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Government decision on DART Underground / Metro North etc. well overdue

  • 01-11-2011 2:13pm
    #1
    Registered Users Posts: 18,889 ✭✭✭✭ murphaph


    Does anyone have any news on this? Varadkar was supposed to be waiting for some reports and would make a decision in fecking September. It's now November and still nothing.


Comments

  • Registered Users Posts: 61 ✭✭✭ kiwster


    murphaph wrote: »
    Does anyone have any news on this? Varadkar was supposed to be waiting for some reports and would make a decision in fecking September. It's now November and still nothing.

    November 10th

    http://www.irishtimes.com/newspaper/ireland/2011/1019/1224306074102.html


  • Registered Users Posts: 3,278 ✭✭✭ dubhthach


    No doubt there will be a whole slew of cancellation announcements been issued in the weeks leading up to the budget.


  • Closed Accounts Posts: 701 Cathaoirleach


    Metro North and BXD are not going ahead. The NTA are currently drawing up plans for several Bus Rapid Transit lines in Dublin. That's the best we can hope for over the next 10 years.


  • Registered Users Posts: 2,330 ✭✭✭ AngryLips


    Where's the source for this?


  • Closed Accounts Posts: 177 ✭✭ LaFlammeRouge


    AngryLips wrote: »
    Where's the source for this?

    S.I. No. 470 of 2011.
    TRANSPORT (RAILWAY INFRASTRUCTURE) ACT
    2011 (ADDITIONAL FUNCTIONS) (PUBLIC
    TRANSPORT BY ROAD) ORDER 2011.


    The Minister for Transport, Tourism and Sport, with the consent
    of the Minister for Public Expenditure and Reform, has made
    an Order entitled as above under Section 11(2) of the Transport
    (Railway Infrastructure) Act 2001.
    The purpose of the Order is to allocate additional functions to
    the Railway Procurement Agency in relation to the
    development of bus rapid transit systems.

    http://www.irisoifigiuil.ie/archive/2011/september/Ir230911.pdf


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  • Registered Users Posts: 63 ✭✭✭ chooochooo


    What a naive spoofer that Varadkar is.


  • Registered Users Posts: 2,330 ✭✭✭ AngryLips


    That's silent on MU and BXD...


  • Moderators, Motoring & Transport Moderators Posts: 13,991 Mod ✭✭✭✭ monument


    Metro North and BXD are not going ahead. The NTA are currently drawing up plans for several Bus Rapid Transit lines in Dublin. That's the best we can hope for over the next 10 years.

    I wouldn't have much hope for any of the rail projects -- at least not without a year or two deferral.

    But it's worth noting that BRT is part of the NTA's 2030 Vision and so are many other things including the rail projects. Currently the BRT routes planned are not conflicting with rail plans too much -http://www.boards.ie/vbulletin/showthread.php?t=2056401848


  • Closed Accounts Posts: 2,468 BluntGuy


    Not sure if posted, but an article on PPPs

    http://www.irishtimes.com/newspaper/innovation/2011/1028/1224306356859.html
    The construction industry needs a serious boost and the public-private partnership model might just be the way to give it the kick it needs – but who will take the first step to recovery?

    THEY WERE ONCE hailed as the pioneering way to plug the infrastructure deficit; a means of getting roads, schools, prisons and hospitals built without burning a hole in the State’s bank account. But with the advent of the banking and fiscal crisis, public-private partnerships have become unviable, with flagship projects postponed and other contracts stalled. So are PPPs off the table for good, or could this funding model eventually serve as an economic stimulus that helps Ireland play catch up once again?

    No major public-private partnership (PPP) infrastructure project has secured funding since the advent of the financial crisis three years ago, the Department of Transport recently said, while a database used by the last government to monitor PPP projects, ppp.gov.ie, has not been updated since March 2010.

    Minister for Transport Leo Varadkar identified the problem when he postponed the PPP for the Metro West line between Ballymun and Tallaght earlier this year: PPPs in Ireland have been undermined by a double funding bind. The reluctance of the international debt funding market to stump up the cash to finance projects in Ireland has come at a time when the exchequer is unable or unwilling to make a contribution of its own.

    It has been “extremely quiet”, confirms Michael Flynn, a partner at Deloitte who specialises in PPPs. The banks are focused on deleveraging rather than lending and the 20-year-plus time horizon on a typical PPP project just isn’t in their interest when sovereign risks are high.

    But though the scarcity of capital is putting the kibosh on large-scale transport projects, Flynn believes that smaller PPP bundles for projects such as schools, in the order of €50-€60 million, are “certainly bankable, with one or two banks” – they just require the go-ahead from Government. This echoes the view of the National Development Finance Agency – the agency charged with an advisory role on all PPPs. It believes that projects with relatively low funding requirements retain an interest for the debt and equity funding markets.

    There is, according to Flynn, “a level of interest” overseas in Irish PPP projects – despite “the odd hiccup”, there have been many successful roads schemes that have served as a good precedent. However, from the contractor’s point of view, any deals done in the current environment would need to have simpler structures than some of the PPP business models favoured in the past, he says.

    Even “bite-sized deals” are easier said than done, however, at a time when Ireland’s capital spending budget is seen as a more suitable target for cuts than current spending (though there are plenty of people, from business groups to fans of using capital programmes for economic stimulus, who will be attempting to persuade the Government otherwise).

    A document prepared for Varadkar’s department starkly blamed the failure of the National Roads Authority to finalise negotiations in the Gort to Tuam motorway bypass on “concern in the capital markets regarding Ireland’s overall financial situation”. But Ireland’s current failure to meet the minimum sovereign credit rating requirements of international banks is by no means a permanent problem, says Shane Lyons, director at PricewaterhouseCoopers’ corporate finance division.

    “The capital markets see the Irish credit risk declining – bond yields and CDS spreads are coming down. The capital markets are really saying that Ireland is getting on the right track, and if this is sustained, eventually the ratings agencies are likely to follow,” says Lyons. “But the Government still needs to have an actual spending programme.”

    Are PPPs in the best interest of taxpayers? At the end of 2010, the State had an outstanding commitment of almost €4.3 billion to some 37 projects already in place, covering roads, schools and medical projects. Some €1.9 billion has already been spent. However, the report of the Comptroller and Auditor General published in September noted that estimates were unavailable for future PPP commitments where contracts had not been signed because of the complexities involved, including the cost of borrowing. It also noted that just three PPPs reached contract stage last year.

    Some old-style road schemes were badly affected by timing issues. The National Roads Authority estimates that it will be obliged to compensate the operators of the M3 motorway in Co Meath and the N18 Limerick tunnel next year because traffic volumes have failed to meet “traffic-related guarantees” included in the original agreements. The private sector companies involved are also bearing losses as a result of these over-optimistic projections.

    This form of contract is now gone, says Mary Dunne, a partner and legal expert in PPPs at Byrne Wallace. It has been replaced with a more standard contract whereby the private bidder pays for the design and construction of the project and the State pays a monthly payment, “almost like a mortgage”. There are penalties for the contractor if they fail to maintain the roads, but traffic forecasts have been taken out of the equation, and it’s the financiers that have called a halt.

    “Eight years ago, the banks were willing to take that kind of risk on population projections, but now they won’t,” says Dunne. The risk the banks are now mulling is whether or not the Irish Government will make its repayments. At the moment, they’re shying away.

    “It’s a confidence issue. There’s a lack of confidence,” she says. One London-based syndicate on the verge of financing a “cookie-cutter” Irish roads PPP walked away earlier this year “just for absolute confidence reasons”, she says. “If solid London banks that have funded loads of these projects are getting cold feet, then it’s a real line in the sand.”

    Like Flynn and Lyons, Dunne sees the financiers returning once this confidence issue in Irish sovereign debt is resolved. For global private equity funds, a deal with a central government department in Ireland should still be worth a look. “A lot of the guys I’m dealing with are sniffing around Poland and Croatia at the moment,” says Dunne. “The companies are in a frenzy to see what comes out of Croatia, and Croatia is much less solid than we are, and it hasn’t got the experience.”

    PPPs can be treated as off-balance sheet expenditure by the Government, which during belt-tightening times makes them an easier commitment than an upfront outlay. But the accounting treatment may artificially heighten the benefits of some projects – a recent report by the UK’s Treasury Select Committee argued that stricter criteria were needed to govern its private finance initiative programme. “PFI means getting something now and paying later. Any Whitehall department could be excused for becoming addicted to that,” said the committee’s chairman Andrew Tyrie MP. In other words, the ability of governments to use the model to keep projects off-balance sheet skews the incentive away from traditional procurement methods, which might be more efficient.

    But many of the original attractions of PPPs for the construction of public infrastructure still remain, in theory. They were attractive because they allowed the costs of an investment to be spread over the lifetime of assets such as roads, rail-tracks or ports, thereby allowing large-scale projects of economic value to be brought forward.

    Lamenting that “too many separate departments” are responsible for PPPs, a report produced by business group Ibec and accountants KPMG in March called for the establishment of a specific National Infrastructure Authority to identify projects and take responsibility for funding strategies. This, it said, would prevent delays in planning and at the pre-procurement stage. The report also complained of a lack of clear visibility on pipeline projects, which it said was needed “in order to attract and maintain interest from international banks and investors in Irish PPP projects”.

    Supporters of the funding model have also pointed out that experience and skills gained by Irish construction contractors during the good times have allowed them to become profitable exporters, as they win bids for partnerships in markets such as the UK and Poland. Construction group Sisk is the leading light in this category. Almost half of its turnover now comes from Britain as a result of its involvement in the London 2012 Olympic athletes’ village and a section of the UK capital’s crossrail tunnel.

    They have been helped by standardised models of PPP contracts across the world, says Dunne, and she should know – she drafted the template PPP for Ireland. Based “95 per cent” on the UK’s PFI model, similar contracts are now used in other markets. “Irish contractors are completely familiar with them. There’s nothing to stop an Irish contractor bidding for a PPP in Canada or Australia or anywhere,” says Dunne.

    Lyons describes PPPs as “one form of procurement”; part of the Government’s toolkit. “I wouldn’t espouse PPPs in every circumstance, but it has successfully delivered a big proportion of our national motorway network and is also making a significant contribution in the education sector.”

    Despite the current squeeze on both public and private participation in PPPs, it seems clear that major projects such as Metro North and the Dart Underground won’t happen in the future unless the model becomes workable again. Or as Varadkar put it bluntly in May: “If PPPs are not a runner, then loads of these big projects are gone.”

    The fate of the not-so-big projects is even less clear.


  • Banned (with Prison Access) Posts: 25,234 ✭✭✭✭ Sponge Bob


    I posted all of that in this forum years ago, still it is nice that the Times gets on message 3 years later all the same :(


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  • Moderators, Motoring & Transport Moderators, Technology & Internet Moderators Posts: 20,995 Mod ✭✭✭✭ bk


    Lamenting that “too many separate departments” are responsible for PPPs, a report produced by business group Ibec and accountants KPMG in March called for the establishment of a specific National Infrastructure Authority to identify projects and take responsibility for funding strategies. This, it said, would prevent delays in planning and at the pre-procurement stage. The report also complained of a lack of clear visibility on pipeline projects, which it said was needed “in order to attract and maintain interest from international banks and investors in Irish PPP projects”.

    This sounds like a very good idea and the NTA aren't too far off it. However an even higher level authority would take a look at all infrastructure projects include electricity, gas, water, hospitals, broadband and transport.

    Such a group could rank and prioritise projects on their economic importance to the country and we might therefore avoid the usual political interference and pump politics that have lead to disasters like the WRC.


  • Closed Accounts Posts: 624 Aidan1


    would make a decision in fecking September

    It's not Varadkar's decision to make - it's part of the Comprehensive Review of Expenditure, and any announcement will have to fall out of that. In any case, even if there was no review (or recession) a project of the scale of MN would require a Govt decision, it's simply too large a call to be left in the hands of one Minister. Varakar may get to say that it is his decision, but given the likely overall capital budget for 2012, it really won't be.

    In reality, given that all PPPs are essentially in limbo because of the euro/debt crisis, the outcome of this is very, very easy to predict, at least for 2012.


  • Closed Accounts Posts: 2,468 BluntGuy


    murphaph wrote: »
    Does anyone have any news on this? Varadkar was supposed to be waiting for some reports and would make a decision in fecking September. It's now November and still nothing.

    As alluded to above, we all know what we've really been waiting for is how the decision will be presented rather than what it actually is. Still I agree that putting these projects out of their immediate misery should have happened sooner rather than later.

    Even the eternally optimistic RPA MN facebook page has a more resigned comment at the top:

    http://www.facebook.com/MetroNorth


  • Closed Accounts Posts: 3,032 DWCommuter


    Sponge Bob wrote: »
    I posted all of that in this forum years ago, still it is nice that the Times gets on message 3 years later all the same :(

    Yes you did and I got slated nearly 2 years ago for daring to question the viability of a PPP in current times. It is true to say that as recession and fiscal chaos came upon us like a tidal wave, many contributers here, were still convinced that a PPP was straightforward enough. But as I pointed out back then, they were forgetting that ultimately the state had to have funds to make repayments. (Not easy when every cent is being funneled into a banking system, to please our EU overlords.)

    Some Anglo bond holders got their piece of pie today. It might mean ****e public transport for a generation, but at least the EU are happy. We are merely an accounting statistic to them.


  • Registered Users Posts: 18,889 ✭✭✭✭ murphaph


    DWCommuter wrote: »
    Yes you did and I got slated nearly 2 years ago for daring to question the viability of a PPP in current times. It is true to say that as recession and fiscal chaos came upon us like a tidal wave, many contributers here, were still convinced that a PPP was straightforward enough. But as I pointed out back then, they were forgetting that ultimately the state had to have funds to make repayments. (Not easy when every cent is being funneled into a banking system, to please our EU overlords.)

    Some Anglo bond holders got their piece of pie today. It might mean ****e public transport for a generation, but at least the EU are happy. We are merely an accounting statistic to them.
    The banks are a huge problem but the bigger problem is the current deficit caused by spending billions a year more than we generate in tax revenue.

    Aside: I know full well none of these projects are going ahead, I just want Varadkar to announce it and at least make provisions to finally deliver real bus improvements. Integrated fares, proper bus priority measures, more RTPI etc.


  • Closed Accounts Posts: 701 Cathaoirleach


    murphaph wrote: »
    Integrated fares, proper bus priority measures, more RTPI etc.

    We'd be lucky even to get that. :rolleyes:


  • Closed Accounts Posts: 2,468 BluntGuy


    We'd be lucky even to get that. :rolleyes:

    There might be enough pennies at the back of the government couch to scrape it together.

    Still fairly shambolic though given the amount of money, whether real or imaginary, that was floating around.


  • Closed Accounts Posts: 7,221 BrianD


    I suspect that if there was going to be "good news" on either project, it would have been announced during the elections. Don't think it would have saved Gay Mitchell though1


  • Registered Users Posts: 1,453 ✭✭✭ strassenwo!f


    I was always very dubious about the merits of the Lucan Luas. I'd imagine this is also under threat, but I haven't seen any confirmation yet that it has been scrapped. I can't find anything on the RPA webpage.


  • Registered Users Posts: 8,194 ✭✭✭ cgcsb


    the route for Lucan Luas was a joke anyway.


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  • Moderators, Motoring & Transport Moderators Posts: 13,991 Mod ✭✭✭✭ monument


    Sunday Times reports on its cover today that Metro and Dart Underground are expected to be scrapped, in one form or another, while even BXD is deferred for at least three years.

    We should know later this week anyway.


  • Registered Users Posts: 822 ✭✭✭ Round Cable


    cgcsb wrote: »
    the route for Lucan Luas was a joke anyway.

    Indeed, the RPA has an estimated journey time of 44 minutes from Lucan to Abbey Street by Luas line F, currently the bus will get you there in about 30 mins (25a/b).


  • Closed Accounts Posts: 701 Cathaoirleach


    Now they'll spend millions planning new BRT lines only to scrap them 4 years down the line and move on to some other half-arsed transport initiative!


  • Closed Accounts Posts: 2,468 BluntGuy


    Another article stating the inevitable:

    http://www.independent.ie/national-news/euro14bn-in-cuts-signal-death-knell-for-metro-north-and-dart-underground-2926667.html
    €1.4bn in cuts signal death knell for Metro North and DART Underground

    MAJOR infrastructural projects like Metro North and DART Underground looked doomed last night as the Government announced capital spending cuts worth €1.4bn over the next three years.

    Other areas, like building schools and health facilities, are also likely to be hit.

    Finance Minister Michael Noonan said more than half of the €1.4bn would be cut next year -- €750m -- with another €550m coming in 2013, and €100m in 2014.

    There will be no capital spending cuts in 2015, the final year of the Government's plan.

    The €750m to be cut next year accounts for a third of the total €2.2bn in spending cuts for 2012, as Mr Noonan said frontloading would save money in the longer term.

    Although it effectively signals the death knell for projects like Metro North and DART Underground, Mr Noonan would not spell out yesterday exactly what was getting cut.

    Transport sources have already indicated both rail projects were unlikely to proceed, with the line linking both Luas services in Dublin -- line BX -- now regarded as the only major rail development likely to be built.

    The Government will publish a capital spending plan next week, and this will detail exactly how much each department will have to spend until 2016. It will then be up to each line minister to decide how to spend the money allocated to them.

    "The €750m for 2012, obviously that implies that certain capital projects will not go ahead but it's a matter for the line ministers to announce. I wouldn't deprive them of the pleasure of announcing them," Mr Noonan said yesterday.

    The Construction Industry Federation (CIF) said there was a strong case for going ahead with big capital projects in order to stimulate employment.

    "The capital investment programme had already been substantially scaled back in recent Budgets and had borne too great a proportion of the fiscal adjustment to date," CIF director general Tom Parlon said.

    "The impact in terms of jobs and overall construction activity will depend on how the cutbacks are implemented.

    "Within the capital programme, construction and infrastructure spending makes up about 50pc of investment.

    "It is vital that this element of the programme is maintained in order to safeguard employment."


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