The Railway Procurement Agency has submitted to my Department the business case, including a cost benefit analysis, for the PPP procurement of phase 1 of the metro. As the estimated costs were substantial, I asked for a number of additional aspects of the proposal to be further examined including the cost of the project, its potential impact on the general Government balance 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 metro extensions at relatively low cost.
My Department is currently finalising its evaluation of RPA's recommendations on how the PPP procurement of the first metro line should proceed and I will be bringing proposals to the Government shortly. Included in the revised proposal is RPA's estimate of the direct capital cost of the first line and an indication of the potential size of the annual availability payments to the successful PPP consortium. These annual payments will cover the construction of the metro and its operation and maintenance over a 26 year operating period. It must be pointed out that the actual cost of the metro and the level of availability payments will be largely dependent on the bids received from the private sector. However, a figure of €10 billion has never been mentioned by me in this regard. More than 30 parties have responded to the pre-qualification exercise launch by the RPA in May 2002, including a large number of major companies from around the world, 22 of which have pre-qualified.
RPA has retained world-class consultants with wide experience of metro in a number of countries around the world. Additional skills and experience required for the procurement of the metro PPP by the RPA will be considered further when the Government decides to proceed with the procurement of the project. Professor Melis' offer will be considered in that context.
I should also add that RPA has signalled its intention to appoint a panel of experts to advise on the project as it goes forward. This panel would include not only technical experts like Professor Melis, but also people with a successful record of delivering PPPs and people with a strong knowledge of local construction conditions.
