CONCERNS IN international markets about Ireland’s financial position is making it difficult for the National Roads Authority (NRA) to secure private finance for major road and rail infrastructure projects, including the multibillion-euro Metro North.
This has emerged in a briefing document prepared last month for Minister for Transport Leo Varadkar.
“The Gort to Tuam PPP is at the stage of negotiations with the preferred bidder but, due to concern in the capital markets regarding Ireland’s overall financial situation, the NRA has so far been unable to finalise negotiations,” the document stated.
The M17/M18 Gort-Tuam and the N11 Arklow-Rathnew/N7 Newlands Cross bypasses had progressed to tender stage.
“The NRA is continuing to work with tenderers on these contracts and is still hopeful of concluding at least one of the contracts by end 2011 but at a higher overall cost.”
It also said that the “financial close” of the Metro North PPP would be dependent on Ireland’s “financial credibility internationally and on the prevailing position of the international funding markets towards providing funding to Irish infrastructure at the time.
In May 2010, the European Investment Bank approved a loan of €500 million for Metro North.
The document, released to The Irish Timesunder the Freedom of Information Act, said the tunnel element of the proposed Dart Underground in Dublin will not be delivered in "the immediate period" because of "reduced funding available" under the National Recovery Plan.
The full launch of an integrated ticketing system for Dublin Bus, Dart and Luas services is “expected” in August of this year.
By the end of January 2011, €40.6 million of the €55.4 million capital budget for the system had been drawn down.
Meanwhile, the NRA expects toll revenues from the M50 and Port Tunnel roads in Dublin to fall this year by 11.6 per cent to €95.5 million from €108 million in 2010.
This is due to the NRA absorbing a 21 per cent VAT levy imposed by the Revenue Commissioners last year.
The document states that the NRA “may proceed to appeal the Revenue ruling”.
The briefing from civil servants cast doubt on the viability of three ports – Dundalk, New Ross and Wicklow – due to the recession.
“Their future commercial viability as independent businesses is open to question.”
The document said our three biggest port companies – Dublin, Cork and Shannon Foynes – are trading “reasonably well and are in a better position to ride out the storm”.
“Possible rationalisation of the sector” would be considered.
