Thursday, 2 April 2009

Rail system's future looks bright if we can get our finances back on right track

ON paper, it's a no-brainer.

A high-speed rail system linking Swords with St Stephen's Green in just 30 minutes, leading to the creation of at least 6,000 jobs at a time of mass unemployment.

Another 35,000 jobs for north Dublin when the project is delivered, congestion removed from the city centre and, finally, an integrated public transport system with links to DART, Luas and bus routes.

But despite Transport Minister Noel Dempsey's bullish comments yesterday on how it makes economic sense and should go ahead, the empty government coffers could result in an unhappy ending for the Metro North project.

The light-rail system is expected to cost at least €3.5bn, and will be built using the Public Private Partnership (PPP) model, meaning the private sector will design, build and finance the project.

But with a global recession, money is hard to come by.

The downgrading of our credit rating earlier this week means Ireland is not best-placed to secure billions of euro in long-term loans for infrastructure -- especially as it will also be seeking billions to fund the DART underground tunnel in the coming years.

Banks are also reluctant to commit to long-term infrastructure projects, preferring less-risky projects with a quicker return.

But on the upside, there's never been a better time to build.

As the recession deepens, construction companies are crying out for work and will drop tender prices, a gesture not afforded at the height of the boom.


Jobs, particularly in construction, are badly needed and Metro North will provide 4,000 in construction and another 3,000 in companies providing services.

Overriding all this is that when the economy recovers, Dublin will need a decent public transport system to get people around or risk losing foreign direct investment.

Although things look bleak, the fact that the project is still only at the planning stage could be the godsend the Government needs.

Not until next year will final and best bids be received, meaning no decision has to be made in next Tuesday's Budget.

The Government intends paying off the system over 25 years, but could renegotiate and seek longer terms, which may cost more in the long term, but at least the project would be delivered.

Assuming the economic recovery plan goes well and banks consider Ireland less of a risk, this time next year, Metro North could face a much brighter future.

Paul Melia
Irish Independent

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