Written answers
Tuesday, 16 October 2007
Department of Transport
Public Transport
10:00 pm
Richard Bruton (Dublin North Central, Fine Gael)
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Question 302: To ask the Minister for Transport and the Marine the estimated number of 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. [23736/07]
Noel Dempsey (Meath West, Fianna Fail)
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The requested details in respect of the rail projects referred to in my reply of 4 July 2007 are set out in the table.
| 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 than 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.
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