The proposed Dublin metro "can't happen" unless the European Union changes its rules on budgetary controls in the euro zone, the Minister for Transport warned yesterday.
Mr Brennan told The Irish Times that even a rail link serving Dublin Airport financed under a public-private partnership (PPP) might not be feasible if the EU remained inflexible about the parameters of its stability and growth pact.
The Minister said that, under the present rules, Ireland would be required to enter the full cost - estimated by the Railway Procurement Agency at more than €4 billion - "up front" on its balance sheet, and this would breach the pact.
The Taoiseach, Mr Ahern, has been asked by Mr Brennan to raise the issue with his EU colleagues at their next summit in Brussels on March 24th. Other countries, notably Germany, France and Italy, are also pressing for more flexibility.
Under the stability and growth pact, member-states in the euro zone are required to keep their annual budget deficits below 3 per cent of GDP. They are also supposed to eliminate deficits altogether between 2004 and 2006.
France is seeking an exemption for elements of its defence budget on the basis that these are in its national interest. The Taoiseach will be arguing that major infrastructure projects in Ireland, such as the metro plan, should also be exempt.
Germany and Italy have found it difficult to meet the budgetary targets and want the pact to be more flexible in accommodating their problems. But several smaller countries are opposed to changing the rules to favour the bigger member-states.
Given Ireland's tight budgetary situation following the demise of the Celtic Tiger, the Minister for Finance, Mr McCreevy, has argued that a distinction must be made between current expenditure and capital investment in essential infrastructure. An investment of at least €5 billion in the national railway network is recommended by the Strategic Rail Review, which is due to be published shortly. The cost of an underground rail link between Heuston and Connolly stations is put at €1 billion.
A rail link from Dublin Airport to St Stephen's Green, running underground in the city centre, has been identified by Mr Brennan as one of his top priorities. The recommended route would serve Swords, Ballymun and Dublin City University. Even if this rail link is financed by a PPP - to design, build and operate it - the Minister fears that the cost to the Exchequer, recently estimated at €450 million a year, would have to be entered on the State's balance sheet in the first year. Adherence to the stability and growth pact is monitored by Eurostat, the EU's statistics office, under rules agreed by the EU Council of Ministers.
But Mr Brennan said: "We can't do the metro without a change in these rules."
