What could have been (Transport Infrastructure)

XPS_Zero

Reading an Irish Times Dublin Port article today reminded me that the Irish have a tendency to viciously oppose any major infrastructure project often for stupid reasons.

Heres the story: http://www.irishtimes.com/news/environment/how-dublin-s-port-tunnel-transformed-the-city-1.3050895

Cutting the ribbon at the opening of the Dublin Port Tunnel, a dozen years after it was sanctioned and five years after construction began, Bertie Ahern joked: “If there’s not a 10-year row about a project, it’s not worth doing.â€

And there were many rows. It was constantly opposed by residents in Marino, with the Marino Development Action Group describing the plan as “not just imperfect, but totally wrongâ€.

In October 2000, Finian McGrath, then an Independent councillor for north central Dublin, was scathing: “It’s a PR and con trick to try to create an image that they’re going to deal with traffic,†he claimed.

Meanwhile, the Irish Road Haulage Association (IRHA) complained that the tunnel’s height would would be too low for many lorries and that plans to exclude trucks from the city centre would strangle Dublin.

As I read it though, my mind drifted and i started to see ''Metro North'' and ''DART UNDERGROUND'' for "Port Tunnel". I remember a classmate telling me, back in school, when I got braces "you hate having them, but once the works done you can't believe that you even considered NOT getting it done"

I began to wonder, imagine if we'd completed these two key projects by now (as the Transport 21 plan called for), how much easier things would be with regards to the bottle necks through Connoly, the painfully slow snake ride on Dublin Bus from CC to Swords . One of Irelands biggest continuing mistakes has been politicans not thinking past the next election, having no long term vision.

I never understood the recession logic of "we've less money now, so lets not build this thing that will help us in 10 years". To me, using short term fiscal problems as an excuse to avoid making long term investments that would be a short term stimulus to the economy (which we BADLY needed in 2011 when this present govt came in) and a long term economic boon is crazy . Using education as an analogy, imagine we had'nt got free tutition at university and you had to borrow it to pay full whack, leave aside people too poor to borrow or who can't borrow lets say you're just middle class. You decide you won't borrow the 20k to invest in your education, which will lead to you earning 1m more over your lifetime at minimum, because you don't wanna loose an extra 100 a week THIS YEAR. Makes no sense does it? All I could think was if we'd done those projects people would be calling the short term thinkers who wanted us to shelve them cribbers and moaners just like the nay-sayers over the tunnel.

Imagine if we'd done a smart big bang infrastructure package in 2011 how much better a position we'd be in to take advantage of the Brexit company bail out etc never mind how good it would be for people already living here.

But we didn't...

Bray Head

There were some key decisions taken in about 2010.

Billions needed to be cut from spending. An easy billion a year was found by postponing a lot of big infrastructural projects (MN, DU) which were basically ready to go at the time.

This meant that real pain was avoided through lower cuts in welfare and public wages. Pensions were not cut of course either.

At this juncture - with 200,000 jobs created again and the public finances close to balance - it's only fair to ask, was this decision in 2010 right?

Banjoxed

Bray Head wrote: »

There were some key decisions taken in about 2010.

Billions needed to be cut from spending. An easy billion a year was found by postponing a lot of big infrastructural projects (MN, DU) which were basically ready to go at the time.

This meant that real pain was avoided through lower cuts in welfare and public wages. Pensions were not cut of course either.

At this juncture - with 200,000 jobs created again and the public finances close to balance - it's only fair to ask, was this decision in 2010 right?

So, basically you're saying that MN and DU would have prevented 200,000 jobs from being created?

That's a massive load of bollix there.

hytrogen

Banjoxed wrote:

So, basically you're saying that MN and DU would have prevented 200,000 jobs from being created?

What Bray Head is saying is that by deferring the projects it saved many more from even further hardships as opposed to sinking us into further ownership of the IMF/EU etc.. and that now we have 200k re-employed and steady stream of tax incoming, etc. we should be pursuing these projects without further delay while the going's good.
I think this thread would be better suited over in the politics or economics perhaps?

Bray Head

What I meant was this. In 2010 the following choice existed:
1) cut welfare and cause hardship in the near term; build rail infrastructure instead
2) maintain welfare rates; postpone infrastructure investment

Option 2 was chosen.

With the benefit of hindsight, the recovery has been stronger than expected. We are not worrying about unemployment anymore, but the problems of full employment like congestion.

With hindsight, option 1 might have been the better choice.

Bass Reeves

Banjoxed wrote: »

So, basically you're saying that MN and DU would have prevented 200,000 jobs from being created?

That's a massive load of bollix there.

I think you should read his post. He did not say that postponing MN and DU created 200k jobs. Rather he pointed out that there postponing was seen as a choice as opposed to cutting welfare or public sector wages. You also have to remember that other projects such as the children's hospital was put on the back burner as well.

The government cut over a billion a year from infrastructure projects it had to complete projects already contracted and in progress. The Metro North and DART are multi billion projects that we did not have the money for. Now you can add that we will have to find another half a billion for water as charges are gone. It's about choices in the way we spend our taxes. We cannot afford to pay Teacher's, health staff, Gardai, politicians and dare I say it transport workers the highest wages in Europe, pay the highest rate of welfare and expect to have world class infrastructure and services as well. It about choices on how we spend our taxes and and charge for services. I think it called reality.

Sam Russell

Bray Head wrote: »

What I meant was this. In 2010 the following choice existed:
1) cut welfare and cause hardship in the near term; build rail infrastructure instead
2) maintain welfare rates; postpone infrastructure investment

Option 1 was chosen.

With the benefit of hindsight, the recovery has been stronger than expected. We are not worrying about unemployment anymore, but the problems of full employment like congestion.

With hindsight, option 2 might have been the better choice.

Surely you mean the other way round.

murphaph

Unfortunately it's not a zero sum game for our Dáil politicians. There's the "Dublin factor" to consider.

It is still a vote loser among large numbers of non-Dublin residents to direct investment into Dublin.

Most posters here, from Dublin or otherwise recognise that Dublin needs this infrastructure to compete with other cities, but this is not how your average voter thinks.

jacksie66

This post has been deleted.

bk

The thing is, those should never have been the choices. What we should have been doing is following the German model.

That is when times are good (Celtic Tiger) you cut social welfare, cut spending on infrastructure and increase taxes.

Basically you take steps to take the heat out of the economy, to slow it down a bit so that a bubble doesn't form. You also take advantage of the reduced spending and increased revenue to save it away for a rainy day.

Then when a recession hits, you do the opposite, increase social welfare spending, cut taxes and increase spending on infrastructure.

Basically you take the money you saved earlier and you pump it into the economy so that the recession isn't so severe and you come out of it quicker.

It is called counter cyclical economic policy.

In terms of infrastructure it means you build it when traffic numbers are down anyway, thus less disturbing, you employ hundreds if not thousands of people while building it (helps keep building companies and suppliers employed during building downturns) and you end up with nice new infrastructure that actually helps pull your economy out of recession and is there to be used when the economy picks up.

All of this helps the boom and bust cycle of the economy in Germany and similar countries to be far less severe, it smooths things out and creates a much more stable economy.

We, like the idiots that we are, do the exact opposite. We cut taxes and increase spending during booms, make the booms bigger and creating bubbles and we cut expenditure and increase taxes during recession, making the recession, longer and more painful.

As a result our booms and busts are much more severe and our economy much less stable.

Those 200,000 people you speak of, they would have gotten jobs much sooner and suffered much less hardship under the German model then our idiotic approach.

hytrogen

bk wrote:

Basically you take steps to take the heat out of the economy, to slow it down a bit so that a bubble doesn't form. You also take advantage of the reduced spending and increased revenue to save it away for a rainy day.

Yeah but our politicians don't like to look like hamsters, even though everyone else is with their bails of cash under the beds.. plus it always rains here apparently

quadrifoglio verde

bk wrote: »

The thing is, those should never have been the choices. What we should have been doing is following the German model.

That is when times are good (Celtic Tiger) you cut social welfare, cut spending on infrastructure and increase taxes.

Basically you take steps to take the heat out of the economy, to slow it down a bit so that a bubble doesn't form. You also take advantage of the reduced spending and increased revenue to save it away for a rainy day.

Then when a recession hits, you do the opposite, increase social welfare spending, cut taxes and increase spending on infrastructure.

Basically you take the money you saved earlier and you pump it into the economy so that the recession isn't so severe and you come out of it quicker.

It is called counter cyclical economic policy.

In terms of infrastructure it means you build it when traffic numbers are down anyway, thus less disturbing, you employ hundreds if not thousands of people while building it (helps keep building companies and suppliers employed during building downturns) and you end up with nice new infrastructure that actually helps pull your economy out of recession and is there to be used when the economy picks up.

All of this helps the boom and bust cycle of the economy in Germany and similar countries to be far less severe, it smooths things out and creates a much more stable economy.

We, like the idiots that we are, do the exact opposite. We cut taxes and increase spending during booms, maker the booms bigger and creating bubbles and we cut expenditure and increase taxes during recession, making the recession, longer and more painful.

As a result our booms and busts are much more severe and our economy much less stable.

Those 200,000 people you speak of, they would have gotten jobs much sooner and suffered much less hardship under the German model then our idiotic approach.

That doesn't get a politician elected in Ireland though.

Del.Monte

jacksie66 wrote: »

One major piece of infrastructure that is badly needed in this country is the m20 Cork to limerick motorway. Drove to Cork from Limerick yesterday and it's such a slow, dangerous and overall substandard road.

Rebuilding the Charleville/Patrickswell/Limerick railway line would achieve the same thing, cost less, be more environmentally friendly and a better long term use of limited resources.

dr.fuzzenstein

quadrifoglio verde wrote: »

That doesn't get a politician elected in Ireland though.

It shouldn't be a problem, they could adopt anti cyclical spending and get away with it, as long as they keep the parish pump going and fixing potholes, no one could tell the difference.

dr.fuzzenstein

Del.Monte wrote: »

Rebuilding the Charleville/Patrickswell/Limerick railway line would achieve the same thing, cost less, be more environmentally friendly and a better long term use of limited resources.

The Cork to Limerick road is a completely unacceptable piece of utter sh*t that would be found insufficient in any country and I include Chad, Yemen and Sierra Leone in that.

Bray Head

Sam Russell wrote: »

Bray Head wrote: »

What I meant was this. In 2010 the following choice existed:
1) cut welfare and cause hardship in the near term; build rail infrastructure instead
2) maintain welfare rates; postpone infrastructure investment

Option 1 was chosen.

With the benefit of hindsight, the recovery has been stronger than expected. We are not worrying about unemployment anymore, but the problems of full employment like congestion.

With hindsight, option 2 might have been the better choice.

Surely you mean the other way round.

Apologies. I will correct the original.

end of the road

dr.fuzzenstein wrote: »

The Cork to Limerick road is a completely unacceptable piece of utter sh*t that would be found insufficient in any country and I include Chad, Yemen and Sierra Leone in that.

there are bigger priorities though. DU for a start

Bray Head

bk wrote: »

The thing is, those should never have been the choices. What we should have been doing is following the German model.

That is when times are good (Celtic Tiger) you cut social welfare, cut spending on infrastructure and increase taxes.

Germany actually spends less on infrastructure than Ireland and has done for ten years when its economy has been both growing and shrinking.

The issue is that it already has a mature public capital stock and has a much older population, likely to shrink without a lot of immigration.

By contrast, Ireland has worse-quality public infrastructure and a growing population, hence bigger need for public investment.

Ideally, public investment should be neither pro- nor counter-cyclical but should not respond to the economic cycle at all.

Sadly the institutional framework to make it like this in Ireland does not exist, except for grid infrastructure.

bk

Bray Head, you are absolutely correct, Germany has been building up it's infrastructure since the 1950's and even further back. Where we were first of all held back by the British and then just due to our own poverty, so we really didn't get started until the 1980's

So a long way to go and a long way behind.

In fairness the motorway network has been a massive success and made the country much smaller (good for economy).

Really the only major * road left to build is the M20 and North Ring Road.

That just then leaves us with Metro North and Dart Underground to do and probably eventually a Metro South.

We would have a pretty solid infrastructure then and could probably pear back on the infrastructure investments a bit.

* When I say major, I mean 1 billion+ projects, obviously lots of smaller things to do around the country. Also I'd exclude the second runway and third terminal at Dublin Airport from this. They come under the DAA and will be done either way on a purely commercial basis.

However having said all that, the point about being wiser with our spending and taxation during economic cycles still stands.

Zebra3

Bray Head wrote: »

What I meant was this. In 2010 the following choice existed:
1) cut welfare and cause hardship in the near term; build rail infrastructure instead
2) maintain welfare rates; postpone infrastructure investment

Option 2 was chosen.

With the benefit of hindsight, the recovery has been stronger than expected. We are not worrying about unemployment anymore, but the problems of full employment like congestion.

With hindsight, option 1 might have been the better choice.

Option 3 which cannot be taken out of the equation is the billions upon billions incinerated in Anglo-Irish. :mad:

Bray Head

Grid and major airport infrastructure is more or less done on the basis of need, with the decisions taken by engineers and accountants, overseen by regulators. Politicians don't have much to do with the actual decisions.

Water and waste-water was moving this way too, but has got stuck in the row about charging households for water. Waste to some extent too.

Road and rail infrastructure is sadly still stuck in the Exchequer where it has to compete with other spending which has a higher short-term payoff and politicians who won't be round to cut the ribbon on the projects they approve.

Bass Reeves

Del.Monte wrote: »

Rebuilding the Charleville/Patrickswell/Limerick railway line would achieve the same thing, cost less, be more environmentally friendly and a better long term use of limited resources.

I do not think so. Cork Limerick road needs investment. NRA have already stated this. It is a priority issue for the NRA. If they do not start this in the short term they will have to upgrade nearly all the road from Buttervant until the end of the 2+1 and as well from the Croom Bypass to Charlesville. The road is not just needed for cars but also for commercial vehicles and is part of the tourism infrastructure. Present Cork/Limerick road is totally unsuitable even as a road between major towns not to mind the second and third biggest cities in Ireland.

bk

bk wrote: »

The thing is, those should never have been the choices. What we should have been doing is following the German model.

That is when times are good (Celtic Tiger) you cut social welfare, cut spending on infrastructure and increase taxes.

Basically you take steps to take the heat out of the economy, to slow it down a bit so that a bubble doesn't form. You also take advantage of the reduced spending and increased revenue to save it away for a rainy day.

Then when a recession hits, you do the opposite, increase social welfare spending, cut taxes and increase spending on infrastructure.

Basically you take the money you saved earlier and you pump it into the economy so that the recession isn't so severe and you come out of it quicker.

It is called counter cyclical economic policy.

In terms of infrastructure it means you build it when traffic numbers are down anyway, thus less disturbing, you employ hundreds if not thousands of people while building it (helps keep building companies and suppliers employed during building downturns) and you end up with nice new infrastructure that actually helps pull your economy out of recession and is there to be used when the economy picks up.

All of this helps the boom and bust cycle of the economy in Germany and similar countries to be far less severe, it smooths things out and creates a much more stable economy.

We, like the idiots that we are, do the exact opposite. We cut taxes and increase spending during booms, make the booms bigger and creating bubbles and we cut expenditure and increase taxes during recession, making the recession, longer and more painful.

As a result our booms and busts are much more severe and our economy much less stable.

Those 200,000 people you speak of, they would have gotten jobs much sooner and suffered much less hardship under the German model then our idiotic approach.

What you are describing is Keynesianism and it isn't particularly the German model. Most western economies follow what you describe somewhat automatically - as an economy grows spending on welfare falls and taxes collected rises as people go back to work, taking money out of an economy. As the economy falls taxes collected fall and social welfare spending rises.

Do you accept that the logical progression of your model with the current growth of the Irish economy (unemployment falling, tax collection rising) is that now is not the time to spend on infrastructure, that spending should instead be cut?

Keynesianism suffers from lots of problems - it is politically easy to spend in a recession but it is hard to cut spending anytime.
It assumes that we could borrow but no one would lend to us at a rate we could afford.
It assumes future growth is inevitable but as an example the UK has had to adjust their growth forecasts down over the next five years has made it harder to balance their budget.

bk

Deleted User wrote: »

What you are describing is Keynesianism and it isn't particularly the German model. Most western economies follow what you describe somewhat automatically - as an economy grows spending on welfare falls and taxes collected rises as people go back to work, taking money out of an economy. As the economy falls taxes collected fall and social welfare spending rises.

Yes, I know, the point is we didn't really do it.

While social welfare payments fell naturally during the celtic tiger due to less unemployment, we then had give away budgets which increased lots of the social welfare payments, including unemployment, pensions, etc. rather then saving the savigns for a rainy day. This positioned us badly for when the recession hit.

Likewise, while taxes from property etc. increased naturally during the celtic tiger, again rather then "saving" that money, we cut many of the income taxes, etc. in give away budgets.

Which all made the recession deeper, longer and more painful.

Deleted User wrote: »

Do you accept that the logical progression of your model with the current growth of the Irish economy (unemployment falling, tax collection rising) is that now is not the time to spend on infrastructure, that spending should instead be cut?

Yes, in a normal, western economy, then yes, we should reduce spending on infrastructure (obviously not stop it completely).

But we are far behind the rest of Europe in terms of infrastructure and still have a lot to build before we properly catch up. So realistically we need to continue spending all we can on infrastructure until we catch up. Not ideal but it is what it is.

Deleted User wrote: »

Keynesianism suffers from lots of problems - it is politically easy to spend in a recession but it is hard to cut spending anytime.

Sure, that is why we need politicians who are actual leaders and help educate our populace better. Germans and other Northern Europeans seem to have few issues with following this model and their economies benefit greatly from it. No reason why we can't do the same.

Deleted User wrote: »

It assumes that we could borrow but no one would lend to us at a rate we could afford.

We had to borrow during the recession because we hadn't saved much during the celtic tiger with the give away budgets and no one would lend to us because we made such a mess during the celtic tiger, massively overheating the economy and creating a massive property bubble that almost destroyed us.

The point is has we actually been following Keynesian model, then we would have saved a lot more money during the celtic tiger which would in turn would have been available during the recession. And also the property bubble wouldn't have been so large and damaging, which would have meant that others would have been more willing to lend to us during the recession.

Deleted User wrote: »

It assumes future growth is inevitable but as an example the UK has had to adjust their growth forecasts down over the next five years has made it harder to balance their budget.

Of course, that is because those idiots threw a wrench in their own works with Brexit and will do severe damage to their economy. Certainly not a model we want to be following!

Bray Head

bk wrote: »

Sure, that is why we need politicians who are actual leaders and help educate our populace better. Germans and other Northern Europeans seem to have few issues with following this model and their economies benefit greatly from it. No reason why we can't do the same.

It is too simple to blame politicians. Spending on transport infrastructure takes a decade to mature. That is why short-term spending often gets priority. 

The real answer is to set up the institutions so that public infrastructure is done on the basis of long-term need, with user charges and a resort to market funding when available.

It works for grid and airport infrastructure. Why not for transport too? Without too much legal work TII could given greater legal independence and the ability to borrow, subject to regulation.

bk

Bray Head wrote: »

It is too simple to blame politicians. Spending on transport infrastructure takes a decade to mature. That is why short-term spending often gets priority. 

The real answer is to set up the institutions so that public infrastructure is done on the basis of long-term need, with user charges and a resort to market funding when available.

It works for grid and airport infrastructure. Why not for transport too? Without too much legal work TII could given greater legal independence and the ability to borrow, subject to regulation.

I agree completely. As you say, it works well for the DAA and ESB. And of course Eir and Virgin, Vodafone and Three have been investing hundreds of millions in infrastructure for years now without much government interference.

I agree that TII and the NTA should have similar independence. And for the small projects you certainly do see that (RTPI, Leap, etc.), but when it comes to the big money projects, in the end the government has to sign off on the budget for those and that is where the blocking comes from the politicians.

At a lower level you also see loads of interference and blocking coming from the CIE unions, e.g. 8 carriage DARTS, DARTS every 10 minutes, etc.

I'm not sure exactly how we fix this. The ESB and DAA and others get away with it as their projects are largely self financed. Unfortunately the same isn't true for roads and rail.

Bray Head

There is plenty of unionisation in the commercial semi-state sector too. I get the impression that the management is a bit more competent though.

bk

bk wrote: »

Yes, in a normal, western economy, then yes, we should reduce spending on infrastructure (obviously not stop it completely).

But we are far behind the rest of Europe in terms of infrastructure and still have a lot to build before we properly catch up. So realistically we need to continue spending all we can on infrastructure until we catch up. Not ideal but it is what it is.

Sure, that is why we need politicians who are actual leaders and help educate our populace better. Germans and other Northern Europeans seem to have few issues with following this model and their economies benefit greatly from it. No reason why we can't do the same.

We had to borrow during the recession because we hadn't saved much during the celtic tiger with the give away budgets and no one would lend to us because we made such a mess during the celtic tiger, massively overheating the economy and creating a massive property bubble that almost destroyed us.

The point is has we actually been following Keynesian model, then we would have saved a lot more money during the celtic tiger which would in turn would have been available during the recession. And also the property bubble wouldn't have been so large and damaging, which would have meant that others would have been more willing to lend to us during the recession.

Of course, that is because those idiots threw a wrench in their own works with Brexit and will do severe damage to their economy. Certainly not a model we want to be following!

You continue to reference Germany but have you actually looked at their stats? The Irish budget deficit/surplus is more like what you are advocating than the German one. Before the crash Ireland ran a balanced budget or surplus for years. During the crash we spent a lot. Germany was running a deficit except for a couple of years until recently.

Recently Germany has been running a budget surplus but it is suffering from an infrastructural deficit. Pretty harsh welfare reforms have kicked in to get the economy going but the state is very hesitant to invest.

You are falling for the same thing that you are criticising in politicians, the problem inherent in Keynesianism - you recognise that we should be cutting back now, but then argue that Ireland is different and should be spending all it can.

bk

Deleted User wrote: »

You are falling for the same thing that you are criticising in politicians, the problem inherent in Keynesianism - you recognise that we should be cutting back now, but then argue that Ireland is different and should be spending all it can.

Only on infrastructure, something we really are very slow to spend on in general and which you admit yourself has a good return for the health of the economy.

The government shows no hesitation in cutting the infrastructure budget, but god help you if you suggest increasing taxes or cutting social welfare spending. I honestly believe we have our priorities wrong in this regard.

Bray Head

bk wrote: »

I'm not sure exactly how we fix this. The ESB and DAA and others get away with it as their projects are largely self financed. Unfortunately the same isn't true for roads and rail.

You could legally devote a minimum share of fuel excise duties and all tolls to a transport infrastructure utility. It would then be able to borrow for long-term investment on the strength of it.

This would be administratively quite simple and politically non-contentious compared to Irish Water where the whole issue of metering sunk what was otherwise a sensible way of setting up water services.

Banjoxed

Bray Head wrote: »

You could legally devote a minimum share of fuel excise duties and all tolls to a transport infrastructure utility. It would then be able to borrow for long-term investment on the strength of it.

This would be administratively quite simple and politically non-contentious compared to Irish Water where the whole issue of metering sunk what was otherwise a sensible way of setting up water services.

Th pretty blem wth Ir*sh W*ter was that consumers had something for nothing for forty years and then expected taxpayers to pay for their unrestricted use of it.

Bit like private buses really. No wonder public transport infrastructure in Ireland was first ripped up and then spun against whenever replacements were proposed.