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PPPs on Track to Fund Dublin Rail Projects - International Law Office

International Law Office

Projects & Procurement - Ireland

PPPs on Track to Fund Dublin Rail Projects

April 03 2001


The Department of Public Enterprise publication "A New Institutional Framework for Public Transport" published last year states that the Irish government is looking to public private partnerships (PPPs) as a way of providing funding, as well as bringing in specialist skills and innovation, in its plan to revitalize public transport in Dublin.

The first significant piece of legislation dealing with light rail in Dublin was the Transport (Dublin Light Rail) Act 1996. The act sets out the framework and procedures governing light rail projects. Under the act Coras Iompair Éireann (CIÉ) was given the sole power to apply for light railway orders and to construct and operate light railways. At present, three light rail orders have been granted to CIÉ in relation to the Dublin Light Rail Project (LUAS), for the construction of:

  • LUAS Line A from Tallaght to Abbey Street;

  • LUAS Line B from St Stephen's Green to Sandyford; and

  • LUAS Line C from Abbey Street to Store Street.

Further legislation has been drafted in the form of the Transport (Railway Infrastructure) Bill 2001. The purpose of this bill is set out as follows:

  • to establish an independent commercial statutory public body, the Railway Procurement Agency. The agency will be responsible for the procurement of rail infrastructure projects, primarily on a PPP basis;

  • to make the necessary statutory provision for private-sector participation in the design, construction, operation, maintenance and financing of new railways;

  • to repeal and re-enact the Transport (Dublin Light Rail) Act 1996 in a modified form, to provide a single statutory railway order procedure for the approval of all new railway projects; and

  • to provide for the regulation of light railways when running on street.

It is proposed that the agency will procure, on a PPP basis, new rail infrastructure projects designated by the minister for public enterprise. New rail infrastructure projects include the Dublin Transportation Office Strategy proposal for a metro and an underground inter-connector linking Heuston Station with East Wall Junction via Pearse Station and the Docklands. Other projects to be included within the remit of the agency are the contracting of the operation of LUAS Lines A, B and C, and procuring light rail extensions.

A Light Rail Project Office was set up as a project office of CIÉ. It is envisaged that the office will be expanded and restructured, and will be the basis for the new Railway Procurement Agency. Statutory independence from CIÉ is crucial to establish transparency and credibility with potential private-sector partners, and to maximize the level of competition for PPP projects. CIÉ or one of its subsidiary companies (possibly in partnership with private-sector companies) might wish to bid for a PPP project, so it is important to avoid any conflict of interest on the part of CIÉ.

The main functions of the agency will be to provide, or secure the provision of, railway infrastructure through the PPP process. The bill allows the agency to negotiate, sign and manage PPPs for the design, construction, operation, financing and maintenance of rail-based infrastructure such as the Dublin metro and future light or heavy rail projects. In order to facilitate possible PPPs in heavy rail, the bill replaces the railway works order process under Sections 4 to 11 of the Transport Act 1963, with the new Light Railway Order process from the 1996 act. The result is that the statutory process, which has proved successful for light rail, will be applied to all railway infrastructure projects. This new process represents a change in the statutory process for heavy rail by requiring a public inquiry prior to the making of the order. At present, the minister has discretion in relation to the holding of a public inquiry.

The bill provides that the Railway Procurement Agency will have compulsory purchase powers for the development of railways. Land acquired by the agency will then be leased on to the PPP partner as part of a concession. It is proposed that such land will revert to state ownership at the end of the PPP concession period.

In early January the minister for public enterprise announced a competition for the franchise to operate Dublin's first LUAS light rail lines, which are due to begin carrying passengers in 2003. The successful company will operate the Tallaght to Connolly Station line and the Sandyford to St Stephen's Green line. The contract is due to be awarded next autumn and will run for five years, with a renewal option for a further five years. The competition has been designed and will be conducted by a consortium of consultants. The department has advised that there is no legal impediment to the participation of any of CIÉ's operating companies or other state-aided companies in the competition. It is understood that around 12 expressions of interest have been submitted to the Department of Public Enterprise, which expects to select an operator and sign contracts by October 2001. Construction work in relation to Lines A and B was procured using the traditional public procurement model.

It was recently announced that a I£10 billion PPP Rail Projects Framework is being developed for the government by a consortium of advisers. This consortium is due to examine which of the rail proposals contained in the Dublin Transportation Office "A Platform for Change" transportation strategy can be successfully built as well as operated under a PPP-type model. The schemes include more LUAS lines, extensions to the existing DART rail system and a new metro rail system.


For further information on this topic please contact Kerri Crossen at Matheson Ormsby Prentice by telephone (+353 1 619 9000) or by fax (+353 1 619 9010) or by e-mail (kerri.crossen@mop.ie).


A version of this article will also be published in PFI Journal.
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