LUAS Extension Given Go Ahead to Citywest under PPP

I noted that a number of landowners have agreed to contribute €39m which is an admirable departure but none of the articles have listed the overall cost of this project.

Which must be a first departure from the Pee Flynn school of announcements ‘hey aren’t I great bagging you €150m from the national purse.

http://www.rpa.ie/luas/news/news_letters

Its €39 million (cash) + land for the permanent rail path.

So the City gets a free Luas line

I wouldn’t welcome this development with open arms. Without wishing to be all Irish begrudgery about it, but allowing developers, (in this case Mansfield and Davy Hickey, in the case of B2, it’s Cosgrave) to dictate transport policy is dangerous and contrary to proper planning. In order that this is delivered SDCC have rezoned vast swathes of the county to the extent that Saggart and Tallaght will be a contiguous blob of low-medium density sprawl. in relation to B2 to Bray, it will not serve the town of Bray at all, (y’know that massive town of 30,000plus people), but parcels of hitherto undeveloped land belonging to Cosgrave and Ballymore, on the side of the Dublin and Wicklow Mountains. They will pay for much of this line as well.

There are major capacity issues on the citywest line. The DTO strategy suggested a Metro service to the campus but this appears to have been shelved. There are also concerns that the line to Tallaght town will effectively become a spur as City west and Saggart grow., compromsing it’s function as a Town Centre and public transport hub

There was a time once when govt used to use taxes to provide services. Now they allow private interests to dictate them. Therefore a cautious welcome

@alonso wrote:

I wouldn’t welcome this development with open arms. Without wishing to be all Irish begrudgery about it, but allowing developers, (in this case Mansfield and Davy Hickey, in the case of B2, it’s Cosgrave) to dictate transport policy is dangerous and contrary to proper planning. In order that this is delivered SDCC have rezoned vast swathes of the county to the extent that Saggart and Tallaght will be a contiguous blob of low-medium density sprawl. in relation to B2 to Bray, it will not serve the town of Bray at all, (y’know that massive town of 30,000plus people), but parcels of hitherto undeveloped land belonging to Cosgrave and Ballymore, on the side of the Dublin and Wicklow Mountains. They will pay for much of this line as well.

There are major capacity issues on the citywest line. The DTO strategy suggested a Metro service to the campus but this appears to have been shelved. There are also concerns that the line to Tallaght town will effectively become a spur as City west and Saggart grow., compromsing it’s function as a Town Centre and public transport hub

There was a time once when govt used to use taxes to provide services. Now they allow private interests to dictate them. Therefore a cautious welcome

line B2 will go to Bray DART station. and I welcome the Saggart extension, it will serve northern areas of Tallaght. And I really doubt that the service to Tallaght will become marginalised as Tallaght has a whopping 103,000 population. The railway order for A1 becomes enforcable on Monday. I’m not sure if this means that construction will begin on monday. Presumably they’ll wait till works on the Docklands extention finish up on Amiens Street to avoid further disruption to commuters

eh when I wrote that post 18 months ago, the RPA were not planning to serve Bray. Now the line is to split in two. My point on Tallaght and the overall strategy to allow developers carry out our policy for us both stand

The railway order for A1 becomes enforcable today 🙂 I e-mailed the RPA asking if the construction of A1 would mean a month long stoppage to the service to Tallaght. To which, I got no reply.

Just to clarify, there are 2 main types of PPP:

1. Where the State pays for the line, like the existing lines, and contracts someone to build it, so it’s paid for during construction.
2. Private finance, where a private company raises the cash and pays for construction and operation, and then the State pays them back in instalments over 30 years or so.

The 2nd option is being used for Metro North apparently.

If a developer pays for a part of the line,well then it’s less for the State to pay, I agree, you might have a point about the State giving priority to lines where developers are stumping up some of the cost…but that’s understandable really. clear as mud!

PPP is a licence for fat capitalists to print money (to compensate for all they’ve filched away in ‘bonuses’ and dodgy sub-prime deals) at the public expense; local and state governments can borrow money more cheaply than the private sector, but it shows up on the ‘public service borrowing’ line – considered in our voodoo economics to be a bad thing. So, by allowing the private sector to built it (‘The real cost? Just you leave that to us, sir’), local government effectively mortgages infrastructure to the private sector, whose only interest is money, money, money…(and interest of course).

I don’t understand how it can be considered ‘off balance sheet’ borrowing either when the tax payer is going to have to pay for it in future anyway, bizarre. It seems to be used, here and in the UK, to avoid the appearance of borrowing and as you’ve rightly pointed out it’s more expensive to raise money in the private money markets than through government bonds.

A better description of it is ‘Payment on the long finger’ essentially the tax payer pays back the capital costs (and often maintenance) in Installments over a long time. The monies paid back greatly exceed the capital costs of building the thing in the first place, however the cost of the individual repayments per annum are less than the cost of wholly developing the project. herefore the overall cost is ‘off-balance sheet’ but the repayments would be in the expenditure accounts.

As accountants and Ministers for Finance are only concerned with the current fiscal year it looks great on the books that they are only spending a certain cost each year but getting the full value of the project. However the developers (or who the sell the finished contract onto) make a killing.

Think of it as the ‘blue-cube loans’ approach

I don’t want to appear necessarily pro-PPP or pro-developer, but isn’t the point that the payback is taken out of income from the development, so the developer carries the risk, selling risk is very expensive and that accounts for the premium the state pays on PPPs.

we got privatized transport in a city i used to live and the government used to pay a performance bonus annually..
or deduction but in reality they went bust and of course the government bailed them out as they have no choice to kept the system running… The performance requirements where not German standards so it was a bit of a joke because they could either.

a) adjust the time table
b) adjust the performance requirements

Of course the fares increase even more every year… blah blah

I won’t even talk about the PPP I worked on here…

notjim: where is the ‘risk’ (cf. missarchi’s post)?

@johnglas wrote:

notjim: where is the ‘risk’ (cf. missarchi’s post)?

So I don’t want to debate PPP’s or the suitability of the specific PPP for this project, I just wanted to point out it is simplistic to say that money raised through a PPP costs more and is there only done as an accounting trick; a PPP can also offset risk.

You scratch my back and I’ll scratch yours.!

Because PPP is used (mainly) to fund necessary public infrastructure (that would have been paid for out of government coffers anyway) and the repayment money is guarenteed by the government the ‘risk’ is as risky as investing in government bonds i.e. none unless the government goes bankrupt (unlikely even with current economic conditions)

Thus ends the PPP argument

@Rory W wrote:

Because PPP is used (mainly) to fund necessary public infrastructure (that would have been paid for out of government coffers anyway) and the repayment money is guarenteed by the government the ‘risk’ is as risky as investing in government bonds i.e. none unless the government goes bankrupt (unlikely even with current economic conditions)

Thus ends the PPP argument

Well perhaps in this case but not neccessarily, they could be promised repayment out of the income, as happened for example with the toll bridges. Again, I am not trying to defend PPPs.