JOINT COMMITTEE ON TRANSPORT díospóireacht -
Wednesday, 21 May 2003

Vol. 1 No. 12

Dublin Metro Group: Presentation.

Chairman

We are delighted to welcome Mr. Cormac Rabbitt, Mr. Gus MacAmhlaigh, Mr. Michael Ross-Lanigan and Mr. Paul Kelly of the Dublin Metro Group. I draw your attention to the fact that members of this committee have absolute privilege, but this same privilege does not apply to witnesses appearing before the committee. Members are also reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make that official identifiable.

I invite Mr. Rabbitt to make the presentation.

Mr. Cormac Rabbitt

I thank the Chairman for inviting me. I wish to make a presentation on the Dublin metro and how the experience of Madrid can be brought on board. I have 31 slides but I do not intend to go through them all. I will skip a number of them. My presentation is on the metro in Madrid and what can be done, and done competently. My focus is really to show what can be done and that it can be done with confidence, both in cost and otherwise.

My first slide shows why the metro happened in Madrid. The three important people are Alberto Ruiz Gallardon, a political representative who wanted the metro system built within four years, Luis Eduardo Cortes, the administrator who oversees the Municipal de Madrid infrastructural transport section, and Professor Manuel Melis Maynar, who is responsible for having the metro built within the two four year periods, from 1995 to 1999 and from 1999 to 2003. By way of 24 major contracts, 56 kilometres were built in the first four-year period and 75 kilometres were built in the second. There were about six consortia working on the contracts. Each built a line roughly twice the length of that which we are considering for Dublin.

The Madrid metro succeeded because there was a political imperative with clear thinking. The contractors were not asked how long it would take them to build it but if they could do so within four years. Manuel Melis Maynar said it was possible and he built the lines in much less time than that. This imperative focused the technical and construction teams and provided them with the wherewithal to progress the scheme.

In the 1995 to 1999 period, line 7 extended eastwards across the city and then extended to the north-east. This line could compare with Dublin, and we will examine it in more detail. The airport line was constructed, as shown on the slides I have presented to the committee. The north-south line, line 10, was the first true north-south line to be constructed in Madrid. It is important to note that the overall cost of this part of the project amounted to €32 million per kilometre.

Line 7 is complex and relates to Dublin Airport. It is under a city area and runs under or over a huge number of metro lines. It has 13 stations and was completed in four contracts. The timescale involved was remarkable. The work between stations one and two was completed in 21 months and that between stations two and four was completed in 23 months, including construction and commissioning. The whole project was completed within 28 months.

Chairman

Were stations one to 13 completed in 28 months?

Mr. Rabbitt

Yes. However, the first four were opened within 23 months, which is extremely fast.

The prices per kilometre of the Madrid metro can be considered when calculating those pertaining to Dublin. In the centre of Madrid, between the first six stations, construction involved going under or over metro line 7 and the Renfe line. The Renfe line is the busiest line and has 485 trains per day, 38 of which are long-distance trains. It goes from north to south beside station 2. The contractors working on line 7 had to go under or over all the lines they met and then connect to them, which demonstrates the complexity of the line and why it can be used as a model for costing the airport route.

Interlinked carparks were built. The first has two bus stations, one for long-distance buses on one level and one for metropolitan buses on the next level. Below this there are short-term carparking facilities, and below that there are long-term carparking facilities.

The slides I have shown to the committee demonstrate the extent of construction in the 1999 to 2003 period. MetroSur, line 12, serves as a template for Dublin. The slides also show the other lines near the airport. Professor Melis constructed these. The line to the airport, on which construction did not begin until 2000, opened a year ago today. It was open for service having taken only 25.6 months to complete. MetroSur, the line in the south, took 35 months.

The overall cost of the metro per kilometre was €44.7 million, but that takes into account some very expensive construction work on the airport route because it was next to the Renfe line. A huge station was built there. All the stations that were built are of a very high standard. There are marble lifts, escalators, travellators, etc.

The MetroSur line has eight interchange stations and took €38.5 million per kilometre to build. The fact that there were six contracts meant that one did not have the economies of scale that would obtain if there were a single contract. The price of €38.5 million is the outturn price. I obtained it from the computer of Professor Melis in February and I am using his times and dates.

With regard to Dublin, let us consider the cost and the EU stability and growth pact, what is involved in the works order and how we should approach construction and operation. The EU stability and growth pact has the same requirements as us. It states that the contracting administrations cannot take on financial liability. In Spain, Comunidad de Madrid set up a special agency called Arpegio and guarantees its credit with its land reserve. We can use the new National Development and Finance Agency and the CIE landholding could provide the guarantees. In Madrid, finance was ring-fenced from the beginning and minimal administration was involved in releasing it. This meant that the consortia that bid for the proposal could give competitive prices because there was no complicated bureaucracy involved in the draw-down of finance, which comes out of somebody else's pocket at some stage.

The metro tunnel in Madrid can take two trains of 2.8 metres in width side by side, which demonstrates how big it is. Bearing in mind that there are two port tunnels, each one would take less than €31 million per kilometre. On that basis, €32 million is a safe bet. This is a ballpark figure and I have overestimated the cost considerably.

Let us consider lines 7 and 12 in Madrid, the former of which was very complex. These cost €38.1 million per kilometre and €38.5 million per kilometre, respectively. Based on current prices, the Dublin equivalent would amount to approximately €45 million per kilometre, which compares with the costs of the MetroSur and line 7. That is a robust figure.

What is the capital cost of construction as far as the airport? Given the distance, 11.5 kilometres, and taking into account rolling stock, land and depots, the cost would come to just under €600 million or €52 million per kilometre. The estimate of €600 million is more than robust.

The timescale and works order issues arise frequently as reasons for delay. However, a metro can be constructed in a fraction of the time it takes to construct a surface road system because it is more straightforward. One has only to consider the complexity of on-street construction compared to underground construction. In the latter case, one does not have to contend with flora or fauna. Air and noise pollution are much simpler to tackle, there are no views, and traffic surveys, involving thousands of cars and modelling, are not necessary. There is no need for utilities diversions, except in areas such as stations. I am speaking from experience. I have a substantial track record, having worked on many successful road-based projects. For the Luas, an on-street system, a ten-book EIS was required. The scheme to extend the Jubilee line on the London Underground was 20 times larger than the Luas and 20 times more expensive, but its EIS is one twentieth of the size. Some road schemes have similar sized EISs, but one project in which I was involved, the northern motorway going from Dublin Airport to the Balbriggan bypass, has an EIS one book long.

The CPO timescale requires a schedule of the properties and rights of way and maps of the land that must be acquired. The 300 metre section at Capel Street, just below Broadstone, is probably the most densely built section on the whole route. The mapping can be done very fast. Compensation is a different story. In terms of the works order, it is not as complicated for a metro system. The compensation paid during the building of the Dublin Port tunnel was between €600 and €6,000 per site. There could not be more than 600 individual owners on the airport route and if each one got €6,000, this would work out as €3.6 million. The average amount that people got in compensation is less than €6,000, so €3.6 million is a maximum figure.

How do we approach construction and why has it not happened to date? We have to change the prevailing mindset with regard to the type of contract and how it is managed. Gus MacAmhlaigh of the IFSC has proved that this can be done. He did exactly as was done in Madrid when the IFSC was being built - he advertised in June for expressions of interest and went for the competition in July. By 7 August the offers were in. This was done as a business project, not as an infrastructural project. It was done from day one as a package and that is why it succeeded, although at that time we were more strapped for cash than we are now. The estimate for the IFSC at that time was €200 million, which is more than €600 million in today's terms. We had no money at that stage. Gus could not have built it if it were not for the fact that the €200 million was fully underwritten from day one. That was a DBFOM project. We must link the statutory process, route selection, operation and contractor from day one into a consortium business plan focused on getting passengers. Getting passengers is what it is all about; this is why the operator needs to be involved from the start. We must put it to the market and see what the market comes back with. That has not been done. We understood that it would be done from our meetings with the Minister in 1978 and 1979. In 2000 the infrastructural committee was to go to competition. The competition, in the form we understood it was to take, has not happened. The result would have been similar to what happened in Madrid and in the IFSC.

No major consultant was employed in Madrid. The staff was very small, which meant that they could deal with everything. Everything was done on a lump sum basis.

Chairman

There were no consultants.

Mr. Rabbitt

There were no consultants with the equivalent of the RPA.

Chairman

How will we possibly get through the day? This goes completely against Irish culture.

Mr. Rabbitt

The committee members must be experienced. The consortium would have its consultants as necessary. The tender would go for concession on a DBFOM basis, utilising design build lump sum turn-key construction contracts as happened in Madrid, which avoided court proceedings and time wasting. The focus was on delivering a turn-key product. The concession will be similar to that of the West Link bridge, for which by-laws which implemented the details were set up after the scheme was planned. The targets and requirements are set up through a negotiation process and enshrined in by-laws; in other words, after the scheme is planned, while it is being designed, one negotiates the targets and requirements. What about a panel of experts and management? The scheme in Madrid was no accident. It is only when one has employed somebody like Melis that things can be done. We can do the same in Dublin.

How does this relate to Dublin? Our forefathers laid out Dublin's railway lines and road network in a pattern that could provide a fully integrated rail and public transportation which is second to none. When one considers Dublin as a bay city, one can see that along with the existing five radial lines we could have two new radial rail lines, to the airport and to Tallaght and Templeogue. Between those seven radial rail lines we could have quality bus corridors, which result in a total of 14 routes radiating from the city for comprehensive coverage. These routes will be of high quality.

Quality bus corridors cannot possibly compare with metro or on-street systems. Taking the demands for the DART to Howth and Bray, which are roughly equal, as 100%, the demand for the Sandyford line would be 180% - in other words, the Sandyford line would have 80% more passengers. The Tallaght route would have 100% more passengers, the Clondalkin route would have 20% more, the Blanchardstown route would have 40% more and the airport route would have 100% more than the DART line. The DART is busy enough with six carriages - this is why we need a formal system such as a metro. The circumventory routes link into the system to form a web. Currently there are seven of these routes on the northside and seven on the southside. I do not know why there are no quality bus corridors, even for Imp buses, on these routes.

Much can be done in terms of integrated transport. Liffey junction in Glasnevin, on the Royal Canal, is a place at which many railway lines come together. What can be done with this? Fortunately, the land needed is all available. The existing railway lines are from Heuston to Connolly and from Blanchardstown to Connolly. Reservation exists from Liffey junction as far as Broadstone. If there was a line from Broadstone to the airport, the airport would thereby be linked to Connolly and the other city centre stations. Going from the city centre to the airport, another line can be built almost for nothing because the infrastructure is there and suitably laid out for another line to be slipped in. One could get from the airport to Connolly, Tara Street, Pearse or Barrow Street - four city centre stations. With the airport to Broadstone link, this represents two routes to the city centre for the price of one. The Blanchardstown route, which one can join at Castleknock, Blanchardstown or Clonsilla, links up to the Grafton Street area. There is a five-platform interchange above ground at Liffey Junction, which fits in with the terrain and can be slotted in quite neatly.

How one gets about the city centre is probably more important to the city than getting into it. A 7.5 km ring rail line would link the largest hospital in Ireland with the Grafton Street and O'Connell Street areas and the Liberties, where the digital hub is to be situated.

Senator Norris

Is this an underground line?

Mr. Rabbitt

This would all be underground. It is building on what we have.

Madrid built a large number of metro lines, some in very difficult, complex conditions, to a very high standard at repeatable prices and in repeatable times. It is robust. This was not just done in Madrid but around the country and in many different schemes. Madrid is a superb example of how quickly and safely metro lines can be built with political will and clear thinking. The Washington line was also built at a good price and in a good time.

The Madrid achievements can be repeated in Dublin. A world-class integrated public transportation system can be built in Dublin in the short-term, including the airport metro and other lines. I am thinking in particular of a line to Templeogue, which could possibly be built along with the ring route in one effort. To do this we would have to link from the beginning the statutory process routes, selection, operation and contractor into a consortium business plan focused on getting passengers. The kernel is to do things in parallel and not in series. Going by the Madrid experience, with the airport metro built in 25.6 months, with a statutory process involved, it is more than achievable in Ireland by 2007. If it was Madrid, one would be boarding it at Christmas 2005.

Chairman

Thank you for that informative analysis. You have given us an overview which seems very logical. Why do you think the Rail Procurement Agency is saying it will cost between €4 billion and €4.5 billion to build a metro over a much longer period? Why do you think there is such a difference? What is the fundamental difference between what you are saying and what they are proposing?

Mr. Rabbitt

The fundamental difference is that we are looking at a different approach to that previously taken with public works contracts. We turn everything into lump sum turn-key projects. The figure given by the Rail Procurement Agency is just under €4.8 billion, including the link to the airport. I do not think that figure can be justified, and to defend it is just to dig a hole. The more it is defended, the worse it gets.

Senator Norris

I heard one of the senior executives of the RPA interviewed. He did not know the length, he did not know how much of it was on the ground——

Chairman

We have invited the RPA to meet us. They will no doubt give us figures relating to this kind of cost. There is a massive differential. It strikes members of this committee all the time when we deal with such issues that people come in and give one figure, and a project ends up costing three and four times that amount. Is this another example? You are saying it is going to cost €600 million, and at the end of the day you will say certain factors were not known, consultants had to be employed, and so on, and the final cost will be €2.5 billion or €3 billion? Is that it?

Mr. Rabbitt

In this case we were very aware of tunnelling costs. In the 1990s we got fed up talking about costs to people who had never built tunnels. We brought in the Japanese construction company and introduced its representative to Cabinet members. These were people who had built tunnels. They substantiated our figures. Regarding the question of robustness, we feel that the costs we are putting forward are achievable and can be delivered. One reason why the project in Madrid was delivered according to projected costs was the timescale. They shrunk the timescale for building right down, so the exposure to cost was much less.

Regarding the €4.8 billion figure, the RPA is possibly looking at the whole life cost of the finance involved, rather than purely the construction costs. It would possibly separate out the construction cost at much less than €4.8 billion. However, that figure contrasts with our €600 million, for which we know it can be built.

Chairman

Is the delegation saying that this is the total build-out cost, including long-term repayments? What would the long-term repayments on your project be?

Mr. Rabbitt

In Spain, when they set up the agency, Arpegio, it was able to borrow at very competitive rates because all its borrowing was backed by assets, something like 0.2% over DBR. Based on the cost of finance at the moment, which is lower than ever, to finance €600 million is not that expensive in relative terms. On a route to the airport, one would expect to get at least two million passengers per kilometre, so one would expect to get income of €22 million annually, and one can use those figures to show one would have a quite substantial income to meet the interest repayments on the loan. There are also many developments associated with the metro which could underwrite its cost. These tend to be more longer-term than simply building a scheme and putting it into operation.

Mr. Michael Ross-Lanigan

We do not have the detail of what is involved in the €4.8 billion figure quoted. I think the routings are more extensive that what we have proposed here. The land acquisition costings seem to be large, judging from what was leaked to the media. The operation cost for the 30 year concession may be involved in that figure too. We cannot therefore answer the question as we have not got all the information.

Chairman

It seems a huge difference, but it does not really surprise me or most members of the committee.

Deputy Naughten

Mr. Ross-Lanigan has brought up one question I was going to ask in relation to the routings. It seems from the presentation given, and the utilisation of the Glasnevin junction which is a major asset gathering dust in Dublin at the moment, that the Dublin metro group is suggesting where possible to put the greater part of this route overground, utilising the Broadstone line to its maximum. I presume the same applies to the other radial lines as the service expands on the other existing rail lines. Will that have a significant impact in relation to the RPA costings? I know the RPA is looking at a number of different routes.

CIE currently has a massive land bank in Dublin, very valuable not only in relation to the docks, but the Inchicore Works, which could be developed into high-quality housing, providing a rail service there. There is no reason why the Inchicore Works have to be based where they are at the moment. Such an asset could be released to put the funding structure in place. It seems amazing that the presentation today alleges it can produce a metro line for a fraction of the cost suggested by the RPA. It will be very interesting to hear what the RPA has to say about that next week.

Deputy Shortall

The proposal that has been made is very interesting, and we should focus on it as a committee because the soaring cost of transport infrastructure is probably the biggest current problem in the country.

I want to ask a number of questions. Perhaps the delegation might note them and respond later. The delegation might first tell us something about the Dublin metro group and its interest in the issue. I know nothing about the group. Does it have any business interest in terms of developing the proposal made?

When the delegation talks of the proliferation of consultants for various projects and the need to eliminate that layer, I agree in general terms. Yet the delegation has referred to the Madrid experience being overseen by a panel of experts. Is that not in effect a panel of consultants? What kind of numbers has the delegation in mind and from where would the experts be drawn? It would be helpful too if the delegation could go into the detail of what we would need to do in this country and what changes we would need to make in order to take its approach. I am thinking in particular of the planning process, a very slow process responsible for many of the delays involved. Can the delegation give the details of what is required in that area from a statutory point of view?

We also need to know about the type of contracts that need to be drawn up and operated. That presumably is a matter for the Department of Finance. Has the delegation details on this matter?

The delegation might also comment on the cost of materials, because it is alleged that the cost of supplying key materials in infrastructural projects is a major factor in the soaring prices. I would welcome the views of the delegation on this matter.

Was the construction and the operation of the Madrid metro in state ownership? Is the delegation advocating that in Dublin? Finally, I wish to ask about route selection. What happens after the Liffey junction? What route is Mr. Rabbitt proposing and to what extent will it be underground?

Mr. Rabbitt

Members have asked a lot of questions and I would like to write them down.

Senator Norris

I will not have very many questions but would like to make a couple of comments. The reason I do not have so many questions is because the two preceding speakers asked some of the best questions.

There has been continuous obfuscation on the part of the Rail Procurement Agency. I have been interested in this proposal for the last 20 years and have repeatedly come up against obfuscation. I return to the radio interview. When the question was asked about the discrepancy of a couple of billion pounds in the costs that had been accounted for in terms of putting in the rail and so on, the answer was based on contingency and administration. It may have been a bad hair day, I do not know, but the person being interviewed did not know the extent of the underground component and so on. There were huge factual gaps. I know it can be very difficult when one is interviewed on the radio and loses contact with one's brief and so on, but it was not impressive.

This fits in with my experience over many years. The Chairman asked how we can know that Mr. Rabbitt's projections are right, and the answer is that the proof of the pudding is in the eating. If we want to know how accurate Mr. Rabbitt's predictions are we should read the Seanad debates over the last five years. What I said in the Seanad was based on information supplied by Mr. Rabbitt and Mr. Monaghan under their previous guise working on the integrated proposal, and everything they said has come about. It is all true. They were proved right by experience. If people do not believe that because it is apparently theoretical, have a look at——

Chairman

Perish the thought that we would not believe that.

Senator Norris

Look at Madrid. They have done it in Madrid, so for God's sake let us wake up and live in a real world where people can do these things. In a rather gloomy environment, it is great to hear something that the Chairman described as logical and clear. I found it convincing. The questions are answered.

There is an absolute need for this because Luas, pretty and all as it is, is going to have damn all impact on moving passengers around. Huge amounts of money would be saved for the Exchequer in terms of delays and efficiency. It would make it a better city in which to live, which is a good thing. I am very impressed by the degree of integration proposed between the different systems further down the line. Could Mr. Rabbitt and the Dublin Metro Group form the core of a team that would establish and administer this and replace all these consultancy groups and so on?

Given Mr. Rabbitt's record of putting in roads, the information he supplied previously and that has been proved correct and the experience of Madrid, I would happily entrust them with it. That may not be a decision for this committee, but I shall end by making one recommendation. I understand that the man who was largely responsible for the Madrid metro may make a submission to Government——

Chairman

He will.

Senator Norris

Good. That is the Spanish experience and it has got to be followed up by showing the Irish experience. Can we do it? I believe this group could. After the submission from Madrid shows that it can be done and has been done and outlines the methodology, we should, in justice to ourselves and to the people who have said that this was the case for so many years and who have been proved right, give this group the opportunity to make a submission directly and specifically to Government on the Irish situation and on how this project could be implemented. Let the Cabinet then ask all the difficult questions. I am convinced that this group could answer them. This committee should recommend that after the submission from Madrid, we have an Irish submission from the Dublin Metro Group made directly to the Government specifically on putting in this network.

Mr. Rabbitt

Hopefully I will remember most of the questions. The Dublin Metro Group came about in 1991 when the then Minister with responsibility for transport, Deputy Seamus Brennan, requested proposals to be submitted to him on upgrading Dublin transport. We responded to that and came up with this proposal. All that the committee saw on the maps was first presented in 1992, and we have not deviated from that. We have pursued the proposal relentlessly. We have held to our costs from day one. We had to do comparative costings with Luas just to show the differences, but our basic costs have been the same all along, including these like for like costs.

Deputy Shortall

When Mr. Rabbitt says that the group came together, who is he talking about? What interests are represented in the group?

Mr. Rabbitt

The group is principally comprised of myself and Mr. Monaghan. We realised that something needed to be done to integrate the transport network. We called it the unified proposal because we believed in all forms and modes of transport and that they all have their own places. We wanted to unify them by building on top of and taking advantage of what is already in place. I come from a very strong background of knowledge of infrastructure in Dublin, probably more so than most people.

What is striking about the overall system in Madrid is not how complex but how simple it is. It is not about the problems but the solutions. We have been looking at the problem - that is what consultants are for. Contractors or consortia know how to deliver products, and if their necks and their borrowings are on the line they have to make projects work. That is our approach. Melis made it so simple. He asked what the problem in Dublin was and what the soil conditions were. He pointed out that theirs in Madrid were way worse. They have sand, water and everything else coming down from the mountains. That essentially answers what is the Dublin Metro Group.

There are different route alternatives north of Liffey junction. That can be built into the process from day one. Once a consortium starts moving forward there is a very short mechanism for that. There is an obvious route straight up Ballymun Avenue, principally because there is the airport and Ballymun. The 88 hectare metro park will be located in Santry. There is DCU, a very big university, and all the people who live around Glasnevin. The Dublin Institute of Technology is going to relocate to Broadstone, and it will be huge. There is the Mater Hospital, which serves Ballymun and so on, so this would really interlink a lot——

Deputy Shortall

Would the line go overground?

Mr. Rabbitt

No, it would go underground and remain underground the whole way up because it is so much easier that way. The incremental costs of tunnelling are very small.

Deputy Shortall

So the entire route would be underground?

Mr. Rabbitt

It would remain underground until north of Ballymun.

Chairman

The Deputy thinks it is a very good project because it affects her constituency.

Deputy Shortall

Certainly.

Deputy Ellis

All politics is local.

Mr. Rabbitt

I was asked about costs of materials. Materials are international commodities like steel. They are the same in Madrid as they are here.

Deputy Shortall

What about cement?

Mr. Rabbitt

Cement is the same. It can be bought anywhere in the world and at competitive prices. A very good price could be obtained for the amount of cement involved in a project like this.

Deputy P. Power

What about labour costs?

Mr. Rabbitt

Labour costs would be higher here but labour would be a very small percentage of the overall costs. Melis's approach was that if the design people said he needed 10,000 horsepower to drive a big enough tunnel boring machine, he would say no, he wanted 15,000. He took this approach throughout. He made it so simple. Building the tunnels, stations and so on was so simple, as was the uniformity of the finishes. With the stainless steel, marble lifts, escalators and so on, the Spanish have the lot. They know how to build such a project.

Materials and labour would not be an issue here. Driving a tunnel boring machine is not labour intensive. There are only a few people involved. It is all automated. There were a number of other questions.

Deputy Shortall

What about the planning process?

Mr. Rabbitt

That problem has been overestimated. I was at the core of the planning process throughout the 1980s and 1990s in Dublin. I went through all the different situations and developments, even in the mid 1970s, and saw how it operated. What people see as restrictions are items that one can take advantage of to move matters through. Planning is not complex though it is seen as such. As I pointed out in regard to CPOs, all of the mapping is on computers, available through national grid references and quick to access. What takes time is the environmental impact statement. The EIS on the disposal of material could be carried out in 12 months time because, assuming it takes close to ten months to work with a tunnel boring machine, as it did in Madrid, the dates can still be met.

Deputy Shortall

There are statutory timescales set down in legislation as well as the oral hearing etc. Is Mr. Rabbitt proposing a change in legislation covering the planning process?

Mr. Rabbitt

We could continue with what we have because there is more than enough there to do so. If there are to be changes, it is not necessary to wait until they happen. It is fine if that is in 12 or 16 months because there will be no question of paying out compensation for perhaps three or four years.

Chairman

We all agree that the planning process is terribly simple. However, it is a question of getting a final answer. The process goes on and on with claims, appeals and oral hearings. The situation is ludicrous.

Mr. Rabbitt

If we take the experience of the Luas lines, which were very controversial, they went through and there have been no High Court appeals. The inquiries were over and the decisions made within weeks.

Deputy P. Power

It still took a long time to get to that point.

Mr. Rabbitt: It took a long time in the context of the very detailed EIS material. An EIS should only address the ameliorative measures that can be taken as a result of the project, and what effect it has on the environment. Underground, that is not as relevant.

Deputy Ellis

Does Mr. Rabbitt envisage that EISs could hold up the project? We all know that the respective interests involved will make a meal out of this, as they have done even in regard to small projects around the country. For their own vested interests, such groups will get somebody to lodge an objection to hold a project up. In what period does Mr. Rabbitt envisage that the planning process for this could be cleared if a decision was taken?

Regarding costs, does Mr. Rabbitt envisage that there are companies which will come in and carry out a turn-key project provided the funding is there? What does Mr. Rabbitt consider would be the number of passengers per day carried on the entire system? How many cars could be taken off the streets of Dublin, given an occupancy of 1.5 persons per car used in the city.

What does Mr. Rabbitt envisage as the return per annum on the investment, a matter which will be crucial to the project from an economic point of view? Members accept that there will have to be an amount of subvention for the project. However, in the context of cost-benefit analysis, there will have to be savings in other areas such as in regard to time, fuel from the reduction in car use and all the other savings which will come overground because of an underground system. Mr. Rabbitt might give us some minor details on that though we do not expect to get the fine points. Nonetheless, answers to these questions are needed to sell this project, which needs selling. If it is to be sold, that will have to be on the basis that a company can provide this service for Dublin City at a reasonable fixed fee which will not escalate by 200%. The Government and all Members in the Houses fear that a project which starts at a cost of X will finish at a cost of X multiplied by five or even ten.

Deputy P. Power

I thank the members of the metro group for attending the committee. The presentation was very impressive. Unlike Senator Norris, I believe we should be asking the tough questions and I do not subscribe to the Senator's view. I am sceptical by nature and sceptical of the presentation made by the group. In saying so, my aim is to be constructive because I would like to see this sort of system in place, as would anybody. It looks extremely impressive and that is what we should aspire to. While I do not profess to be an expert in the field, the project does not add up in my mind. I would need a lot more convincing. I say that because in our most recent experience of a very short tunnel - I encourage the group to argue against me - the costs have been explosive and have gone out of all proportion to the size of the project.

I seriously doubt the figures given by the group in regard to the planning process. With the greatest respect to Mr. Rabbitt, comments that "we will deal with planning in 12 months time" fly in the face of reality. It takes at enormous amount of time just to prepare for the planning process and to get an application lodged for such a fantastically expensive project. To go through a planning process, involving a local authority, An Bord Pleanála, an EIS and, undoubtedly, a public inquiry after that, would take an enormous amount of time. While I realise that my comments sound very negative, I firmly believe them.

The experience in this country of acquiring land and dealing with third party rights in relation to major infrastructural projects is not a happy one. The reason for that is because we have very difficult and complex statutory procedures to go through, on which Deputy Shortall focused. I do not think it possible to carry out the sort of project proposed within the framework of our planning process, and I have a lot of experience in that area.

There are a number of other issues. I hate to sound so negative about it because I would like it to happen in a short time, and I am very open to being convinced. However, these difficult questions need to be asked and I have not heard answers which convince me.

Chairman

Before we go to the next speaker, there is a proposal from Senator Norris that we ask the Cabinet sub-committee to allow the Dublin Metro Group make a presentation to it. Senator Norris must attend the Committee on Foreign Affairs shortly. Before he leaves, is it agreed that we write to the sub-committee?

Deputy Shortall

It would be more appropriate if we waited until the end of this session and then discussed it among ourselves.

Senator Norris

I just wanted to ensure that it would be heard by the sub-committee.

Deputy Shortall

That is fine. However, we need to deliberate on the matter.

Senator Norris

Could that be at this meeting?

Deputy Shortall

Yes. However, the RPA is coming before the committee shortly and there are a lot of answers to be obtained before we make a decision.

Senator Norris

My proposal is that the group would make a presentation to the Government and be listened to. I do not see any problem with that. I have been on this committee for many years. I am simply suggesting that the Government should be given this information and I see no problem with that. I am not trying to gazump matters. However, I must shortly leave to attend the Committee on Foreign Affairs where I have a proposal regarding Iraq. It would look bad if I was not in attendance for a proposal which I made.

I do understand the difficulty in this regard. The proposal is before the meeting and has been seconded.

Chairman

Okay, it is before the meeting and will be discussed at the end of the meeting.

Senator Norris

I will vote in absentia.

Chairman

I do not think it will go to a vote.

Senator Morrissey

I would like to make two points. The difference here - Mr. Rabbitt has hit the nail on the head - is that he approaches this as a business model and business project, not as an infrastructure project similar to the port tunnel and Luas. This is a business model and if it is approached in that sense there will be a beginning and a definite end, and that is where we have to start with this project.

There are two aspects I very much support. Use is being made of Liffey junction but there is a question mark over the reason CIE has left Liffey junction, land which is in its ownership, unused for decades. That area could be integrated with the existing suburban railway line to Dublin west and onwards to the west. One can see that the line is short from the airport to that location. A value for money analysis was given by the representatives on this proposal versus a DART proposal in which they stated clearly that a total of 180% of passengers could be carried on the Sandyford route and 200% on an airport route versus a DART model. That is the information a Government or any committee needs to determine the best area in which to allocate funds to the best effect. Those figures should be concentrated on to get this model up and running.

The project is ambitious. As Deputy Power said, it appears to be possible in a very short timescale but when did the information given to us today become available? From what the representatives said, it appears to have been available since 1999 at the latest, possibly earlier. What have we been doing since then?

Deputy Eamon Ryan

I was pleased to hear most of Mr. Rabbitt's presentation on the monitor upstairs. In regard to the metro, has Mr. Rabbitt and his group seen the business proposal from the RPA? The Minister has obviously seen it and he has possibly shown different versions of it to the media and the friends behind me because there is confusion about the actual costs involved. I would like to see it so that I could argue the case, as a politician involved in the area, but the Minister appears to be holding on to it for six months and having an internal debate. I would be interested to know whether Mr. Rabbitt has seen the actual business proposal put forward by the RPA and, if so, which one of the figures has he seen. The Minister started talking about a €2 billion scheme, which increased over the weeks to a current figure of €4.8 billion. Has Mr. Rabbitt seen the figures and the full presentation by the RPA? If so, will he give me a copy?

One of the cost reductions that may be possible is if we went ahead with a single bore tunnel rather than a twin bore tunnel. Certain countries regard a twin bore tunnel as essential for safety reasons. I believe Madrid has a single bore tunnel, which obviously has significant cost savings. Which type does Mr. Rabbitt favour? Does he believe it is necessary to have a single or a twin bore tunnel?

Mr. Rabbitt is looking after Deputy Shortall's constituency but I am concerned about the good citizens of Dublin south. On his central rail link proposal, I would be interested to hear about the Sandyford line, which is being constructed currently and could be easily upgraded to metro standards. What are the details in terms of how the passengers getting on board the metro in Sandyford Industrial Estate will get to the airport? What city centre connection would Mr. Rabbitt suggest they and the citizens of Ranelagh follow?

Mr. Rabbitt

Many questions have been asked and I assure the committee that robust answers will be given to all of them. If members want to contact me later to get more detail, I will be happy to supply that.

In terms of the timescale for the EIS, it could be done within six months. As I said, there is no complexity in that regard. I have managed EISs for schemes and this would be one of the easiest from that viewpoint. The principal aspect is the disposal of material, which can be disposed of in some way. It is a question of how it can be disposed of in an acceptable way, but the material has a use as a building product and therefore it could be stored.

On the number of passengers carried per day, there are rules of thumb in Europe for cities similar to Dublin and they would have an average of 3.25 million passengers per kilometre. DART, being close to the sea on one side, is suitable for people living in Booterstown, Blackrock, Dún Laoghaire and so on but many people do not live near it and therefore it carries a very low number of passengers per kilometre. The European average is about 3.25 million and therefore if the airport route was built, it would depend on the degree of integration with other systems. We could initially expect to carry about 2 million passengers rising to over 3 million passengers a day per kilometre. The figure, therefore, would be 22 million per day.

In terms of the price, members know how much it costs to operate DART. The airport run is about 32% the length of the DART line and it would have as many passengers. The costs of operating the system increase, therefore, because with the airport run being shorter, we can operate two peak hour services per train and therefore far fewer trains are needed for that length of route. Economics come into this in a major way.

On the benefits and so on, they are mostly time benefits but what we do not have are the massive disruptions on-street. Those do not occur with the metro. A metro could be built and people would not even know it was going in. Major tunnels have been built in Dublin and they have not been seen going in. An interceptor sewer, which is a fairly big tunnel, was put in down at the canal. Many tunnels were built in Dún Laoghaire. A few years ago they blasted their way under Dún Laoghaire with dynamite. They were quite substantial tunnels but two-way traffic continued to operate on the roads system in Dún Laoghaire.

The big question is the planning process and whether it adds up. Having been in An Bord Pleanála perhaps three or four times a week all through the 1980s, I have seen every type of development, objection and proposal coming forward. In relation to this proposal, mention was made of the vested interests, but who are the vested interests on the airport route? We are going under businesses which will benefit from this project and which are crying out for it. The route will pass under very few houses. It is possible it may go under three or four houses in Ballymun or just north of the Liffey junction. Outside of that, it will go under open space the whole way up to the airport, so we do not have that problem.

Deputy Shortall

We are not talking about three or four houses. There is a huge residential area between Liffey valley and the open spaces north of Ballymun——

Mr. Rabbitt

There is a lot of——

Deputy Shortall

——and they are the kind of complaints which hold up the planning process.

Mr. Rabbitt

Yes, but just north of Liffey junction there are only half a dozen houses. At that stage the route goes under the edge of Glasnevin cemetery, just left of it.

Deputy Shortall

For goodness sake, just think of the planning process involved in going under Glasnevin cemetery in terms of what we have to deal with.

Mr. Rabbitt

It will swing around it and they will not——

Deputy Shortall

We are talking about Glasnevin Avenue. I am not being parochial about this but it is a densely populated residential area.

Mr. Rabbitt

No. It is industrial just north of that.

Deputy Shortall

Mr. Rabbitt said Glasnevin Avenue and Ballymun.

Mr. Rabbitt

I am talking about Liffey junction and Glasnevin junction. The route then swings around up through Ballymun Road under the dual carriageway. What I am saying is that the relative size and the relative number of houses is quite small on the route.

Chairman

Compared to the port tunnel.

Mr. Rabbitt

Compared to the port tunnel. It will go under businesses that will directly benefit from it.

Deputy Shortall

We are still talking about statutory timescales in the planning process as it currently exists. We are all playing devil's advocate here. We would all like to see this project being possible and going ahead but we also have to be realistic. It is not adequate for Mr. Rabbitt to say that the planning process could be dealt with in 12 months because we all know from our experience that is not the case. It could be done if there were no staff shortages in An Bord Pleanála and no pressures on staff in Dublin City Council, but that is not the reality of what is happening. That is why I ask you to present to us the details of the kind of legislative change that will be required to fast-track this. We are anxious that you should do this if it is possible.

Deputy P. Power

Something needs to be done.

Deputy Shortall

I agree. We ask you to be realistic about how the system works and how we can address these problems.

Mr. Rabbitt

We can forward our views on that, but the legislative changes are in hand and the process can proceed in anticipation that they will be implemented. It is not a reason to stop the process now, to stop building the metro today, and wait until the ink is dry on the signatures on the planning process. We can move forward in anticipation of that.

There is no complexity regarding the CPO, which is essentially concerned with an area of land that is needed for acquisition for the provision of the metro. There is a need to outline it, to swear it is the land that is necessary to implement the scheme and that it is not a yard more or less than what is required. A fully detailed design is not needed; a preliminary one is sufficient. The CPO is a map with an area shaded in grey, similar to the one I illustrated with the line going through it. The grey area covers the land that will be gone under. It is necessary to outline the impact this will have. It is not complicated but very straigtforward. I have done CPOs on many occasions and could provide the committee with dozens of examples where I have done them quickly, including for major schemes.

The CPO process, which is straigtforward, simple and can be done in a short timeframe, is separate from the EIS, which can be done within six months. The project would be developed during that period. I am convinced that we can proceed under the existing legislation, although it could be improved.

Chairman

The Minister is considering introducing legislation to cover major infrastructural projects.

Deputy Shortall

We are also bound by the existing planning process. While much of this is underground, the stations will be above ground. It takes a minimum of two years to get a public project through the planning process.

Chairman

The Government is prioritising legislation in this area. Legislation in America provides that if projects are deemed to be in the common good they can be fast-tracked. Something like that should be done here.

Deputy Ellis

We can raise this with the Minister when he next appears before the committee. There is a need for legislation to allow major projects to be proceeded with more speedily. It only takes one person to delay projects with consequent costs to the State that can be as high as 100% of the estimated cost of the project. This matter must be addressed in the context of the forthcoming legislation. The proposals regarding the metro should be included because it will only take one individual to delay the project for up to two years by complaining that a station may be too near his or her back garden and will interfere with the cat's playroom.

Mr. Kiersey

Since 1988 I have been opposed to the Luas light rail system as a mass transportation solution to Dublin's traffic problems. In 1989 I was told by a senior member of CIE management that following surveys CIE would not go underground because the public, especially women, would not travel underground. With regard to the Phoenix Park tunnel, CIE sought advice from the geology department of Trinity College which took the view, in a report published in The Irish Times, that Dublin’s sub-strata would not support tunnels. It was unique in that respect. Many of the current arguments are not concerned with the provision of a solution to Dublin’s mass transportation needs but with the interests of those they are seeking to protect.

Mr. Rabbitt

Single bore tunnels are common in most of Europe. With tunnelling technology it is cheaper to do a single bore rather than a dual tunnel although two single tunnels remove a larger area. They have many advantages in terms of running a rail service. There is much information from the Madrid line to outline why a single rather than a dual tunnel is preferable.

Deputy Eamon Ryan

Have you seen the business case for the project?

Mr. Rabbitt

No. We would like to see it, but it is not necessary at this stage.

Mr. Ross-Lanigan

Deputy Ellis asked if there were contractors available who would build the project. I first met the Dublin metro group in 1996 and considered that it had very few resources. It needed people who knew the business, who would consider the proposal and say if it was possible. I put the group in contact with the Nishimatsu Construction Company, which walked all the routes, examined the ground structure in the city and said it could be done. Following various meetings, matters progressed to the presentation to the Cabinet sub-committee. The Department and the Department of Finance preferred a design-built, finance operated and maintained proposal. We would agree with that for Dublin.

There has been a big log-jam in the past three years in terms of implementation. With regard to public private partnerships, we seem to have followed closely developments in England. Consultants have become more involved. Our idea at the time was that the metro would be a pilot project, constructed on a design-built, finance operated basis, and that attempts would be made to ascertain who was interested in building it on an output basis. At the time the route under consideration was to run from Sandyford to Dublin Airport. We considered this to be a very good route to begin with and that it would be successful in starting the process of building a metro network, similar to what has been done in Hong Kong.

However, since then there have been a number of digressions with the hiring of consultants to consider various aspects. They went as far as to consult with contractors asking them how they would do it. It is what we want, not what they want. An example of this arose in the past six months where the Minister for Arts, Sport and Tourism advertised in the newspapers for interest in respect of Campus Stadium Ireland and received a good number of replies. However, the requirements of the applicants were not feasible and the idea was scrapped. It now appears that a project will be agreed involving the Government, the IRFU and the FAI. However, at least the suggested project was advertised, submissions were made and a decision was taken. The metro scheme has never been tested in the same way. It should be tested. It is quite easy to test it and it can be done quickly.

Deputy Eamon Ryan

The last part of the question to which I sought an answer concerned the direct connection from Sandyford. The Japanese company the witnesses approached also submitted a bid and believed it to be feasible. I presume it made a bid to the RPA under this open bidding system which involved following a route from Sandyford through to the airport. What are the details of the witnesses' proposed route from Sandyford through the city centre to the airport?

Mr. Rabbitt

There is an area between Northbrook Road and Dartmouth Road where a tunnel could be built or a station located where one would change levels between two lines or the two could be integrated into one. The levels are suitable in that vicinity.

That is just one possibility. There are a number of options. Another would be to continue from the airport to the city centre and move out towards Templeogue. A Templeogue-airport line would be built with the Sandyford route as a route coming into it.

Deputy Eamon Ryan

Would the portal come out in Dartmouth Square?

Mr. Rabbitt

No, not Dartmouth Square, between Northbrook Road and Dartmouth Road where the existing Harcourt Street line is situated. There is an old yard there that——

Deputy Eamon Ryan

It is not easy to take a tunnelling machine out of the ground. One needs a——

Mr. Rabbitt

No, we have gone through the open and available spaces there and so on. That is an option we examined at the time when we were considering the Sandyford-airport route.

I wish to mention briefly a point about the station. The stations on the airport route are all under or on public open space. Looking at the individual stations that can be fitted in, it is not a question of acquiring massive areas. Stations like St. Stephen's Green could be situated under Iveagh Gardens. It would slip in quite neatly there. At Broadstone, a station is already there. Where the line crosses the Liffey, we could be looking at a station under the river. Up in Glasnevin, the line is already there and stations would be situated on the line. A route could be built there. On Botanic Avenue or whatever in Glasnevin, there is open space where a station could be fitted. Dublin City University is on Government controlled land, and up towards Ballymun there is open space. Beyond that, just west of Santry Demesne, a developer wants a station located there.

Deputy Eamon Ryan

Some people have seen presentations by the Rail Procurement Agency on stations at St. Stephen's Green or under the Liffey, as the witnesses recommend. They appear to be massively expensive infrastructural projects. Have the witnesses a rough idea of what it would cost to build a station under St. Stephen's Green?

Mr. Rabbitt

The costs I have given would build a very sophisticated station. Let us look at Madrid and what was done there with interconnectivity. It is a case of working between, under and over lines and connecting up to them in an extremely busy city centre. The costs I have would cover a very high standard. Developments associated with a station can be built independently of the metro but would facilitate it at the same time. Was there a question on the RPA?

Deputy P. Power

What Mr. Rabbitt said underlines the fact that we need to examine the Madrid operation. We discussed this in private session in recent days. Mr. Ross-Lanigan addressed a few of the issues I was going to raise, especially relating to contractors.

Am I given to understand there are few contractors in the world who can deal with this type of project? What are the lead-in times to procure them? The Japanese company which was mentioned that is building the port tunnel is very good. If the witnesses obtained the money or received the go-ahead immediately, how long would it be before these people became available? I am sure they are contracted to different projects.

The witnesses have given the costs per mile or kilometre of the Spanish experience. What was the overall capital spend on the Madrid project in round figures?

In light of everything Mr. Rabbitt said, he must be highly critical of the cost of the Dublin port tunnel. I asked him this at the beginning. I am interested to hear his views on the Dublin port tunnel in light of what he said, that this vastly more complex project will cost less than the four kilometres or whatever of the Dublin port tunnel.

Mr. Ross-Lanigan

It is 4.6 km of tunnel.

Deputy P. Power

It is now costing €600 million to €700 million.

Mr. Ross-Lanigan

As regards contractors, building this is not difficult and there are many builders interested in becoming involved, from Swedish, German, Spanish, Japanese and UK to American. We have to look on it like they did in Hong Kong - it is a business.

Chairman

Will Mr. Ross-Lanigan sit forward towards the microphone because people are taking a record of what he is saying and cannot hear him?

Senator Norris

I wish to make a technical point. Some of my colleagues have pointed out that, although Mr. Rabbitt was introduced, the other gentlemen and their backgrounds were not. It might be helpful if, as they spoke, they introduced themselves and outlined their backgrounds.

Chairman

Perhaps Mr. Ross-Lanigan will inform us what he does.

Mr. Ross-Lanigan

I work with the Kentz Group in Clonmel, which is a construction company. For some years I was working on my own on some of these projects, so I have come from a finance background.

In Hong Kong they would have treated such a project very much as a business rather than a building project. If it is treated as a business, the route that will put most people on the trains will be chosen. The critical part is having the operator involved from the very start. If we want it to be successful in Dublin, we must have him involved and have his neck on the block. That is why the Department of Finance favours design, build, finance, operate and maintain.

In Seán Duignan's book, One Spin on the Merry-Go-Round, he quoted Albert Reynolds as saying that the real pressure was when you had to get £10,000 on a Friday night for the bank manager on Monday morning. With a design, build, finance, operate and maintain project, one may need Government capital grant of whatever order to get it off the ground, but after that the consortium takes on the loan, puts in the equity and has to pay the loans and the equity. It will compete against the likes of Aircoach, CIE and taxis, so there will be competition and that will drive a good service for Dublin.

Building it is not an issue. There is spare capacity in the world market at present.

Mr. Kelly

For 21 years from 1980 to 2001 I was running Mitsui, a Japanese corporation, in Ireland. Mitsui represents Nishimatsu and other significant Japanese contractors, such as NEC. I was involved in the introduction to Ireland of fibre-optic technology with the old Department of Posts and Telegraphs in 1981. We built the first fibre-optic route in Ireland between Sligo and Ballymote, of all places, and further routes from there. I was also involved in the construction of Ireland's first earth satellite station in Midleton, where Mitsui was the turnkey contractor. Telecom Éireann came into existence during that contract. Other earth satellites have been built since then. In 2001 I left Mitsui to pursue some independent business interests, mainly in property, but also to throw my lot in with Cormac and his Dublin Metro Group. I firmly believe in their project and in the philosophy behind it.

Mr. Kiersey

I am Gerry Kiersey and I have been a transport enthusiast since I was a child. I went to England at 15, having left school at 14. I spent ten years at sea and came home in 1973 to set up a road transport business which became very well known. I am still in that business, shipping cars out of Dublin Port to various garages around the country. I am a past president of the Road Hauliers Association and am currently chairman of the Transport Umbrella Group, which is lobbying for an increase in the height of the port tunnel.

Broadly speaking Irish people have travelled the world creating transport solutions for other countries and there is no reason we cannot have the best solutions in Ireland. We built the Channel Tunnel for the British.

Deputy Shortall

Just so we know where everyone is coming from, does this delegation propose it should be the panel of experts or is it lobbying us for support for this approach? Where does the delegation see itself?

Mr. Rabbitt

If this were the American, Spanish or French system the committee would have the power to appoint us and we would have the metro in jig time. We would look favourably on that option. Apart from that, we want to get the competition in the newspaper, not for someone to interpret the competition. When expressions of interest were in the newspaper in March 2002 to prequalify people, the consortium which went to the RPA and asked what it wanted was told that the RPA wanted this built in much the same way as Luas. We understood that was not the thrust of how the metro report was to be built, that it was going to come forward as a PPP and we would put forward proposals. That has not happened yet and we are waiting for that advertisement to go into the newspapers. I am trying to emphasise that if that advertisement goes into the newspaper, we should see what comes forward. It will have to go in in the right form and this is one of the options we are putting forward - the advertisement will have to include that option as a possibility.

Senator Norris

Is Mr. Rabbitt saying he would be competent, capable and willing to put this in and have it in for us by 2007 if given the opportunity?

Mr. Rabbitt

We would be competent, yes.

Senator Norris

And capable and willing.

Mr. Rabbitt

Yes. We would be very competent, very capable and very willing.

Deputy Ellis

At a similar price to the one in Madrid?

Mr. Rabbitt

Yes.

Deputy Ellis

Is Mr. Rabbitt in a position to bond that suggestion for the Government? Would the companies he is operating be able to provide that bond?

Mr. Rabbitt

We would come forward with certain guarantees. We believe so.

Mr. Ross-Lanigan

The answer is yes.

Chairman

As I said earlier, something that has been highlighted since the committee started is the number of projects that start at €200 million and suddenly end up at €650 million. When one asks those concerned they say they did not see this or that. It is very difficult at political level to make a decision on something that costs a certain amount when one knows well it will cost far more at the end. You are halfway out to the airport with the metro and everyone is waiting to see this happen, then you say we need another €200 million, €500 million or €I billion to finish it off. There is a gun to one's head and one has to cough up. If you can secure this and guarantee it——

Mr. Rabbitt

Michael can answer this question. He is being very modest in that his role in international infrastructure provision is quite huge. When I talk to him he is in the States one day and South America or the Middle East another day, troubleshooting and financing infrastructural projects from the strength of the petrochemical industry - it is mega-stuff. He will answer the questions on cost overruns, but the thrust of our approach was that we had to go and convince various people in Government, particularly the Minister for Finance, of our proposal - it was not a situation where a project ends up being a multiple of the price. This is the whole purpose of this type of project.

Senator Norris

If one checks the records of the Seanad Mr. Rabbitt's record is good and the figures are accurate, not just on this but on the overruns of the Luas project. He covered the reasons for that also. Suppose this came in at five times the price, it would still be half the figure suggested by the Rail Procurement Agency. That is a stunning thought.

Chairman

That is at this stage. It is starting at €4.6 billion and God knows what it will end up at.

Deputy Shortall

I seek clarification. Is the group making a pitch for the construction or the construction and operation of the metro?

Mr. Rabbitt

We believe in the one stop shop.

Deputy Shortall

And operation.

Mr. Rabbitt

Yes.

Deputy Shortall

What is the situation in Madrid? Is that system fully state-controlled?

Mr. Rabbitt

The system in Madrid is being built onto an existing system but there are some new lines. There is a concession on one of the lines to the private sector. The full capital cost for the full two by four year period was just under €3.7 billion.

Chairman

For the whole project?

Mr. Rabbitt

The whole lot. There are 111 metro kilometres in that and some surface rail lines, but it is €3.7 billion for 111 kilometres, which is ten times the length of the airport route.

Deputy Shortall

With respect, that changes the perspective if the proposal relates to operating also. We do not know what the deal is. We have been given estimated costings for the construction of the metro, but what about operation? Is an indefinite contract being sought?

Mr. Ross-Lanigan

A couple of years ago, when we had the Japanese proposal, which was an outline proposal put to the Government, it encompassed operation. Since then the RPA has pre-qualified people on a discipline basis for the construction of the metro. Until a final decision is made on the contracting strategy by the RPA we cannot address this.

Deputy Shortall

You have not costed your proposals. What is the deal you are offering on the operation contract?

Mr. Ross-Lanigan

We offered a one-stop package. We sought a capital grant at the time of £100 million and a 30-year concession.

Deputy Ellis

At the time it was £100 million in State aid for the project. If someone said how much State aid is needed now, what would the figure be? That is crucial to the overall situation.

Mr. Rabbitt

The figure would be about €100 million.

Deputy Ellis

The cost has come down rather than going up - €100 million rather than £100 million.

Mr. Rabbitt

Yes. The cost we gave before was £50 million to £100 million. We gave a range as a lockout amount that would be a once-off amount——

Deputy Ellis

Mr. Rabbitt is telling the committee that for a €100 million investment by the Government his consortium, whoever he brings in on it, can provide Dublin with a metro system which will cover the routes outlined earlier?

Chairman

Is the Deputy correct in saying that?

Mr. Ross-Lanigan

That is what we proposed previously. I will not give the Deputy a direct answer today because, since the RPA changed the strategy, we calculated the proposal. The air went out of our tyres, so to speak. We have tried to promote some momentum in getting it into the marketplace and then pick it up again. The key to its success is to have a good operator who will make a business out of the project and brand it. This is very successful in Hong Kong.

Deputy Ellis

That is what I am getting to. The only way the project can be carried out at that cost to the State is if the group that puts it in place is also the operator, rather than have a third party operating it. The most successful way to carry out the project would be to build, design and operate under a 30 year operational contract. The only question is whether in that scenario the marketplace will then be in a position to determine fares?

Mr. Ross-Lanigan

Yes, that is correct. However, there is also a lot of competition at this point. It is not a monopoly.

Deputy Ellis

I agree with that.

Senator Norris

I would have no difficulty with that. If a group, including this group, can make a profit, I will be delighted, and let it because Iarnród Éireann or CIE can be guaranteed to make a loss on anything and we will have to pick up the bill. If some other group can take a risk and make a profit, I will be absolutely delighted.

Deputy Shortall

I want to clarify the ballpark figures. Will the construction costs for the city centre to airport line amount to approximately €600 million, with €100 million State payment up-front, with the concession?

Deputy P. Power

With the international bonding and guarantees in place?

Deputy Shortall

Are we talking about rough figures from the city centre to the airport only?

Deputy Ellis

If we take in the other lines suggested——

Chairman

I agree with Senator Norris. To quote the Leader of the Labour Party - I must quote him as he has gone so much to the right - the people do not care who is providing the service as long as it is provided. I agree totally with that——

Deputy Shortall

It is true but it is up to politicians to make sure that services are sustainable in the long-term.

Chairman

He made it very clear.

Deputy Ellis

Sustainability will be determined by competitiveness with regard to other forms of transport in the city of Dublin. It will mean competition for taxis, Bus Éireann and all the other operators of transport services.

Senator Norris

People will be queuing to get underground and away from the traffic jams. The speed and efficiency would be fantastic.

Chairman

I thank the delegation and wish it luck. We must ask these questions because we become slightly sceptical when so many people come in here with figures and suddenly they turn out to be three and four times as much. However, no one will be more positive or supportive than the members of this committee if the project can be carried out for the money stated.

Mr. Ross-Lanigan

Perhaps it would be useful if members spoke to Maurice Treacy in the Department. He has lived with the project for many years. He has all the history and his room is full of consultants' reports. I suggest he will start the metro when the politicians take control of it and drive the project.

Chairman

The escalating costs is what is stopping the politicians.

Deputy Ellis

If we were able to go to the Department of Finance and say this can be provided by X group for X, Y and Z, including the necessary safeguards which they will look for, the politicians would be able to move much faster because they would know what the actual cost would be. This is what frightens politicians and everyone else. If one does not know where the finishing line is in relation to costs, people will shy away from projects.

Mr. Kiersey

Aer Rianta forecasts that by 2015 figures for Dublin Airport will be in the region of 30 million. These figures are conservative because many others set them much higher.

Chairman

Are we agreeing to Senator Norris's proposal? Agreed.

The joint committee adjourned at 11.45 a.m until 9.30 a.m. on Wednesday, 28 May 2003.