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Dáil Éireann debate -
Wednesday, 18 Jun 2003

Vol. 568 No. 6

Written Answers. - Light Rail Project.

Liz McManus

Question:

89 Ms McManus asked the Minister for Transport the current position regarding plans for the construction of a metro system in Dublin; if his attention has been drawn to the recent submission made to the Oireachtas Joint Committee on Transport by a consultant (details supplied) suggesting that a metro system could be constructed for less than ?600 million, or one eighth of the estimated cost; and if he will make a statement on the matter. [16878/03]

John Gormley

Question:

132 Mr. Gormley asked the Minister for Transport if he will consider asking the Railway Procurement Agency for a public sector price comparator for the first stage of the Dublin metro to analyse the cost reductions that may come with greater public sector financing of the project; the reason the business case scenario presented by the Railway Procurement Agency includes VAT charges in view of the fact that these do not incur a real cost to the State; and the ratio of public to private sector financing involved in the business case scenario set out by the RPA. [16954/03]

Ciarán Cuffe

Question:

142 Mr. Cuffe asked the Minister for Transport his views on whether there is a case for the continuation of the overground Luas lines from St. Stephen's Green to link the two overground Luas systems; and if this overground Luas city centre connection will not have to go through the normal planning process in view of the fact that it already has been subject to the initial Luas light rail order. [16948/03]

I propose to take Questions Nos. 89, 132 and 142 together.

Last year, the Government agreed that the development of the Dublin metro should be undertaken on a phased basis and as a public private partnership, PPP, with phase 1 including a link from the city centre to Dublin Airport. Since then the Railway Procurement Agency, RPA, has concentrated its work on developing proposals for this phase. A preliminary public consultation has taken place and a pre-qualification exercise for potential bidders was launched by the RPA in mid-2002 which met with an enthusiastic international response – 18 companies have already been pre-qualified.

In November 2002, my Department received the outline business case, OBC, for phase 1 of the Metro from the RPA. Given the size of the project, careful consideration of the OBC was undertaken. The estimated costs were substantial and I asked for a number of additional aspects of the proposal to be further examined. These additional aspects concerned the cost of the project and its potential impact on the general Government balance in the context of the EU Stability and Growth Pact and the legal, planning and technical considerations based on practice elsewhere, particularly Madrid where the authorities have developed a strong international reputation for the speedy completion of the Madrid metro extensions at a relatively low cost.

I received the RPA's formal response on these matters on Monday last. I expect the evaluation of the RPA's preferred solution to be completed shortly and to bring proposals to Government next month. A competitive procurement process will help to minimise the actual cost of the metro to the Exchequer. I am aware that the group mentioned in Deputy McManus's question, made a submission recently to the Oireachtas Joint Committee on Transport. The competition for the metro PPP is being conducted by the RPA in accordance with EU procurement rules and is open to suitably qualified companies. If the group believes that it has the technical and other resources required, then it should apply to the RPA to pre-qualify for the construction of the metro, in the same way as other interested parties have done. The RPA will be producing a public sector comparator for the metro proposals, with this comparator being used as a benchmark against the bids received.

On public sector financing, the OBC provided a range of financing options for consideration by the Government. While up-front capital funding by the Exchequer can reduce the interest costs of the PPP consortium, it also reduces the level of financing risk being transferred by the State to the private sector. In the area of VAT, it was assumed for the purposes of the financing model used in the original OBC that it would be a cost to the private sector. However, the OBC, as with the public sector financing issue, provided a number of options for the Government. These options are refined further in the latest information I have received from the RPA. The eventual mix of public and private funding for the project and the treatment of issues such as VAT, will be decided in the context of what provides best value for money for the State.
Additional Luas lines and extensions to the existing lines are contained within the Dublin Transportation Office's strategy. Their alignments and roll-out will be determined to a large extent by how the metro is developed. In the context of the proposed Metro providing a connection between St. Stephen's Green and line A, an additional parallel surface link would not be justified. Any additional Luas lines or extensions would require a new railway order.
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