Tenders for Metro North "coming in below €2bn"

etchyed

Sorry to disappoint anyone who thought the title of this thread refers to a newspaper article. But I have seen it stated several times over the last few months by various posters here that the tenders for Metro North are either "coming in below €2bn" or "well below €2bn". It's always immediately followed by one or two posters asking for a source, which is generally ignored.

So I've started this thread to ask where this piece of info came from. I realise it's unlikely we'll find out whether it's true or where exactly it originates but it keeps cropping up and it would be nice for someone to categorically state that they heard it from a reliable source somewhere out there in the real world.

Cookie_Monster

wasn't it just the same poster posting again and again without backing it up, and ignoring any questions about his opinions or sources?

Victor

I imagine there are less than 20 people in the country who can confirm that for certain. And a similar number outside.

Of course, €2,000m for what? For infrastructure? For infrastructure + vehicles? For infrastructure + vehicles + staff + ...?

The state it self will have costs well north or €100m in design and land acquisition costs which aren't part of the contractor end of the project.

HeritageRailway

etchyed wrote: »

Sorry to disappoint anyone who thought the title of this thread refers to a newspaper article. But I have seen it stated several times over the last few months by various posters here that the tenders for Metro North are either "coming in below €2bn" or "well below €2bn". It's always immediately followed by one or two posters asking for a source, which is generally ignored.

So I've started this thread to ask where this piece of info came from. I realise it's unlikely we'll find out whether it's true or where exactly it originates but it keeps cropping up and it would be nice for someone to categorically state that they heard it from a reliable source somewhere out there in the real world.

This is the best I can locate. It mentions €3.7 billion but as it is two aggressive tendering parties competing in a time of current deflation and recession, it is likely to be a lower figure; how low and for long it holds good for is another story but it's way short of €2 billion.

http://www.akc.ie/index.php?pageID=363

Cookie_Monster

HeritageRailway wrote: »

This is the best I can locate. It mentions €3.7 billion but as it is two aggressive tendering parties competing in a time of current deflation and recession, it is likely to be a lower figure; how low and for long it holds good for is another story but it's way short of €2 billion.

what does, no link

HeritageRailway

Cookie_Monster wrote: »

what does, no link

Apologies; I inserted the incorrect link and was amending it:o

http://www.akc.ie/index.php?pageID=363

RPA has announced details of the two Tenderers selected to proceed to the final stage of the €3.7 billion Metro North PPP procurement competition.

The two tenderers are:

Celtic Metro Group (Barclays Private Equity, Obrascon Huarte Lain, Mitsui, Soares da Costa, Iridium Concesionesde Infraestructuras S.A., CAF and MTR) and

Metro Express (Macquarie Capital, Global Via Infrastructuras, Allied Irish Bank, Bombardier and Transdev/RATP).

This means that Cathró (Fluor Ireland Ltd, BAM PPP, Siemens Project Ventures GmbH and Strabag A.G.) and Dublin Express Link (HSBC Infrastructure Fund Management Ltd, Meridiam Infrastructure Finance SARL, Acciona S.A., Bouygues Travaux Publics, SIAC Construction Ltd and Alstom Transport S.A.) are out of the competition.

The announcement marks a significant milestone in the delivery of the project, which is set to create 4,000 direct construction jobs.

RPA said in a statement it plans to formally commence the final stage of the procurement competition following a decision being made on the Metro North Railway Order application.

“RPA are pleased with the level of competition in the Metro North procurement process to date and believes that the final stage of the competition can deliver a value for money solution for the state whilst providing an important stimulus to the economy,” RPA spokesman Tom Manning said.

Under the Metro North Public Private Partnership (PPP), the private sector predominantly finances the construction of the project and this is then repaid by a service charge (availability charge) by the RPA over a 25 year period from the date that passenger services commence on Metro North.

“The consortium that will be selected to build Metro North is likely to include both Irish and international contractors and much of the work will involve local contractors, professional service firms and local workers.

“Other sectors of the regional economy are likely to benefit such as those in the construction material supplying industry. There will also be secondary spin off impacts due to the expenditure of wages in the local economy by the construction workforce,” he added.

The new 18 km heavy rail line will run from St Stephen's Green via Dublin Airport to Belinstown (north of Swords) using underground, surface and elevated tracks.

The RPA say the project will address a significant deficit in public transport infrastructure in north Dublin city and in Fingal, the fastest growing county in Ireland.

The agency say it will facilitate development in the corridor which is forecast by Fingal County Council to generate 37,000 additional jobs and more than double the existing level of economic activity and employment in the area.

“It is crucial to the continued expansion of Dublin Airport and will underpin the significant investment already made in the economic regeneration of Ballymun,” Mr Manning said.

Sponge Bob

etchyed wrote: »

Sorry to disappoint anyone who thought the title of this thread refers to a newspaper article. But I have seen it stated several times over the last few months by various posters here that the tenders for Metro North are either "coming in below €2bn" or "well below €2bn". It's always immediately followed by one or two posters asking for a source, which is generally ignored.

MN fanboys never quote sources, that is their usual MO from what i can see. Then again they may not be real MN fanboys but may actually be batting for some other projects. One never knows and one must beware of fanboys who rant away with no supporting evidence. They may not be fanboys at all :cool:

The tenders are to essentially build only with a small amount for 30 years of operation that ticket prices will largely cover.

If the 'well below' figure is true it excludes all ancilliary costs like planning and testing and design and land acquisition( note) and monies given for rerouting of services and utilities to the Corpo etc and of course much of that has already been spent as we know.

Compo will have to be paid for disruption and damage to property too. That will be fun.

'Up To' €200m was allocated in 2009 alone but not all of that was spent by any means.

http://www.transport.ie/viewitem.asp?id=11226&lang=ENG&loc=2262

Budget provided for Metro North in 2009

18 December 2008
To ask the Minister for Transport the budget provided for Metro North in 2009; and the aspects of the project which will proceed in 2009.
- Róisín Shortall.
For WRITTEN answer on Thursday, 18th December, 2008.

Metro North is being delivered as a Public Private Patrnership (PPP). In January of this year, the Government approved the funding structure for the Metro North PPP, including an Exchequer provision for advance works ahead of the main PPP contract and a capital contribution during construction.

I have allocated in excess of €200m to the RPA to progress Luas and Metro projects, including Metro North, in 2009. The amount of expenditure on Metro North in 2009 is contingent on the grant of an enforceable railway order.

etchyed

Cookie_Monster wrote: »

wasn't it just the same poster posting again and again without backing it up, and ignoring any questions about his opinions or sources?

I'm not referring to any one poster in particular. I've seen a few people say it.

Sponge Bob

But you have seen nothing adding up what has already been spent on MN and showing accurate calculations for compo a la the Port Tunnel I bet

Not that IE have been very forthcoming about the Interconnector that way either and I look forward to their case after the Railway Order and the ABP hearing is announced. Their tunnel is a lot heftier.

antoinolachtnai

Well, the other big cost for any big projct is financing, i.e., interest. The interest payable on the construction phase alone (i.e., the time between the money begins to get spent and the time the builder/operator gets the first payment from the government) is a significant amount.

Sponge Bob

antoinolachtnai wrote: »

Well, the other big cost for any big projct is financing, i.e., interest. The interest payable on the construction phase alone (i.e., the time between the money begins to get spent and the time the builder/operator gets the first payment from the government) is a significant amount.

Yes indeed. This problem applies to every single 20-30 year PPP the state enters into though. However you could build a school in a year but not a rail project like this.

The interest will itself be linked to our sovereign rating which was AAA when this tender was announced and is now a few notches lower. You may be sure that the tenderers covered themselves against sovereign rating downgrades by protecting their spreads over sovereign irrespective of rating.

The initial interest rate could well be in the range 8-10%...not of the total but of expenditure in year one of construction... but the formulae would reduce that interest rate if we were re-rated upwards towards AAA again. If not they stay there.

Maybe we feel lucky and will eventually sign a contract at those rates. We could have gotten a 5% fixed for 30 years deal not so long back.

dynamick

etchyed wrote: »

Sorry to disappoint anyone who thought the title of this thread refers to a newspaper article. But I have seen it stated several times over the last few months by various posters here that the tenders for Metro North are either "coming in below €2bn" or "well below €2bn". It's always immediately followed by one or two posters asking for a source, which is generally ignored.

So I've started this thread to ask where this piece of info came from. I realise it's unlikely we'll find out whether it's true or where exactly it originates but it keeps cropping up and it would be nice for someone to categorically state that they heard it from a reliable source somewhere out there in the real world.

I don't think the bidders have quoted prices yet so we won't know the total proposed costs until next year. It may suit the bidders to put around the idea that it will be very costly beforehand so that their prices don't looks so shocking.

Business and Finance magazine ran an article on delays to metro north and interconnector last year quoting an estimate of 2.8bn from an unnamed source.
http://www.businessandfinance.ie/index.jsp?p=366&n=372&a=1447

There are other ways to guess. The RPA has released some cost benefit reports showing prices including finance for different options and there was the famous leak a few years ago claiming the project would cost 5bn. By taking these final prices and assuming an interest rate and a term and then stripping out interest charges we can work back to numbers that are around 2bn.

Finally we can compare costs per km for metro projects in other countries and make a wild guess of costs in Ireland. About 100m/km including trains seems fair to me. which would make Metro north about 1.8bn

Labour costs and materials costs are now lower than a few years ago. However, lower demand predictions might lead to the state having to pay an annual operational cost subsidy.