Shortfall looming for major projects

The Irish Fiscal Advisory Council (IFAC) warned last week of a looming shortfall in capital allocations for major projects.

The largest single item is the MetroLink, partly underground, from Dublin city centre to the northern suburb of Swords, estimated at €9.5bn in 2022 money.

There are plans also for extensions to the on-the-surface LUAS, as well as further expenditure on the DART mainline rail lines around the capital.

There would be cutbacks on allocations across the country, should these Dublin plans go ahead, and the Government has signalled a preference for rail projects nationally over road investments.

Cost

Costs have not been provided in Government medium-term budget planning, according to IFAC, and would exhaust the resources available even in a benign scenario where tax revenues continue to expand. IFAC’s warning coincided with a further revenue slowdown in the monthly Exchequer returns.

According to Daniel Murray in the Business Post, the Department of Finance’s warning to the cabinet in September of a €14bn shortfall by 2030 has been upgraded to €19bn by IFAC.

The implication is that all of the Government’s plans cannot be accommodated and that some will have to be sacrificed.

MetroLink

The elephant in the room is MetroLink – easily the most expensive capital project ever proposed in this country.

The project first emerged back in 2005 and has undergone numerous iterations, including route alterations, over the years.

In 2018, the capital cost was estimated at €3bn to €4bn for a bigger project than is now envisaged – it would have run north-south through the city centre to connect with an expanded LUAS green line to Sandyford and beyond. The €9.5bn estimate thus represents a far higher figure for a smaller project.

Roughly €300m has already been spent on design, route selection and public consultation, and the National Transport Authority has been recruiting further consultants to assist with the application to An Bord Pleanála for a railway order.

Hearings will commence shortly and the project could not be completed before about 2035, if all goes to schedule.

All large capital projects must pass a cost-benefit test in order to comply with the Public Spending Code, which is overseen by the Department of Public Expenditure.

The 2018 iteration of the project, at that time estimated to cost between €3 and €4bn, was the subject of an evaluation commissioned by the project promoters, the National Transport Authority, from consultants Jacobs and Systra, of which a brief summary is publicly available. This document maintains that benefits exceeded costs.

But even at the lower €3bn cost figure, benefits were three times costs; that is, below the latest cost estimate of €9.5bn.

It is not clear from the document that the benefit estimate is robust, and the authors stress that it is not to be taken as a definitive business case for the project.

Given the huge sums involved and, according to IFAC, the emerging pressure to find economies in the capital programme, there are reasons for doubting that MetroLink would pass a cost-benefit evaluation prepared independently of the project promoters.

The critical question is whether, given the multiplying demands on the capital budget, there are alternatives to a single rail line to Swords in the context of peak-hour traffic congestion in the Dublin area.

There are numerous outlying suburbs comparable in size to Swords, for example Blanchardstown, and several have already made their pitches for underground rail connections to the city centre.

The line to Swords would serve Dublin Airport and a number of intermediate points on the city’s north side. There would be 15 stations, 11 underground, including the one at the airport.

Dublin Airport is, and has been for many years and by a considerable distance, the busiest bus station in Ireland, served at high frequency via the Port Tunnel from the city centre, from all the main Dublin suburbs and from 31 of the 32 counties across the island.

It is closer to the city centre than most large European airports and has a high public transport share, with regular users, including employees as well as passengers.

According to a 2017 user survey, Dublin had as high a public transport share as several comparable European airports with direct fixed-line service.

Danger

There is a danger of spending an enormous sum on MetroLink to improve surface access to an airport which has good surface access already, including a speedy bus service to the city centre. So does Swords – courtesy, again, of buses through the Port Tunnel.

There are unfinished projects on the main inter-urban road system, for example the long-deferred M20 from Limerick to Cork and the poor connection along the Dublin-Sligo route beyond Mullingar.

Are these important projects to be long-fingered once again, to address lesser problems in north Dublin?