A MOTORWAY NETWORK running across the island of Ireland could be built for €15 billion, or less than €100 per worker each year in borrowings, it has been claimed.
Ireland’s biggest business group, Ibec, and its Northern Irish equivalent, the Confederation of British Industry (CBI), have published a report today calling for a massive investment in Ireland’s infrastructure network.
The document argues for the development of an all-Ireland motorway. The proposal, which was first floated by Ibec CEO Danny McCoy in an interview with Fora, would see thousands of kilometres of road built and upgraded on both sides of the border.
The suggestion is part of Ibec’s plan to develop an all-Ireland economy to support 10 million people on the island by 2050.
The report said that the island’s motorway network should connect all of Ireland’s major urban centres.
“The immediate priorities (should) include completing routes already in development such as A5 and A6 upgrades to Derry and the northwest, the M1/A1 Sprucefield bypass, to better link Dublin and Belfast, and major upgrades to the N20 from Cork to Limerick (and to) the capacity of the M50,” it said.
It said that the current all-island motorway and dual-carriageway network “stands at an estimated length of 1,450km, broken down to over 1,000km of motorway and over 400km of dual carriageway.”
The report proposes building an additional 180km of motorway and a further 1,800km of dual carriageway.
Connected
The groups claim that, if the proposed upgrade is completed in its entirety, “up to 85% of the population will live within 10km” of the new road network.
The report said it advocates a coordinated approach between the Republic and Northern Ireland “to tackling the clear requirement for enhanced connectivity through infrastructure investment”.
“It has also established that there are possible and significant mutual benefits to adopting such an approach and having a scale of investment that will accelerate the pace of delivery,” it said.
The development would need to be constructed in phases, the last of which would likely be completed around 2040 if the plan went ahead.
Financing
Ibec said that the dual-carriageway upgrade would cost about €9.8 billion, while the new motorways would require an additional €1.8 billion. The group added that servicing the interest on borrowing would amount to about €290 million a year.
“To further test this affordability, the cost estimate used to construct and maintain the completion of the network was increased to just over €15 billion,” it said.
Ibec said that at this higher estimate it would cost €375 million per year to service the debt on the project.
“This higher estimate results in the investment required being €94 per annum, or €1.68 per week, per employed person. This is also an affordable and, therefore, achievable cost.”
The group said that there are several potential sources of funding for the project, including traditional debt or institutional finance, the European Investment Bank or large investment funds such as the Irish Strategic Investment Fund.
Repayments
Ibec director of international and corporate affairs Mary Rose Burke told Fora the estimates were based on assumptions that funding for the project would cost about 2.5% per year.
“A fixed rate of 2.5% is what can be availed of on long-term bonds at the moment,” she said.
She added that as long as the debt repayments on the project can be met, repaying the principal loans would not be a major issue.
“On huge strategic problems, once you can repay the debt, why would you tie up capital repaying the principal?” she said. “The principal is almost never repaid on public debt, once you grow other ratios your debt isn’t an issue.
“If you did want to repay it you could do a phased repayment from excess returns or from the public purse as part of capital expenditure.”
Written by Paul O’Donoghue and posted on Fora.ie
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