government’s standards of planning.

MarkoP11 wrote:

it just reinforces the fact that Metro on the Green line from day one would have been the best option

The Green party keeps banning on about continuing Metro North south. Don’t quote me on this, as such, but I may have heard something about tunnelling to Beechwood(???) – is this or any kind of Metro North – Luas Green Line link realistically possible?

(Edit: Metro North that is)

MarkoP11

monument wrote:

The Green party keeps banning on about continuing the Metro south. Don’t quote me on this, as such, but I may have heard something about tunnelling to Beechwood(???) – is this or any kind of Metro North – Luas Green Line link realistically possible?

Yes very much so the design of the Luas line beyond Beechwood is such to allow for metro. The RPA are very much up for it

Problem is there already is a nice light rail line there and doing well and a lot of work to do elsewhere

Luas is successful too successful since it was designed for the Dublin of 1990 thats why it uncomfortable at rush hour, it hasn't been without its problems such as the St Stephen's Green accident as well as several derailments or the poor design of Sandyford Depot. That said its got an exceptional safety record, no serious injuries in 2 years of operation.

If there is a failure its on the Red line, the colossal demand between Heuston and City prevents those further out getting on, then there is the huge lull in usage when you hit the Naas Rd, the routing is far from ideal.

I have an idea of the scale of the surplus and it is on par with that the DART achieved once upon a time its not huge its sufficent and everything is on long term contracts so future costs are known.

Its a classic case of a green field style project no baggage clean sheet no need to worry about pension funds, 175 year old infrastructure and so on. If it wasn't profitable given the load factors you would be really worried

elivsvonchiaing

I am really sceptical about these figures:

I used to depend on Connex for commuting; the train was late at least 1 in 5. Saw billboards boasting 95.5% of our trains on time - spoke to work colleagues about this - and we agreed this was cooking the figures.

Really believe that some "haute-cuisine" is going on here...

dowlingm

the difference being Connex didn't take over a brand new line from BR the way they took over LUAS (and its no-strike agreement) from the RPA.

Slice

MarkoP11

If there is a failure its on the Red line, the colossal demand between Heuston and City prevents those further out getting on, then there is the huge lull in usage when you hit the Naas Rd, the routing is far from ideal.

Wasn't Luas originally meant to route through Inchicore but was re-routed through a pretty unpopulated area because of objections from local resident groups?

I'd say those same residents must be kicking themselves now. The Red Line is simply way too long - I think that's the main problem.

steve-o

MarkoP11 wrote:

Its all creative accounting since the Luas is not burdened with the construction costs, its running on new infrastructure and as such serious maintenance is at least a decade away. Its an operating surplus

And it's indirectly subsidised (like all public transport) by the Revenue Commissioners though the TaxSaver scheme.

MarkoP11

Slice wrote:

Wasn't Luas originally meant to route through Inchicore but was re-routed through a pretty unpopulated area because of objections from local resident groups?

We shall wait to see if the Lucan Luas goes that way

Red Luas could have been so much better

MarkoP11

steve-o wrote:

And it's indirectly subsidised (like all public transport) by the Revenue Commissioners though the TaxSaver scheme.

No its not since the passenger pays the full price of the annual ticket and gets tax relief at source the value to the transport company is the same. You can buy a annual ticket for the same price outside the tax saver scheme, note self employed people cannot claim under the current set up

If anything the tax saver scheme is reducing revenues since passengers can more clearly see the cost savings in annual tickets and can pay by direct salary deduction each month, annual ticket sales have grown massively as a result

shltter

It is a completely different system to the Dart or to the Bus service you cannot compare.
Luas is only operating 2 very well used routes and does not have to deal with traffic or man stations.

If you separated the QBC routes like the 46s 27s 39s etc from the rest of the network DB would not need a subvention
Traffic in Dublin is estimated to cost DB 50 million euro a year which is the best part of the size of subvention.

Also LUAS may not need a day to day subvention but for example when the rolling stock needs to be replaced the taxpayer will foot the bill as they footed the bill for the over 800 million it cost to build in the first place.

dowlingm

MarkoP11

I suppose the argument is that while annual tickets reduce income, if they increase ridership within existing capacity (higher load factor) the lower costs per commuter maintain existing margins.

I'll be getting a metropass in Toronto soon because with the new tax relief it will be cheaper than 20 working days x 2 tokens. It will also mean I will take the subway more at weekends as it means zero cost to me above what I will already have paid, but it means my car isn't on the road which is good for the city.

Diaspora

One wonders would the €850m upgrade of the M50 have been required if such a scheme had been in place 5 years ago and platform for change delivered on time.

Victor

http://www.thepost.ie/post/pages/p/story.aspx-qqqid=15268-qqqx=1.asp

RPA not directed by state to recover Luas costs
25 June 2006 By Richard Curran

The €238,000 surplus for the Luas reported by the Railway Procurement Agency (RPA) last week did not include a €24 million depreciation charge for the fall in the value of the network or €35 million in exchequer funding towards the cost of building it.

When depreciation is included as an operating cost, as it is in most businesses, the state’s subvention helped to bring about a modest operating surplus. However, the government has not directed the RPA to recover from Luas’s operations any of the €775 million it cost to build it.

Frank Allen, the RPA chief executive, said it was instructed to ensure the Luas broke even and did not require an operating subvention from the state in the future.

This enabled the agency to report that LUAS made a €238,000 surplus last year, which excluded the depreciation or the state’s capital grants towards the cost of construction. Neither did the surplus figure trumpeted by the RPA include any administration expenses incurred by the agency in relation to Luas.

If depreciation is included, as it would for most typical businesses, Luas made a loss of €24 million before exchequer funding. Based on these figures the state’s total subvention was equal to €1.09 for every passenger journey.

Allen acknowledged that the €238,000 described as a surplus by the RPA last week was equivalent to Luas’s earnings before interest, depreciation and tax (EBIT).

However, he rejected the suggestion that describing it as a surplus was in any way misleading because of the specific nature of the business. Typically businesses include their depreciation charges as part of their operating costs.

The RPA did this, but highlighted the more positive figure at its press conference last week on the basis that it doesn’t have to try and recoup those building costs. He said infrastructure firms are different.

‘‘No toll road in the world for example has recovered its capital costs. We do not recover capital costs,” he said. Allen said the goal set by the Department of Finance was to ensure that an operating subvention was not needed, and that means ensuring a break even. He said the Luas had achieved this ahead of schedule.

‘‘Our accounting approach is approved by our auditors and we are not doing anything unusual,” he said. He cited several international toll road companies that tried to recover their capital costs and they went bust. ‘‘Toll bridges recover capital costs, toll roads don’t,” he said.

The annual report shows the LUAS with an operating surplus of €957,000 when depreciation is included, but that also includes €34 million in grants and administrative expenses for the RPA.

Allen said the RPA head office operations were doing less and less work on Luas and there was nothing wrong in not attributing any of its €9.4 million administration costs in reporting a €238,000 surplus.

dazberry

Slice wrote:

Wasn't Luas originally meant to route through Inchicore but was re-routed through a pretty unpopulated area because of objections from local resident groups?

Yes, AFAIR there were objections - not sure exactly where they came from mind - but at times like that all the politicians come out in force to do FA except sent around flyer after flyer.

The first series of flyers were about how each politician single handedly brought the Luas to Inchicore and how great it would be for the village. The second series of flyers were how each politician was lobbying to get the route changed, and the third lot was how single handedly each had got the route changed.

D.

BrianD

... and the fourth lot will be how they will be building a branch line to Inchicore in time for the next election!

BTW what are the responsibilities of the Luas operator. Do they maintain the rolling stock and line?

Red Alert

I think Alstom have the contract to maintain the line and rolling stock, I presume they report to the RPA (as opposed to Con(nex)/Veolia/insert-less-sullied-name-here)

dowlingm

DB/BE doesn't recover any costs of building roads - in fact aren't all BE Expressway buses still rego'ed in Dublin which means DCC gets all the road tax - or did that get fixed?

Victor

dowlingm wrote:

DB/BE doesn't recover any costs of building roads - in fact aren't all BE Expressway buses still rego'ed in Dublin which means DCC gets all the road tax - or did that get fixed?

Irrelevant, it all goes back into the Local Government Fund.

Slice

Obviously if RPA were instructed to recoup depreciation cost as they should have done then the construction of Luas under private-public parnership might not seem so advantageous after all (as oppose to being completely funded/run by government) - it all appears a bit political if you ask me, the government want PPPs to appear successful and so instruct RPA not to pursue depreciation - the excuse that ‘‘No toll road in the world for example has recovered its capital costs. We do not recover capital costs,” seems pathetic as excuses go given that public funds were used in constructing Luas and the deal was such that if Luas made a profit government should be paid...

Capt'n Midnight

€238,000 at that rate they could pay off the full €775m by the year 5262 :rolleyes:

Metrobest

We should all be celebrating the outstanding success of luas. Is it a uniquely Irish trait that the more successful something is, the more it is admired across the world, the more we must try and tear it down, stop it getting too big for its boots.

Luas is one of the best investments an Irish government has ever made in public transport and I think it was worth every cent. Incidentally, of the 775m it cost, 91 came from our good friends in the EU.

It cost a lot of money to build but that's a capital cost that had to be spent. It is perfectly fair to now talk in terms of an operating profit based on the cost of operating the service set against revenue from fares and ancillary revenue.

The fact is, leaving aside capital costs, the luas is not relying on handouts from the taxpayers. It can stand on its own two tracks.

DART, on the other hand, remains firmly attached to the bosom of the state. That's the real story. How in God's name does DART - with its packed commuter trains - lose so much money. It's hardly a non-commerically viable route - all we ever hear about is how overcrowded it is. Maybe the Indo and SBP should investigate.

Ham'nd'egger

dazberry wrote:

Yes, AFAIR there were objections - not sure exactly where they came from mind - but at times like that all the politicians come out in force to do FA except sent around flyer after flyer.

The first series of flyers were about how each politician single handedly brought the Luas to Inchicore and how great it would be for the village. The second series of flyers were how each politician was lobbying to get the route changed, and the third lot was how single handedly each had got the route changed.

D.

If memory serves me correctly, the line was to have ran through Kilmainham and Emmet Road, where it was to turn left into St. Michaels estate and to Goldenbridge. And this was all announced not long after they had opened the 78A and 51B Cityswift bus routes via Kilmainham. Aside from the bus issue, it would have cut off a whole mile of houses and commercial units on a street that would have literally have had zero roadspace to access premises, not to mention cutting off Inchicore and James Street to most road access.

As it happened, the "alternative" route was found and all was quiet as the cat slept

paulm17781

Metrobest wrote:

DART, on the other hand, remains firmly attached to the bosom of the state. That's the real story. How in God's name does DART - with its packed commuter trains - lose so much money. It's hardly a non-commerically viable route - all we ever hear about is how overcrowded it is. Maybe the Indo and SBP should investigate.

Because of debt that it has to pay and Luas doesn't... But you already knew that.

shltter

paulm17781 wrote:

Because of debt that it has to pay and Luas doesn't... But you already knew that.

And because it is two completely different systems the dart by its nature requires a much higher staffing level.
And of course they depreciate their assets like most businesses because the Government has not told them to lie and appear like they made a surplus.

अधिनायक

shltter wrote:

And because it is two completely different systems the dart by its nature requires a much higher staffing level.

What is it about the DART that requires a much higher staffing level? The tickets are sold by people instead of machines. Why is this? DART trains have a much higher capacity than Luas so they need less drivers to ferry the same number of passengers.

What is the purpose of maintaining suburban DART stations in the form of houses such as Blackrock? Is this to provide accommodation for the human ticket sellers? Why not just have open platforms with ticket machines in suburban areas like the Luas?

I don't understand.

dam099

Metrobest wrote:

DART, on the other hand, remains firmly attached to the bosom of the state. That's the real story. How in God's name does DART - with its packed commuter trains - lose so much money. It's hardly a non-commerically viable route - all we ever hear about is how overcrowded it is. Maybe the Indo and SBP should investigate.

If as other posters have been saying the DART operating figures include depreciation and/or interest costs related to the capital borrowed for the project and LUAS does not then it is not comparing like with like. It would be interesting to see a comparison of the two systems done on a consistent accounting basis.

Capt'n Midnight

Metrobest wrote:

Luas is one of the best investments an Irish government has ever made in public transport and I think it was worth every cent. Incidentally, of the 775m it cost, 91 came from our good friends in the EU.

It cost a lot of money to build but that's a capital cost that had to be spent. It is perfectly fair to now talk in terms of an operating profit based on the cost of operating the service set against revenue from fares and ancillary revenue.

IIRC they could have got £300m from the EU if they had gone ahead when first proposed. Anyone know how much Barcelona got for their one ?

D'Peoples Voice

Anyone else hear about the hundreds of thousands of euro worth of damage done to numerous Luas carriages every weekend on Red Line at Kingswood.
I heard someone the other day DEFENDING the scumbags doing this,
saying there is nothing else for them to do in their area.
Do you blame the parents or society?

Enigma365

Red Luas could have been so much better

I agree, 48 minutes end to end is too long. It should have been given more segregated track, to allow a running time of Tallaght-City Centre of close to 30 minutes.

The Green Line is pretty much perfect, apart perhaps from capacity.

the design of the Luas line beyond Beechwood is such to allow for metro.

Isn't the line after Charlemont suitable for metro standard? I know there are traffic lights at one or two very minor junctions around cowper, but these could easily be replaced by level crossings(or kept as traffic lights, as Dublin metros are going to be light-rail).

shltter, I may be wrong, but you sound like one of those people who said, at time of launch, that the Luas money would have been better spent on more QBC's. I doubt those people even use public transport.

I could be wrong on this, but I believe very few public transportation networks around the world make a financial profit. They are a public service, like healthcare and education. Financial profitability is not that important and should never be a requirement.

Waster

On the red line, how long does it take to get from Jervis to the Kylemore stop?

aliveandkicking

Waster wrote:

On the red line, how long does it take to get from Jervis to the Kylemore stop?

Approx 25 minutes

monument

aliveandkicking wrote:

Approx 25 minutes

But not a rush hour where you can see two or even three trams outbound around Jervis.

Even if Freeflow has helped this, it is just for Christmas. There were Garda at major and minor city centre junctions this evening.

Enigma365

But not a rush hour where you can see two or even three trams outbound around Jervis.

That shouldnt be happening with the luas. The red line is supposed to take 48 minutes end to end. Does it sometimes take more than 50 minutes?

The red line should absolutely have been given more segreagated track.