Signing of Second Public-Private Partnership Contract for Major Motorway Project
9th February, 2004
Signing of Second Public-Private Partnership Contract for Major Motorway Project
The successful consortium, Celtic Roads Group (Dundalk) Ltd, was awarded the contract following a competitive tendering procedure. The consortium comprises Dragados Concesiones de Infraestructuras SA (a major Spanish firm), Edmund Nuttall Ltd (UK), HBG Ascon Ltd (Irl), and NTR plc (Irl).
The Dundalk Western Bypass is an integral part of the M1 road corridor and is also a part of the Trans-European Road Network (Euroroute E01). Currently the M1 motorway terminates to the south of Dundalk and all traffic must pass through Dundalk town with resultant delays and congestion difficulties. The new section of road, which is expected to open to traffic in late 2006, will reduce travel times by up to 30 minutes at peak times. The remaining section of the N1, Ballymascanlon to the Border, is now through the statutory procedures stage and it is hoped to commence construction on this section early next year.
The terms of the contract provide that the consortium will design, construct, finance, operate and maintain, during a concession period of 30 years, a new 11 km section of motorway from Ballymascanlan to Haynestown, along with approximately 7 km of new link roads, 12 over/underbridges and a major railway overbridge. In addition, the consortium will take over the operation and maintenance of 43 km of existing motorway from Haynestown to Gormanston (including the recently constructed Boyne Bridge and an adjacent toll plaza) for a 30 year period. The consortium will also take over the operation of the toll plazas adjacent to Drogheda within 3 months and will upgrade the plazas with electronic toll collection together with dedicated non-stop electronic lanes at the mainline plaza. The consortium will be required to invest in the full 54 km of road, prior to handback to the State, in order to provide a satisfactory residual life after the end of the 30 year concession period.
The consortium will recoup the up-front construction costs and on-going operation and maintenance costs through the collection of tolls. The contract provides that the NRA will make no payments to the consortium, and that the consortium will pay 95% of the toll revenue collected at Drogheda during the construction period to the NRA, which is estimated at ¤25 million, and furthermore will pay a share of the future toll revenues above specified traffic volumes to the NRA during the remainder of the concession period as a mechanism to prevent windfall profits in the event of exceptional traffic growth. It is estimated that if the public sector were to undertake all the works in the contract that it would cost approximately ¤340m, excluding land costs, with the construction element amounting to ¤ 160m.
The PPP mechanism for this scheme will introduce significant private sector funding from banks and the consortium members in the order of ¤140m, ensuring earlier delivery of important national road schemes and increasing the scale of road construction activity above what would be possible through reliance on Exchequer funding alone. In particular, and in keeping with the principles of PPP, significant risks associated with scheme’s construction and operation, and with future traffic levels has been assigned to the private sector.
Close partnership between the NRA and the local authorities of Louth and Meath has enabled the achievement of this important milestone for this major scheme. The NRA is also pleased that the European Investment Bank is investing funds in this infrastructural project as it did in the first PPP inter-urban motorway contract.
The Dundalk Western Bypass scheme is one of eleven PPP projects identified by the NRA as part of the overall strategy to deliver the national roads element of the NDP. The NDP sets a target to secure private sector finance of ¤1.27 billion to supplement Exchequer and EU investment in the national roads programme, thereby increasing the scale of the programme and accelerating the commencement and completion of projects.
The NRA anticipates reaching contract award on two further PPP schemes during 2004, the N8 Rathcormac/Fermoy Bypass and the N25 Waterford Bypass. In addition, the M3 Clonee to north of Kells PPP scheme is set to go to tender in the near future, and the contract will be advertised for the Limerick Southern Ring PPP scheme (incorporating an immersed tube tunnel under the river Shannon).
The NRA’s first PPP contract was for the N4/N6 Kilcock-Kinnegad motorway, which was signed with the Eurolink consortium in March 2003. This contract has recently been awarded “Infrastructure Deal of the Year for Europe, Middle East and Africa” by the influential trade magazine Project Finance International. In qualifying for the award, the deal was cited as a benchmark for excellent value for money for the public sector through PPP. Construction activity on the Kilcock-Kinnegad scheme is proceeding on schedule, and through efforts by all parties, an exemplary spirit of partnership has so far been developed.
Mr Peter Malone, Chairman of the National Roads Authority, stated “I am particularly pleased with the NRA’s recent award which confirms the excellent value being secured in our PPP programme and recognises the outstanding work of NRA personnel in developing this whole new initiative. I look forward to the completion of the Dundalk Western Bypass which will remove substantial traffic from Dundalk and will strengthen and support its economic development and enhance its residential amenities.”
The planning and design element of the scheme was funded by the Irish Government under the National Development Plan 2000-2006, with part funding from the TEN-T fund of the European Union.
For further information please contact
Caroline O’Brien 01 6602511 Ext. 254
086 6049430
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The Minister Communications, Marine and Natural Resources, Dermot Ahern TD, today (9th February 2004) announced the signing by the National Roads Authority (NRA) of the contract for the M1 Dundalk Western Bypass road scheme. This is the NRA's second major inter-urban Public Private Partnership (PPP) scheme contract award in the current National Development Plan 2000-2006 (NDP).