If any further sign that Ireland’s infrastructure market has reopened for business, then it was the announcement that the long-delayed DART underground project is now back on track.
Long considered by many in the industry as a dead duck, the project was first mooted as a PPP during the boom times of the Celtic Tiger and was set to be another boost to the Dublin transport network.
It involved a new 7.6km underground train line which will run from Docklands to Inchicore, trebling the rail service from a capacity of 33 million passengers a year to 100 million annually. Once the recession hit in 2011, however, plans for the project were put on ice and while it is still to be determined whether it will be run as a PPP, it offers a clear indication to investors that Ireland is finally turning a corner.
Speaking about the recent turnaround, a member of the National Development Finance Agency recently said: “Two years ago the situation was very different in Ireland, things were dire and recovery seemed a long way off. Twelve months ago, interest was growing but people and investors were very sceptical. Now we feel there is a good story to tell and things are improving.”
This optimism is spreading throughout the country. Michele Connolly, partner at KPMG Ireland, agrees that the pace of progress is picking up. “Over the last three or four months we’ve really seen international interest in Ireland pick up,” she says. She adds, however, that it is now up to the government to continue this momentum and proceed with new projects. The DART may be the biggest example so far that they are listening to this kind of encouragement.
Credit rating agency Moody’s has also jumped aboard this positive bandwagon by restoring the country’s credit rating to investment grade.
Other positive news to have come out of the island recently is the closing of the M17/M18 motorway PPP, which is also encouraging for investors as it shows that projects can not only be tendered, but can also get across the line.
What is needed now is further tranche of deliverable projects to continue the stimulus package announced last year and once a few are delivered on time and on budget it should further cement the country’s resurrection. A manageable project size will also be key, as the country only has the resources to handle a finite amount of work. Indeed, taking on too much and getting in over its head is one of the reasons the country was burned so badly in the crash.
All in all, the next 18 months will be critical, not only for the international community looking inward but also the domestic population. The next Irish General election is set to take place in April 2016, and if the current coalition government of Fine Gael and Labour wish to hold on to power they’ll have to start delivering on promises made – and that means more new projects. Construction, housing and infrastructure incentives remain inextricably interwoven with land and politics in Ireland.