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That is quite frankly untrue.

You have to understand the location to understand that a leisure use inside the power station would be a massive success. To the East you have a combination of holdings which are ripe for residential development and will in the medium term produce 10,000 plus homes which will be predominently occupied by affluent young prefssionals. To the North you have the affluent districts of Victoria, Belgravia and Chelsea and to the South and West lie Battersea and Clapham which both have a disproportionate population of young professionals who eat out and socialise disproportionately. The Power station will become another Covent Garden albeit on a much larger scale; there is not one of the major restaurant groups that would not cut off their right arm to get in there and pay a central London rent to have access to such a high quality demographic.

The question is do public bodies grant aid the project as a stand alone project or do they await development funding streams to materialise for the wider development of the site.

Agreed on capacity there is nothing more frustrating than descending multiple escalators to the platform and seeing the display say 5 minutes; if typical underground loadings were to be delivered based on the population density along the proposed Metro North route then the sign on Metro North platforms outside peak times would probably say 12 minutes on average; if you just missed the Luas specification vehicle that just left for the next station.

Compare that to Interconnector where route options would be Airport, Swords/ Malahide or Howth and the frequency could be every 2 – 6 minutes and by virtue of the service being a through service as opposed to one terminating in the City Centre there would be significant passenger loadings from the West of the City as well.

For the Interconnector to really maximise its potential it is felt that the Metro West alignment should be looked at for the provision of Dart spurs from the Kildare line; what would it cost to develop spurs to say Tallaght and Porterstown to further increase loadings and in the case of the latter provide a second routing for services from West Dublin should service be disrupted in the inteconnector due to say a passenger incident.

I wish I could share your view on where demand is; Ciaran Cuffe explained his take to my class in college and my experience in London bears his view out. People from 18 -30 flock to apartment living starting first in a house share or bedsit; then to a flash pad during their first serious relationship. Flat 2 is more often than not a bought 2 bed apartment and works for child 1; as soon as child two arrives child 1 is ready to start school; it suddenly dawns on them that there are limited eductional options in the City Centre and they relocate to the suburbs to have kid number 3 or simply educate the first 2 in a school with 50 acres of playing fields.

In the UK they use the commuter rail network in Dublin they move to 2 miles from Drogheda and in a good outcome they park and ride in a bad outcome they drive.

I do agree that demographics have changed completely and that the 19 – 30 phase more often than not is probably closer to 19 – 38 and that a sizeable proportion of the 39 – 45’s will if the right product goes on the market go for a 1,200 sq foot 4 bed flat. But another factor you need to work out is that where children play you can only hear them up to about 4 stories above ground whichj precludes this target market above this height.

I am all for the medium to high density infill you propose; but what I would hate to see is the East region of Dub/Kildare/Meath/Wicklow exclude all unsustainable housing types only to see counties Laois, Westmeath and Carlow continue granting planning permission for housing developments of 300 plus houses at 16 to the acre with no credible link to the rail network.

Realistically there is enough development land between Heuston and Clondalkin Castle alone to provide medium to high density development for the next 20 years. The question is what do you do in the 10 – 20 mile radius where people will be a lot less likely to accept apartment living. The first thing I would recommend is a complete ban on one off houses unless you actually farm land or can prove that you are caring for a parent who needs at least daily part time care.

I have to agree with Graham my view of the use of brick in general in Dublin has been in the main based on the fact for a long time brick was cheap; hung over brickies were cheap and it didn’t offend planners.

[url=http://www.daft.ie/searchsale.daft?search=1&s[cc_id]=ct1&s[search_type]=sale&s[a_id]=ga1&s[furn]=&s[refreshmap]=1&offset=20&limit=10&search_type=sale&id=463448]http://www.daft.ie/searchsale.daft?search=1&s[cc_id]=ct1&s[search_type]=sale&s[a_id]=ga1&s[furn]=&s[refreshmap]=1&offset=20&limit=10&search_type=sale&id=463448[/url]

and the avoidance of brick as being over large sections as being

[url=http://www.daft.ie/searchsale.daft?search=1&s[cc_id]=ct1&s[search_type]=sale&s[a_id]=ga1&s[furn]=&s[refreshmap]=1&offset=100&limit=10&search_type=sale&id=435902]http://www.daft.ie/searchsale.daft?search=1&s[cc_id]=ct1&s[search_type]=sale&s[a_id]=ga1&s[furn]=&s[refreshmap]=1&offset=100&limit=10&search_type=sale&id=435902[/url]

Compare this to London

http://www.rightmove.co.uk/property-for-sale/property-23241298.html?locationIdentifier=OUTCODE%5E2768&minBedrooms=2&maxBedrooms=3&minPrice=900000&maxPrice=3000000&displayPropertyType=houses&radius=3.0&oldDisplayPropertyType=houses&pageNumber=1&backToListURL=%2Fproperty-for-sale%2Ffind.html%3FlocationIdentifier%3DOUTCODE%255E2768%26minBedrooms%3D2%26maxBedrooms%3D3%26minPrice%3D900000%26maxPrice%3D3000000%26displayPropertyType%3Dhouses%26radius%3D3.0%26oldDisplayPropertyType%3Dhouses

http://www.rightmove.co.uk/property-for-sale/property-26708849.html?locationIdentifier=OUTCODE%5E2768&minBedrooms=2&maxBedrooms=3&minPrice=900000&maxPrice=3000000&displayPropertyType=houses&radius=3.0&oldDisplayPropertyType=houses&pageNumber=4&backToListURL=%2Fproperty-for-sale%2Ffind.html%3FlocationIdentifier%3DOUTCODE%255E2768%26minBedrooms%3D2%26maxBedrooms%3D3%26minPrice%3D900000%26maxPrice%3D3000000%26displayPropertyType%3Dhouses%26radius%3D3.0%26oldDisplayPropertyType%3Dhouses%26index%3D30

http://www.rightmove.co.uk/property-for-sale/new-homes/property-12687204.html?locationIdentifier=OUTCODE%5E2768&minBedrooms=2&maxBedrooms=3&minPrice=900000&maxPrice=3000000&displayPropertyType=flats&radius=3.0&oldDisplayPropertyType=flats&newHome=true&pageNumber=4&backToListURL=%2Fproperty-for-sale%2Ffind.html%3FlocationIdentifier%3DOUTCODE%255E2768%26minBedrooms%3D2%26maxBedrooms%3D3%26minPrice%3D900000%26maxPrice%3D3000000%26displayPropertyType%3Dflats%26radius%3D3.0%26oldDisplayPropertyType%3Dflats%26newHome%3Dtrue%26index%3D30

There is some really good bespoke work being done by the usual suspects; sadly half the stuff built never has an architect within a mile of it

Ireland is an educated country with a crippling deficit. Building a €2bn underground line under 1930’s 3-bed semi’s will waste valuable resources

Secondly the Gov is very determined to go ahead with both the IC and MN.

The government is struggling with a deficit not seen since Jack Lynch was booted and before that since the late 1930’s. I understand Rhuadhan’s desire for a cheap solution; fiscal recititude under McSharry created the last boom; which in hindsight was spectacular.

The interconnector marries up 4 corridors; 3 of which should be 2 corridors and a 4th that hasn’t developed because it is remote in terms of direct connection. Metro North would by virtue of existing densities be a waste of money; money is scarce just now. Dublin is developed North – South on DART; what it needs is the ability to go west into open country where the genius of Adamstown can be replicated ad infinitum.

The US built up large strategic reserves almost by accident; the Oklahoma oil fields dried up and they were left with a large number of storage facilities used in the production process which they were in a position to use for storage. In sustainability terms the US is not a good model and the concept energy security means a lot more to them as the distances that they need to move their freight are a multiple of those required here. Their dependence on oil is likely to fall dramatically in light of the recent restructuring of the Detroit motor offer spearheaded by the new Volt car which makes the Pious look very sinful.

Annual consumption of Oil in Ireland is some 9m tonnes or 71m barrels of oil roughly equivelent to a weeks supply in Russia or Saudi; or put another way about 35 tankers.

The existing storage facility at Whiddy Island has a capacity of 8.5m barrels or about six weeks supply. There are some interesting points in Colm Rapple’s article below. http://colmrapple.com/?p=34

Maybe rapeseed could be the way to go as it guarantees local production, employment for farmers and hits the green box. What I can’t see happening is the Green Party shelling out the $5.4bn it would cost to fill a years supply into storage tanks.

However if land were provided together with development consent were forthcoming possibly one of the global investment banks might set up a fund to build tanks for use in exploiting seasonal movements in oil / pertroleum markets such as driving season and November heating oil spikes. Just make sure where ever it is proposed for there are no Maura Harrington’s living close by!

@jimg wrote:

The crisis in Irish retail banking has nothing at all to do with any of: sub-prime lending, derivatives, liquidity or the global credit markets. No Irish retail bank has had any exposure to the sort of credit derivatives that wrecked the balance sheets of Lehman’s, AIG, UBS and the rest.

The Irish retail banking crisis has nothing to do with these factors. Retail banks fail with surprising regularity independently of global trends. The failure of some Irish banks is akin to other business failures in Ireland – hotel groups, construction companies, manufacturers, etc..

It was a very different type of bust but there is no doubt that sentiment towards real estate was affected by a perception that reduced credit would lead to a rise in the cost of credit and make many loan deals that stacked up at say 4% interest costs entirely unviable as spreads widened from 50-100bps to 400-600 bps for development finance. Development finance is still the major piece in the jigsaw that is missing and to date I have other than a few developers raising finance in terms of share placings not seen any idea how that gap is going to be bridged within the current structures.

@jimg wrote:

Take Anglo for example; I’ve had a morbid interest in them for a while. Over a year and a half ago, I looked at their consolidated balance sheet for 2007 (just as the property market was beginning to falter) and could not understand it. The were able to claim only 3 billion excess of assets on a balance sheet of 100 billion – which contained over 60 billion worth of property loans. It became immediately obvious that once the bubbly rise in Irish property values faltered, they were doomed. Many people must have come to the same conclusion and the stock price started tanking at the start of 2008. Of course, the usual scapegoats were named – particularly evil short-selling “speculators” (often guessing that they were based in London – suggesting they were English – even worse). The reality was simple – Anglo had no future baring a miracle.

How did Anglo respond? They resorted to short term borrowing – paying higher and higher interest rates. They borrowed from anywhere they could – the markets, institutions and they even started offering ludicrous retail deposit rates – over 7% when the ECB rate was about a third of that. No bank can make profit paying these rates plus costs for their credit. Anglo had effectively become a pyramid scheme desperately trying to find ways to pull in cash to keep the show on the road..

That is a good analysis; if a forecast from peak to trough in property values was 40% clearly €3bn of capital protection would leave a shortfall of €21bn; it is however fair to say that whilst values did ultimately sink 40% on commercial assets in the UK and US the speed of the collapse from say October 2007 to March 2009 was unprecendented.

Thankfully values are rising again albeit at a slower pace and it will probably be 2015 before values are back to 2006 levels again on most assets with some very localised asset bubbles not recovering to those levels from 20 – 30 years.

@jimg wrote:

The government is about to pay between 4 and 10 billion in order to ensure that all the people who joined this particular pyramid scheme get their promised payout. The bill for this largess is to be met by future tax-payers. This is not only unjust, it is very bad policy. I’m not a Keynesian by any means but spending this 4 to 10 billion on infrastructure would do far more to maintain activity in the economy than using it to pay off shareholders and bond holders who had been paid handsomely previously for shouldering risk..

This is where we differ; I look at the macro-economic picture and analyse that sustainable housing development is c50,000 units per year; currently roughly 22,500 units are being built. The costs of not building these houses can be expressed as

Build 22,500 houses = value c€6.75bn (ave house 300k)
Build 50,000 houses = value c€15.00bn (ave house 300k)

Lost vat assuming 50% is construction costs = c€557m p.a.
Lost Stamp Duty assuming an average of 5% of sale price = €412.5m
Lost PAYE/PRSI assuming 35% of salary for 50,000 workers each earning €1000 a week = €1.75bn
Costs of Social Welfare for 50,000 workers at a cost of €300 p/w = €1.5bn

Total cost of letting construction run below medium term is €4.22bn p.a.

@jimg wrote:

How would I have responded? Like most economists, I would clearly separate the two types of retail bank failures. One is cause by liquidity issues (or panics as they called them in the old days) and others are caused by hopeless insolvency. I have no problem with governments getting involved to help a bank over a panic but there is simply NO VALUE to the taxpayer in keeping insolvent banks alive..

Take a breakdown of the assets in a very negative and unspecific way.

€30bn overseas investments – peak to now minus 30% €9bn
€30bn built Commercial Ireland – peak to trough minus 40% €12bn
€30bn undeveloped – peak to trough minus 60% €18bn

The majority of overseas investments are performing and over the life of the loan values will in most cases present an exit opportunity that involves no loss

The majority of commercial built in Ireland will recover as yields harden – in some very small sub-markets there will be realised losses

The undeveloped landbank is probably most impaired and will remain impaired until the market recovers; however the costs of doing nothing exceed €4bn p.a. in lost tax receipts and social welfare costs. A pay back of c54 months for this category makes a very compelling case for sorting the issue out.

@jimg wrote:

Having said this, I believe the national payments and clearing systems must be protected almost at any cost; any threat to the workings of ATM machines, cheque clearing, direct debits and the like could destroy the wider economy. Secondly – and this is a little more painful – I would offer blanket protection to deposit holders for much the same reason. Beyond these imperatives, I see no reason to pour 10s of billions of tax-payers money into maintaining these failed businesses.

Retail banks fail all the time and there is a relatively simple process for allowing this to happen without causing systemic financial panic (as you’ll know given your knowledge of the Swedish response) and there are retail banks failing at the moment all over the world – particularly in the US – yet you don’t even hear about it in the news..

Without confidence in the wider banking entities there are no ATMs or clearing facilities; I agree that everyone is very sore with banks at the moment as weaknesses in their business models has caused a lot of pain to taxpayers in all Anglo-Saxon economies.

They are however a key part of the way business is done and without them we are unable to function; as painful as it is to hand money out under these circumstances there is I fear no alternative.

@jimg wrote:

As per the Swedish response, I am also in favour of simply liquidating the loans at current market values even if the market is “depressed” (I simply don’t buy the technical analysis hocus-pocus view of markets). The sooner this crap is flushed out of the system and that regular economic activity can return the better. The Japanese alternative (a variation of which you and many others seem to favour) has been proven to be the absolute worst response to a national asset bubble deflation/retail bank crisis.

As you raised with Anglo above a cushion of €3bn was never going to cover a shortfall estimated to be c€24bn at trough; the question is do you allow an avoidable fiscal shortfall of €4bn year on year to persist when there is a way to allow a goverment body to take a medium term view. I think the vlauation process will be key to tax payer value on NAMA; there have to be realisitic discounts and if there is a shortfall the government should receive more equity for the risks taken. However the banks should not be forced to put performing assets into the scheme if the covenant strength and interest cover are deemed adequate by independent experts.

There will as you say inevitably be a lot of failures once the third round of the fallout kicks in; I am of the opinion that this will be mostly amongst sub-contractors, professional advisors and building supply companies; that has happened in most other comparable markets which entered the end game more quickly.

Of course that will be really painful for the senior management and shareholders of these firms but I have a hunch looking at the unemployment discrepancy between males and females that most of the lower level employees of these firms were deemed surplus to requirements during the second half of 2008 and the first half of 2009; so the impact on unemployment is likely to be more muted than the past year.

With unemployment at c50% in the wider industry unless a complete collapse occurs in the public sector invetment then the sector appears close to the bottom of the cycle; albeit that it could bounce along there for a while if nothing is done to stimulate it and the costs of carrying 200,000 unemployed people appear very damaging to the wider economy and in particular the employement costs of kee[ing taxpayers in unrelated sectors competitive.

The idea of a ‘good bank’ caught my attention as well; it would be highly unlikely to get around the competition aspects of the European Commissioner. The most recent argument I have seen is that Northern Rock which trades only the stronger assets of the collapsed group; is by virtue of not having any impaired loan book as a result of government intervention; in a position of having received unfair state aid.

We are also minus a large dock into which larger tankers could birth. The British refinerys are saying, that we are making life too difficult for them to do business. Because they are constantly having to float across small little tankers to supply Ireland’s needs. The major centre of demand being the Dublin area, and we have no facilities planned to cater for oil imports.

I could be wrong on this but my interpretation is that the oil refinery known formerly as Whiddy Island can take quite large vessels. My interpretation is that something based on the Contango concept of capitalising on the difference between different spot prices in oil futures markets could work; i.e. when earlier in the year when February WTI was trading at c$42 a barrel but June was trading at say $52 a barrel. Traders at the time chartered ships to buy oil that was ready for immediate delivery and stored it until the price rose. The question is if you were going to store oil where would you store it; my guess would be somewhere with a reasonable amount of geo-political stability but not somewhere in the developed World.

I’d also look at what oil products are consumed in Ireland; very little of it is unrefined be it pertrol, diesil or specialist petro-chemicals used in the pharma or manufacturing industries.

However if an entrepreneur or commodity brokerage could find a former industrial site in a natural harbour such as the former Ispat site in Cork to build a quantum of oil tanks for use in playing the markets it would be a good fillup for the construction industry.

@johnglas wrote:

Peter Fitz: I was being provocative (not like me), but too much Martha would cause visual indigestion, if that’s possible.

No quibble there, its not the kind fo thing that could or should be replicated elsewhere really anyway, and thats probably just as well.