The estimated passengers per year who will be served in respect of each of the cost benefit project analyses

Date: 16 October 2007


Dáil Question No 302 *To ask the Minister for Transport the estimated passengers per year who will be served in respect of each of the cost benefit project analyses indicated in his reply of 4 July 2007; the benefit to cost ratio calculated in the analysis; the internal rate of return; and the minimum acceptable ratios and rates of return which his Department would accept on such a project. - Richard Bruton.

Answered by the Minister for Transport
(Noel Dempsey)

The requested details in respect of the rail projects referred to in my reply of 4 July 2007 are set out below.

Project

Benefit to cost ratio

Internal rate of return

Estimated passenger numbers (per annum)

Luas Line B1 from Sandyford to Cherrywood

3.33:1

13.2%

12.2 million

Luas Line C1 from Connolly station to the Point

1.08:1

6.1%

2.95 million

Luas Line A1 to Citywest

2.02:1

12.4%

5 million

Purchase of 33 intercity railcars

1.85:1

12%

250, 000

Integrated ticketing*

1.53:1

Greater then 5%

Applicable to over an estimated 200 million passenger journeys per annum

* Appraisal of the integrated ticketing project was carried out in 2002 and updated in 2007. The updated financial analyses indicated there continues to be a positive net present value for the project before wider socio-economic benefits are taken into account.

Each of the projects was appraised in compliance with the Department of Finance’s Capital Appraisal Guidelines and Value for Money criteria.

In examining requests for funding for capital projects, my Department takes account of the guidance on cost benefit analysis and internal rate of return set out in the Capital Appraisal Guidelines. The minimum benefit to cost ratio which is generally compliant with the Guidelines is one greater than 1:1 and the minimum internal rate of return generally accepted is 4%.

However, the Guidelines do not preclude a Minister, under the delegated sanction arrangements set down by the Minister for Finance, from approving projects independent of the details of these Guidelines. Recognising that it is not always possible to monetise all the social and economic benefits of transport projects, it may be possible, in exceptional circumstances, to approve projects with a less favourable ratio or a lower internal rate of return, which confer these wider benefits.