Minister challenged over capital investment

THERE was tight security at the M18 Crusheen roundabout on Friday morning in light of protest rumours and incidents at recent ministerial outings and sod-turnings. But gardaí checking tickets for the official opening of the new road could hardly have anticipated the source of controversy on the day.

A simple ribbon cutting ceremony turned into a very public spat between a Government minister and the head of one of Ireland’s largest construction companies.
In his speech at the opening of the Gort to Crusheen bypass, SIAC managing director Finn Lyden warned the Government not to cut the Capital Programme, claiming the country cannot afford it. This resulted in Minister for Transport, Noel Dempsey tossing aside his prepared speech in order to rebuke Mr Lyden’s claims.
The 22km of motorway was built by SIAC Wills Joint Venture, which according to Mr Lyden had more than 1,500 people working on the project during the course of its construction.
“The indirect income from this project was spread far and wide, including local shops, restaurants, pubs, accommodation, builders merchants, trade suppliers, sub-contractors, hauliers, banks etc, which means that the SWJV turnover is spent a number of times over in the local economy. In Northern Ireland, the evaluation is an economic impact of £2.50 for each £1 invested in the project,” Mr Lyden said.
“This economic spin-off from good projects is enormous. This country cannot afford to reduce the Capital Programme,” he continued.
According to Mr Lyden, a study has shown that every €1 billion infrastructure spend sustains 10,000 direct and 4,000 indirect jobs. He said an official American estimate is similar, saying that a further 14,000 jobs are generated in the wider economy, making 28,000 jobs for $1 billion capital spend. He argued that one third of each billion euro spent comes back to the exchequer in taxes, so the net spend is €650 million.
“By cancelling the Capital Programme, those 14,000 workers become a direct burden on the State, costing €300 million. The cash saving, ignoring the multiplier effect,” Mr Lyden claimed, “is €350 million. If that marginal saving figure is used as the real capital cost, rather than the gross €1 billion, the return from the infrastructure projects is exceptional. It is for that reason that most OECD countries have used a stimulus package based on infrastructure investment to pull their economies out of recession. Ireland is the exception.”
Mr Lyden said he believed it is “very unlikely that the Public Capital Programme can be maintained so that the job losses in the industry over the next year are likely to be more than the 50,000 estimated by DKM Economic Consultants”.
The construction industry, according to Mr Lyden, discussed the provision of an infrastructure bond with the pension fund industry. The idea being that the €350 million shortfall in the figures be funded by a bond from the pension industry but, he claimed, “the Department of Finance appears to have killed the idea”. This he described as “false economics” as he claimed it could yield €70 million in 10 years. He also asserted there was a need to “redefine the role of the National Pension Reserve Fund” saying, “it makes no sense to invest that money abroad when investing it here could produce a real return, as well as a multiplier effect”.
Minister for Transport, Noel Dempsey, described Mr Lyden’s speech as “not really appropriate” and “a little bit hard to take”.
He said that over the past decade €13 billion had been spent on capital projects and much of this money had gone to construction companies. He also called it “a bit unrealistic to expect that we can spend another €13 billion over the next 10 years providing roads that may not be needed”.
“I don’t see how a construction job on Metro North, 4,000 directly and 3,000 indirectly, plus all of the spin-offs that Finn talked about, that those jobs are any much different to those we are going to provide on roads.”
Minister Dempsey described Mr Lyden’s speech as “self-serving” and “failed to recognise that the Government had the highest level of capital spend over the last 10 years of any country per capita in Europe and continues to have a higher capital spend even in the very difficult circumstances”.
The minister did not spend all his ire on the construction chief. He was critical of the local and national media and admitted being “fed up by the constant depressing knocking of this country”. He also said it would be nice if “instead of trying to depress the situation, there was some effort made to lift it”,
Work is set to being on the next phase of the Atlantic Road Corridor early in the new year when the sod will be turned on the Gort to Tuam motorway. BAM Balfour Beatty Consortium was chosen as the preferred bidder to build this.

New road to improve West’s connectivity

THE director of Shannon Airport described the opening of the M18 Gort to Crusheen bypass last Friday as “a significant opportunity”.
Martin Moroney said the opening is a “significant development that will enhance accessibility of the airport and widen its market”.
He said when the roads programme is completed, it will grow the airport’s catchment area from 400,000 to close to one million people.
“The widening of our catchment area from the ongoing roads programme is a significant opportunity for Shannon. We will be responding to it by ensuring the airport will have the level of services to meet the demand and, in that way, continue to strengthen Shannon’s position as a key economic driver for the greater West of Ireland,” said Mr Moroney.
Shannon Chamber said the opening of the new road removes bottlenecks in road infrastructure and helps business connectivity.
“The internet may have revolutionised the way businesses connect, yet the requirement for face-to-face interaction has not been obliterated. Interpersonal connectivity is still important for generating and maintaining business activity and for transporting goods,” said Helen Downes, chief executive of the chamber.
“All companies, be they off or online, still need a good road infrastructure to connect with customers and suppliers and this connection must mirror the ease of transaction advantages that accrue to the information superhighway, the internet. They must be uncluttered and unhindered by town and city traffic. The current M18 extension, while offering time savings, will deliver even greater access benefits to the entire Western corridor when the Gort to Tuam extension is also completed,” she said.
Speaking at the opening, the Minister for Defence Tony Killeen TD said, “The Government is committed to investing in a safe and modern road network. This 23km road scheme that forms part of the Atlantic Road Corridor and the Trans-European Road Network, will offer direct benefits for the people of Galway and Clare by reducing journey time and, more importantly, by providing a safer route.”
“This scheme improves regional cohesion from Limerick, Shannon, Ennis and Galway. It has long been argued that the upgrading of this route is vital to the further development of services to Shannon Airport,” added the minister.
The opening of the road promises to take 8,000 to 10,000 vehicles per day from Gort and Crusheen.