Friday 6 May 2011

Walking away from Metro North is the only way to go

ANALYSIS: Plan to link two Luas lines is the only major transport project that still makes any sense

LEO VARADKAR was being brutally realistic when he said last month that we could only afford to go ahead with just one of the three “big ticket” public transport projects in Dublin – Metro North, Dart Underground and the long-missing city centre link (known as BXD) between the two existing Luas lines.

The new Minister for Transport made it clear that times had changed since all three were included in the Fianna Fáil-Progressive Democrat coalition’s €34 billion Transport 21 investment programme, announced in November 2005. “We are not awash with cash anymore and our city is not growing any more,” he said.

Varadkar has been advised by his officials that cancelling Metro North – the most advanced of the three projects in planning terms – could have a “serious impact on the credibility of the Government as a counter-party for PPP deals for other major infrastructure investment projects”.

Pat Mangan, former assistant secretary at the Department of Transport, warned recently that any decision to “walk away” from Metro North would put off potential PPP investors in Dart Underground, with the result that its estimated €2.5 billion cost would “fall back on the exchequer”, making it “unaffordable”.

There is no doubt that consortiums bidding for the Metro North PPP would be deeply dismayed if the €3 billion-plus project was shelved; they are believed to have invested up to €15 million each in their bids. So would the Railway Procurement Agency (RPA), which has spent some €135 million on the project so far.

But Ireland’s financial plight is very well-known internationally and this has made it increasingly difficult for prospective PPP partners to raise money in the capital markets for projects here. Instead of being shocked by a Government decision to shelve Metro North, the markets would now be more surprised if it went ahead.

Yes, there would be some “reputational damage”, but we’ve suffered plenty of that already. As one transport source put it, the case being made to avoid more is analogous to “someone who’s lost their job saying he’d still go ahead with the domestic extension he was planning in the good times, out of sympathy for the builder”.

Neither would it be unprecedented to cancel a PPP. Two weeks ago, after applying for an €80 billion “bailout” from our friends in the ECB and the IMF, Portugal’s interim government suspended plans for a high-speed rail line between Lisbon and Madrid and disbanded Rave, the country’s high-speed rail company.

The new line was to be built and operated as a PPP project, a joint venture by two Portuguese companies, working with a Spanish contractor. It will be up to the next government to decide whether it goes ahead and, meanwhile, the companies involved could claim more than €200 million in compensation for breach of contract.

We have not yet reached that stage with Metro North. Although the RPA shortlisted two consortiums – Metro Express and Celtic Metro – in June 2009 to proceed to the final stage of the PPP process, it has not yet selected a final bidder. It must also seek a new railway order from An Bord Pleanála for a relocated depot at Dardistown.

Just as Luas was conceived as a relatively modest project in the early 1990s when we were not flush with money, Metro North is a boom-time scheme – with a rationale rooted in highly optimistic population projections for Fingal that will not be realised, even in the medium term. It no longer makes any sense – and never did.

An independent review of Transport 21, commissioned by the Chartered Institute of Transport and Logistics, called for priority to be given to the Dart Underground project because it represented better value for money and would serve a wider catchment than Metro North – the opposite of what the previous government decided.

The review, led by Prof Austin Smyth, concluded that Metro North’s limited extent – reduced to a 16km line by An Bord Pleanála – “would make its overall contribution marginal” and said that, where fiscal and financial constraints required difficult choices to be made, Dart Underground and the city centre Luas link should go ahead.

Unfortunately, the only one of the three major projects that’s “shovel ready” is Metro North. An Bord Pleanála has yet to make a decision on Dart Underground, following a 22-day oral hearing, while an inquiry into the BXD Luas line that would run from St Stephen’s Green to Broombridge, via O’Connell Street, will open next week.

Dublin is the only city in the world that was daft enough to build two free-standing light rail lines, due to a cowardly decision by the Fianna Fáil-Progressive Democrat coalition in May 1998. Surely common sense dictates that we should now “join the dots” between them? The cost, at some €400 million, would also be relatively affordable.

Irish Times

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