Yesterday's headline to the article about Luas - Studies show that Luas makes economic sense - made me see red (ink) as it made no reference to the expectation that the capital cost of Luas could exceed €750m - equivalent to about twelve times Dublin Bus's annual subsidy.
A few basic assumptions can be used to illustrate the economic nonsense of Luas. Let us assume that it carries about 30,000 passengers a day (versus 500,000 for Dublin Bus and 90,000 for the DART); that interest and depreciation rates each run at 4% a year; that the invested capital is repaid over 25 years; and that a fare of about €1.50 per trip covers all operating and related costs etc. On this basis, the real cost of a Luas ticket is about €8.60, over five times the proposed fare! How does this make economic sense (except to the tiny minority that will use the service)? On this basis, it would be cheaper to give free taxi and bus vouchers to all prospective LUAS users for decades to come.
Once again, our policy makers have lost the plot. No amount of spinning, huffing and puffing will ever justify Luas. As a massive "white elephant", Luas should have been scrapped. The funds could have been used to provide more buses and a larger subsidy to Dublin Bus to benefit of ALL commuters in Dublin instead of just a tiny minority.
A few basic assumptions can be used to illustrate the economic nonsense of Luas. Let us assume that it carries about 30,000 passengers a day (versus 500,000 for Dublin Bus and 90,000 for the DART); that interest and depreciation rates each run at 4% a year; that the invested capital is repaid over 25 years; and that a fare of about €1.50 per trip covers all operating and related costs etc. On this basis, the real cost of a Luas ticket is about €8.60, over five times the proposed fare! How does this make economic sense (except to the tiny minority that will use the service)? On this basis, it would be cheaper to give free taxi and bus vouchers to all prospective LUAS users for decades to come.
Once again, our policy makers have lost the plot. No amount of spinning, huffing and puffing will ever justify Luas. As a massive "white elephant", Luas should have been scrapped. The funds could have been used to provide more buses and a larger subsidy to Dublin Bus to benefit of ALL commuters in Dublin instead of just a tiny minority.
