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Contract difficulties for Gort-Tuam bypass project


THE National Roads Authority has “had difficulty” concluding the Public Private Partnership contract for the Gort to Tuam bypass due to the country’s financial insecurity, the Minister for Transport, Tourism and Sport has stated.
Minister Leo Varadkar was responding to questions posed by Labour TD Colm Keaveney.
“The N17-N18 Gort to Tuam project is being tendered by the NRA as a public private partnership, (PPP) but due to concern in the capital markets regarding Ireland’s overall financial situation, the NRA has had difficulty concluding this PPP contract,” Minister Varadkar stated.
Deputy Keaveney said he had met with the minister “regarding concerns at unhelpful commentary in the national media about the future viability of the Gort to Tuam bypass”.
“The Gort to Tuam scheme is being tendered by the National Roads Authority as a PPP. As such, we are reliant on private sector funding for the construction and for its operation. The contract for this critical infrastructure should have been awarded in 2010 and the construction should be underway as we speak.
“As a consequence of developments in the financial markets relating to the bank crisis and the need to establish the EU-IMF relationship regarding the nation’s funding, however, the market perception of Irish sovereign risk has given rise to concerns on the part of the private investor,” he commented.
“This project must progress at the earliest opportunity,” Deputy Keaveney said, adding, “The strategic importance of this section of the north-south corridor will be significant in laying the foundation for the economic recovery of the region. The sustainability and competitiveness of more than 400 firms that provide thousands of much-needed jobs in the West and Mid-West are highly dependent on this critical capital investment. It needs to take place without delay.”
Deputy Keaveney argued the Programme for Government states economic recovery must be export-led and that the West, “Galway in particular, needs to have connectivity to its international markets to attract foreign direct investment and to retain the multinational employer base we currently enjoy”.
He stressed the economic significance to the region of the Tuam to Gort bypass project and “the positive impact this infrastructure would have on sustainable spatial planning”.
In the “very unlikely event of this much needed bypass being further delayed beyond any acceptable period”, the Galway East TD also called on the minister to “instruct the National Roads Authority to have in place an immediate plan to proceed with a bypass at Tuam as a stand-alone project”.
Speaking in reply, Minister Varadkar said, “The successful awarding of a major PPP contract involving private funding is challenging at any time but is particularly challenging in current circumstances, where Ireland has been the subject of intervention by the IMF and the European Union. Until financial credibility is restored, the international debt-funding market will be reluctant to lend funds to finance projects in Ireland, the repayment of which is ultimately dependent on the Irish State,” Minister Varadkar continued.
“This project remains a priority for the Government,” he assured Deputy Keaveney, adding, “The Government is committed to this PPP. The NRA has my full support in seeking to get the project to a financial close this year. I can undertake to keep the deputy and other deputies for the region informed of progress as it is made and also the county and city managers. The NRA and my department have not given up on this PPP and intend to pursue it for as long as we can.
“Should the project not become possible I would agree with the deputy’s suggestion that an alternative arrangement should be made to proceed with part of the project on a traditional Exchequer funding basis but I want to make it clear that we are still trying to get this PPP over the line,” Minister Varadkar concluded.

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