Ireland after NAMA

Irish Rail have announced plans to upgrade their rail network with the aim of bringing down travel times between the major cities to under two hours.  This move would require a state investment of an extra €175 million between 2012 and 2016.  This follows a similar scheme previously implemented, which brought down travel times between Dublin and Cork to less than three hours.  The plan to enhance the service will presumably involve additional tracks and upgrading of the fleet.

Irish Rail suggest that this investment is necessary because, with the shorter travel times offered by the new motorways, they cannot compete with car journeys.  The company suggested they have noticed a decline in passenger numbers, which will need to be counteracted through providing faster services.

As a regular rail user this announcement does not instil me with confidence that my experience on Irish trains will greatly improve.  Rather it strikes me that this investment will be misplaced.  It seems to me, from my own perspective and from speaking to others, that the most prohibitive factor to rail travel is not travel times but price.  A return ticket between Dublin and Cork, a journey I regularly take, now costs around €80.  You can do the same journey (albeit somewhat less comfortably) by bus for around €20.  More significantly perhaps, you could make the trip in a (small) car for the cost of around €50 in petrol.  It simply does not make sense that travelling on a train with a few hundred other passengers would be significantly more expensive than travelling alone by car.  Over the last number of months, the cheaper seats that Irish Rail had introduced to bring up passenger numbers on certain trains have been steadily withdrawn.  While ticket prices remain this expensive, I believe, passenger numbers are unlikely to go up regardless of improvements in travel times.  There is very little incentives to use public transport in Ireland.  If an investment of this sort were to be made, perhaps a better use of this money would be to subsidise ticket prices, thus allowing Irish Rail to increase their passenger numbers with the view to making these lower ticket prices more sustainable if more people were to be convinced to use the rail network on a regular basis.  Of course, economies of scale play a part in all this.  Countries with more efficient and cheaper rail networks often tend to have larger populations that Ireland.  Nevertheless, I do not believe increased speeds will play as decisive a role as Irish Rail are making out, and if anything may result in further increases in ticket prices thus making rail usage more and not less prohibitive.

Cian O’Callaghan

An article by Carl O’Brien in today’s Irish Times highlights the severe impacts of the recession on families. Almost 200,000 parents have applied for the Back to School allowance this year, an increase of over 120% since 2007. According to Department of Education and Skills, there were 864,000 students in full time first and second level education in 2010. If each parent who applied for the Allowance has the average family size of 1.9 children, this means that over 40% of children in first and second level education come from families experiencing financial difficulties. For example, a couple with one child, with a weekly household income of less than €563.60, will qualify for the allowance. This income is before expenses, so the increasing cost of food, housing and energy bills will create further difficulties for families already in need. There is a backlog in processing the applications for the allowance, in part because of the quantity of applications, but no doubt exacerbated by cutbacks in public service funding.

The everyday hardships of the economic crisis in Ireland sometimes get lost in discussions of the mesmerizing levels of national debt. This is a salutary reminder of the difficulties now faced by ordinary families, all across the country.

Mary Gilmartin

There’s been a fair bit of discussion in the media as to whether unfinished developments will be demolished.  The Mullingar Advertiser is reporting that a six acre site in village of Ballynagore, Westmeath is being returned to greenfield status by the local authority at a cost of 40,000 euro after local residents pressed for action.  The site presently comprises three almost complete bungalows that were erected in 2009 (I’ve had a look on Google Street View and I think the photo is the site as of May 2010) and was due to double the size of the village if completed.  The site has been described as dangerous posing health and safety concerns, with several large holes and an absence of secure fencing preventing access.  There have been reports of anti-social behavior, with the houses badly vandalised.  It was also unsightly, with several graffiti tags.

Unfinished estate, Ballynagore

There seems to be some confusion as to who owns the site and the person believed to be the developer is refusing to engage with the Westmeath County Council.  Given the lack of cooperation the Council is using the Derelict Sites Act to take action, including knocking down the three bungalows.  At present, the Mullingar Advertiser is reporting that it seems unlikely that the Council will be able to recover the costs of demolition.

Whilst it is good to see Westmeath County Council being proactive in tackling the site, it also raises a couple of questions including:  Why is there confusion over who is the owner/developer? Why can’t the bond be drawn to down to contribute/cover costs?  If the developer has defaulted, why can’t the bank be called on to cover costs?  Is there any possibility of the site transferring to local authority ownership in lieu of costs?  It seems a shame to knock three almost complete bungalows, six kilometres from the M6 at Kilbeggan, but clearly they are in a poor state of repair and the local authority feel they and the site are past saving at this point without the developer’s input.

What the story does make clear is that some unfinished estates are now starting to be levelled and returned to greenfield status.  It’ll be interesting to see the extent to which other sites follow suit.

Rob Kitchin

Enterprise Ireland today announced that 445 jobs will be created in 24 new high potential start-up companies which have been supported by government through Enterprise Ireland in the second quarter of 2011. The announcement follows on the 310 new jobs announced earlier this year as part of the first quarter results of Enterprise Ireland’s High Potential Start Ups programme.

Many of the companies involved operate in the sectors that the Government has identified as part of the Smart Economy strategy, including biotechnology, life sciences, ICT and financial services. This is good news for Ireland but from a regional development perspective it is important to consider the extent to which different regions benefit from these developments.

Interestingly today’s press release includes a breakdown of number of projects and related jobs by location. Unfortunately, the information pertains to 16 of the 24 investments only, and the press office was not in a position to provide details of the other eight investments because of the commercially sensitive nature. Charts 1 and 2 below present the geographical breakdown of projects and related jobs. The charts distinguish between the Greater Dublin Area (including Kildare and Wicklow), the rest of the South and East (S&E) Region and the Border-Midlands-West (BMW) Region.

The results are striking. Three quarters of the new projects are located in the Greater Dublin Area and a further 12 per cent in the rest of the S&E region. Only 12% of the projects are located in the traditionally lagging BMW region. The results in terms of jobs are similar with merely 12% of the jobs located in the BMW region.

Chart 3, presenting the data for the first quarter of 2011, suggests that this is not a once-off result. In the first quarter the GDA accounted for nearly 70 per cent of the new projects, while the rest of the S&E region accounted for a further 16%. With 15% of the new projects, the BMW region again performed poorly. The press release for the first quarter did not provide complete data for jobs.

To put these figures into perspective Figure 4 presents the geography of employment in all Irish-owned agency-assisted companies by regions in 2010 using figures from the Forfas annual employment survey. Currently the Dublin region only accounts for 31 per cent of jobs in indigenous assisted companies with the rest of the SE accounting for 41 per cent. The BMW region still accounted for 28% of the jobs in 2010.

Clearly, there are some limitations to the data on the geography of recent project and job announcements, not at least the fact that we don’t have access to the complete dataset. However, if the results do represent a real trend, this will have important implications for the economic development potential of Irish regions and raises questions about the role that different regions can play in the Smart Economy as promoted by the Irish Government.

The regional trends outlined above highlight the timeliness and relevance of the upcoming Irish Regions in the Smart Economy Conference, organised by the Regional Studies Association at NUI Maynooth. For further details: http://www.regional-studies-assoc.ac.uk/events/2011/sept-ireland/programme.pdf

Chris van Egeraat,

Chair Regional Studies Association Irish Branch