The day of reckoning dawns

Now it's up and running, Luas has to prove its worth - and its cost - argues Dominic Coyle.

Now it's up and running, Luas has to prove its worth - and its cost - argues Dominic Coyle.

When it was first seriously mooted back in 1994, the idea of a light rail network for Dublin was warmly received as part of a cohesive public transport strategy for the city. Now, as the first trains start operating 10 years later, Luas - funded largely by the taxpayer with some assistance from European Union structural funds - has to prove its worth.

While it is expected to transport around 6,000 people an hour each way during peak times, critics say there are cheaper alternatives. They point to the 3,000 passengers using the Stillorgan/N11 quality bus corridor (QBC) at a fraction of the cost.

The running costs for Luas are predicated on 20 million passenger journeys each year, which the Rail Procurement Agency says will meet the €20 million bill Connex is charging the State to run the system.

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Despite a report from the British National Audit Office last April, which showed night rail systems consistently failing to meet passenger targets, the RPA remains confident.

If it is right, the service will generate almost as much fee revenue as the more established and unbroken DART service, which still receives some State subvention. Connex is the largest private transport operator in Europe. It won the contract to operate Luas for five years with an option for a further five years in February 2002.

It was one of the first significant public private partnerships announced under plans to boost private funding of national infrastructure projects in the National Development Plan. Despite its size, the selection of Connex, which saw off British and French rivals to win the contract, has been criticised as it had previously lost two contracts to run parts of Britain's rail network.

Alstom, which has supplied the 40 Citadis trams at a cost of around €68 million, have also faced criticism after being rescued from bankruptcy by the French government last year.

The company, which with Mowlem was one of the bidders to lay the tracks for the network, is also a leading player in the consortium that secured the €20 million contract to maintain the network.

One of its consortium partners is Dalkia, a subsidiary of Veolia Environment (formerly Vivendi Environment) which is also the parent group of Connex.

Ironically, it won that part of the business when Dutch firm Ballast-Needam - the B in the AMB Joint Venture that is the main Luas contractor - decided to wind down its international activities after losing more than €130 million in 2002.

The AMB consortium had originally planned to maintain the network under a design build and maintain contract that is fairly standard for such networks. Ballast-Needam is the largest of the three companies in the AMB consortium and is responsible for the civil engineering side of the contract.

Its partners are Italian group Ansaldo, which was touting the idea of light rail for Dublin back in 1990 and is managing the rail element and the Australian group MVM, which is responsible for design.

Cost has been a big issue for the Luas. When it shifted from the drawing board to become an active project in 1997, the cost of the on-street service including a city centre link was estimated at the equivalent of €288 million. By 2000, the capital cost had jumped to €440 million.

Twelve months later, as construction work started on the Luas lines, the projected cost had jumped to around €635 million. With the trains going live today, the cost is now understood to be closer to €800 million.

The RPA insists it is not over budget. Earlier this year, spokesman Mr Tom Manning said the contracts for the construction of Luas were signed in March/April 2001 for €775 million and that this figure "the only officially agreed budget figure" had not been breached.

Addressing a Dáil Committee on Transport late last year, RPA chief executive Mr Frank Allen acknowledged there had been disruption and some hiccups, but said "building light rail through the heart of a built-up area is inevitably disruptive".

The Irish experience would be consistent with other countries, he added: "The project is being implemented to the highest international standards, and its projected cost is on a par with similar light rail schemes in Britain and France."

Now comes the day of truth. Luas means speed in Irish. Now we shall see whether the service can deliver the commuter benefits it promises.