Budget 2016-17 – Implications for NI Road Schemes

Here are some initial thoughts on the Northern Ireland Budget for 2016-17 that has been agreed today. The budget covers a lot more than transport, but I am focusing in specifically on new road schemes here. There are currently a huge number of worthy road schemes in planning, and nowhere near enough cash to build them all. Although the DRD progresses major road projects up to the point of being “shovel ready”, it is up to the Executive to actually allocate the cash, so the Executive in effect decides what gets built and when. So budgets are always of critical importance because they basically decide what the priorities are going to be.

Lots of road schemes are in planning, but the six major schemes that are closest to being “shovel ready” are (in order of readiness, costs are DRD estimates):

1. A6 dualling Randalstown-Castledawson. Is shovel ready NOW. Design work basically completed, contractor appointed and just awaiting cash. Cost up to £140m.
2. York Street Interchange, Belfast. Design work mostly completed, public inquiry completed but inspector’s report not yet received. Appointment of contractor underway. Could be shovel ready within 8 or 9 months. Cost up to £165m.
3. A5 dualling Newbuildings to north of Strabane. Design work mostly completed, contractor appointed but public inquiry still to take place. Within a year of being shovel ready. Cost £170m.
4. A5 dualling south of Omagh to Ballygawley. Design work mostly completed, contractor appointed but public inquiry still to take place. Within a year of being shovel ready. Cost £160m.
   Items 3 and 4 here are collectively referred to as “A5 dualling Phase 1” which the Executive agreed to progress ahead of the rest of the project back in 2012. Confusing, I know.
5. A6 dualling Derry-Dungiven including Dungiven Bypass. Majority of design work completed, public inquiry completed, report received but DRD has not yet issued its response. Process for appointing contractor not yet begun. Could be shovel ready within a year or so if this was made a priority. Cost up to £420m for the whole project, or up to £65m if the Dungiven Bypass element is decoupled and built separately.
6. A24 Ballynahinch Bypass. Design work at advanced stage. Public inquiry to take place January 2016. Could be shovel ready within two years. Cost up to £50m.

This budget in the first instance covers just the next single financial year, 2016-17 (April to March). While £384m of capital funding is provided to the new “Department for Infrastructure”, this is not broken down in the document into its components (roads, water, electricity etc) so we can’t say too much right now on exactly what that money is going towards.

However, the budget statement notes that “the nature of some capital projects means it is important to provide funding certainty beyond that time span. Therefore the Executive has agreed to identify a number of flagship projects where funding will be agreed now for future periods.” So, although we are only getting the final funding allocations for the next financial year, we also get commitments to fund particular “flagship” projects for the next five years. These are schemes, like the six listed above, which will take more than a year to build and so need funding commitments for several years in order to begin. The ones relevant to roads that are mentioned in the budget are:

Project	2016/17	2017/18	2018/19	2019/20	2020/21
A5 Road	£13.2m	£40m	£53m	£55m	£68m
A6 Road	£21m	£57m	£60m	£60m	£60m
Belfast Rapid Transit	£17m	£9m	£20m	£12.9m	–

Taking these in turn:

A5 Road

The total money allocated here is £229m. This figure seems to INCLUDE the £75m promised by the Republic of Ireland in the “Fresh Start” agreement a few weeks ago (judging by a comment on page 5 of the budget statement), to be paid in three tranches of £25m over three years. So this is actually £154m of Executive funding plus £75m of Dublin funding. £229m is more than enough to cover the A5 dualling Newbuildings to North of Strabane scheme at £170m, but the £59m that that leaves is only a third of what is needed to complete the other half of “Phase 1”, namely the A5 dualling south of Strabane to Ballygawley scheme. In a DRD press release issued tonight (not yet online now online) the DRD Minister indicates that she clearly thinks the funding refers to the first of these ONLY, saying only that the funding includes “the New Buildings to Strabane section of the A5 Western Transport Corridor”. But given that there is too much funding allocated for just that one stretch, we still have to determine what the rest of the money is for.

Now, assuming these two schemes pass their inquiry, they could in theory get underway in about a year from now, say January 2017 for the sake of argument. Assuming that each one takes three years to complete, they would be completed by January 2020, which is during the 2019/20 financial year. Clearly there is not enough cash in the allocations above to allow this. However, it COULD work if start on one of the two was deferred by a couple of years so that its funding profile moved up to the 2021/22 financial year, beyond the scope of this budget. So in that scenario we could see:

• A5 dualling Newbuildings to North of Strabane scheme commencing in early 2017
• A5 dualling south of Omagh to Ballygawley scheme commencing in early 2019

It’s also possible, though I think less likely, that the DRD will decide to abandon this way of breaking down the A5 project (i.e. abandon the “Phase 1” distinction) and instead progress another element, such as the Strabane Bypass instead of Omagh-Ballygawley.

A6 Road

In a press release issued tonight (not yet online now online), the DRD minister says that the funding allocation will allow work to get underway on “the A6 road scheme”. Now, clearly there are TWO A6 road schemes, but  the Minister must surely be referring to the A6 dualling Randalstown to Castledawson scheme which is shovel ready, has a contractor and is just awaiting a cash allocation. Given that there is funding allocated to the A6 from the 2016/17 financial year onwards, it’s virtually certain that we will see:

• A6 dualling Randalstown to Castledawson scheme commencing in April 2016 and being completed by around April 2018.

The Randalstown to Castledawson scheme costs up to £140m. The funding actually allocated to the A6 is £258m, so clearly work is going to get underway on other parts of the A6 too as that leaves £118m unaccounted for. The major A6 dualling scheme, A6 dualling Derry to Dungiven, will cost a whopping £420m so with these funding allocations we can’t build all of that in the next five years. But we could begin work on the A6 Dungiven Bypass, which we know can be decoupled from the rest of the project at an estimated cost of £65m. This still leaves £53m, so it could be that the plan is to begin work on the entire A6 Derry-Dungiven stretch later in the five year period. The budget does NOT commit to this, however, and due to the very substantial shortfall of over £300m we have to be careful not to get carried away. So given that the Randalstown to Castledawson scheme will use up all the cash for the first three financial years, I think we could see:

• A6 Dungiven Bypass commencing around 2019.
  Or possibly work starting on the entire Derry-Dungiven scheme in 2019, though this has not been committed in this budget and would depend on available funding at that time.

York Street Interchange, Belfast

Is very notably absent from this list. Now, according to Julian O’Neill, the DRD have pointed out that “it simply was not highlighted in today’s document“. This is true – the budget is not allocating money for ALL road schemes for the next five years, it’s merely listing two very high-profiles ones. So the absence of a project from the table does not mean it won’t also get funding during this time period. However, I have to say that York Street Interchange is clearly in the same league as the A5 and A6 – it’s at a similar cost level (albeit attracting 40% EU funding as it’s on Euroroute 01), it’s at a similar point of readiness, it’s funding is similarly spread across multiple financial years, and it’s similarly high-profile and surely also a “flagship” project. So I don’t think it’s jumping to conclusions to say that this budget is not encouraging for an early start for York Street Interchange and could well be a disappointment to its advocates within the DRD. Make no mistake, I think the York Street Interchange project will go ahead, but it may not go ahead at quite the timescale the DRD have been hoping (they want it to begin on the ground within 12 months).

Belfast Rapid Transit (BRT)

Phase 1 of BRT (East Belfast, West Belfast and Titanic Quarter) has been underway since May 2014 and is due to be operational in September 2018. Since the scheme is actually underway, at a total estimated cost of around £99m, it’s no surprise at all that funding has been allocated for future years. However, I do note that funding has been allocated for the 2019/20 financial year, which is well beyond the scheme opening date. Now, I don’t know enough about the project to know whether it will still be requiring capital funding a year after it is completed, but another possibility is that this is a commitment to launch fairly rapidly into Phase 2 of BRT, which would see additional routes built to North and South Belfast. The fact that no funding is allocated for the final year, however, makes me think something more mundane may be going on – but we shall see.

Summary

This is all my speculation, but my best reckoning for the commencement dates of major projects going ahead in the next few years are:

• April 2016 – A6 dualling Randalstown to Castledawson
• Early 2017 – A5 dualling Newbuildings to North of Strabane
• Early 2019 – A5 dualling south of Omagh to Ballygawley
• 2019 – A6 Dungiven Bypass (and possibly more of the A6 Derry-Dungiven scheme)
• Uncertain – York Street Interchange probably sometime in the next five years

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