NRA Announces £1billion (¤1.3b) PPP Roads Programme

26^th June, 2000

NRA Announces £1 billion (¤1.3b) PPP Roads Programme

The National Roads Authority today (26^th June, 2000) announced a further 8 Public Private Partnership (PPP) schemes for the national road network. All these PPP road schemes will be design/build/finance/operate contracts with a long-term concession period, in the order of 30 years, during which the concessionaire will recoup the up-front construction costs and on-going operation/road maintenance costs by the collection of tolls.

These additional schemes are a significant advance in the plans to utilise the PPP approach for major infrastructural schemes. Three pilot PPP road projects, namely, the N25 Waterford By-Pass, the Limerick Southern Ring Phase 2 and the Second Liffey Valley Bridge on the M50, are already under development as PPP schemes following the Government's announcement in June, 1999.

The 8 new schemes together with the pilot projects involve a total roadway length of approximately 230 km, requiring estimated investment of £1,030 million (¤1,307m) with a potential private finance input of about £700 million (¤889m).

The Authority's Chief Executive, Mr. Michael Tobin, in announcing these additional schemes, stated "The Authority has advanced significantly towards fulfilling the Government's target for attracting private finance into the national roads programme as set out in the National Development Plan 2000-2006."

The NDP states that £4.7 billion (¤5.97b) is to be invested in national roads in the next seven years of which £4.4 billion (¤5.6b) is for road construction and improvement works and £300 million (¤381m) is for maintenance of the network. The NDP puts considerable emphasis on the importance of Public Private Partnerships for the delivery of the infrastructural investment programmes. A minimum target of £1billion (¤1.27b) - 23% of the total road investment programme - has been set for private finance in national roads capital projects.

At the heart of the PPP approach is the concept that better value for money can be achieved for suitable projects through the utilisation of private sector expertise, enhanced scope for innovation and the allocation of risk to the party best able to manage it. Also, importantly for Ireland, the injection of private finance will accelerate the delivery of the public capital programme designed to remedy our infrastructural deficit.

The Authority has focussed its attention on the five major inter-urban routes for the purpose of identifying further potential PPP road projects. This reflects the priorities set out in the NDP. The routes are:

• Dublin - Border (M1)
• Galway to Dublin (N4/N6)
• Cork to Dublin (N8)
• Limerick to Dublin (N7) and
• Waterford to Dublin (N9)

In addition to these key routes, the Authority has reviewed a number of other large projects with features which may make them suitable as PPP schemes.

The 8 additional PPP schemes identified from the Authority's assessment are listed below. The terminal points of the schemes are indicative only and will be determined during the next stage of detailed planning.

^* Portlaoise-Castletown (N7) and Portlaoise-Culahill (N8), although separate schemes, will be placed as one PPP contract.

N9 Waterford to Dublin Route

Consideration of the development of the Dublin-Waterford route using the PPP approach has been deferred until more detailed route selection and traffic assignment work have been undertaken. The N9 corridor was only chosen for this route in February, 2000. It is anticipated that this overall route will incorporate tolled sections which will be announced by the Authority at a later stage.

The Authority is progressing the three pilot projects, announced by Government in June, 1999, as toll roads in accordance with the strategy of using tolling to the maximum extent possible on PPP roads for the purpose of recouping private sector investment. A similar approach will be adopted for the eight new PPP schemes.

The road projects concerned will be constructed to a high standard - motorway or high quality dual carriageway - and will provide road users with an enhanced level of service. Toll charges will be set at a level consistent with balancing the objectives of maximising revenue and attracting significant volumes of traffic on to the new roads. Actual charges will be determined in accordance with procedures contained in the Roads Act, 1993, which provide for public consultation on tolling proposals brought forward by the Authority, public inquiries and consideration of submissions before determining whether or not the proposals should be adopted.

The practice of tolling roads and major river crossings is used extensively in other countries. In Western Europe, approximately one third of the 51,000 km motorway network is tolled. On a worldwide basis, between 1984 and the present, in excess of 230 projects have been funded by the application of tolls.

Through tolling, the road user directly availing of the road or bridge facility pays for the enhanced service. Under the approach proposed by the Authority, toll roads would be constructed as additions to the current network of national roads rather than provided by means of the improvement of existing roads. Road users will accordingly be in a position to choose whether to use the existing toll-free network route for their journey or the new tolled roads.

The planned tolled roads are spread across the main national routes in order to create an equitable distribution of user-charging on the newly constructed network.

The Authority's Chief Executive, Mr. Michael Tobin, confirmed that "The Authority proposes to continue to examine the remaining schemes planned for construction during the period of the NDP and it is anticipated that further PPP schemes will be identified as part of this process."

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