Stalled transport projects wasted €30m

Sat, Feb 23, 2013, 00:00

About €30 million spent on plans to develop the now deferred Metro North and Metro West projects in Dublin has effectively been wasted, the Department of Public Expenditure and Reform has said.

The Dáil Public Accounts Committee has been told that services costing €26.2 million for the development of Metro North and services costing €2.7 million for the development of Metro West cannot be reused even if the stalled rail programmes get the go-ahead in the future.

Deferred projects

The secretary general of the Department of Public Expenditure and Reform Robert Watt said the Department of Transport estimated that the amount spent on the deferred transport projects, Metro North, Metro West and Dart Underground between 2006 and 2012 came to just under €227.8 million.

The projects were to be developed under public-private partnership initiatives.

These costs included €32 million on design and PPP procurement for Metro North as well as €25 million on property and €20 million on fees for legal, commercial and insurance advisers for the same project.

Design costs

More than €20 million was spent on the design of the proposed Dart Underground system. More than €10 million was spent on preparation for the railway order for the development of the proposed Metro West project.

In a letter that has just been published by the public accounts committee, Mr Watt said: “15.9 per cent (€26.2 million approximately of the total of €165.2 million) of Metro North costs have no value going forward, with the remaining costs having value on the basis that the project progresses in the future.”

He said 14.4 per cent or €2.7 million out of the total of €18.7 million spent on Metro West costs had no value going forward.

He also said the balance of the costs would have value on the basis that the project went ahead in the future.

‘No residual values’

“The full costs of these projects [Metro North and Metro West] will have no value and no residual values [beyond the €10 million in property values relating to Metro North] will arise in the event that the projects do not progress in the future.”

He said property costs for Metro North of more than €25 million were incurred at the peak of the boom.

It would be reasonable to estimate that the value of these would therefore have fallen by approximately 60 per cent to €10 million in the intervening years.

Assumptions

Mr Watt said Iarnród Éireann believed the costs incurred on the Dart Underground project would have full value going forward in the event the project went ahead and there were no changes to a number of assumptions.

These included that it was implemented within the constraints of the current railway order and there was no alteration to the proposed PPP contract method.