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@marmajam wrote:
decision already made in PA being prepared right now.
overhead lines being used.bit rash to say ‘most’, many systems worldwide use overhead lines.
I’ve not come across an underground without a third rail
Current Status of Project The preliminary design of the project has been completed. The project is due for completion in 2015. Work is currently underway on the scheme design, geotechnical investigation and preparation of an environmental impact study including a detailed archaeological report. Iarnród Éireann expect to submit an application for a Railway Order to An Bord Pleanala by the end 2009
There is time to tweak the project as there are no grounds to challenge the planning process based on project assessment carried out to date; they could however fit a third rail to the surface sections as an interim measure should the costs and disruptive effects of creating a wirescape from Hazelhatch to the tunnel be excessive.
The concept of DART should be subservient to the concept of creating a central underground spine for the wider Dublin transportation network this line should be viewed as handling the last 15 – 20 miles into Dublin on 2 existing lines and freeing up significant capacity on two others.
In light of reduced development levels it is vital that the four existing rail lines form four medium density corridors where development is activily promoted. This project is the only one that can deliver so much potential; literally 12 miles South, 12 miles North if you include Howth as an extra, 12 miles west and 12 miles to Maynooth. Not to forget the 3 miles in the middle!
@marmajam wrote:
incorrect.
IC will use overhead wires
you do love making things up
Most underground systems use a ‘third rail system’ including London, Paris and Frankfurt as it reduces the size of the tunnel required and in this case would lead to a lot less rebuilding of existing route components. If you could stick to the points raised instead of resorting to immature personnal attacks people might actually read what you have said before they reject it.
In any event Irish Rail have not submitted a works order or planning application so they still have the luxury of making modifications to any preliminary models they may have compiled when money was less of an object; needless to say given their extensive real estate portfolio in strategic locations they also have the opportunity to highlight how they propose to fund their scheme.
Why would you want to destroy this amount of Zone A space to create a really standard box where you’d value off Zones C + D for the majority of space?
In a good market the arcade would surely attract a premium as being a quirky building to have in one’s portfolio.
I can well understand that one may get frustrated dealing with local independents in the current climate but in the medium term this proposal would destroy a lot of value.
A pavement license for tables and a change of use to coffee operator from the CC may assist greatly in fixing the LTV
@DjangoD wrote:
From Saturday’s Irish Times…
http://www.irishtimes.com/newspaper/weekend/2009/0704/1224250018875.html
Follow this train of thought
FRANK McDONALD Environment Editor
A quarter of a century after the inauguration of the Dart, the Government is still trying to devise a public-transport solution for the capital, and the next stage could take the Dart underground
It was described in an Irish Times headline as “CIÉ’s new weapon to confound the begrudgers”. And in truth, the Dart did. On the Sunday after it started running between Howth and Bray in July 1984, more people travelled on the new electric trains than on any day since the railway line opened in 1834. There was something symmetrical about the Dart being inaugurated in the year of the 150th anniversary of Ireland’s first railway, the Dublin to Kingstown (Dún Laoghaire) line. And despite criticisms that it only served the “gold coast” around Dublin Bay, it gave the city its first whiff of continental Europe.
For months, Dubliners had been stopped in their tracks by the sight of brand-new, German-built electric trains gliding up and down the line on test runs. They were so different to the old diesel engines, which hauled probably the most obsolete rolling stock on wheels in this part of the world. That the new trains were electric was entirely due to Des O’Malley, then minister for industry and energy, who recognised the importance of not relying so much on imported oil; had it been left to his cabinet colleague, Prof Martin O’Donoghue, all Dublin would have got was a cheap and cheerful set of new diesel trains.
The Dart brand-name was chosen after sifting through numerous alternatives (such as “Bayline”). As Cartan Finegan, then marketing director of CIÉ, said at the time: “Finally, we settled for Dart because it seemed to say everything.” Dart is an acronym for Dublin Area Rapid Transit, which implied that electrifying the Howth-Bray line was merely the first phase of a much more ambitious plan to turn it into a network, with lines serving Tallaght and Blanchardstown via an underground link in the city centre. But that never happened.
When work on the electrification project started in 1980, David Waters, the engineer in charge, took personal responsibility for everything – he never bulldozed the project through, and instead negotiated with residents’ associations and other interest groups on issues such as rebuilding bridges.
There was some controversy about the cost of this EU-funded project, which worked out at £113 million (€143.5 million). Economists such as Seán Barrett of Trinity College thought it was wildly extravagant; like Martin O’Donoghue, they would have preferred to see a simple upgrade of services on the existing line. The most shocking thing was that the Department of Finance purloined £27 million (€34 million) in EU funding for the Dart, leaving CIÉ to borrow money to make up the difference. This saddled the company with repaying both capital and interest on a debt that should never have arisen, and vastly inflated the cost.
Even before the new service was inaugurated on July 24th, 1984, the price of houses along the line was going up; had CIÉ been able to “recapture” some of these gains, it could have repaid the capital outlay over time. The Dart also facilitated major commercial development, contributing to an office-building boom in Blackrock, for example. Land located near the line shot up in value, even in the bleak 1980s. It took a long time before CIÉ cashed in on this upward trend by promoting a major office scheme at Connolly Station, for example.
The company’s plans for a new transportation centre in the middle of town ran into trouble. Since 1976, CIÉ had been acquiring property on both sides of the River Liffey for this mammoth project, which would have incorporated an underground train and bus station topped by an array of office blocks, hotels and shopping malls. An Taisce was first into the breach, calling in January 1986 for a “complete reassessment” of this scheme on the basis that it would destroy the Temple Bar area. Ironically, the emerging “left bank” culture of the area had been unwittingly encouraged by CIÉ’s policy of renting out its buildings on short-term leases.
Liam Skelly, a firebrand Fine Gael TD for Dublin West, was having none of it, however. In late 1986, he claimed to have lined up a Canadian company to develop the proposed transportation centre. But the “Skelly Plan” bit the dust and Temple Bar was later designated as Dublin’s “cultural quarter”.
The plan to extend the Dart to other parts of the city was scuppered in October 1987 by the then Fianna Fáil minority government, led by Charles J Haughey. Not only did it rule out investment in anything other than buses and “diesel-based options” for rail, it also abolished the Dublin Transport Authority, which had been set up just six months earlier.
Eventually, as a result of the Dublin Transportation Initiative in the early 1990s, we were offered the Luas – although the city became the first in the world to build two free-standing light-rail lines. This was the outcome of a cowardly decision in May 1998 by ministers who couldn’t get their heads around the Luas running up and down Dawson Street.
When the Dart service started in 1984, a fleet of 80 carriages carried about 35,000 passengers per day. Government parsimony meant that not a single extra carriage was added during the next 16 years, even though passenger numbers were climbing to 80,000 per day. As a result, overcrowding during peak periods became unbearable.
Since 2001, major improvements have been made. The Dart line was extended to serve both Malahide and Greystones, new rolling stock was bought, real-time passenger information screen have been installed in all stations, platforms have been lengthened to cater for eight-carriage trains, and new stations were opened at Portmarnock and Grand Canal Dock.
Maintenance is poor, however. Dún Laoghaire station is grungy and confusing, despite its new look. Station nameplates are flimsy, their colour scheme a residue of Iarnród Éireann’s orange period; it’s a long way from the original “total design concept”.
The most serious problem is capacity. Due to constraints in and around Connolly Station, only 12 trains per hour can be accommodated on the Loop Line – too few to cater for the 90,000 passengers a day using the Dart and thousands of others on diesel trains.
Now, two decades after being ruled out, a Dart underground line is back on the agenda. This would connect Heuston Station to the Docklands, via Christchurch, St Stephen’s Green and Pearse Station, linking up with both the Tallaght and Sandyford Luas lines as well as the existing Dart line, to give Dublin a rail network.
Last December, the Minister for Transport Noel Dempsey described the proposed rail tunnel as the “most critical piece” of public-transport infrastructure in the State, and pledged that it would proceed, notwithstanding the Government’s yawning budget deficit. The estimate for the “Dart Underground” is €2 billion – considerably less than the still-secret cost of Metro North, which would provide a single, 18km Luas line from Swords to St Stephen’s Green. Given that the CIÉ plan would integrate existing suburban rail services, it seems better suited to serve Dublin’s sprawl than the metro.
What’s not included in the €2 billion estimate, however, is the cost of electrifying lines to Kildare, Maynooth and Drogheda so that trains could use the tunnel; clearly, diesel engines could not be allowed through because of the fumes they emit. The question remains of whether a cash-starved Government will have the stomach to go ahead with this.
What a synopsis; this is FMD doing WMD on the RPA’s uncosted Luas line in such a well written way.
There are two things I would like to add to this near perfect synopsis; most tube trains work with the electrical current coming from the track bed and not overhead lines. To realistically cost an essential upgrade to underground DART costs would need to be sourced for retro fitting DARTS to draw current from a trackbed system and overhead wires on existing DART section to at least a sizeable section of the DART fleet and the line from where it is proposed to surface at Kilmainham to say Hazelhatch in phase 1 before extending to Balbriggan and Maynooth in time. Rebuilding numerous bridges and erecting large quantities of overhead wirescapes would add excessive cost and involve much more disruption to the existing network.
Secondly CIE are a real company with plenty of undeveloped real estate; CIE should begin a discussion process with a number of International real estate groups who have developed major mixed use schemes at rail hubs for example the groups who did Kings Cross London or Spencer Dock Dublin. This would establish what type of income stream could be produced by doing a joint venture to coincide with completion and such sums could be set against future bond payments to hedge exposure to the taxpayer.
@marmajam wrote:
the fare might be 2.20 now but in 2016 it will be over 3 euros and so on and so on
the difference is you have the mindset that we are certain to decline. but ireland is not Japan – we are more like a region than an independent national economy.
we are more likely to expand quite quickly but even if we stagnate so what?
we won’t be stagnating for 100/200 years and that is the timeframe for MNNo but if you take away the pension fund and if demographics stay as they are there will be a huge pension fund hole in 20 – 30 years if the project runs into difficulty. Given that basic pensions are €210 a person you can’t risk those funds to invest in a clearly loss making project. Most certainly not at a rate of return that is significantly below the ‘risk free asset’ of government bonds. The idea of this investment was to ensure that if the economy stalled disproportionately that income streams from other markets would cushion the blow. In the Celtic Tiger era you could take that chance on the back of huge fiscal surpluses, not anymore.
The idea of an infrastreucture bond for a pension fund is original because it breaks every investment principal of spreading risk and acheiving long term returns. Best case scenario the bond gets repaid having earned below ‘risk free asset returns’ for its life. Worst case scenario it is subordinate to government debt and a future government buys it back at a rate in euro.
@marmajam wrote:
in the most negative situation, the repayments will be tight only for the fist few yeras.
10 years after it’s open they will be peanuts relatively speaking.At 25m passengers it will never pay its way; what are the runnings costs? The interest payments aren’t even covered.
@marmajam wrote:
you started out saying it would cost 200 million a year with 100 income. that’s been shot down
but never mind, it’s now immoral to build it sez you.it was not planned on the projected construction of 100,000 houses or 35 million passengers per year at the airport. you made that up
as you need to continually invent ‘facts’ as your original numbers fall apart.The 35m passengers is based on contemporary projections that between 2006 – 2015 that air travel would grow by 7% per year. Holding an average of 20m pax for the next decade will be a good performance.
I stick to the €200m which is made up of €110m interest, €50m operational loss or operators profit on top and a 2% sinking fund to cover future large scale programmes of works for the 30 – 40 year periodic refurbishment of stations, rolling stock track etc.
I have yet to learn details of the money that the consortia are willing to pay the government to operate the franchise; surely if it is north of €50m p.a.x. they would be trumpeting this. How you can claim that this project will almost break even is quite Parlonesque
@marmajam wrote:
the claim that the route was chosen because it goes through Bertie’s constituency lets the cat out of the bag.
it’s all a conspiracy. the gov is to blame ha ha
Fine Gael PVC? COIR? Libertas-me-arse?
No the point made is not party political it as an observation of the correlation between senior government figures and vanity projects. Take Martin Cullen and a motorway to Waterford, P Flynn and the road to Castlebar, Gordon Brown and the straddling of HBos on Lloyds.
However what is worse is that the current government is selling the pension pot of this country down the drain as a short term stimulus measure on a project that simply does not stand up to scutiny. If this paid a return i.e. even paid back 25% of the interest payments surely the government would be crowing about it; their silence is deafening.
@spoil_sport wrote:
I’m not going to pretend I know too many stats, nor do I care for them, but PVC K, a Dublin Bus to the airport (the 747) costs €6, and Dublin Bus warn that journies from O’Connell St to the airport can take 55mins at peak time, not including that it starts from BusÃras, so 90mins probably isn’t too wild an estimation.
http://www.dublinbus.ie/en/Your-Journey1/Timetables/All-Timetables/747/
The aircoach for comparison costs €7 one way or €12 return (all prices for adult)
A small point, granted, but just to show that all the supposed facts and figures above, if one was to give them the time, are probably all bunkum.
This thread is getting very, very tedious, please give it up.
The 16A costs €2.20; if you take the aircoach that is personal choice; I do as the route fits. If it were to allowed to use the port tunnel free that would be even better, but we haven’t been given that no cost to the taxpayer option.
If you want time as a justification; what is wrong with waiting until a revised needs assessment for transport for the region done at 2009 figures is undertaken?
To make a transport project viable you either charge high prices to airport travellers and put off local commuters or you have enough locals to make it a pleasant surprise for airport travellers.
Sadly in the case of Dublin the airport is not sufficiently difficult to access to have business travellers pay €20 return as part of their day trip to Manchester or Glasgow and there certainly aren’t enough commuters to have a fare structure that lines up with the existing fare matrix of Dart from Malahide or bus from Ballymun. That real wage growth that was going to lead to a minimum wage of €12 an hour by 2015 hmmmmmmmmm
@marmajam wrote:
Most people interested in the metro project understand the rationale behind it. It is not being built only for the circumstances of today, which themselves warrant it ayway, but it represents the joined up thinking that many criticised was lacking in previous administrations.
Recessions come and go but overall expansion increases exponentially. It is wiser to plan for this than to sit on your hands and wait.
The is a fundamental difference between a recession and what is going on in Ireland; Ireland has through ‘tax reform’ ended up in a situation that features a tax base that collects only 65% of the money required to public services at current levels for the country and that excludes the bank bailout.
@marmajam wrote:
In fact with construction costs down 25% this is the time for big projects like this.
When you look at the patronage of the DART which has the open sea along one side of it’s length it is obvious that a high quality rail corridor out through the NW of Dublin will be a certain success. The problem, more likely will be that it will be oversubscribed too soon and people will complain that a heavy rail metro should have been built.
MN is not some glamour vanity project – all other options were considered and MN was chosen as the most affordable system that could deal with the sort of capacity needed given reasonable growth.
MN will be there for 200 years so one has to consider what NW dublin will be like 20/50/80 years from now.Metro North was chosen on the basis of three facts firstly it ran slap bang down the middle of the then Taoiseach’s constituency, secondly the presumption was that 100,000 homes a year would be sold into infinity and the promise of metro secured the transport credentials for many a planning application and thirdly Dublin Airport would have 30m passengers by 2015. All three presumptions are now ancient history.
@marmajam wrote:
The throughput in Dublin airport, even in this downturn is still 20 million +.
When growth resumes it will quickly be over 25 million plus.
This is 70,000 people a day on average. Then there are about 15,000 people directly employed by airport related industries.
Most of this 70,000 passengers might not use MN but a lot of them will.
Swords itself has been transformed from a semi rural village to a budding metropolis in the space of 25 years.
In 20 years time it’s population is projected to rise to 125,000. MN will be significant in it’s development.Between 1970 and 1990 Japan grew at an average of 7% a year, between 1990 and 2005 it stagnated; rapid periods of boom are often followed by lengthy periods of stagnation. 2006 is ancient history.
@marmajam wrote:
These are projections but looking at the past, they are much more likely than anything more modest.
Of course the projection of 100,000 houses a year ‘that had to go somewhere’ when the contemporary economy delivers 20,000 houses a year most of them in the provinces.
@marmajam wrote:
Then there is DCU, the Mater hospital, the link to the Maynooth line (soon to be DART) the link with the LUAS Red and Green lines..
With an airport spur the Maynooth line could intersect just as easily at Connolly station and for 10-15% of the price as could the Red Luas Line; with interconnector the green line is in an identical position. DCU while generating some passenger activity is small scale; the Mater is 10 minutes walk from Drumcoundra or O’Connell St.
@marmajam wrote:
The idea that anybody would prefer a one and a half hour bus trip costing 3/4 euros in preference to a metro trip taking 25 mins costing 4/5 euros is not sensible..
The bus costs between €1.60 and €2.20 and does not take 90 minutes; your figures don’t add up. For the time conscious allowing taxi’s to use the port tunnell free would have them in Spencer Dock in less than 20 minutes or Merrion Street in 25 minutes; put 4people in a cab and there is little cost difference and a lot less handling of cases.
@marmajam wrote:
As people do on the outer London transport stations, passengers not directly on the line in the Swords area will park their cars at the park and ride at Bellinstown and others will get local buses to connect.
In the vicinity of every DART station you will find every available parking space taken during the daytime, even 10 mins walking distance from the station- without designated car parks even in place..They already do to Malahide to use Dart; if they want to go to the airport or DCU they drive the backroads through St Margarets. For outer commuters build Multi Storey carparks in Rush/Lusk and Donabate; I belive NAMA have a few too many acres in that part of the World.
@marmajam wrote:
Dubliners will enthusiastically embrace a decent public transport service. Those who argue against it are the ones who have got us into the situation were in.
The so called celtic tiger was not a mirage. .
Given the hangover most people must wish it was a mirage. Using funds put aside to cover future pension liabilities to build Bertie’s vanity swansong fails on the following points.
1. The demand side is flawed it is based on top of the cycle projections
2. The money isn’t there to pay for it
3. The pension fund should be treated like any other soveriegn wealth fund and left alone to fulfill its intended purpose which was one of the better initiatives of the FF era.
4. The costs of finance are too high
5. Dublin Airport passenger traffic is declining
6. Net in migration has ceased the next phase will involve a lot less imigration and as a result a lot less air traffic as these migrants return home from other countries
7.The route doesn’t have densification potential for most of its length
8. The Destruction of Stephens Green as part of the construction process; where the AHU’s should never have been proposed to be sited.
9. Undisciplined construction costs http://www.rte.ie/news/2009/0705/electricians.html2004 – 2006 Fiscal Surplus and project conception
2009-2014 Deficit and no funds.@marmajam wrote:
upon opening in 2016 the average fare will be approx 4 euro.
Perhaps it will but a higher fare will firstly act as a disincentive to use why pay €4 by metro when you can take the bus for €2; combine this with higher energy and labour costs means that taking present tarrifs are the only way assess the project. Were the sampled surveyed to assess demands told the fare structure, how many of these people then working are now unemployed?
@marmajam wrote:
incredibly, you ignore the fact that the pension fund has committed to invest 6 billion in the infrastructure bond at 5%………
The first principal of sovereign wealth investment is to spread risk and acheive a target rate of return, no credible sovereign wealth fund can invest in a project that involves higher risk than government bonds and produces a lower rate of return. The pension fund has a serious credibility issue here, this is what one would expect of an oil rich dictatorship not a once democratically elected government.
@marmajam wrote:
but………………………dublin airport is only a small element of MN. nevertheless we will no doubt see exponential growth there relatively soon in the 200 year lifetime of a rail line like this.
Sorry I forgot Ballymum with its population of 19,517 and Swords with its massive 37,762 people spread over 3,476 hectares the vast bulk of which couldn’t walk to any of the stops proposed. Dublin airport is declining and the rest of the route was assessed on wildly optimistic development assumptions; i.e. 100,000 housing units annually when the reality is about 20% of that number.
If you built a railline from Belmullet to Kilgarvan it might last 200 years but it still wouldn’t stack up. Fair play to the proponents of this scheme the Emperor got a fair bit of the route without anyone noticing all the devices used to keep the reality covered.
Underground in Dublin can only be justified when it links existing elements of the network in areas where plot ratios exceed 3.5 or higher.
Are you taking drugs?
Even if the 30m projected passengers materialise which they won’t the total fare revenue at an average ticket price of €3 per ticket would be €90m per year. Given that interest costs alone will exceed €110m it loses money before any running costs are calculated.
Given that passenger numbers are down 15% this year at Dublin Airport will those proposing this process now accept their boom period figures are a fantasy that isn’t coming back anytime in my lifetime.
Where is the revenue going to come from to even wash its face day to day?
@marmajam wrote:
your highness pvcqueen, as has been noted before, you fling numbers around because you have entirely failed to grasp the heart of the matter.
And, very predictably, your numbers themselves always undone with hilarious howlers.the world is not some sort of property park. on projects like this a much broader perspective is required.
be interesting to see your estate agent analysis of……the space shuttle…………the LHC project………van gogh never selling a painting in his life……..
or not………you’re out of your depth.Actually I was in bed when you wrote this like all people with a job; it says a lot about someone to be writing an abusive tirade such as the above at 4am; unless I am mistaken and you are based in a pacific timezone. You have failed to answer 6 of the seven questions put and got the seventh wrong.
@marmajam wrote:
from your made up geography about estuary, your odd belief that Swords is some sort of rustic hamlet of 2 souls and a cat,
The point I made is simple the development density in the area known as Estuary is not sufficient for a high cost rail project; furthermore its location beside a protected nature reserve prevents future development on any meaningful scale. Route selection on the project is poor.
@marmajam wrote:
your mangling of traffic data on the M50,
The majority of traffic from the M1 heading South goes via the M50 that is a fact as born out by NRA traffic count data; there is no reliable evidence that the thousands of people commuting on the M1 corridor would ever use any rail service open to them; in fact they have rejected rail by virtue of ignoring the existing service available. Where is the passenger demand analysis for the project?
@marmajam wrote:
your flip flopping on bond data, even though its been pointed out that the money will come from a pensions investment in an infrastructure bond
there must be a term for the condition where inappropriate technical guff is sprayed around to impress.The pensions fund was created in a very different era, it no longer exists unless you want to take €2bn away from other budgets; which is it to be health, education, old age pensions, are you really saying any government would commit political suicide in this way. It is simply Government money in good years set aside for the future; what is the current fiscal surplus? More debt = higher taxes
@marmajam wrote:
you remind me of that penniless toff – one of adrian mackinder’s comic characters
of course if you really knew your stuff you wouldn’t be spouting here…..What don’t I know? The most unpopular government in the history of the state failing to get to grips with public spending, you are talking about a project that didn’t stack up in the boom and the boomier years as being a no brainer; which part is the no brainer blowing the boom, accelerating the boomier, ignoring the bust or adding to the rising debt mountain. Stick to the facts.
@marmajam wrote:
interest payments less than 100 million
Government bond 10 year interest rates 5.57% * €2bn = €111.4m p.a. and these rates are rising; underlying fiscal deficit c€10bn p.a. – no pension fund to pay for it.
@marmajam wrote:
operating profit
The report supporting this is where?
Why isn’t this a two tender process one for construction the other for running it.
Simply because it will not make money and the government will end up putting a large annual subvention into it; this isn’t Luas it is a complex series of underground stations that need to be lit, cleaned, secured and maintained. Not a series of granite platforms where the local authorities and Gardai pick up the service bill.
@marmajam wrote:
its a nobraner
What would be three no brainers are
1. Reverse the new travel tax
2. Ban handling fees on tickets
3. Open the port tunnel free of charge to taxis.Then see if a reversal in passenger decline can be acheived and what visitors think of a 20 minute journey time to Dublin 1 from the airport.
But you can only reserve the land by preventing development if it would constitute a material variatioon to the development plan. I’d admire your fiscal conscience but feel it is worth pointing out that there is a big difference between spending a few hours discussing a development plan objective at council level and making a planning application for something that there is no money to build. By preserving the route now if the money is there in 5 years time so will the route.
Grey space tends to follow financial services employment culls; it was very prevalent after the dot com bust of 2001 but as the tenancies are on short notice the users of such space enter the market themselves for their own space as the market picks up. It is very good for fit out contractors as the tenant usually hires them twice in a cycle, i.e. once to put in the grey tenant and once to put their newly hired own team in; investment banks are great at hiring large numbers of graduates and ditching them at the next recession, anyone who makes it to 50 at Goldman Sachs or Morgan Stanley is pretty impressive. There is something very surreal about these projects the papers are full of a failing market but you have to work to even tighter deadlines to put the new co in! Almost like a timewarp back to the boom for 2 -3 months!
On reflection I think the conclusion has been reached that rising input prices got us into the mess we were in from a speculative land bubble to contractors not applying realistic pricing to a fear that the spiral would continue indefinitely.
The hangover is clearly lack of finance which is another conversation, lower construction prices which appears to be happening – what are average construction rates per square meter for mews developments in Dublin and what were they in 2006?
The real challenge though is to figure out what is going to be done for the 200,000 unemployed construction industry professionals and tradesmen?
@reddy wrote:
Second of all. To answer your estate agent analogy, the fact is the government isn’t the one selling the house, they’re the ones buying. Its a pretty foolish buyer who doesn’t do their sums and work out the actual cost of a purchase, including the real costs and determines their ability to finance the debt required.
Agreed but I wouldn’t stoop to the estate agent level i’d look at commercial property structures; this is like buying a large building that is empty and then breaking it down into smaller units called retailers and passengers. The costs are therefore buying the building and running the services such as trains, lighting, cleaning and ticketing. So just like a linear shopping centre you have a rent as the govenment can’t afford to buy it with cash, they will have to turn to the bond markets who clearly feel they have borrowed too much already, then you have insurance and you have a charge for services.
@reddy wrote:
First of all – no-one wants to read all your crap insults and bizarre ramblings so don’t bother posting unless you’ve something decent to say. Ps. its spelt brain..
Very succinctly put. I’d have expected Paul to ban him before now but he is obviously preoccupied with his cutting and pasting project. Until he is banned I will put the questions again.
1. On completion will the Government position support a straight puchase out of a single fiscal year?
2. Given that point 1 is clearly not going to happen, what will the rate of finance be in light of all credit rating agencies downgrading sovereign debt http://www.rte.ie/business/2009/0702/rating.html quantify the annual servicing cost based on a debt of €2bn and the selected rate. How will another €2bn affect the rate on the rest of the credit mountain
3. Who is going to operate the service and what profit margin or return on investment are they going to receive?
4. What will the annual subvention be to cover operational losses?
5. What will the govenment do if an operator walks away as happened with the UKs most profitable rail franchise only this week http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article6620768.ece
6. What are demand forecasts for Dublin Airport in light of the increased travel tax, imposition of €10 handling fee by the two dominant airlines and likely higher landing charges to pay for Terminal 2 and second runway.
7. Why hasn’t the port tunnel been opened to taxi’s on a free of charge basis to give a quick free solution to the connectivity issue?
The costs are clearly
1. Interest payments north of €105m p.a.
2.Operating loss north of €50m p.a.
3. Franchises profit / depreciation to rolling stock north of €50mGiven that demand at Dublin airport is being wrecked by the government, airlines and DAA who in their right mind would give the go ahead to take on an annual liability exceeding €200m to connect an airport whose stakeholders seem hell bent on destroying their prime asset?
Open the tunnel to taxi’s debt needs to be preserved for projects that pass cost benefit analysis and create sustainable employment
@garethace wrote:
I remember in Argentina, or some other one of the large South American countries they found themselves in trouble a while back. I think the solution they employed was to tie their own currency to another strong international currency, the dollar. What happened was a period of new prosperity and wealth in that country. I think something similar happened in Ireland, in that land became the new currency. Everything tied to that.
Myself and Dick D were in Buenos Aries in January 2002 purely by accident, it was an ugly time to see a very beautiful city; what they did was to write off all loans below $100,000 and keep remainder open. Needless to say there were many people who lost their deposits and had a mortgage for excess of $100,000 US; those type of write offs are never equitable as they reward irresponsibility. People if they really want to walk away can simply go to Australia and deal with the banks in a few years when they have a wedge to present the bank against a debt long since written off. In so doing they have a 3-5 year record of good credit to offset their bad credit, out of sight out opf mind.
In respect of commercial property you are absolutely right; developers only built large floor plates and it was very hard to grow organically in the same premises. You get the feeling that this will change in the current market. All income is good income today. I would suggest that the Anglo HQ be completed and space be made available for small start up Financial companies operating much the way that the principal of the law library works.
KB
You are probably right that construction costs were off the scale for a while in Dublin; the problem is the percentage based fee scales that the QS/project management indusrty works to makes it very diifcult for the SCS to compromise their members by criticising the fact that prices bore no relation to European norms. Now that they probably do it would be a good idea for the SCS to publish a pan-European comparison table to highlight the probable good value on offer. They must however learn the lesson that if severe deviance from the meadian occurs again it will be short term gain long term pain.
KB think you both miss the point on land, it is not something that can be compared to construction in terms of asset inputs to value. It is more a product of the bid rents that the market establishes. It costs not much different to build an identical house in Dublin, London or Cannes however the market bid rents are different. I do however agree that if construction costs fall some of it is likely to be passed on and more marginal projects become viable.
In Dublin you have a mortgage market based on three times salary, in London 4-5 times and in Cannes you have a product of imported bid rents from other markets.
For the market to recover four things need to happen; people need to be employed, they need to be in a position to secure finance, they need to deem the property of a decent standard or capable of being converted into a decent standard but above all they need to have confidence that prices will not fall any further.
The key steps are to stabalise the finance markets, secure and rebuild employment levels and remove stock overhang finally they need to rebuild the capacity to deliver a quality product and stable or rising prioce matrix so that a new market is willing to go to the finance markets and take on what is a very long term commitment.
If you concentrate on those 4 issues the construction sector can be restored to health in a 3-4 year period. If finance remains challenging or overhang persists it will take a lot longer.
If people pay €450k for a postage stamp plot then clearly the 3 year earning rule failed due to very poor due diligence and underwriting standards in mortgage lending departments. Not a mistake that one would expect to see for another 29 years or so. Another indication of market failure are the towns in the outer commutter belt where housing estates of 50 plus units lie half built because the existing 2,000 people in the town simply have no demand for them
@marmajam wrote:
it’s not easily available, I doubt anybody in the RPA will tell you, but for good reason I believe the best tenders were below 2 billion.
which is realistic.
So the final cost will be below €2bn and the successful tender consortium will run it free and of course the finance will be free. Add €50m investment return and you have an annual service bill of €200m
So lets take your position as correct.
What does the first annual or quarterly payment include from the items below
1. Capital
2. Interest €100m
3. Profit €50m
4. Operating Loss €50m
5. Operating profit / rtn €50m@marmajam wrote:
what MacDonald did was extrapolate a guestimate bid of 3 billion into the potential to be paid over 25 years – around 5 billion.
McDonald was absolutely spot on to include the total actually payable even if the capital cost comes in at €2bn there will be an annual rate of interest to be paid to stop the sum accumulating, the consortium will want their profit margin not to mention the operating contract which will be accompanied by another round of profit. Even if you assume that the consortium settles for no return Government bond rates are excess 5.35% which gives a pure finance cost exceeding €100m
Add to that how much it will lose operationally say another €50m a year. It simply is not worth the money.
Then look at demand side initiatives to support the metro
€10 additional travel tax
€10 handling fee on both Ryanair and Aer Lingus
Probable increased landing charges to pay for Terminal 2 and second runwayJust allow taxi’s to use the Port Tunnel free, then assess your needs, taking 4 passengers per taxi it would be significantly cheaper for the government to offer free taxi’s than build this project.
This is the last ideological PPP project still standing on its fundamentally flawed basis, restore some credibility open the tunnel to taxi’s for a 20 minute Journey time to O’Connel Bridge at no cost
I dopn’t know Cork intimately enough to discuss the specifics of what would be a better route, I can however say from my experieince of Luas that both the Square and in particular Dundrum Town Centre delivered a huge quantum of off peak passengers. No doubt the challenge is to remove traffic and as such giving people a choice of trams versus cars for the weekly visit to the shopping centre to hang out has proven highly effective both at Dundrum and at Westfield London (albeit Tube versus tram)
I further wouldn’t say that just because Dublin made a mess of delivering Luas that it is highly likely that Cork would learn the lessons and deliver on time and on budget. The real questions are
1. Do you have enough commuters to give morning and evening peak sufficient benefit through not losing too much money and through eliminating enough traffic to make CC traffic move again.
2. Does the route have enough suitable development land to densify the route over a ten year period. If the route is exlcusively 2 storey semis forget it!
Property busts invariably involve bizarre stories like that 7 story block of flats, in Mid 2007 some nutter paid a net equivelent yield of 2.5% or 40 years passing rent for a fully rented eight story building in the square mile in London, the purchaser intended to secure planning for a 30 story block of luxury apartments within 500 yards of St Pauls Cathedral which was never ever going to get planning permission. Desk top valuations are almost as useful or reliable as the back of the 20 Major box method of conceiving a building as seemed to suffice in the 1970’s!
I do however feel that the tone of the discussion has moved back to where most conversations have been recently i.e. diagnosing the mistakes and highlighting the one or two indivuduals who either diplomatically side stepped the buzz words or controversially predicted grief was around the corner.
There are KB as you point out four major issues to be solved
1. Getting the banking sector sorted
2. Dealing with employment overhangs in costruction
3. Dealing with excess inventory levels
4. Getting a poorly funded construction sector back on its feet.In reverse order
4. Construction companies – do what the Fed did in 1931 with the banks, close every construction company for a week and decide which ones are solvant and which ones aren’t; let those that aren’t go into examinership. Award contracts for local authority housing refurbs that were to be PPPs as straight government contracts through a tender process to those that remain standing. Follow that up with retro-fitting energy efficiency initiatives in state buildings; build a global design powerhouse in this area to build on the research advantage that Kingspan have built in this area.
3. Get NAMA to take mananagement control of completed schemes or half completed schemes where the loans have become non-performing with no prospect of the borrowers raising 3rd party capital to complete specific developments or where a fire sale would see significantly below market prices acheived i.e. realising an unacceptable negative equity position. In terms of seeking court orders for specific performance for houses bought by booking deposits; I am not sure that would work many of those not completing are either unemployed or would simply leave the state to avoid sanction; many others have character and would take a long term view. Surely the objective needs to be to establish a clearing house to pair off would be tenants with stock overhang. Even if it were as simple as hiring people to put the distressed stock currently sitting in liquidated retail warehouse units into furnishing suitable properties to a lettable condition, hiring sparks, chippies and painters to complete second fix and decorate them and even redundant estate agents to answer the replies on daft; it has to be better than doing nothing; surely the one thing you can’t afford is to have 50,000 houses lying empty and at the same time paying sky high taxes to cover international interest payments and dole payments for people who 95% of the time want to work.
2. What ever the true future employment levels will settle at long term it is clear that at least 100,000 and possibly as many as 300,000 people will not work in the wider construction sector again. They clearly need to be retrained or encouraged to move elsewhere; leaving that number of people on the dole is just too much of a waste of dreams and aspirations not to mention scarce cash resources. Further grant aiding hardwood forrestry and wind energy projects has to be a good start as no doubt many of the skills are similar from engineers down. This is certainly the greatest challenge and the most complex to find solutions for.
1. Getting the banking sector sorted; clearly the most complex and urgent challenge but one where if handled right there is clearly the greatest upside. Irish property debt has a very negative perception overseas as the scale of the bust is truely spectacular by International standards. On the upside a lot of the debt held by the Irish banks is in fact relating to property assets that are out of Ireland and it is highly likely that a lot of these markets such as UK, Belgium and Sweden both didn’t become as distressed and are likely to recover a lot more quickly. You have to laugh Aiden Brooks bought the Shell Mex Centre (Shells UK HQ) on a yield of almost 6% or say 15 years passing rent and people were buying buildings iwth very secondary tenants in central Dublin at yields of 3% or twice as many years purchase; now the yields would be Shell Mex 6.50% with potential to come in to 6.15% and Central Dublin Retail 6.50% plus.
The presumption that 30% plus of property loans will fully default is in my opinion entirely flawed, the biggest gains to be acheived would be to sell the primest overseas assets at 90% of debt value and buy the bonds underpinning those debts at very deep discounts that in many cases equate to a price of paying 30% of face value of a 70% discount. Not for a second am I arguing that borrowers who are meeting payments should lose their investments but where loans have ceased to perform. I also have a couple of clients looking at specific investment opportunities in Dublin; whether they will complete these depends on the yields moving out slightly; this clearly proves that there is a level beyond which the sector can’t sink.
As opposed to playing the blame game should you not be focussed on solving the four problems above and making sure that the next model is based on a presumption that builds in the economic cycle and not the flawed concept of whatever new pardigm is in vogue. Easier said than done but if you repeat the negative often enough you start to believe it yourself.
@rofbp wrote:
From the front page of tonights echo:
new City Development Plan which acts as a blueprint for the future development of Cork up until 2015, but is it realistic or viable?
It is a credible aspiration for a development plan which is afterall an aspirational document. It is clear that times are tough at present but the cycle will turn 😉
