€2bn Dublin metro PPP bites the dust

The Irish government has shelved Dublin’s Metro North metropolitan rail project, which was being undertaken as a public-private partnership. Bidders including Barclays Private Equity and Macquarie Capital will be compensated for the cancellation.

The Irish government has slashed its planned capital investment programme for 2012-16 – and one notable victim is the 18-kilometre Metro North metropolitan rail public-private partnership (PPP), which had a total cost of more than €2 billion. 

More than €150 million had already been paid out by the government on the project, which had two shortlisted bidders. They included the Celtic Metro Group, led by Barclays Private Equity and counting OHL, Iridium, Mitsui, Soares da Costa and MTR; and the Metro Express consortium, comprising Macquarie Capital, Global Via, Allied Irish Bank, Bombardier and Transdev. 

Ireland’s Minister for Transport, Leo Varadkar, said €1 million each would be paid out to the competing bidders in compensation. However, there has been press speculation that the government may also face a legal challenge regarding the decision to cancel the project. 

Viradkar added that the project may yet go ahead at some stage in future, though, in light of the decision, this will not be for at least the next five years.

The project, which had been approved by the Irish Planning Board, was designed to provide a rail link from St Stephens Green, in Dublin city centre, to Estuary, north of the Swords area. The original scope of the project had already been trimmed to exclude three stops in the Swords area and 2.3 kilometres of track. 

The plan was for the winning bidder to build and operate the rail line, with Irish rail agency RPA paying out fees over 25 years from the date that the line started carrying passengers. The award of the winning bid was originally scheduled for March this year, and the project was expected to have created 4,000 direct construction jobs and thousands more indirect jobs. 

In other Irish news, Sydney-based fund manager AMP Capital announced yesterday that it won the mandate to manage a €1 billion fund dedicated to investing in Irish infrastructure. 

The vehicle is being established by insurer Irish Life Investment Managers and has already raised €300 million – including a €250 million cornerstone investment from Ireland’s National Pensions Reserve Fund. The latter was founded in 2001 to meet Ireland's welfare and pension needs from 2025 to 2055.