[Article] Varadkar to review road and rail projects

[Colm Moore]

http://www.irishtimes.com/newspaper/...293869961.html

Varadkar to review road and rail projects
TIM O'BRIEN

A REVIEW of spending on new road and rail projects has been announced by Minister for Transport Leo Varadkar.

Mr Varadkar said he will review each new transport infrastructure project against the need to ensure existing roads and rail routes are properly maintained.

The review follows the publication by the National Roads Authority of a new report which found almost €3 billion is needed to make the State’s local regional and national secondary road network safe.

The Minister’s review could potentially halt key transport investment programmes including Metro North, the reopening of the Navan Railway line and new road building schemes in Clare, Galway, Longford and Wicklow, which were being progressed under the last government’s four-year plan.

In a statement last night Mr Varadkar told The Irish Times: “If we stuck to the plan left to us by the last government, not only would we be unable to keep up with the backlog of repairs, but the situation would actually get worse.”

The Minister who has in recent weeks been briefed by senior officials on key issues facing the department is understood to be concerned after the National Roads Authority put the cost of the backlog of urgent repairs to the non-primary routes at €2.7 billion. This figure was in advance of the severe weather conditions at the start of the year.

“Before we start work on any new infrastructure projects, we have to ensure that existing infrastructure is properly maintained. That is why I am conducting a full review of capital spending with a view to prioritising the investments that we already have,” Mr Varadkar said.

Last night a press spokesman for Mr Varadkar said he could not say which projects would “categorically not proceed” but emphasised there had been “a change in priorities” and that the thinking was moving towards maintenance of existing roads and railways.

[Colm Moore]

http://www.independent.ie/national-n...o-2611216.html

Varadkar seeks to privatise building of Metro
By Paul Melia

Wednesday April 06 2011

THE Government yesterday raised the prospect of privatising the Metro North light-rail project in order to get it built.

Transport Minister Leo Varadkar said if the private sector fully funded the project, then he would allow it to retain all the fares for up to 100 years.

The move comes because of concerns about public-private-partnership projects (PPPs) collapsing due to the economic downturn.

Senior officials at the Transport Department have advised the minister that securing the funding under a PPP -- where the private sector finances the bulk of construction costs and the State pays back the costs over time -- was dependent on Ireland restoring its "financial credibility".

Two PPP consortiums have been shortlisted to build the 16km Metro North, linking Dublin city centre with Swords, with the cost expected to be paid back over 25 years.

The Railway Procurement Agency wants to begin moving utilities, such as telecommunication lines, sewerage pipes and water mains, from O'Connell Street this month in order to allow construction of underground tunnels to take place.

But Mr Varadkar has said he will not approve the works -- with an estimated cost of €30m -- in case the PPP consortiums pulled out of the project.

Some €135m has already been spent on it.

"I don't want to dig up O'Connell Street for 2016, where all the statues would be removed, only for the PPP company to say they're not going ahead," said Mr Varadkar.

"Metro North is part of a review of investment in transport projects. I would expect to make a decision on that (enabling works) before the summer.

"The roads PPPs have more or less fallen through. Does anyone think that's going to change a lot in the next few years?

"If it does not, it means the Exchequer needs to put up billions for Metro North and that's not going to happen.

"We're looking at allowing the National Pension Reserve Fund to lend money for transport projects and a long shot is offering it to sovereign wealth funds to do the entire project and take a 50- or 100-year lease."

Metro North was given priority under the last government's four-year capital investment programme and the European Investment Bank has already committed to provide €500m in loans.

Risk

Planning permission for the line was granted late last year, and up to 4,000 jobs will be created if it goes ahead. Enabling works, which were due to begin this month, would have created 250 jobs this year.

The Department of Transport has warned that there is a risk to the project because of economic circumstances and the IMF/EU bailout.

"Financial close for the Metro North PPP will be dependent on Ireland's financial credibility internationally and on the prevailing position of the international funding markets," it said in briefing notes to the minister.

Meanwhile, just €65m in construction projects were awarded by the State last month.

The Construction Industry Federation said government spending was 11pc behind target so far this year and that up to half of all projects that had been publicly advertised might never go ahead.

These include schools, water services and telecommunications projects.

- Paul Melia
Irish Independent

[Thomas J Stamp]

Incredible short term thinking seems to abound. The new minister is in place only a month and it seems as though the permanant government - the civil service - have clipped his wings already.

The Ministers mindset appears to be based around this:

http://www.independent.ie/business/irish/bailout-puts-rail-projects-in-jeopardy-2603945.html

Bailout puts rail projects in jeopardy







By Paul Melia, Treacy Hogan and Aideen Sheehan

Friday April 01 2011

THE future of Metro North and other key infrastructure projects has been thrown into doubt because of the fallout from the EU/IMF bailout.
Key roads and rail projects are unlikely to go ahead unless "financial credibility" is restored and the international markets are assured that the State can make repayments, the Department of Transport has warned.
And even if the projects eventually get the green light, they will end up costing taxpayers millions of euro more than planned for.
This is because Ireland will be forced to pay a premium to borrow money on the international markets in the wake of the ongoing banking and economic crisis.
Markets
In a 322-page briefing note to new minister Leo Varadkar, which was published last night, officials warn that the markets will be "reluctant" to lend unless the debt crisis is stabilised.
This means that public private partnership contracts -- where the private sector bankrolls a project and the State repays the cost over time -- are at risk of being permanently shelved.
Projects affected include Metro North, Metro West, DART Underground and at least four roads projects.
"The successful awarding of a major PPP contract. . . is particularly challenging in current circumstances where Ireland has been the subject of intervention by the IMF/EU," the Department warned.
"Until financial credibility is restored, the international debt funding market will be reluctant to lend funds to finance projects in Ireland, the repayment of which is ultimately dependent on the Irish state."
On Metro North, due to be finalised later this year, it adds: "Financial closure will be dependent on Ireland's financial credibility internationally and on the prevailing position of the international funding markets towards providing funding to Irish infrastructure."
The department said that of the €4.8bn available for transport projects from 2011 through 2014, some €1.7bn is already committed. This includes €800m for roads that have already been built.
- Paul Melia, Treacy Hogan and Aideen Sheehan
Irish Independent

The point being missed here are the 4000 jobs that could be created, which for a Government bringing in a Jobs Budget you would think this would be an important aspect. However, it appears moving statues in o connell street is more of a priority.

The IMF/ESF have said repeatedly that Ireland can move around the funding which they are giving us, so long as we keep up the repayments. With that in mind, surely it is more responsible for the Government to put some of that money into something that will give us a return in terms of investment and competitativness in the future?

Also, all parties agreed back in 2008 that they would avoid the calamatous mistakes of the 1980's recession. This seems to prove they are hell bent on repeating every single one of them.