The next item on the agenda is a discussion on the proposed metro system for Dublin. On behalf of the joint committee, I welcome Mr. Cormac Rabbitt of the Dargan Project whose presentation has been circulated to members. I draw his attention to the fact that while members of the committee have absolute privilege, the same privilege does not apply to witnesses appearing before the committee. Members are reminded of the parliamentary practice that they should not comment on, criticise or make charges against any person outside the Houses, or an official, either by name or in such a way as to make him or her identifiable. The committee will hear a short presentation by Mr. Rabbitt which will be followed by a question and answer session. I ask Mr. Rabbitt to begin his presentation.
Dublin Metro: Presentation.
Mr. Cormac Rabbitt
I have a 14 minute presentation in two parts. The first is a written statement some 11 minutes long. In the second part I will use some slides to demonstrate what can be done.
I thank the joint committee for giving me this opportunity to respond to its report entitled, Proposal for a Dublin Metro System. In May 2003 I came before it and made a presentation on how we could approach the construction of a Dublin metro, based on the experience of the Dublin Docklands Development Authority's procurement of the IFSC and Madrid's new metro. My presentation was entitled, Knowing what can be done and doing it with confidence. Since then, it is heartening that members of the committee have visited Madrid's new metro lines and Professor Melis, president of Metro de Madrid, has made presentations to both the Cabinet sub-committee on infrastructure and public-private partnerships and the joint committee. In addition, the joint committee commissioned O'Reilly Consultants to prepare a report, asked the Railway Procurement Agency, RPA, to account for its estimates and published its conclusions and recommendations. In particular, its endorsement of the O'Reilly report, together with its own conclusions and recommendations, are most welcome. I hope its endeavours will help a Dublin metro to be procured successfully sooner rather than later, as was the case with the IFSC and Madrid.
While the joint committee has made much progress, further steps must be taken before we will have a metro. To this end, I wish to respond to some of the issued raised by Professor Melis, the joint committee's consultants and the RPA's subsequent responses, before suggesting a way forward.
Professor Melis's contribution certainly made a difference. The RPA reduced its airport metro estimate by billions of euro, with a proviso that this would involve dropping a number of stations, reducing the quality of construction and its service level to that of the metro in Madrid. The joint committee's report is right to express its concern that the cost revisions proposed by the RPA, while achieving lower costs, may also reduce service level and construction quality. The joint committee should respond to the RPA on the foregoing and other matters it raised, as they are important to the Dublin metro.
As members who visited Madrid's new metro lines are aware, it is among the best in the world. Its stations, layout, decorations, escalators, lifts, travelators, that is, moving footpaths, and trains are all of the highest standard. Madrid's new metro lines are built to the highest standards. Its number of stations per line is high. In one example I gave to the joint committee in May 2003 Line 7 has 13 stations along its 11 km length. One never achieves higher frequencies of stations on a metro. If the RPA intends to build a metro of a similar standard to the one in Madrid, the joint committee has nothing to fear except its cost which is interlinked with the management approach. This issue was addressed in the joint committee's report and recommendations.
For his Dublin metro estimate Professor Melis used labour and material rates which were some 2.4 times higher than those obtaining in Madrid. The rates used are untrue and unbelievable, as Irish and Spanish labour costs are similar. I have included details in Appendix 1 of my presentation which consists of three tables containing data from 2003, 2000 and 1999-2000. In 2003 the rates for skilled labour were the same in Ireland and Spain. In an index prepared in 2000 which assigned a base figure of 100 to wage costs in the eurozone as a whole, Irish wage costs had a rating of 89 — leaving it at the bottom — while Spanish wage costs had a rating of 104. This may be explained by the fact total employer social security costs in Ireland come to 12%, while the comparable figure in Spain is 30.8%. The employee social contribution rate is the same in both countries. Members should note that the figure of 30.8% is approximately two and a half times higher than the Irish rate of 12%. Hence, when one compares like with like, costs in Dublin and Madrid are similar. Moreover, materials for large projects such as steel and cement are internationally competitively traded on the open market. Therefore, any variation between Dublin and Madrid is likely to be no more than a few percentage points.
There is no argument that the RPA's estimated cost is similar to that for many other cities, except Madrid. The argument is that the metro procurement method for the Madrid metro and the consequential cost outturn differ from those in other cities. I am not alone in making this argument. Appendix 2 consists of an extract from a report prepared by Professor Melis on comparative metro extension costs in different cities, showing cost differences of between three and 12 times the cost in Madrid. For example, the Athens metro was five times more expensive than the Madrid metro. The World Bank made the same point. The RPA's claim in the O'Reilly report that its costs are similar to those for the Madrid metro and those in other cities is contrary to the facts. Either one has similar costs to those in Madrid or similar costs to those in other cities — one cannot have it both ways. Professor Melis has stated the position in Madrid is different.
The management system and technology used in Madrid are substantially different from those used elsewhere. On management, in its presentation to the joint committee last October the RPA stated the consultants' argument for setting up a new agency to manage implementation of a metro system, that is, separate from Luas, was not explained in the report. It will be a matter for the Government to decide whether it should proceed with the proposal included in the RPA business case for the Dublin metro but we will be ready to respond to any requests from the Department of Transport.
The RPA appears to be reluctant to embrace the joint committee's recommendation that the procurement management structure should be similar to that used for both the IFSC and Madrid metro. The joint committee's O'Reilly report management recommendation must be viewed in the context of competition between service providers and states "the metro service should be established as a separate service from the services of Iarnród Éireann, Dublin Bus and Luas". It is unfortunate that the O'Reilly report used the word "agency", when it meant a company.
The joint committee's recommendations and those of its consultants are fully supported by the Competition Authority. It went into great detail on this issue and recommended removing responsibility from Iarnród Éireann and the RPA in order that the metro would be operated as a separate entity, like Dublin Bus or the Luas. That is also the Government's mandate, to be implemented by using public-private partnerships.
The joint committee's consultants recommended that to achieve this goal, a company "can be established as a State Agency, such as Dublin Metro Limited (DML) possibly in the long term under the joint control of, or in partnership with, the four local authorities in Dublin County". In most respects, this is no different from how other cities operate their metro systems, except that the company, as part of the Government's PPP mandate, could include some private sector members. One example where private companies are involved is MTR metro of Hong Kong, where the Government sold 23% of the company in 2000 and listed MTR on the stock exchange. I also note that Mr. Bill Gaffney, who will become a director of Iarnród Éireann next year, is the executive director in that company and launched that company on the world market. Another example is Madrid's 18 km metro line, Arganda del Rey PPP concession of the TSN company, that opened in 1999 in which Metro de Madrid holds a shareholding. Contrary to what I believe the RPA advised the committee, around the world it is common to franchise lines.
Central to Madrid's management success is that the project management was done by themselves. This was not the case with the Luas, where the RPA and its consultant employed over 100 engineers and technicians, or the Dublin Port tunnel where the NRA, Dublin City Council's consultants, employed dozens. The NRA employed two companies, one to oversee the project management and one to advise Dublin City Council, and they had dozens of engineers cross-checking matters. In Madrid, the method by which they approached it did not work in that way. In comparison, Melis employed circa six people for all his projects, which were a multiple of those two put together.
The technology used in Madrid is substantially different from that used elsewhere. There are over 20 readily identifiable areas in which Madrid excelled in comparison with other metro procurements, details of which I can provide for the committee. One such area was the tunnel boring machine, which did not have to stop every 45 minutes as the Dublin Port tunnel machine did. It worked continuously. They put in the panels on the move, they did not have to stop to put in the panels for 20 or 40 minutes and then start it up again. That is just one issue but there were many safety and other features built into that as well.
Issues raised by the RPA on planning and risk are far from the truth. The converse to their belief is the case, as borne out by the NRA. Major delays and costs to schemes can be avoided where, for example, the contractor is fully able to deal with environmental issues from excavations as part of the schemes EIS and CPO. I have seen major delays in schemes, where a contractor is appointed and must seek planning permission for quarries to dump stuff or the inquiry is suspended until this is sorted out, but if they are done together, as the NRA is now doing and as I have been advising since 1996 to both the NRA and others, it overcomes those problems.
One final aspect that Madrid handled very well was the approach to finding solutions to what they wanted to achieve rather than seeking to solve problems that could arise, as we tend to do. We continually approach all we are doing by trying to solve problems — a new infrastructure Bill, a new this, a new that — instead of finding solutions. There have been hundreds of successful CPOs and EISs and there is much stuff there with which one can proceed.
From the committee's deliberations, it knows what can be done and how the committee wants it done and that the committee's next step could be to request the Government to facilitate a call for proposals in a similar manner that it did for the National Conference Centre and the IFSC. If it does not get proposals, it need not go ahead. It happened with the stadium. They got proposals, did not get it, went out again and are now building it at Lansdowne Road. In 1985, the IFSC could not have gone ahead if it did not get 100% guarantees. There was no money available from the Department of Finance at the time and they could go ahead only when they got the 100% financial guarantees. I am saying this is the case and can be done for the Dublin metro as well.
Having lead a team, which included Mitsui and Nishimatsu, in a presentation in April 2000 to the Government Cabinet Committee on Infrastructural Development and PPPs for a Dublin metro, which included an offer to design, build, operate finance and maintain it, I am confident that it could all be done again. The people who flew in that day had turnovers of three times the GNP of this country. They arrived on a private jet and offered to do it.
My confidence is not unfounded. The committee's O'Reilly Consultants report noted my "undoubted knowledge and many skills that are appropriate for the building of a Metro", and that my "extensive knowledge could be harnessed for the development of the Dublin Metro system". The committee will not be disappointed.
Turning immediately to the presentation on the Dargan project, I am sure many members of the committee are familiar with Mr. William Dargan, who was Ireland's foremost entrepreneur ever. The quality of his work and the way he treated the people who worked for him was outstanding. He was a man who has yet to be equalled.
The Dargan project addresses the social and economic need to upgrade, without delay, the public infrastructure. It will also help alleviate the massive infrastructural deficit of €140 billion, which was identified by Mr. Peter Brennan ofA&L Goodbody, through utilisation of a public private partnership fund. The deficit in roads and rail is €40 billion. It can be done in a profitable manner, consistent with the market.
This is how the first stage of the Dargan project came together. It is project similar to that of Madrid — upgrade all the lines, extend a few new lines and link everything together. Dublin is a bay city. It has six rail lines, nine major radial roads and a 6.3 km loop line along the north side from Heuston, around through Cabra to Spencer Dock. The project proposes the linking of this loop line with a 5.9 km line on the south side.
The characteristic of the circle line is that it is 12 km long. It is interesting that 80% of the new line is under State controlled land. It runs from Heuston Station, under Dr. Steeven's Hospital, under St. James's Hospital, under the wide Cork Street, on to the Coombe bypass, on to Cuffe Street extension, through St. Stephen's Green, across the Huguenot Cemetery, under Merrion Square, to Pearse Station and over to Spencer Dock. It links all that up. It also links up the other proposals on it.
The reason I provided a big tunnel in the presentation is that it is for mainline rail as well. The map shows the River Liffey going down the centre. It shows the red line, with the black through it, on the north side. The one on the south side is the new line. The map shows six rail lines, with four black ones — two coming in from each side — and the two Luas lines. By building only less than 6 km, the project connects up six rail lines.
The committee saw Metro Sur, which was 40.5 km. It put that out into six contracts, each of which was 6 km or 7 km. This project is smaller than any of those. In Madrid, they repeated it, not once or twice but about 34 times at this stage. Therefore, the costs are manageable and it is repeatable.
The circle line includes the following features. It is possible to link Dublin's railway in a web pattern which builds on all the work Dargan did with his railways. It is only connecting a line within what Dargan did. It is connecting the six radial rail lines. Consequently, the circle line will help form an integrated public transport network as never before and will help give Dublin a world class transportation system.
That is the difference. It is adding to Transport 21. It gives Dublin a world class transportation system. Dublin will not have a world class transportation system by having a few lines going across the sea on the straight. That way one will not get integrated transport where people can plan their journeys, as they do in other cities like Prague.
The cost of the project is €912 million. That is taking a huge multiple of what it should cost and includes everything. The promoters, I believe, would put up 10% and the minimum rate of return I would expect to get on that is over 5% in year one. The finance available would be at a low interest rate. At the time I offered that the Japanese participate — the money could be borrowed from the Japanese Central Bank for a fraction of 1%. Our figures were conservative compared to Madrid and we could have done it.
The presentation gives the committee some details. It would take 36 million passengers per year, taking 3 million km. If one were to rank metros in the world by the number of passengers using them per kilometre, one would find this would rank at number 50. Working it out like that, one should be able to achieve that as a minimum. The presentation shows the figures I used and the train timetable shows journeys would be frequent.
The slide on expenditure and financing includes interest costs during construction. It includes the lot: the income from it, the income before tax and the return on investment of 5.2%.
My estimates are safe because I compared them to those of the Dublin Port tunnel, which was expensive. Since Melis was here in June 2003, he started work in September 2004 on another project, building a road including 56 km of tunnels, which is two thirds as big as the Dublin Port tunnel. He is opening that project in the second quarter of 2007. The scheme concerned is 99 miles of treble lane road. He is doing it all for €3.8 billion.
Where is this project?
Mr. Rabbitt
It is the M30 route in Madrid. It is a central, circular route which is being upgraded and put below ground. That is where the 56 km long tunnel comes in. The only source of income I use is fare income but all associated income sources are used, for example, by MTR of Hong Kong. Phil Gaffney is as familiar with it as I am I because I have met him and his people many times. A return on investment is possible because of the National Development Finance Agency-EIB. When I met its representatives, they were full of solutions regarding how to go about the project. However, when it came to discussing the metro, they began to mention problems. I said they should stick to the scientific solutions, not solutions to problems. I said I was not interested in solutions to problems, that I was only interested in how we should go about doing things.
The circle line's ability to use existing infrastructure makes it possible to be profitable. One is getting the payback from what is available and so on. Approximately 52% of the line is in place. The IFSC was procured and is a world class system which many countries have tried but failed to copy. However, its management structure was a tight knit three person group — an administrator, a technical person and a politician. An extra person on the board of the Dublin Docklands Development Authority was provided to accommodate a civil servant from the Department of the Taoiseach. Once that happened, that became its focus, for which there is a need.
The International Financial Services Centre was established through flair and involved regeneration of the city centre. It did not just do the minimum; it did what many other cities did not achieve in style. It also was built at a time when the country was broke. The circle line can be developed in the same way. The legislation is in place and a railway order can be used to secure a wayleave, not a CPO, similar to the manner in which the Dublin Port tunnel was developed. A wayleave does not imply land purchase and is, therefore, much cheaper. Property values along the route are enhanced massively. The compensation paid to landowners along the route of the Dublin Port tunnel was between €600 and €6,000 per site. Therefore, the cost is low.
The business plan is to set up and manage the projects already developed, implementation structure, schedule a different 16 month programme — Melis would do this in 36 months with a year lead-in period — and provide for the evaluation of benefits to large business holders such as Spencer Dock. At Westgate, Heuston Station, 37 acres of flooring is being put down for a skyscraper hotel, offices and do on. The circle line will link up with it. Development contributions will be paid and could focus on the route. The development at Spencer Dock is a multiple of 37 acres and I have outlined a structure and timetable. I am familiar with all parts of the timetable. I have done it many times in road schemes. I have selected dozens of routes and alignments around the country on which motorways have been built. I would like the committee to ask the Government to call for this notice in the newspaper to invite submissions which can be responded to. I am confident I can bring this project in, at worst, cost neutral or very profitable.
I thank Mr. Rabbitt for his presentation. While I did not visit Madrid, I have an interest in this issue dating back to his presentation in April 2000. I completely agree the devil is in the detail regarding costs and potential overruns and disasters in building a metro because an underground project costing this amount is full of pitfalls. Therefore, everything depends on project management beginning with procurement and following through on the matters of design, build, finance and operation. Everything depends on getting this right. Is Mr. Rabbitt's central contention that the RPA is not capable of doing this and that the only way to undertake the project is for the Government to seek a private company to procure somebody who will provide a design and that he or she will put a team together? What is the difference in the RPA doing this? We do not know that it will place such an advertisement in the newspapers seeking somebody to undertake to design, build, finance and operate the project. Why does Mr. Rabbitt feel it would be a disaster if the RPA did this and that it would be better if one responded to an advertisement?
Mr. Rabbitt
The RPA is well capable of doing it but I have serious doubts based on its track record. Its set-up is absolutely brilliant for doing a project such as this but a focus group needs to be established and the RPA could advise, monitor and so on. It had 120 people working on one Luas line. I spent four years going around the city telling everybody the RPA had left out various costs for the Luas project which had to be paid. I am now going around saying the RPA is doing the opposite regarding the metro and costing it too highly. It is funny. A focus group needs to be set up, in which the RPA would have a major role.
What is Mr. Rabbitt's central contention? Should a three person group be established?
Mr. Rabbitt
A focus group, similar to the one used in Madrid, would comprise a bureaucrat, a technical expert and a civil servant. That is how the Dublin docklands were developed and that project was delivered in adverse economic circumstances.
How was that group different from the RPA, whose job is to procure rail services? Should somebody be brought in to manage the RPA's procurement, monitoring and so on?
Mr. Rabbitt
The operation of a metro needs to be procured by those who will run it as a PPP. Melis was president of the metro and undertook the project. The Competition Authority goes into great detail on this in its advice on the light rail Act. It states Dublin Bus, Luas, the metro and so on should be distinct entities and refers to the RPA as the agency procuring the lines and it would be in conflict with the other transport modes if it operated the metro. The authority advises a split up. A focus group should be put together from day one with the public and private sectors involved in a partnership to move the project forward.
Is there a reason to believe that will not happen?
Mr. Rabbitt
There is every reason to believe it will not happen. First, the RPA is recruiting consultants who will manage the job for it next year. This is similar to the Dublin Port tunnel. The longer the project takes, the more the consultants will be paid. Dozens of people will work on the project instead of a few.
Does Mr. Rabbitt contend private money needs to be invested in the project to deliver it efficiently?
Mr. Rabbitt
The Government has stated the RPA was set up with a mandate to provide for a PPP on the metro and it is to carry out that mandate. The RPA was asked to do this in 1998. The Luas people were asked to move forward with what I am suggesting. They were asked to do this in 2000 after I had made a presentation to the Cabinet infrastructure committee. They were asked to do this in 2001 and 2002. It is capable of being done under the Act but it was resisted by others who wanted to do it as a direct labour job similar to the Luas project and nothing would turn them. When the consortium——
We are losing the plot a little.
No, we are finding out what the plot is.
The project is to be done as a PPP. The Government proposes——
That was my understanding.
My understanding is the same. If it is to be done by the Government or a PPP, it will be up to the bidders to make their own technical assessments. I expect the standard level of cover will be taken out by the RPA which will advise that the technical detail as presented by the bidder stands up. It is no different from the motorway job done between Kilcock and Kinnegad.
It will be monitored by the NRA.
Yes, it is the very same. What Mr. Rabbit is trying to suggest is that the RPA, as the monitoring organisation, is going beyond what he feels is necessary, if it takes everything in good faith.
Mr. Rabbitt
Yes. Let me give the committee an example in addition to the consultant example, which makes the job top heavy and expensive because everybody goes to a solicitor to sort out every problem instead of trying to solve them. A parallel example would be soil investigations. Large consortiums want to find their own data and do now want to rely on that of others. If there are ground investigations and the line is shifted 10 m, the investigations are a waste of time. The process must be completed in parallel, not in theory——
Where we are getting mixed up on this is——
What Mr. Rabbit is saying is that the private sector must be brought in early enough to be involved in the early stages of design, including ground investigations. I would have no problem with this as it makes sense.
Nobody would have a problem with it. The route should be decided. Then the process should be opened to bidders who should be informed of the route and told to go and make their investigations and bid. That is what everybody wants and what happened with regard to the Kilcock to Kinnegad motorway. The bidders were given the line of the road, CPOs were completed and the process was handed over.
It would be daft to do a road project without soil investigations.
What used to happen was that site investigations, for example, on road projects, were carried out by the local authority. As Mr. Rabbit said, if the line moved 0.5 m or 1 m, extras were added and claimed. In this case, what he suggests — we all agree — is that a definitive route should be subject to a PPP process.
That is an important point on which Mr. Rabbit should comment. The Chairman suggests the only way forward is to determine the route before one goes to tender. Will Mr. Rabbit respond to that significant point?
Mr. Rabbitt
The NRA does not select the route but gets the consortiums to engage in the full procurement process, including CPOs, EIS and route selection. As part of the EIS and due process, they must consider the different routes. They can often see advantages in routes that would prove cheaper, easier and have less of an impact.
Mr. Rabbitt's suggestion has much in its favour, including using 80% of land already owned by the State. I favour it as one of the conditions in determining the route.
Is Mr. Rabbitt suggesting the private company should also be involved in site selection? Presumably, that forms part of the tender bid. Is he saying all those who tender should engage in site selection and soil investigations? That seems to be an expensive way to procure anything.
Mr. Rabbitt
No, the suggestion is that they should engage in route selection and the whole procurement process.
Who are "they"?
Mr. Rabbitt
The consortium. However, it would do so in consultation with the relevant authorities and vested interests.
How is the consortium selected?
Mr. Rabbitt
We select a preferred bidder and work from there.
The bidders cannot know on what they are bidding if a route has not been chosen.
Mr. Rabbitt
They can. We can introduce a benchmark early on. I have the system outlined in the table at the end of the slides.
Does one ask them to provide the plans to build a metro and then tell them where the line is or let them tell us where it will go?
Mr. Rabbitt
No, one more or less signs heads of agreement. We consider the routes and select the best one on an economic basis in consultation with the RPA, the civic council and the public. The information is published on the web. When the first stage is complete, the route will be selected. The more detailed design work will be done, while the EIS and the CPOs will be processed. One negotiates with the agency constantly on an agreement. Negotiations continue while the CPOs are being completed and confirmed and approved by An Bord Pleanála. The final agreement is then signed and the scheme will go ahead.
Mr. Rabbitt is forgetting an important factor. If he succeeds in having a route selected, he must then face the constitutional rights of property owners along the route, a problem one does not have in Madrid. His suggestion of using public property where possible is the most important in route selection because it would minimise the number of objectors. It is necessary that we push the proposal that public property be used where possible, for example, under CIE lands, St. Stephen's Green and the other places mentioned that are owned by the State. If we use the percentage of public lands mentioned, that should reduce the amount of time spent dealing with objections to one quarter or less of what it would otherwise take. We accept that we will always have the permanent objectors. No matter what the project, NIMBY protestors will arrive straightaway. In this case, we must consider how we can set the parameters with regard to bidders to maximise the rate at which the project can be completed.
We must set out the criteria.
Yes, I agree.
I welcome Mr. Rabbitt. The level of detail supplied for discussion is impressive. Will he give us a brief resumé of his experience in dealing with CPOs and the EIS? Will he explain how the process can be fast-tracked using existing legislation? What experience does he have of working on motorways around Dublin, for example?
The circle line Mr. Rabbitt proposes introduces a level of interconnectivity, as well as dealing with public transport problems. We are all concerned about connectivity and would like to see integrated systems. Mr. Rabbitt's suggestion is impressive. However, the circle line he proposes is nothing like the proposed "Swords line" from St. Stephen's Green via O'Connell Street and Ballymun to the airport. His suggestion is completely different. Will he elaborate on it?
Mr. Rabbitt
On my experience of motorways, I have vast experience of dealing with CPOs. I have been at the cutting edge and been involved with dozens of them.
Will Mr. Rabbitt give an example?
Mr. Rabbitt
I was project manager for the airport to Balbriggan motorway scheme which a team of four completed in two years. The route was not even on the agenda at the time and was supposed to be considered after other routes. However, I had the CPO done and dusted and delivered the project in two years. The route was twice as long as the south-eastern motorway and more controversial in the case of the Broadmeadows estuary. I parcelled out the project. On the south-eastern motorway, I selected the route by the racecourse. I moved the interchange at Carrickmines further north, leaving a small footprint, but it was moved back subsequent to my involvement.
I was also involved with the northern cross project and realigned the route in the 1980s. I put together a package for the project which was to come ten years after the southern cross route but actually opened approximately 15 years ahead of it. This was despite the fact that significant amounts of money were allocated for the southern cross route.
I have also selected bypass route alignments for Enniscorthy, Longford and Galway. I have been at the forefront in large bureaucratic organisations. I know how they work and how to get them to work advantageously.
On whose behalf did Mr. Rabbit do that work?
Mr. Rabbitt
I worked for local authorities and consultants. I worked with a large consultancy group based in Galway, 50% of whose work was done in the United Kingdom. For four years I was a team leader dealing with motorways worth approximately €600 million at the time.
How was the team composed?
Mr. Rabbitt
I had one other engineer and a technician in my part of the team. We worked on the design route selection along with everything else.
What Mr. Rabbitt is describing is very simple in comparison to a ring road. I use the Longford bypass every time I come to Dublin. It is a basic straight cut-through road and would not involve the problems faced by going through virgin farmland. It is very different from a project in Dublin where metro stations must be included.
Mr. Rabbitt
I refer to White's Cross — Knocksinna junction — in Dublin. That was a problem for many years and I sorted it out. I talked to all the people involved which included eight or ten representatives for each individual, such as their solicitors, quantity surveyors and valuers. With regard to the Portuguese Embassy, I devised a solution so that we could proceed irrespective of whether the embassy gave the land. I have been involved in many road projects.
With regard to property, it is important to understand that when one is moving people's front gardens, the question of ownership of the boundaries and the centre of the road can be very complicated. In the case of underground, one is probably going through the centre of a rectangular site. The boundaries are very definite and there is no problem with people's boundary walls, footpaths and so on. An underground just goes straight through. The environmental impact of underground is tiny compared to a road and the work associated with it is much less.
I will cite an example for the committee. In May 2003, 16 kilometres of the Jubilee line was constructed in London. This was 20 times the value of the Luas line, yet the EIS documentation was one twentieth of the size of the Luas documentation.
It appears in this country, environmental impact statements have been turned into such a fine art by more and more consultants that this adds to the problem of trying to undertake public schemes. A level has been reached which is way beyond what is required to protect the citizen's environment and the people. The RPA and other groups are extremely careful when managing a project. They apply the belt and braces approach with regard to safety.
When members of the committee went to Madrid we discovered the project there had a carte blanche to dig anyway it wished and nobody could say “boo”, because of the law relating to property ownership which rules that the State owns the land below two metres and property owners have no rights at that depth.
The proposal being presented by the delegation should be examined. I suggest the committee invite the RPA to a meeting in the new year. The RPA is the management of the project. The committee could ascertain whether it is prepared to go forward on the basis that the route selection the RPA is given would be the route that would be decided without any further investigation and that those who tender for it would be aware they are tendering on the basis that they would have to sort out all the problems. Is this what Mr. Rabbitt is suggesting?
Mr. Rabbitt
Yes. It is similar to the situation regarding the national conference centre.
Is that with a preferred bidder and ensuring the bidder is strong enough?
Mr. Rabbitt
Yes. People came up with proposals.
It is crucial to ensure the bidder is strong enough to carry the project.
Mr. Rabbitt referred to the financing of the project and that 10% would be from the private sector. How sound are Mr.Rabbitt's figures regarding the 10% private investment and the passenger fares providing a rate of return of 5.2%?
Mr. Rabbitt
The soundness of the figures is based on the fact that existing infrastructure is being utilised to connect passengers to it.
Those figures could become inaccurate very quickly if it were discovered the infrastructure was not carrying sufficient numbers of passengers. The income figures would not stand up in that case. The assessment of motorways is done on the basis of the number of cars that use those routes on a continuous basis. The number of users is established in that way.
A system like this can pick up its own momentum.
Yes, that is what normally happens. I do not disagree with the Senator.
It is all about interconnectivity and that is the reason we are considering linking the North and the two Luas lines. People make cross-town journeys.
Mr. Rabbitt
It is about fare levels and competence in passenger numbers. I gave the example that a system would be ranked about 50th if it carried about 3 million passengers per kilometre, which is a figure I consider quite reasonable.
To consider what would happen if a system does not achieve these numbers, I refer to West Link. When the numbers go over 100,000, the State takes 80% of the toll and out of the remaining 20% NTR must pay all its overheads. There is no problem in putting such steps into an agreement. The RPA will probably argue there will be a subsidy on this project of €20 million a year but if one has to pay only €10 million, then one is making a profit of €10 million by not having to pay €20 million. It depends which way this is approached. This has all been done before.
I have a question about the difference in the line proposed by the delegation which is a circle line as opposed to the direct line.
Mr. Rabbitt
The Dargan project is phase one of what can be done in respect of Dublin transport. I have described what can be done with the Blanchardstown line, with a loop going to Campus and Stadium Ireland and Blanchardstown and going to the airport. The distance from Cabra junction to the airport is eight kilometres, which is two thirds the distance of the other line.
How does one get there from the centre of Dublin?
Mr. Rabbitt
One would go up to Broadstone.
Mr. Rabbitt is envisaging an underground link line.
Mr. Rabbitt
As shown on the map——
It shows a brown line going through the centre of Dublin. Is that in the first phase?
Mr. Rabbitt
With reference to the map, the very north part is a spaghetti junction. The red and black lines are existing lines. The right of way for the brown line exists and the bridges are still there. The track has been lifted——
What about the Broadstone line?
Mr. Rabbitt
It is a much higher standard than the former Harcourt Street line. All the line is still there.
Will that not go underground to a certain point?
Mr. Rabbitt
The underground will be the line up to the airport. The airport connects directly into the circle in two ways, one coming down from the airport and going east and connecting up with the line. This is all possible because the ground is very flat and I have studied the long sections. The other line will go up from Heuston Station straight to the airport and provides full interconnectivity. There are options in the way the connection is made to the airport and to Swords. The plan to go up by way of the airport to Swords and on to Belfast was one I put forward in 1992 when I realised the coastal line was at saturation point and it would be very costly to upgrade the bridges and so on. The coastal line is a commuter line and high speed trains would be much noisier. The line along the motorway was a much better way of connection. This has been done in cities such as Copenhagen, with a line to the airport which heads north which is very similar to this concept.
I welcome the contribution from Mr. Rabbitt. I think the logic is irrefutable. I think he needs a proof-reader as there are a lot of typos in his presentation and some of them produce perfectly delightful results, like "the completion authority" and we certainly need such a body. It would be much better than the Competition Authority if we had some body that would complete tasks because that is what this transport system needs. Even though this is an accidental slip, what we have been presented with is something that looks towards a complete system for the city of Dublin. What I like about it is the fact that it represents joined-up thinking and a joined-up transport system that utilises what already exists. I will not ask Mr. Rabbitt to provide background on his degrees, qualifications, experience and so forth as this subject was raised frivolously previously. The person who did so is not present and is, I believe, properly abashed.
On the comparative costs, Mr. Rabbitt's proposal seems to come in at a significant saving as compared to the underground element of Transport 21. Is my reading of the cost, namely, that the proposal would deliver a saving to the Exchequer, correct? As one who was involved politically in trying to advance this proposal or its predecessor, I remember that a Japanese consortium which visited Dublin was prepared to build, manage and operate a metro at virtually no cost, simply on the basis that it would make a profit from operating the system. Is there a reasonable chance that this type of consortium could be put together to save further taxpayer's money?
Will Mr. Rabbitt explain clearly what is a wayleave? If one could obtain a wayleave, rather than a compulsory purchase order, it would obviate some of the legal difficulties to which the Chairman correctly drew our attention.
Page 2 of the submission refers to Professor Melis's cost estimates and states the rates supplied to him are untrue and unbelievable. From where do these inaccurate figures come? Will Mr. Rabbitt supply to the joint committee some valuable information on the more than 20 readily identifiable areas in which the Madrid metro excelled, as noted on page 2? A number are well explained, in particular, the difference in technology employed in Madrid and the fact that the side panels in the enormous and remarkable boring machine used in the Dublin Port tunnel had to be changed every 45 minutes, whereas the machines used in Madrid operated continuously. This approach provides for massive savings in time and effort and so forth.
As regards the port tunnel, once an area had been bored sufficiently to put in a panel, the machine was switched off to allow the panel to be inserted. In Madrid, however, the panels were replaced as tunnels were bored without any stoppage. In addition, the machines bored 24 hours per day, seven days per week, whereas boring in the port tunnel takes place, I understand, for only 12 hours per day.
If a tunnel is to be bored under public land where there are no dwellings, there is no reason not to bore 24 hours per day, seven days per week. One of the tasks the group could perform would be to assess what hours could be worked. We constantly hear about flexi-time. Why do we not provide for flexi-time in this context? If there is an opportunity to work without disturbing people, we should just plough ahead. By being creative in ways such as this we will find an excellent solution.
That is how contractors make profits building motorways. Once they obtain the area design, they assess how much rock and so on they can use as part of the project. That has always been the major trick in public-private partnerships. When a company has full control of a site, any natural advantage can and is used.
I believe the Chairman will agree me on the following matter because he appeared to be smiling and nodding at the suggestion. We should try to reduce bureaucracy and duplication of personnel and have a slimmed down, efficient, professional team. Will Mr.Rabbitt supply the joint committee with information on the other 19 areas in which Madrid excelled and differed from Ireland? What are the Chairman's views on how we could advance this terribly important process? I would be happy to propose Mr. Rabbitt's suggestion if the Chairman believed it would be a good idea.
We should wait until we discuss our work programme in the new year. We can then decide how we will approach this issue. We will also have to speak to the Railway Procurement Agency and the Department of Transport, both of which are involved in this area, to ascertain their positions on the proposal.
We should run with the metro proposal and ensure we do not get what was described by a person with whom the Chairman may have been acquainted in the past as an Irish solution to an Irish problem. We do not want a half-baked solution cobbled up at the last moment. We need a coherent, consistent approach and this proposal seems to be a good starter. The less delay, the better. We should ruthlessly exploit the expertise of Mr. Rabbitt, whom I have known for at least ten years. I have never found that his figures need to be challenged or his assertions to be incorrect or inappropriate. I have outlined in the Seanad yards of information he supplied me, albeit not before I had investigated it and satisfied myself as to its accuracy. Nobody was able to challenge it. The track record of our public agencies is lamentable in terms of efficiency, value for money and on-time delivery. Mr. Rabbitt, on the other hand, has a track record in this area and I would be happy to add his expertise wherever we could.
While no one would have a problem with that, it was decided earlier that our work programme for 2006 would be discussed in the new year. I am aware the Senator will be absent for the first meeting but to facilitate him we will leave the issue on the agenda for the second meeting.
I am sure members will co-operate.
This matter will have to be followed up on a continual basis to ensure it is delivered as soon as possible. Our only interest is to try to secure an integrated public transport service in Dublin which will facilitate citizens and reduce the number of cars in the city.
Mr. Rabbitt did not get around to answering some of my questions on wayleaves, comparative costs and so forth.
Mr. Rabbitt
On comparative costs, one must have certainty and be confident that one will remain within a set parameter when making a business decision. Massive amounts of data are available worldwide on costs. The only place none is available is in our own back yard. I do not know the reason but my experience is that the more information one places in the public domain, the better as it enhances rather than reduces competition. Contractors know their costs and do their own cost estimates. For example, the new Navan Road and Bray to Shankill bypass projects were to be put out to tender in the same month because of concerns that if one was put out to tender on its own, the second would come in more expensive. In fact, if one puts projects out to tender at slightly different times, the bottom price on the first will be the top price on the best bid and contractors will work down from that figure. There is nothing to fear from publishing costs.
This is a commercial matter. Companies never use public costings; they take their own costings.
We have had a major problem with the Railway Procurement Agency coming back and forth stating it could not legally disclose certain sets of figures to the joint committee.
It finally provided most of them but it took a long time.
As Mr. Rabbitt stated, companies will know their costs.
Mr. Rabbitt
Yes, in terms of savings to the Exchequer, one can examine what Professor Melis did. He saved billions when one compares what he provided in Madrid with metros in comparable cities. I also have a track record of making savings to the Exchequer. I retained three lanes on the northern cross route, whereas one lane was dropped from the plans for the southern cross route, a decision which caused many problems. I gave all the relevant information to those involved in the latter process and told them I had made and won the case to have three lanes. I asked them to do the same. I found out afterwards that they did not do so. I have done this repeatedly and can identify hundreds of millions of euro in savings I made in and around Dublin on roads, interchanges and so on. From day one, the Royal Canal Bridge on the Navan Road was supposed to connect with the roundabout, rather than being routed underneath it. I was almost sacked for asking what was the logic behind that proposal. I subsequently won the argument hands down.
With regard to whether Japanese or other consortia would be interested in coming here, they would. I have had talks with the consortium to which the Senator referred and other groups and they expressed an interest. However, one must structure this properly, say, in the way the MTR in Hong Kong does it. It is doing exactly what I am proposing to do. It builds its metro systems, operates the franchise——
Does it identify the route?
Mr. Rabbitt
Yes. It deals with buildings and sells off property along the route. The company is listed on the stock exchange. The government sold off only 23% of it, at which percentage it was 17 times oversubscribed.
It seems Mr. Rabbit is suggesting a consortium could approach the Government with a project, including route determination, costing, etc. The problem with this is that one runs into European competition legislation.
The bottom line is that when one decides where one is going, one must publish details in the Official Journal of the European Communities — there is no way around this. It is important that the project be sufficiently big and straightforward for international companies to tender. The one lesson we learned from the Spaniards who constructed the M4 was that a project smaller than the one offered would not have enticed them to tender. This shocked us. They were not interested in constructing a road shorter than 40 km.
Mr. Rabbitt
On that point, larger companies do not want to be messed around by states. When they start a project, they want to focus 100% of their energy thereon. If it is not to their liking, they do not want to have anything to do with it. Their managing directors and top people are all busy and tied up with what they are doing, but when they have a real project, they will put in the time and produce a package.
If one has wayleave to gain access to one's house through someone's driveway, one has the right to drive over it, but one does not own the land. The same applies to tunnels. The right of the owner of the wayleave is to maintain and traverse through it.
In other words, wayleave could be obtained, even under existing Irish legal structures, for a route at a sufficient depth underneath somebody's house, such that there would be no cost.
Mr. Rabbitt
Yes. It is common practice to have wayleave through people's gardens for sewers and water mains.
In Ireland.
Mr. Rabbitt
All over the place.
That answers my question. That represents an important and significant method of saving.
There is a problem with wayleave. Irish citizens own the property under their houses and I believe there is no limit as to depth.
Do they not come into competition with people in Australia?
They still own it. One must negotiate wayleave with the people concerned in the same way as one would negotiate if they were over ground.
Mr. Rabbitt
Yes, but this is done all the time. We have covered many Acts on this subject. One will see from the documentation I provided that one does not make savings, as were made in Madrid, just by having a lower tunnelling cost — one must be better in every area. The machine used in Madrid was much safer than any used here. It was also much stronger. The consultants recommended that an 8,000 horsepower machine be used, but Melis used a 15,000 horsepower machine, thus saving time. Time was identified as a critical element, but safety was paramount. The machine used was extremely safe and could bore into all types of ground. Those used in Athens, Copenhagen and other areas cannot. The contractors in Madrid were made opt for the better machines. Safety, rather than cost, was prioritised. Timescale was also an element.
When the representatives of the Railway Procurement Agency appeared before the committee about two months ago, I asked about the tunnels. They indicated the Irish law in respect of twin-bore tunnels.
Mr. Rabbitt
Single-bore tunnelling is now much cheaper and safer. Twin-bore tunnelling was opted for in the draft regulations drawn up, but it is much more expensive to build stations in twin-bore tunnels, to carry out maintenance work and address catenary issues. One can work from one to the other if one has a large tunnel — there is plenty of room to work as it is very open and safe. The figures suggest there are no accidents in rail tunnels.
There is a major difference of opinion between the representatives of the Railway Procurement Agency and Mr. Rabbitt. The Railway Procurement Agency was very certain it would not be allowed, under Irish law, to build——
They referred to health and safety issues.
They mentioned Irish law.
Mr. Rabbitt
Most tunnels in the world are single-bore tunnels which are cheaper to construct. The tunnel to which I referred is of a size that includes the stations. It is so big that, in respect of the half circle on the south side, one can operate trains on two levels. At the stations one set of lines goes down slightly and one goes up. Therefore, a train can go straight through underneath.
This is the detail I like to hear because when the Railway Procurement Agency representatives appeared before the committee, we asked whether one could build a few of the stations from the top down in one fell swoop.
Mr. Rabbitt
It is cheaper to build stations from the top down by dropping down very simple walls, effectively excavating a big shed. The members will have seen them in Madrid. They have mezzanine areas with very bright light coming down around them. This is the cheapest method. The contractors in Barcelona constructed the bigger tunnel, of a size to include the stations. They then only had to put down a very small footprint for escalators and lifts to get into them.
There is obviously less destruction overhead.
Mr. Rabbitt
Some of the stations only use lifts, rather than escalators.
To save space.
Mr. Rabbitt
Yes.
I thank Mr. Rabbitt for his presentation. We will return to the subject in the new year.
The joint committee adjourned at 4.20 p.m. until 2.30 p.m. on Wednesday, 11 January 2006.