PLANS FOR metro lines and motorways “need to be reassessed” because the higher rates of interest on Irish borrowings mean many of these projects no longer produce an economic rate of return, according to An Taisce and Friends of the Irish Environment (FIE).
Cost-benefit analyses for Metro North, Metro West and some 850km (528 miles) of new road schemes “need to be updated as a matter of urgency” to reflect the higher cost of borrowing, the groups say. “It is now clear that cost-benefit studies done for proposed projects where the money was not secured before September 2010 are no longer valid because the assumptions made regarding interest rates have turned out to be inaccurate.”
As a result of higher borrowing costs, they claim the final price tag for Metro North “may now be closer to €8 billion” – at least €3 billion more than the estimate made in 2005 for the 18km line between Swords and St Stephen’s Green. If there is an unwillingness to update the cost-benefit studies, then the projects need to be officially suspended, and expenditure on consultants and planning postponed; otherwise taxpayers’ money to the tune of millions of euro is being wasted.”
They called on the Department of Finance to confirm that these “transport mega-projects” would either be reappraised in line with Ireland’s revised cost of finance, or postponed in favour of “more modest, affordable projects” such as busways.
“When interest rates were 4 per cent, a 35km section of motorway built on borrowed money would have led to total repayments of in or around €600 million. But now, owing to recent changes in Ireland’s cost of borrowing, total repayments could top €800 million.”
An Taisce and FIE said that “instead of placing such excessive burdens on taxpayers by building entirely new roads, ‘hard shoulders’ need to be added to existing roads” – as in Britain and Sweden, where motorway plans were being shelved on cost grounds.
Regarding public transport, they said priority for investment should go to bus rapid transit projects such as the “Blue Line” between Sydney Parade Dart station and Sandyford Business Estate, which is being promoted by Dún Laoghaire-Rathdown County Council.
They said a €33 million provision for this 18km busway, serving St Vincent’s hospital, RTÉ and the UCD campus at Belfield – with articulated single-deck buses running every four minutes at peak times – should be made in December’s budget.
Such advanced QBCs (quality bus corridors) could carry more than 3,000 passengers per direction per hour – “more than sufficient to serve demand in Dublin” – and be built at one quarter the cost of Luas-type light rail lines.