€13 Billion spend on infrastructure

ricimaki · 30-08-2016 8:22pm #1

Suppose Ireland is given a lump sum payment of €13 billion from the EU apple ruling, and the government - being the mighty infrastructure lovers that they are - decide they will invest it all in infrastructure. What should they build? What should be left aside?

Whilst €13 billion is a lot, it might not build as much as you'd think. According to The Journal, the DART underground will cost €3B, Metro North €2.4B, M20 €1B, St. James hospital €650M, and €5B to sort the housing crisis. That's roughly €12B.

The likes of rural broadband, solving the overcrowding issues in some hospitals, rail electrification around dublin, and improved transport both in and between all cities are often overlooked by the government. Sure, they mention that hospital overcrowding is terrible, but there never seems to be a plan to solve it. The national broadband plan has had no real visible impact to date, and was only ever going to guarantee 30mbps.

Rail electrification might seem like an odd one given all the other issues, but it could greatly help rail transport around Dublin, along with the DART underground. Even without DART underground, DART trains could potentially run through Phoenix Park tunnel (tunnel height might be an issue). Removal of at-grade junctions on railway lines around Dublin would also have a massive impact on journey times and congestion.

So, there's lots than can be built, but whats needed the most, and is somewhat achievable with this €13 billion hypothetically available?

marno21 · 30-08-2016 8:24pm

The M20 scheme was proposed as costing €800m in 2009 which included an Adare bypass and a North Ring Road of Cork, and a northern bypass of Mallow.

It is now somehow priced at €1bn minus the Adare bypass. Approximately 26km of the motorway is to be built upon the existing road, almost a third of the entire scheme.

Who pulled this figure out of their arse?

Bray Head · 30-08-2016 8:30pm

Slightly off-topic but other EU rules would mean that one-off revenues like this cannot be spent. It would instead have to be used to reduce national debt. The debt interest savings could be spent on a recurrent basis though.

Given that (at the margin) national debt is financed at 1%, it would provide about 130m per annum to play with.

Bray Head · 30-08-2016 8:30pm

Double post.

ricimaki · 30-08-2016 8:44pm

marno21 wrote: »

The M20 scheme was proposed as costing €800m in 2009 which included an Adare bypass and a North Ring Road of Cork, and a northern bypass of Mallow.

It is now somehow priced at €1bn minus the Adare bypass. Approximately 26km of the motorway is to be built upon the existing road, almost a third of the entire scheme.

Who pulled this figure out of their arse?

Has the expected cost ever been updated since 2009? The overall project cost would be expected to increase with inflation after 7 years, but €200M more for less road is definitely wrong.

Bray Head wrote: »

Slightly off-topic but other EU rules would mean that one-off revenues like this cannot be spent. It would instead have to be used to reduce national debt. The debt interest savings could be spent on a recurrent basis though.

Given that (at the margin) national debt is financed at 1%, it would provide about 130m per annum to play with.

I presumed they wouldn't be just given €13B with no spending rules, but didn't know that, so thanks for the info.

Leaving aside EU policy, even if you handed the Irish government €50 billion and forced them to spend it on infrastructure, you know the majority of it would be spent on never-ending consulting, redesigns and building pointless projects rather than the actually required ones

Bray Head · 30-08-2016 8:59pm

What inflation has there been since 2009?

Consumer prices and wages are maybe 1%-2% higher overall.

I can't imagine materials have gone up that much.

4068ac1elhodqr · 30-08-2016 9:08pm

Build a new eco-carbon neutral city. Something similar to Masdar City with a few extra ideas borrowed from Jacque Fresco's Venus Project

Stick it slap bang in the geographical middle of the country. Hyperloop'd to all major urban centers. Jobs for everyone and an end to the housing crisis. An additional sun in the sky wouldn't go a miss for the cooler months via large offshore passive-tracking concave panel(s), up in the NNW. Naturally the budget would quadruple (as expected with these sorts of things), with most going to quangos, paperwork, research jollies etc.

LeinsterDub · 30-08-2016 9:43pm

Winter Lazy Waitress wrote: »

Build a new eco-carbon neutral city.

This guy for president!

CatInABox · 31-08-2016 4:44pm

So the revenue commissioner believe that the take will be closer to €19m, and the EU think that we could spend the tax take on anything, rather than being required to reduce debt. It makes it more interesting, but I doubt anything is going to come of this.

Regardless, it's going to be years before the appeals are dealt with.

nordydan · 31-08-2016 8:28pm

A motorway from Downpatrick to Newry. Surely we can all agree on that.....

(gets coat)...

31-08-2016 8:31pm

ricimaki wrote: »

The likes of rural broadband.

We should absolutely not provide high-speed broadband to rural areas. Rural Ireland is a massive drain on our economy as it is without giving them high speed internet. The solution is to reduce our rural population because subsidizing 35% - 40% of the population is depriving the our urban areas from investment. We have to highest or second-highest percentage of people living in rural areas in Europe and it's by a good bit too. In the UK, it's about 17%.

Urbanization is tread for industrialized nations and Ireland was late to the Industrial revolution party, we had an agricultural economy up until the 1950s. Then during the '70s and '80s we allow way too many people to live in one-off housing in ribbon developments, which stretched out our infrastructure.

The national broadband plan has had no real visible impact to date, and was only ever going to guarantee 30mbps.

I don't think you understand how the technology works, providing 30Mb will cost the same as 1000Mb because only fibre can bring a reliable 30Mb to rural areas and fibre is capable of download at several Tb/s. They won't be getting a technology that's only capable of 30Mb, they'll be getting a technology capable of 1000Mb.

However, as I stated above, we can't afford to subsidize rural Ireland anymore, the solution is use a temporary stopgap (Imagine's fixed wireless) for the internet access, while encourage urbanization through removing subsidies and higher taxation for rural dwellers. We have to make rural Ireland a more hostile environment to live in because this can't continue. Eventually, another technology will come along taht rural-dwellers will be demanding and we're back to the age-old problem again of subsidizing a huge percentage of the population, while depriving urban areas from investment.

ricimaki · 31-08-2016 10:12pm

511 wrote: »

We should absolutely not provide high-speed broadband to rural areas. Rural Ireland is a massive drain on our economy as it is without giving them high speed internet. The solution is to reduce our rural population because subsidizing 35% - 40% of the population is depriving the our urban areas from investment. We have to highest or second-highest percentage of people living in rural areas in Europe and it's by a good bit too. In the UK, it's about 17%.

Urbanization is tread for industrialized nations and Ireland was late to the Industrial revolution party, we had an agricultural economy up until the 1950s. Then during the '70s and '80s we allow way too many people to live in one-off housing in ribbon developments, which stretched out our infrastructure.

I don't think you understand how the technology works, providing 30Mb will cost the same as 1000Mb because only fibre can bring a reliable 30Mb to rural areas and fibre is capable of download at several Tb/s. They won't be getting a technology that's only capable of 30Mb, they'll be getting a technology capable of 1000Mb.

However, as I stated above, we can't afford to subsidize rural Ireland anymore, the solution is use a temporary stopgap (Imagine's fixed wireless) for the internet access, while encourage urbanization through removing subsidies and higher taxation for rural dwellers. We have to make rural Ireland a more hostile environment to live in because this can't continue. Eventually, another technology will come along taht rural-dwellers will be demanding and we're back to the age-old problem again of subsidizing a huge percentage of the population, while depriving urban areas from investment.

Its only a guaranteed speed of 30Mb, as only premises with speeds lower than that are covered by the NBP. Its the same reason Imagine won't offer their LTE to houses that cannot reach 30Mb, as when the NBP eventually rolls out, Imagine are guaranteed to lose any customers not getting that speed.

Images LTE service isn't that amazing. Sure, the speeds are good, but there will be contention issues in the future (some are already getting them on the thread in the broadband forum), as well as data caps making it very difficult to download large files without speed reductions. All wireless communication is also highly dependent on line of sight, the weather, and sources of electromagnetic interference. At distances of 12km+, it doesn't take much to disturb a wireless link.

I do agree that we should reduce our rural population, but that's something that takes decades. Lets say rural Irish broadband stays the same way for ever. What happens to everyone living there who wants to watch 8k Netflix in 10 years time, or download a game that's nearly 1TB in size? They are forced to move to urban areas, or be limited to poor quality of service. Suppose it gets to a stage where the extreme majority of people move to urban areas based purely on internet. You're left with lots empty houses around the country, whilst the housing crisis gets worse and worse. Spending the money on laying fibre is much less than spending on half a million new houses.

marno21 · 31-08-2016 10:19pm

The National Broadband Plan tender hasn't been awarded yet, thus rollout hasn't begun.

All rollouts to date are 100% private enterprise.

LeinsterDub · 01-09-2016 12:21pm

Money for everyone ! http://www.thejournal.ie/e13-billion-apple-2955309-Aug2016/

Middle Man · 01-09-2016 1:23pm

LeinsterDub wrote: »

Money for everyone ! http://www.thejournal.ie/e13-billion-apple-2955309-Aug2016/

Of course we want proper infrastructure, but spending 13bn quickly would see a massive greed related increase in our already bloated cost base and hence, would represent poor value for money - the common sense to money ratio has to be right - common sense in this country wouldn't offset 1bn in unexpected spending provision let alone 13bn. I would simply pay off the National Debt - I heard that 13bn would cut our National Debt by 7% - if interest rates start rising again, this could result in substantial savings over time. Then there's increased financial reputation thereby decreasing bond yields - particularly in times of trouble.

LeinsterDub · 01-09-2016 2:05pm

Middle Man wrote: »

Of course we want proper infrastructure, but spending 13bn quickly would see a massive greed related increase in our already bloated cost base and hence, would represent poor value for money - the common sense to money ratio has to be right - common sense in this country wouldn't offset 1bn in unexpected spending provision let alone 13bn. I would simply pay off the National Debt - I heard that 13bn would cut our National Debt by 7% - if interest rates start rising again, this could result in substantial savings over time. Then there's increased financial reputation thereby decreasing bond yields - particularly in times of trouble.

Currently the debt interest rate is a a historical low. I'd rather investment in the economy of the state long term and let the debt be inflated away over time. Projects like du and MN will deliver real profits over time as well as lowering the cost of economy

Bray Head · 03-09-2016 7:23am

CatInABox wrote: »

So the revenue commissioner believe that the take will be closer to 19m, and the EU think that we could spend the tax take on anything, rather than being required to reduce debt. It makes it more interesting, but I doubt anything is going to come of this.

Regardless, it's going to be years before the appeals are dealt with.

This is incorrect. The Commission is divided into nearly 30 DGs.

The spokesperson is from DG COMP which does state aid, not DG ECFIN which does fiscal policy.

It is clear that spokesperson in DG COMP did not talk to the spokesperson in DG ECFIN.

If he had, he would have learned that under EU fiscal rules what are known as 'windfall gains' must be used to reduce debt if it is already above 60% of GDP.

monument · 04-09-2016 8:54am

Bray Head wrote: »

This is incorrect. The Commission is divided into nearly 30 DGs.

The spokesperson is from DG COMP which does state aid, not DG ECFIN which does fiscal policy.

It is clear that spokesperson in DG COMP did not talk to the spokesperson in DG ECFIN.

If he had, he would have learned that under EU fiscal rules what are known as 'windfall gains' must be used to reduce debt if it is already above 60% of GDP.

The actual rule reads should, not must:

"(18) The obligation to achieve and maintain the medium-term budgetary objective needs to be put into operation, through the specification of principles for the adjustment path towards the medium-term objective. Those principles should, inter alia, ensure that revenue windfalls, namely revenues in excess of what can normally be expected from economic growth, are allocated to debt reduction."

And a view could be taken that "revenues in excess of what can normally be expected from economic growth" does not include taxes which the Commissiom said should have been paid.

Has anybody actually got the finance commission's view? It's been days since their fellow commission gave their view.

Bray Head · 04-09-2016 5:14pm

I would be very surprised if these were classified as anything other than windfall revenues.

Dardania · 04-09-2016 7:11pm

511 wrote: »

ricimaki wrote: »

The likes of rural broadband.

We should absolutely not provide high-speed broadband to rural areas. Rural Ireland is a massive drain on our economy as it is without giving them high speed internet. The solution is to reduce our rural population because subsidizing 35% - 40% of the population is depriving the our urban areas from investment. We have to highest or second-highest percentage of people living in rural areas in Europe and it's by a good bit too. In the UK, it's about 17%.

Urbanization is tread for industrialized nations and Ireland was late to the Industrial revolution party, we had an agricultural economy up until the 1950s. Then during the '70s and '80s we allow way too many people to live in one-off housing in ribbon developments, which stretched out our infrastructure.

The national broadband plan has had no real visible impact to date, and was only ever going to guarantee 30mbps.

I don't think you understand how the technology works, providing 30Mb will cost the same as 1000Mb because only fibre can bring a reliable 30Mb to rural areas and fibre is capable of download at several Tb/s. They won't be getting a technology that's only capable of 30Mb, they'll be getting a technology capable of 1000Mb.

However, as I stated above, we can't afford to subsidize rural Ireland anymore, the solution is use a temporary stopgap (Imagine's fixed wireless) for the internet access, while encourage urbanization through removing subsidies and higher taxation for rural dwellers. We have to make rural Ireland a more hostile environment to live in because this can't continue. Eventually, another technology will come along taht rural-dwellers will be demanding and we're back to the age-old problem again of subsidizing a huge percentage of the population, while depriving urban areas from investment.

You're probably making an uncomfortable point for many, but it's probably true - certainly bringing high quality public services scattered around rural areas is unsustainable after a while. Look at the ambulance response times too.

Say all of the rural dwellers migrate to urban areas-2 questions:

1. What do they need when they et there?

2. What do we do with the rural house stock?

1. Loads of others on the thread can give better answers on this.

2. Maybe the rural houses can be repurposed to holiday homes for the population? Or tourists?
And could be quite a good ECI system?
In which case, maybe relatively decent internet is a value added in tourists eyes?

€13 Billion spend on infrastructure

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