Madam, - Tim O'Brien contends that the Kilcock to Kinnegad motorway being built under a public private partnership (PPP) contract is "proving costlier" than the adjacent Kinnegad to Kilbeggan section of the route (The Irish Times, January 13th). His contention is incorrect. He has not taken account of significant differences between the two schemes, and the fact that the PPP scheme costs include maintenance and re-investment over 30 years.
The two roads are significantly different. The Kinnegad-Kilbeggan section is a standard dual-carriageway whereas the Kilcock-Kinnegad PPP scheme is a full motorway with provision for the addition of a third lane in the median should that be necessary in future. Typically, there is a construction cost difference of over €2 million per kilometre between these two road types. In addition, the PPP scheme is 39 kilometres long, not 35 kilometres as quoted.
The net cost to the State for the construction of the 39-kilometre PPP motorway, its maintenance for 30 years and its handback in a high-quality condition will in fact be only around €10 million, excluding land costs. What the article fails to recognise is that the construction payments by the National Roads Authority will be offset by the subsequent return to the NRA of a share of the toll revenue. Depending on actual traffic on the route the NRA expects to receive over €80 million as its share of the toll income. Also, the State will benefit from municipal rates and corporation taxes to be paid by the PPP company.
It is strange that The Irish Times can portray such a different picture of the PPP contract to the international financial press, which has reported, "Simply put, the Irish National Roads Agency (NRA) went to market and got one of the best first-time PPP deals ever procured by a public sector entity" (Project Finance magazine, February 2004); and: "In this respect the NRA, the Irish road tendering authority, is to be congratulated - should we start a 'public sector procurer of the year' award?" (Project Finance International Yearbook, 2004).
The Kilcock-Kinnegad PPP contract was subject to rigorous evaluation and the conclusion reached by external financial advisers to the NRA was that it represented excellent value for money to the State. The provision of this and other PPP schemes allows the delivery of vital infrastructure earlier than would be possible using Exchequer funding only. The benefits to all are obvious. - Yours, etc.,
GERRY MURPHY, Public Private Partnership Manager, National Roads Authority, Dublin 4.
Tim O'Brien writes: The project website puts the length of the Kilcock-Kinnegad motorway at "about 36 km" (www.eurolink-m4.com/). The figure of 35 kms was provided by the NRA.
Mr Murphy appears to be confusing the cost of putting the road in place, and the cost to the NRA, which he acknowledges will eventually be reimbursed by motorists paying tolls. Because the money will be recouped by the NRA is not a good reason for ignoring overall cost.