The massive cost overrun on the Luas has yet to be adequately explained by the Railway Procurement Agency, writes Frank McDonald, Environment Editor.
Frank Allen must have one of the least enviable jobs in Ireland. As chief executive of the Railway Procurement Agency (RPA), he has had to field all the brickbats over the Luas "fiasco" and the huge discrepancy in its own estimates of the cost of a metro to Dublin Airport.
At the weekend, he issued a statement rejecting claims by Mr Eoin Ryan TD (FF), chairman of the Oireachtas Committee on Transport, that the RPA had not adopted a "hands-on" approach to managing the tortuous construction of the two Luas lines, particularly in the city centre.
"There is no basis for Deputy Ryan's assertion that Luas is 'headed for a fiasco'," Mr Allen said. "This is a major infrastructure project which will bring considerable benefits to Dublin, but it has to be appreciated there has to be a certain amount of disruption and inconvenience to achieve that."
He also indicated that the nightmare will soon be over by reaffirming the RPA's Christmas deadline for completion of the major Luas construction works in the city centre and its determination that both lines will be operational by next summer - the Sandyford line in June, and the Tallaght line in August.
"The RPA is doing everything within its power to ensure that the contractor meets these dates," Mr Allen declared. But there has been some slippage and he said that realising this goal would involve "striking a balance between penalising contractors for under-performance and working with them to get the work complete".
The biggest issue at stake is money. Since Luas became a live project in 1997, its estimated completion cost has soared from £227 million (€288 million) to the current figure of €765 million. The contractors, AMB JV, are also claiming a further €50 million for "variations" - a sum which the Minister for Transport, Mr Brennan, has said won't be paid.
The former Taoiseach, Dr Garret FitzGerald - a long-time critic of Luas - suggested on RTÉ Radio yesterday the cost of completing the project should be €400 million to €450 million, allowing for construction inflation during the "Celtic Tiger" boom. He found the latest figure of €765 million quite inexplicable.
The Minister has cautioned against comparing the original "guesstimate" of £227 million with the out-turn now anticipated by the RPA. He said the only valid comparison was with the contract price - but we don't know what that price was, because the RPA has never revealed it on the grounds of "commercial sensitivity".
There are also significant differences between the original project and what is currently being built. The 1997 scheme envisaged a single line from Tallaght to Balally, south of Dundrum, running on-street through the city centre from St Stephen's Green to Middle Abbey Street. But that was dropped by the Government in 1998.
What is being built now consists of two free-standing lines, one from Tallaght to Connolly Station, covering a distance of 14 km, and another line from Sandyford to St Stephen's Green, 9 km long. And because they are physically separate, there was a need to provide two depots to store the GEC-Alsthom trams.
The cost of construction was also inflated by the need to relocate gas, electricity, telephone and sewerage lines away from the trackbed on city centre streets. What wasn't anticipated was the discovery of "uncharted utilities" - a polite way of describing underground pipes for which no locational drawings were available.
There was also the RPA's ill-advised decision to proceed with the demolition of the ramp at Connolly Station, treating it as a terminal stop even while options for an extension into Docklands were under consideration. Including land acquisition at commercial market rates, this would have added at least €35 million to the overall bill.
But the RPA has yet to provide an adequate explanation for the massive cost overrun on Luas, which has turned it into the most expensive infrastructure project in the State's history. And this, in turn, has jeopardised the possibility of extending Luas - or even connecting up the two lines in the city centre, as originally planned.
Next week, Mr Brennan will present a superficially attractive plan to the Cabinet for a rail link between St Stephen's Green and Dublin Airport, whereby the entire cost of this project would be funded by the private sector and the State would only have to start paying for it after it is built and the trains are running on the line.
Such a financing mechanism would overcome the risk of breaching the EU Stability and Growth Pact. Instead, the Exchequer would not have to foot the bill, at least during this Coalition's lifetime. The line would be paid for through hire-purchase, on the "never never".
Nobody at this stage, not even the Minister, can say what this type of financing package would cost in the long term. The RPA itself at first projected the cost of the airport metro line at €4.6 billion and, within months, revised the figure downwards to €3.2 billion after the earlier estimate provoked widespread disbelief in political circles.
However, there is almost no debate at all about the likelihood that the Government's motorway programme, which will largely cater for private transport, will cost €21 billion, with the vast bulk of this bill to be met from the public purse. Yet, perversely, the same Government expects public transport to be funded by the private sector.