Transport Modes

1
PPPs and Tolling
Presentation to L.A.M.A. Conference 9 November
2002 Gerry Murphy PPP Manager
2
Roads

• Critically important for economic and regional
  development
• 96 passenger movements
• 90 freight

• National Roads
• 6 of public road network
• 38 of traffic
• 2/3 of traffic work-related
• Over 20 HGVs

3
Infrastructure Gap

• How do Irelands roads measure up?

4
International Comparison

• In 1997, 1.3km motorway per 1,000 km2
• 23rd out of 28 countries
• National Competitiveness Council 2001 Report
  ranks Ireland 13th out of 15 EU Member States
  under the competitiveness score for transport
  infrastructure

5
  The road infrastructure indicator is the worst
for all countries compared in 1996. Ireland is
by far the worse performing country and the
absolute value is over twice as small as that of
the second worse performing country.   Source
Report 2000, National Competitiveness Council
In a recent survey, more than half of Irish
businesses felt that the poor quality of road
infrastructure was having a negative impact on
their operations.   Source Enterprise 2010 - A
New Strategy for the Promotion of Enterprise in
Ireland in the 21st Century, Forfas 2000 
Bottlenecks in physical infrastructure such as
housing, transport and environmental services are
fuelling inflation and constraining future
growth.   Source Regulatory Reform in Ireland,
OECD, April, 2001
6
New Infrastructure to be built during NDP

• Currently 324km of dual c/ways motorways
• 900 km further to be built in NDP period
• at least 250km by PPP

7
Sources of CapitalFinancing 1994 - 2006

• 1994-1999
• 1.85bn
• 62 EU funding
• 38 Exchequer

• 2000-2006 (1999 prices)
• 5.6bn
• 14 EU Funding
• 64 Exchequer
• 23 Private finance
• (1.27bn)

8
Public Private Partnerships for Roads

• Simply a different form of contract
• Includes design, build and operate tasks
• Traditionally done via separate unrelated
  contracts
• Because of lifecycle of a road , the contract
  period is generally 30 years
• Includes for major reinvestment in the road at
  the end of 30 years so that road pavement has a
  further 10 year life
• Includes finance

9
Advantages of PPPs

• Fixed Price Contract
• Addresses international problem of cost over-runs
  on traditional contracts
• Risks are transferred to the company for it to
  manage
• Ground conditions
• Design changes
• Interfaces with utilities
• Archaeology
• Inflation
• Long-term quality
• Result is better Value for Money
• Facilitates better advance budgetting by national
  road agencies

10
Control of Costs

• Cost over-runs occur on traditional contracts
  because of their very nature
• UK 28 extra cost from mid 80s to early 90s
• UK Highway Agency
• First 8 Design/Build/Finance/Operate road
  projects
• Cost savings of 15 compared with traditional
  tendering system

11
1891-1904, Elan Valley Waterworks, Birmingham
Corporation
12
It will be practically impossible to draw up a
specification for these almost unique works in
which there will be no weak places upon which a
contractor could found claims for extras.
Nowadays, with big contractors likely to tender
for such jobs, extra claiming has become a fine
art. I believe that they employ experts who, from
the moment a contract is commenced, are engaged
exclusively in devising and formulating such
claims. James Mansergh Elan Valley
Waterworks Engineer Report dated 9th Dec.
1892
13
Why toll?

• Brings in vitally-needed finance into the roads
  programme
• Users pay for the benefits
• Historically successful way of expediting key
  national transport infrastructure

14
Tolls in Europe
1/3 of European motorways are tolled

• Ireland
• Britain
• France
• Spain
• Portugal
• Italy
• Belgium
• Denmark
• Sweden
• Norway
• Turkey

• Austria
• Poland
• Hungary
• Germany (under construction)
• Slovenia
• Croatia
• Serbia
• Greece

15
Tolls in Europe - Perceived Benefits

• Enhanced investment and accelerated road
  construction
• Norway (1993) - 32 of national rd. budget
• Spain (1996) - 46
• France (1995) - 68
• Fund for satisfactory road maintenance and
  re-investment

16
Key Features of PPP Road Schemes

• NRA and local authorities plan the road, specify
  it technically
• Lands acquired and built road always remain in
  public ownership
• All schemes include tolling
• Alternative toll-free route available
• Tolls set by NRA
• Tolls can only increase by inflation

17
Toll Charges
M50 - Border Journey Time
1999 79 mins
2006 55 mins
1.40 car
Cork - Dublin Journey Time
1999 205 mins
2006 147mins
2.80 car
18
Car toll per Km (excl VAT)
Belgium (tunnel) 2.46 Austria 0.12 Hungary
0.10 Spain 0.07 France 0.06 Ireland
(Kilcock-Kinnegad) 0.05 Portugal 0.05 Norw
ay 0.05 Italy 0.04 Greece 0.02
19
Additional Funding- Preferred Approach
All Adults
Motorists
Only motorists pay a specific charge or toll per
journey Everyone pays through extra
taxation Motorists pay higher motor
taxes Motorists pay higher petrol taxes No
preference Dont know
20
PPP Roads Programme
Dundalk Western Bypass
Clonee-Kells
Kilcock-Kinnegad
2nd Liffey Valley Bridge
Oranmore-Ballinasloe
Portlaoise-Castletown
Portlaoise-Culahill
Nenagh-Limerick
Limerick Southern Ring Road Phase II
Waterford Bypass
Fermoy Bypass
3 Pilot PPP Schemes (June 1999)
8 Additional PPP Projects (June 2000)