The National Roads Authority – Going Places Public Private Partnership (PPP)

The National Roads Authority Publications Unit, - an Overview of the Authority’s National Roads Authority, Roles and Functions. St. Martin’s House, Waterloo Road, The National Road Needs Study. 4. National Roads Improvement Other Booklets in this Series Tel: +353 1 660 2511. Programme and the National published by the National Roads Fax: +353 1 668 0009. Development Plan 2000 - 2006. Authority include: Email: [email protected] National Road Project Planning. www.nra.ie

Compulsory Purchase Order Procedures and Compensation.

Road Safety.

ITS (Intelligent Transport Systems). What is a Public Private Partnership?

PPP Benefits Road Tolling A Public Private Partnership, or PPP, is an agreement between the public and private sectors with the purpose of delivering a project or service • Faster delivery of much Tolling provides the key for drawing private sector finance needed road infrastructure. into the NRA’s Road Programme.This finance is additional traditionally provided by the public sector. to Exchequer and EU funds and so accelerates the • More cost-efficient design, commencement and completion of projects.Tolling is used construction and operation world-wide to charge road users for the service benefits Why a PPP Approach? PPPs are identified in the Government’s National of road schemes. gained from improved roads. Development Plan (NDP), 2000-2006 as being essential • Cost savings to the public sector resulting from risk There is a major need for investment to upgrade national in helping to deliver the NDP’s objectives, including those transfer and private sector management skills, innovation Principles Underlying PPP Tolled Schemes roads and the injection of private finance will accelerate relating to national roads. and efficiency. the delivery of much needed road infrastructure. PPPs offer the opportunity for improved value for money The NRA’s PPP Programme is guided by a number • High standard of service due to strong supervision and for carefully chosen infrastructure projects by utilising of principles including: performance requirements. private sector enterprise and innovation, and by allocating • An alternative toll-free route must be available. risk to the party best able to manage it. A case study carried out by the UK Highways Agency • A public subvention to be available for high-cost schemes The Government, in the NDP, have set a target of securing on eight PPP road contracts in the United Kingdom ensuring that tolls are set at affordable levels. Û1.27 billion in private finance to supplement Exchequer concluded that there has been an average cost saving and EU investment in the national roads programme, of 15% compared to traditional procurement. • Tolled roads to be spread throughout the network. thereby increasing the scale of the programme and accelerating the commencement and completion of PPP Approach • Tolled roads must deliver value for money. projects.This figure accounts for a significant element of the total NDP planned investment in the roads programme. The approach adopted by the NRA to all PPP projects is: PPPs in Other Countries

The commitment to the development of PPPs in Ireland • Public sector decides what is needed and sets Over one third of motorways in Europe are tolled. is reflected in an agreement reached in 2001 on the standards The most developed networks are in France, Italy, Spain a Framework for Public Private Partnerships by the Public- • Private sector agrees to design, build, operate and finance and Portugal where a large number of cities, towns and Private Informal Advisory Group.This group was the project villages are bypassed. established by the Department of Finance and includes representatives of the business, construction and trade • Public sector monitors performance and the private Tolled roads are also found in other European countries union sectors. sector is paid accordingly such as Greece, Croatia, Slovenia and Turkey. In many The framework fulfils the requirement in the Programme • The asset remains in public ownership of these countries there is a mix of tolled and non-tolled for Prosperity and Fairness which called for the development national routes as is proposed for Ireland. of a clear framework to assess the appropriateness of PPPs for infrastructure projects and to guide their implementation, taking into account the wider economic, social and environmental objectives that should guide infrastructural development, irrespective of the procurement method followed. Proposed Toll Charges Conclusion

Toll charges are determined in accordance with procedures It is clear that failure to make substantial investment in the network contained in the Roads Act, 1993, as amended by the of national roads will have serious economic and social implications Planning and Development Act, 2000. Charges are The Concessionaire will be responsible for the design and for the country and result in a rise in traffic congestion proposed at an affordable level with a public subvention construction of the road to the NRA’s national standards and will on the network. paid where necessary to augment the charges. be responsible for operating and maintaining the road to the high To help keep the Irish economy strong and competitive we must standards set and enforced by the NRA. The significant lengths of untolled sections on Irish routes invest so as to provide a world-class network of roads. will ensure that the overall charge for the entire route will The NRA will set the level of toll charges and the PPPs will help ensure the earliest provision of such a high class be very low especially in comparison with whole journey annual inflation to be applied (not the Concessionaire). network of roads, resulting in shortened journey times and increased charges in other countries. Toll revenues will be capped to prevent ‘super profits’. safety. Access will be improved throughout the country, underpinning national spatial strategy and facilitating employment creation The following example illustrates this, showing the Each contract will ensure that a high quality facility is handed and a better spread of economic benefits. anticipated toll charges on the Dublin to route back at the end of the concession period. compared with the equivalent French charges for a journey More detailed information on the NRA’s PPP Programme of the same length: can be accessed at www.nra.ie or by contacting the PPP Unit NRA PPP SCHEMES at the following telephone number: 01 660 2511. TOLL CHARGES Route Total Length (Km) Expected Car Toll N1/M1 Dublin-Border Route Cost per Kilometre Charge (inc.VAT) Western By-Pass 11 N3 Cavan to Dublin Route Dublin to Galway Clonee-Kells 60 Û 220 km 2 cents 4.60 N4/N6 Galway to Dublin Route -Kilcock (N4) 39 Toll Charge Oranmore-N6 East (N6) 45 in France for similar journey: 7 cents Û15.40 N7 to Dublin Route -Castletown* - Nenagh-Limerick 38 Key Features of the NRA’s PPP Contracts N8 to Dublin Route Portlaoise-Cullahill* 42 Each PPP road project will have a number of common Fermoy By-Pass 18 conditions and standards including the following: City By-Passes By-Pass 37 Limerick South Ring II 10 The Private Sector (‘Concessionaire’) will design, Extension of an existing PPP Concession build, finance and operate the scheme for a 30-year M50 2nd West Link Bridge concession period (period can vary from project to * Portlaoise-Castletown (N7) and Portlaoise-Cullahill (N8) will be placed project). as one PPP contract.