Toll Roads Boondoggle - The “acceptable” face of waste in transport spending

Sam Russell wrote: »

I do not think it works quite like that. I think there is a transition where the tolls are shared, but I have not read the contracts so I cannot be certain.


I made no mention of always having low interest rates. What I said is that Gov generally have lower interest coupons than private enterprises. Clearly in extreme cases, like the crash of 2008, that might not pertain.

Currently, interest rates for the state are near zero for 10 year bonds. It is time to borrow to build needed infrastructure, but not to borrow for social welfare or vanity projects.

Well, when we put in a toll, the road signs and the location is always put to favour the toll and make avoiding it near impossible. The West Link was built that way and we had to pay billions of Euro to get it back. In the contract, the state were prevented from building an alternative bridge across the Liffey that would have bypassed the toll bridge. Not a deal that favoured the State, but times were hard.



I have no idea if corruption plays a part in any State business, and certainly no evidence. There have been many claims and accusations of corruption and many Tribunals of Enquiry. Some findings of those tribunals clearly suggested corruption, but they all got their legal fees paid and only one Minister (Ray Burke) went to jail, so just a bottle of smoke - nothing to see here - move along.

I did read through the M6 (Athlone to Galway) PPP contract once and came to the conclusion it was one sided wrt risk and reward. That is the basis for my opinion, but it may be just that particular contract.

The point is its 47 year contract and it needs to be assessed over that time scale. 2008 while extreme unfortunately isn't exactly unusual over a 50 year odd period of time. Economic crisis happen, they are a fact of life unfortunately. To assume that a crisis like that won't happen again is foolish as we see presently.

Could the government borrow the money to buy out the counterpart similar to what happened with the M50 that's an option. It cost the government billions but remember that money in real money terms would have had to borrowed anyway in build it in the first place and attracted its own interest costs.

One hard thing is you also have to know is what the government options were at the time. As you have noted we currently have very low interest rates however that wasn't always the case and will not always be the case. Even back in 2008, 09,10 interest rates in general were very low in general however Ireland's rates were so high the government came to the brink of default and would have defaulted had different political parties been in power or an agreement not been found with the EU and IMF.

One thing I don't know is what the alternative financing options were available at the time. You can't use what's available now. You have to look at options when the agreements were signed.

There is also the other side of the things two different people when provided with the same facts can make different decisions. My issue with the previous posts from other posters was that the whole process was corrupt without a shred of evidence.

Even in your post you mention tribunals of enquiry. Genuine question here, what PPP contracts were investigated? You can't lob them all into one big lump. As you have noted different contract have different terms.

This article from 2018 suggested a move away from PPP on costs grounds. However, it also explains the attractiveness of PPP to the State in the past.

https://www.rte.ie/brainstorm/2018/0226/943622-have-public-private-partnerships-gone-out-of-fashion/

Currently, the use of PPP is attractive to government because the big up-front financing (borrowing) for these PPPs is not counted as capital expenditure in the years that the infrastructure is under construction. Instead, the funding of PPP projects is spread over the life of the contracts. This helps the government control spending and meet fiscal targets. In addition, if certain conditions are met in relation to risk-sharing, the borrowing required to finance a PPP project is not counted as government debt and it’s counted off-balance sheet.

On this basis, it would be fair to say that we would have less infrastructure today without PPP.

It also notes a trend internationally as follows:

The encouragement of toll roads procured as PPPs is at odds with government policy since 2013, which has moved to providing non-tolled motorways. ... This is also consistent with the international trend away from PPP models where revenues to private operators depend on traffic flows. It is difficult to see Ireland bucking this international trend which has emerged because private contractors are reluctant to assume demand (traffic) risk. If the incentives which Project Ireland 2040 recommends lead to encouraging privately financed toll-roads, a likely consequence will be the need to give the private sector guarantees that compensate for low traffic levels. This may not be politically acceptable and will have implications for the overall cost to government.

Again, not a hint of a suggestion by this academic of corruption in the past. That claim remains unfounded here and the excuse of 'but very few investigations have been undertaken' doesn't cut it in a jurisdiction where a politician can fart and there is a public inquiry.

Zebra3 wrote: »

If you're not familiar with NTR giving money to FF as FF were handing out lucrative state contracts, there's not much I can do about your ignorance.



This is what has gone completely over your head.

There were no investigations.

White collar crime isn't something that interests the authorities in Ireland.

Can you please evidence what you are alleging? There has been lots of allegations and no evidence other than "observation", assumptions and impressions and this has been used as a basis to insult people with whom you disagree.