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01-04-2020, 05:39   #1
marno21
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Infrastructure investment in a post covid-19 world

In light of Ireland and the rest of the world living through the greatest economic shock of most citizen's lifetimes, when the dust settles on this major event we will be living in a changed world. The degree of this change is not yet known.

Ireland is just coming out of years of austerity after the 2008 recession, which was much worse in ireland than in many other Western countries. We have the benefit this time of their being no internal systemic issues in Ireland to make it worse here than in other countries. In fact the OECD predicts Ireland will be the least affected Western country time time around. The large pharmaceutical cluster in ireland no doubt helps here.

However, Ireland, whilst one of the most advanced and developed countries in the World living wise has major infrastructural issues which go unresolved. How do you see the approach to this changing in a world post covid-19?

PS: Chatter about how it affects road investment is permitted here. No point in a parallel thread in the roads forum

Last edited by marno21; 01-04-2020 at 05:48.
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01-04-2020, 05:48   #2
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Personally, while there has been a lot of chatter about Metrolink getting cancelled etc., I disagree with this viewpoint. Another few years of austerity is not palletable in this country and if FG/FF retain power they won't be too keen on it with Mary Lou breathing down their necks. The lack of public transport capacity is a major issue in the Dublin area and projects like Metrolink will help address the housing issue by providing much more serviced land.

Add to the ECB potentially financing projects that stimulate growth in member states and there will be a major case to proceed with the project. And I haven't even touched the green element of all this yet.
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01-04-2020, 08:22   #3
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"The large pharmaceutical cluster in ireland no doubt helps here."

You're assuming that stays the case. There might be calls (with incentives) for a lot of large companies to repatriate and help get their own countries off the floor.
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01-04-2020, 08:50   #4
marno21
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"The large pharmaceutical cluster in ireland no doubt helps here."

You're assuming that stays the case. There might be calls (with incentives) for a lot of large companies to repatriate and help get their own countries off the floor.
I’m talking short term (next 12-24 months)

Regardless given the sunk costs by many of the foreign companies they won’t be leaving anytime soon

In Cork anyway, MSD, Johnson & Johnson and Eli Lilly have all made major expansionary investments in the past few years and they won’t be abandoning them anytime soon
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01-04-2020, 09:00   #5
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When this draws to an end I expect we will see massive public fiscal & monetary stimulus to try and essentially restart economies. Infrastructure is always a good investment in those circumstances, as it gets people and money working very quickly. There will also be huge opportunities for companies with strong balance sheets to capture new markets while their competitors are reeling/bankrupt.

A pandemic is very different to other financial crises. In previous economic downturns, economic stimulus taps are turned on while it is happening, in an attempt to keep the economy above water. In this case, stimulus doesn't work because people are afraid to spend/leave their houses. I expect we'll see a very different approach this time, and much more concentrated on a particular point in time.
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01-04-2020, 11:46   #6
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Buy low/sell high.

Build when the costs are as low as they are likely to ever be and develop medium-long term wealth through projects.

After 2008 everyone droped their plans and the construction sector collapsed which of course came back to bite us when the economy picked up steam we can't make this error yet again.
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01-04-2020, 12:15   #7
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Obviously it depends on how long the pandemic lasts, how many people die unfortunately, etc.

However recessions that are caused by pandemics usually are quiet short and the economy usually rebounds strongly once it passes. All those people locked up at home, who can't wait to get out and get back to the pubs, restaurants, gyms, etc. and start spending.

I think this recession will be quiet different to 2008. As you say, the Irish industry and economy went into this healthy. Pharma and medical equipment made here will obviously do well. But IT is also doing very well through this due to everyone working from home and discovering cloud services, etc. and of course there is always the need for financial services and agriculture.

BTW I think countries will look to pull back the manufacture of PPE, etc. from China only to Europe/US and I think Ireland could be well placed to benefit from that on an EU wide basis.

Of course tourism, airlines, retail, restaurants, etc. will suffer in the short term and may take time to bounce back. Specially international tourism might take quiet a while for people to trust travelling internationally again.

I'd agree with the report that says we will be one of the countries who suffers the least.

I'd also say that we won't see austerity type budgets. Quiet the opposite in fact for a number of reasons.

2008 was different because we were so directly hit by it, the cost of government lending went WAY up due to it be a financial crisis, hell folks might not remember, but the government was worried if they would even be able to borrow at any cost! Austerity was necessary then because of the circumstances and it was also forced on us by the Troika.

This time around, the cost of government lending is at an all time low and Irish bonds are particularly attractive given the overall health of our economy. Not only is their no appetite for austerity by FG/FF, but there is non across Europe and most of the rest of the world.

Governments around the world saw how damaging it was and how it led to the rise of the far right. Also it just doesn't make any sense for a recession like this.

With this sort of recession, once the pandemic is dealt with, the correct move is too pour money into economies to restart them as quickly as possible, to have people feel comfortable to go back out and start spending again. Austerity doesn't make sense it this case, as it would just drag it out and likely lead to a worse depression.

And I haven't seen any government suggest that, they are all talking about printing money, etc. once the lock down is over.

So if anything I'd think we should absolutely be investing in infrastructure like Metrolink, etc. Money will be cheap and it can help employ people who are laid off from retail, restaurants, etc. that might be slower to restart.

Of course we need to beat this pandemic first.

Last edited by bk; 01-04-2020 at 13:24.
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01-04-2020, 13:38   #8
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And I haven't seen any government suggest that, they are all talking about printing money, etc. once the lock down is over.
And the one Government in the EU that did suggest something along those lines, the Dutch, have been slapped back pretty hard, including by some of their former ministers.
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01-04-2020, 13:56   #9
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To reinforce the difference between now and 2008 crisis. The NTMA has just raised an extra €4 billion in bonds at a rate of 0.05%, by comparison the rate in 2011 for a 10 year bond was 14% !!

You can easily see why austerity was necessary in 2011, given that borrowing money then was so expensive. But now, at 0.05%, it is almost giving away money for free.

Not that I want to see us take on massive debt just to blow it like we did in the Celtic tiger days. But taking on debt to support the health service now and investing it in infrastructure like Metrolink over the next few years is a no brainer IMO.
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01-04-2020, 15:38   #10
Dats me
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Originally Posted by marno21 View Post
Personally, while there has been a lot of chatter about Metrolink getting cancelled etc., I disagree with this viewpoint. Another few years of austerity is not palletable in this country and if FG/FF retain power they won't be too keen on it with Mary Lou breathing down their necks. The lack of public transport capacity is a major issue in the Dublin area and projects like Metrolink will help address the housing issue by providing much more serviced land.

Add to the ECB potentially financing projects that stimulate growth in member states and there will be a major case to proceed with the project. And I haven't even touched the green element of all this yet.

The only problem with this is that MetroLink, BusConnects, DART etc are all very very far away from being shovel ready and designers for the rail projects at least seem to have been chosen mainly for the cheapest tender so there isn't expertise there in the first place let alone to fast track it.


Busconnects is slightly different because there are four different designers, I think Busconnects is our best chance tbh. But still a good while away, busconnects.ie says ABP application later this year so probably 18 months of detailed design after that?



I do think we should see a lot of cycling projects, policy seems to be moving that way.
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01-04-2020, 16:02   #11
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Originally Posted by Dats me View Post
The only problem with this is that MetroLink, BusConnects, DART etc are all very very far away from being shovel ready and designers for the rail projects at least seem to have been chosen mainly for the cheapest tender so there isn't expertise there in the first place let alone to fast track it.


Busconnects is slightly different because there are four different designers, I think Busconnects is our best chance tbh. But still a good while away, busconnects.ie says ABP application later this year so probably 18 months of detailed design after that?



I do think we should see a lot of cycling projects, policy seems to be moving that way.
All of these projects are nearing the planning application stage. Design work is essentially done on Metrolink. The rail designers have designed and completed rail projects around the world.

Cycling projects will still need to be designed and put through planning.

If we're going to be using any projects for stimulus, then it's going to be Metrolink, BusConnects and Dart Expansion in Dublin. A more interesting question is what projects can be done similarly in the rest of the country? I haven't looked in a while, where is the M20 at?
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01-04-2020, 16:55   #12
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All of these projects are nearing the planning application stage. Design work is essentially done on Metrolink. The rail designers have designed and completed rail projects around the world.

Cycling projects will still need to be designed and put through planning.

If we're going to be using any projects for stimulus, then it's going to be Metrolink, BusConnects and Dart Expansion in Dublin. A more interesting question is what projects can be done similarly in the rest of the country? I haven't looked in a while, where is the M20 at?

Not trying to be argumentative but I'm afraid that's not true. The route is still in preliminary design stage and a railway order application is made with a preliminary design. It will also take a year (at least, Metro North took three years) to get through ABP, hopefully a lot of the detailed design can be done while they're waiting and they don't just stop and wait. But it will be 2022 at the very least until it's shovel ready.



Even the public line is for ABP application at the end of the year and then one year for ABP consideration.
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01-04-2020, 20:02   #13
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I haven't looked in a while, where is the M20 at?

It's just started the route selection process so it's a few years away from ABP yet. They could probably fast track the M21 which is currently with ABP.
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01-04-2020, 20:13   #14
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Surely a massive public housing programme is also on the cards. Much faster through planning - used to be Part 10 by local authorities and then put hundreds of small schemes out to tender for small local builders. Quality shouldn't be an issue if there are good CoWs from Councils. Take the dead hand of the Department off the controls with their ten page cost control forms HCA1 etc - god how we hated them. As one of their architects, recently deceased said - control freaks.
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01-04-2020, 21:33   #15
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The only problem with this is that MetroLink, BusConnects, DART etc are all very very far away from being shovel ready and designers for the rail projects at least seem to have been chosen mainly for the cheapest tender so there isn't expertise there in the first place let alone to fast track it.

Busconnects is slightly different because there are four different designers, I think Busconnects is our best chance tbh. But still a good while away, busconnects.ie says ABP application later this year so probably 18 months of detailed design after that?

I do think we should see a lot of cycling projects, policy seems to be moving that way.
I'd tend to agree with this. We're seeing the result of tenders awarded at lowest cost, resulting in less resourcing on these projects with lower levels of expertise involved. This always leads to a longer project duration.

Busconnects will need to be implemented on a phased basis to be successful. Should never underestimate the level of effort involved to relocate services along such extensive corridors. Moving kerb lines causes such headaches and getting third party agreements including utility provider proposals and works can take an age
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